changes along the electronics value chain – packaging as a key … · 2017. 2. 17. · 20150915...

Keynote Speech

Friedrichshafen, September 14, 2015

Changes Along the Electronics Value Chain – Packaging as a Key Enabler

2 20150915 Keynote Speech EMPC.pptx

This document shall be treated as confidential. It has been compiled for the exclusive, internal use by our client and is not complete without the underlying detail analyses and the oral presentation. It may not be passed on and/or may not be made available to third parties without prior written consent from Roland Berger Strategy Consultants. RBSC does not assume any responsibility for the completeness and accuracy of the statements made in this document. © Roland Berger Strategy Consultants

Contents Page

A. B.

I. II. III.

C.

The digital challenge The digital transformation is disrupting the microelectronics industry 7

Staying ahead in times of fast change What needs to be done to stay ahead of the game? 12

Innovate Innovation is and will remain key to stay in the game – Packaging technology is one focus topic 17

Enter new market segments Intelligent extension of application and regional focus – New applications require new packages 22

Boost productivity Digitization creates tremendous opportunities – Also in the world of packaging 27

How we can support you Roland Berger's value add to microelectronics clients and Terra Numerata 32

Introduction to Roland Berger Roland Berger Strategy Consultants is a trusted advisor of the electronics industry 3


Introduction to Roland Berger


Roland Berger Strategy Consultants is a truly global firm with its roots in Germany Our profile

Founded in 1967 in Germany by Roland Berger

50 offices in 36 countries, with around 2,400 employees

Nearly 220 RB Partners currently serving

~1,000 international clients

Source: Roland Berger


We combine broad industry expertise with functional know-how – Engineered Products & High Tech covers microelectronics Our competence matrix


Chem

icals

&

Phar

ma

Cons

. goo

ds

& Re

tail

Tran

spor

tation

Function Digital

Leadership & Transformation

Operations

Private Equity

Restructuring & Corporate Finance

Indu

stry

Au

tomoti

ve

Civil

Eco

. &

Infra

struc

tures

Eng.

Pro

duct

s &

High

Tech

Fin

ancia

l Se

rvice

s Te

chno

logy,

Media

&

Telec

ommu

nicati

ons

Ener

gy &

Ut

ilities

Strategy Microelectronics Coverage


> Detailed market and competition analysis > Corporate strategy and growth strategy

> Strategy check and validation > Market entry strategy in China and other Asian countries

> Post-merger integration support

> Development of performance improvement pro-grams, e.g. sourcing, R&D, production footprint, reorganization

> Product optimization and cost out

> Supply chain optimization and risk management

> Operational and financial restructuring > …

We have broad experience in the microelectronics and semi-conductor industry

Selected topics Selected clients


Project references – Microelectronics & semiconductor clients


A. The digital challenge


Digitization is a critical challenge: It potentially disrupts competitive positions and leads to radical shifts of profit pools Impact of digitization


Slow ramp up of digital business models and tools

Digital transformation

Scenario

1

Scenario

2

Companies as digitally transformed players with new strategic options

Companies negatively impacted by loss of customer interface, value share, limited strategic flexibility

Today Tomorrow

Tasks necessary immediately for mitigation

Strategic analysis of disruptive market scenarios

Change & enable-ment of organiza-tional processes

Build the backbone (Computing power, storage, band-width, security,…)


Previously known technological trends coinciding now - This digital transformation affects more than EUR 750bn GVA in Europe

Source: Survey across 300 decision makers, BDI study on digital transformation in Europe, Roland Berger

Digital transformation and its playing field

D i g i t a l t r a n s -

f o r m a t i o n

Computing Power

Con- nectivity

Virtuali-zation

The four levers of the digital transformation…

…affecting the industrial heart of Europe [EUR bn GVA]1)

M e c h a n i c a l & p l a n t e n g i n e e r i n g 2 ) 299

1) GVA = Gross value added, 2013, EU-15 states plus Norway, Turkey 2) Including energy systems

L o g i s t i c s 271

A u t o m o t i v e 140 C h e m i c a l s

124 A e r o s p a c e & a v i a t i o n 35

M e d i c a l t e c h n o l o g y 43

E l e c t r i c a l e n g i n e e r i n g 87

Autonomy

"Moore's Law" "Internet"

"Nielsen's Law" "Internet of Things"


Industrie 4.0 can be understood as a subset of digital transformation – The full integration and digitalization of the industrial value creation

