The electronics landscape is shifting rapidly to the Far East, where China's influence on the direction of IC development will become a significant factor in years to come, according to Brian Halla.
In an interview with EBN, the chairman, president and chief executive of National Semiconductor Corp. said booming wireless and landline telecom business and soaring PC sales place China in a class by itself as other regional markets sag, a fact that will give China an increasingly dominant role in determining the path chip design will take.
"It's possible that in not too many years the entire global semiconductor roadmap will be driven by China," he said.Halla cited the expectation that the number of cell phone subscribers in China will surpass the United States this year as evidence of the country's growing clout.
Interviewed Thursday in Washington after attending a White House briefing on energy conservation, Halla pointed out that China has 14 new chip fabs under construction or about the break ground, which is far more than any other region in the world. He also wondered what would happen if a significant portion of this new capacity goes unsold, causing China to begin dumping chips on the world market.
"If the [Semiconductor Industry Association] thought Japanese dumping years ago was a problem, try fighting with China on this issue," he warned. "SIA would look like an ant trying to attack an elephant."
Halla added that the entry of China into the World Trade Organization is a positive step and could serve as a safeguard to avoid trade friction.
Halla said National hopes to expand early joint ventures in China to benefit from the country's burgeoning electronics market. National has a joint venture to sell chip sets for third-generation cellular phones, China's unique 3G standard. The U.S. chip maker also is starting "to roll out its thin client PC networks in China, initially starting in schools. National and Legend Computer Corp., China's largest PC maker, have a joint venture to use National's Geode processor in settop TV boxes for Internet access.
But if China is high on Halla's scope for future business, it is Korea, primarily Samsung Electronics Co. Ltd., that captivates him now. "Every morning when I get up, I thank God for Samsung, our largest single customer by far," Halla said.
National provides Samsung with its RF and analog intermediate frequency wireless-phone chipsets, as well as RSDS (reduced swing differential signal) driver chips for flat panel displays.
"At Samsung's request, last year we acquired Vivid Semiconductor, which makes high performance high-voltage chip drivers for LCD panels, Halla said. He said Samsung was partially the matchmaker in getting the two companies together. "They had the same vision that we do -- getting as much technology in hand to integrate as many functions on one chip as possible."
In the current semiconductor slump, Halla said National has fared better than most of its competitors, but isn't immune to the industry's vast oversupply problem. He said National will take an extra unscheduled seven-day summer shutdown in the current fiscal quarter on top of a five-day shutdown last quarter.
"Lately it has been erratic," Halla said of the industry's performance. "We had a week when orders were back to a normal pattern, followed by a week of declining orders. We are beginning to see some inventory correction in a few large wireless phone handset customers. The PC market has generally worked through excess inventories, and we have even gotten a few requests for faster deliveries of chips."