In order to assess the ability to respond to the disruption of CNT technology, I have prepared a box score for vulnerability to potential disruptive threat assessment below. The resulting conclusion is that costs are the biggest factor affecting the semiconductor industries ability to react. As mentioned in question 1, the high costs associated with R&D and manufacturing in the semiconductor industry means that current facilities need to be planned well ahead of time. Uncertainty, risk, and complexity also make semiconductor road mapping tricky business. Box Score for vulnerability to disruptive technology threat – Semiconductor Manufacturing Firms Denial – 0 History – 0 Resistance to Change – 0 Mind Set – 0 Brand – 0 Sunk Costs – 10 Profitability – 10 Lack of Imagination – 0 The factors I will discuss therefore are: (1) costs and (2) uncertainty. Sunk costs problem implies that firms will not want to migrate…
CNT
The industry I have chosen to investigate, and claim will be a big disruption in the future – although it isn’t poised for market yet – is the carbon nanotube (CNT) processor. Carbon nano technology was highlighted as a disruptive technology in a May 2013 report from McKinsey Quarterly (Manyika, 2013). The reason I believe it will be disruptive is because carbon nano processors have the potential to be much more energy efficient and compact (per processing capacity) than silicon based transistors. The infamous Moore’s Law has accurately predicted the improvements of silicon based semiconductor technology since it was stated by Moore in 1965 (Moore, 1965). While 9nm silicon chips are manufactured today, the the inherent quantum limitations posed by silicon-based semiconductor technology threaten to cause the development pace to drop below Moore’s expected level of improvement by 2020 at the 7nm scale (Merritt, 2013). On the other hand, a…
In order to ‘catch the wave’ of CNT technology, firms in the semiconductor industry will need to morph their business model to accommodate competition and new opportunities. The reason that I say “morph” the business model, instead of radically change it, is because the shift to CNT from silicon is not here yet, it is a long process forthcoming, and the shift will entail many years of extensive forecasting and planning. The stakes are high for semiconductor developers and manufacturers, so a careful balance between maintaining strong revenue streams, and investing it into R&D is more realistic strategy than a ‘flip the switch’ type of strategy. Although it is less likely that a new player will suddenly emerge onto the field and eat lunches (like Netflix is doing in online media) because of the high barrier to entry, patent activity should be carefully monitored and assessed to judge the relative…