Source: Plattform Industrie 4.0, MIT Sloan Management Review, Roland Berger

Industrie 4.0 as the digital transformation of the industry

Digital transformation

Industrie 4.0 Mobile devices

E-Commerce Car sharing

Apps

Contactless pay

Home robotics

Wearables

Smart Home

Cloud data

Smart instructions

Private robots

Self-optimizing systems

Self-learning robots Predictive Maintenance


The digitalization of both human society and industry fuels the growth of the microelectronics and semiconductors market Semiconductor market growth and size 2011-14

2014 market value [USD bn]

1) Tablets: Tablets, eReaders, and Portable Media Players 2) Set-Top Boxes: Set-Top Boxes, DVD Players, & Projectors 3) TV sets: TV Sets & AV Equipment

Source: IDC, Roland Berger

Connectivity

Digital Customer

Access

Big data Auto- mation

-25-20-15-10

-505

1015202530

100 10 1

Wireless Network Wired

Network

Servers

Automotive

Industrial

Storage

Consumer

Tablets1)

PCs

Mobile Phones

CAGR 2011-2014 [%]

Misc. Computing

Printing & Imaging Set-Top Boxes2)

Gaming

TV Sets3) Point of Sale

Military & Aero

Cameras


B. Staying ahead in times of fast change


ODM1)

Equipment vendor

IP vendor

Foundry

Sub- contractor

Distributors

OEM2)/Tier 1

EMS

IC design Front-end production

Back-end production Sales System

integration

System design3)

Production- equipment

Complexity along the value chain increases - Coexistence of many different business models

Integrated Device Manufacturer (IDM)


Fabless

1) Original Design Manufacturer 2) Original Equipment Manufacturer 3) Basic structure of the chip application

Microelectronics and semiconductor value chain incl. selected companies


Significant movements across the value chain can be observed


Vertical integration – Power electronics examples 2015

Broad range of activities Activities in some areas (e.g. High-Power only) Expected future move

Chip-only suppliers

Module companies

Integrated chip/module companies

Integrated conglomerates

Backward integrated application specialists Non-integrated application specialists

Front-end prod. Back-end prod. System integration Application

IXYS

Starpower

Mitsubishi/Vincotech

Danfoss/VACON GE

Vestas

ABB

Cree

Transphorm

Infineon/IR

SIEMENS

Toshiba

Automotive specialists

OEMs (BMW, Daimler, VW) Continental Bosch

Bombardier

Renesas

SEMIKRON

ON Semiconductor Rohm

KION


2015 marks an extraordinary year in terms of horizontal integration

Horizontal integration – Transaction value of semiconductor industry M&A [USD bn]

Source: IC Insights, Roland Berger

37.0

16.7

11.8

16.911.59.5

17.0

7.7

7.1

72.6

2015H1 2011 2012 2014 2013 2010

Other


How to react to competitors' moves

Three areas to stay ahead of the game: Innovation, new market opportunities, productivity

I Players are changing

their position

in the value chain

What needs to

be done?

Innovate

Boost productivity

Enter new market segments

II

III



0 2 4 6 8 10 12 14 16 18 20

90

75

60

45

30

0

Aerospace & Defense

% Gross Margin

% R&D to Sales ratio

Telecom

Technology

Software & Internet

Industrials

Health1)

Consumer Computing & Electronics Chemicals

& Energy

Automotive

Innovation is and will remain key – Companies with strong focus on innovation performance show consistently higher profits R&D spending vs. gross margin [%]


Innovate I

Bubble size depends on standard deviation of R&D/sales ratio to gross margin

High return sectors Low return sectors

1) High R&D share in Health includes expenses driven by regulatory requirements


Is your company innovative enough?

Key questions

Innovate I

How to (re-)energize the innovation power ?

How to accelerate innovation time-to market and technology readiness ?

How to define technology strategy and to improve new technology introduction ?

How to design to value for the customer ?

How to re-design to cost ?

How to reduce product complexity ?


How to develop global & standard products while sustaining local needs ?


