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Jean-Philippe Dauvin ST Group VP and Director of Education and Knowledge at ST , World Chairman of World Semiconductor industry Why, one might ask, has the US economy been doing so well for the past ten years? Is it because of the interest rate policy, or the flexibility of the workforce or the genius of the country's politicians? All these are possible factors, but we have another explanation. Since the early 1990s, the US economy has entered a new virtuous circle of growth based on continuous development in the information industry, itself driven by the semiconductor industry.  This means that the new wealth of nations is founded on the capacity of each nation to incorporate microelectronics into its economic and social fabric. The underlying mechanisms are simple enough: chip functionalities memory, processes, display, sound, etc are doubling each year in keeping with Moore's Law, a historically verified principle that will remain valid another 10 years for current technologies. And each year, the price of these functions is dropping by 20 %. Which means that our equipment manufacturing customers are rolling out products on an annual basis that are continually better and cheaper. It took 10 years to sell 10 million black and white TV sets per year, but less than three years for the mobile telephone market to reach the same 10 million sales mark. Why? Because cell phones now cost 1/10th of the basic wage in Europe, whereas a TV cost 10 times the same basic wage when launched on the market in 1950. In 1998, the product that sold most units on the US market, the PC, also fell sharpest in price, helping to push inflation down to 1% , and giving a nice boost to household purchasing power. But there's more to it than that. Those PCs that grew cheaper through better chip design are not just unproductive consumer items like refrigerators and couches. PCs help generate greater productivity by enabling users to boost knowledge via the Internet, connect with their customers, work better and sometimes more, buy and sell without moving from their seats, and prepare their children for tomorrow's world. All this makes for a virtuous circle of collective wealth creation, based ultimately on technology advances in semiconductors. To round out the picture, our own microelectronics industry, with its capacity to generate global wealth right across the economic and social fabric, is itself a creator of qualified jobs: due to its multiplier effect, it creates three new jobs for every job in our industry. But all this is well known. In 1915, Henry Ford boosted productivity in his factories by 7 % a year, brought down the cost of his Model T by 1% a year, and increased the wages of his employees, who would, he said, go out and buy his automobiles. In fact he somewhat exaggerated on this last point - more than half his Model Ts were the pickups that carried their owners out to conquer the Far West! The Ford model is now ancient history, of course, long replaced in the USA by the microelectronics paradigm that has ensured America's success. But Europe is now well on the way to benefiting from this huge potential for growth. Our European microelectronics industry would be only too happy to contribute to the wealth of the Union's 350 million citizens. And ST is certainly ready to rise to the challenge.  |
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