Project summary – Scenario planning for a leading power electronics company

Through the scenario planning approach, we supported a client deciding on where to focus its innovation capabilities

> Client had the impression that the industry was changing strongly, without concrete evidence

> Need to get direct, unfiltered feedback from their clients and industry experts on expected market developments…

> …in order to adjust the strategy based on facts

> Roland Berger Scenario Planning, based on telephone interview process and mapping tool

> Transparent overview on trends and uncertainties in the market

> Scenarios as basis for strategic moves > Innovation focus identified

Innovate I

Scenario Planning Tool Interview Process

Trends Scenarios

Background/objective

Approach

Results



The part of the low/medium power market with highest growth rates will potentially move towards new technologies Scenarios for wide band gap material in power electronics (view until 2025)

Source: Expert panel, Roland Berger

Implication: Massive technology move in the industry, but still uncertainty which voltages GaN will be able to handle and whether SiC can achieve the cost reductions necessary to penetrate the mass market

"Currently the cost of SiC outweighs the benefits by a factor of 3-5" (statement made by 3 companies from different Med-Power segments)

SiC

"In my opinion, GaN will kill SiC for all applications below 900V, including Automotive - GaN will extend from Automotive into other markets" (former mgmt. executive of an integrated chip/module producer)

"I don't think that GaN can be used for 900/1200V applications, but players like Transphorm are trying to move in that direction" (Module producer)

Shar

e pow

er el

ectro

nics

on

drive

/pow

er

conv

ersio

n sy

stem

cost

600V 1200V Voltage

Si 10%

1%

?

Innovate I

SiC

GaN

?

Today Tomorrow

SiC

GaN


Innovation in packaging as a key enabler in wide bandgap (SiC/ GaN) power electronics miniaturization race

Illustration (to scale)

Source: Rolff Aschenbrenner Fraunhofer IZM SEMI ISS 2015 Amsterdam, TU Berlin, Google, Roland Berger

Technology comparison – Miniaturization race in power electronics State of current technology Possible new technologies

Pulse rate [kHz] 800 250 15

Material

Energy consumption [kW]

2 15 15

Innovate I

SiC MOSFETs Si IGBT

SMA Sunny Tripower 15000 TL IZM Gen. 2 (2015)

GaN FETs

IZM Gen. 3 (10/2015)

Weight [kg] 0.6 2 59

100% Volume [l] 0.2 2.4 120

2% 0.2% Space requirement

Typcial edge length [cm]1)

6 13 49

1) Assuming cubic format, based on volume


Gaining a foothold in new markets is important for constant top-line growth Typical client revenue composition

Known adjacent market segments


time

Revenues

Existing market segment endangered to saturate and to become obsolete

Enter new market segments II

Today Future Past

Future adjacent market segments


Have you considered all relevant markets and opportunities yet?

Key questions


Are all opportunities and trends in existing and adjacent markets on the radar screen ?

How to use core competences best in other market segments?

What are the emerging business models, especially regarding duration of design-in cycles ?

What are the effective synergies between existing and envisaged new market and how can they be leveraged ?


What is the ideal ownership in this new market and where are possible partnerships ?

Which ones are relevant and are they sustainable and differentiating ?


Project summary – Automotive current sensors strategy

For a client, we estimated market development to define strategic moves in automotive current sensors markets


> Identify market potential and possible risks in the automotive current sensor market

> Define strategic implications from opportunities and threats

Approach

> Conducting various interviews along the whole automotive value chain

> Preparing a market model for current sensors by application, region and technology

> Defining and quantifying strategic moves

Results

> Full market model on current sensors in automotive > Qualitative insights beyond quantitative time horizon > Strategic recommendations on how to act

Initial situation Project approach

Market forecast Recommendation




Industry players expect semiconductors to play a stronger role in current sensing, opening up new markets to tap into Indications for Automotive current sensor market developments

Source: Expert interviews, Roland Berger

Implication: Semiconductor content in automotive current sensors is strongly increasing, enabling different competing technologies

"The accuracy of the individual current sensor is not that important. Increasingly, OEMs want an inverter that overall fulfills the accuracy requirements, which can be done with semiconductors" (Automotive semiconductor manufacturer)

"Integrated Primary-based measurement has been available for some time. So far it has not taken off, but is a question of time" (Automotive module manufacturer)

2017 2014 202x 2020 Hall Smart shunt Integrated Primary

Indicative market development of current sensors by technology


"The rising integration and miniaturization of systems call for smaller and lighter components" (Automotive module manufacturer)


Entering new markets requires diligent market understanding and the build-up of new competences – Packaging and Software Selected semiconductor based current sensors for Automotive


Source: Hella, Infineon, LEM, Roland Berger

Illustration

Curr. range [A]

Packaging specifications

Tolerance [%]

Target Market

Technology

Dimensions

Market to enter immediately

200 – 1,500 (max.)

0.5

> Clamped directly at pole terminal > Electronics within molded case with

electrical connector as interface > Operating temperature range -40° C

to 105°C

"Smart" Shunt: μC & SW for SOX1)

European automotive market

71 x 55 x 41 mm

Current Market

60

0.5

> Compact design for PCB mounting > Hermetic package > Operating temperature range -40° C

to 125°C

Hall ASIC with analogue electronics

American automotive market

52 x 58 x 56 mm

50

> 5-PIN CB package > Integrated shield > Operating temperature range -40° C

to 150°C

1

Market to enter in due time

Integrated Primary

Chinese automotive market

20 x 14 x 9 mm

1) State of Charge (SOC), State of Health (SOH) and State of Function (SOF)


Digitization creates a EUR 1.25 tn opportunity to gain in productivity – But high EUR 0.60 tn downside risk if nothing is done

1) Threat scenario in line with the already digitized media and telecommunications industries; derived from the historic increase in ICT's share in value added. Opportunity scenario calculated on the basis of capital intensity, relevance of the customer interface and the existing digital maturity of the industry

The digital transformation will emerge in 3 waves … Wide span of gains/losses calculated for the period through 20251)

Today 2025

Gains in productivity and gross value added of 20% to 30% per industry (+30% or + EUR 26 in Electrical Engineering)

EU-17 opportunity scenario: +1.25 tn EUR

Losses of IT-based value added and the customer interface

EU-17 threat scenario: -0.60 tn EUR

Automotive Logistics

Mechanical & plant engineering

Electrical engineering

Medical technology

Energy systems

Wave 1 Wave 2 Wave 3

Chemicals Aerospace

Source: Roland Berger, BDI study on digital transformation in Europe

Boost productivity III


Have you leveraged all the productivity advantages that come along with digitalization in R&D, supply chain, and Sales & Marketing? Key questions


How to implement rapid prototyping and lot-size-one manufacturing practices?

How to implement/improve direct customer interaction?


How to implement/extend collaborative models?

How to improve digital engineering and manu-facturing practices and dramatically reduce cycle times?

How to globalize the footprint and supplier networks?

How to optimize make or buy?


Project summary – R&D efficiency increase

We developed an efficiency increase program for the R&D department of a leading component supplier's division


> Client: R&D division of a leading global component supplier (~ 4,000 engineers)

> Excessive R&D cost, TTM too long, missed some innovations > Objective: Increase efficiency by 25% over 3 years

Approach

> Definition of short-term measures within 7 units > Development of cross-organizational topics in 10 sub

projects > Anchor the change program with RB Point© software

Results

> Efficiency target reached > High client appreciation and strong change

momentum

Project approach Methods overview

Sub project landscape Results




Most important levers are linked to digitalization – Standardization/ modularization/automation of high importance Efficiency levers in R&D


Implication: Many levers to boost R&D productivity – Standardization/Modularization/Automation lever with high potential and medium effort

Prio 3 Prio 2 Prio 1

High

Low

Efficiency potential

Implementation effort High Low

Medium

Medium

2

1

3 6

7 9

10

8

5


4 Road mapping management

8 Verification and validation management

6 Light Footprint concept

5 Efficient Controlling/Reporting

4

Levers using Digitalization

7 Lean Engineering (operational structure)

1 Reduction of development stages

10 Development target costing

3 Lean Engineering (organizational structure)

9 Project Management

2 Standardization/ Modularization/Automation

Focus on next page Conventional levers


Digitalization opens up many ways to gain productivity in the electronic packaging development process Example: MEMS development



Key questions Implementation in MEMS package development

> Where in the design process is it possible to use a standardized/ automated approach?

> Is it possible to standardize the product/a specific module/a specific design element?

> Where is it possible to store and re-use design elements?

> How is it possible to replace HW realizations by digital modelling and simulation?

Design2Layout Automatic design of micro-PCB packages

Automated models Virtual packages in MEMS model kit – Build-up of chips and package in digital instead of real world

Process simulations Automated simulation of critical packaging processes, e.g. molding of SiPs


C. How we can support you


Summary

Roland Berger offers support to turn digitalization into a competitive advantage

Key message

Constant innovation keeps you in the game!

Our potential value add

I

Reap the opportunities which lay in front of your doors!

Constantly do your homework to optimize your bottom-line!

II

III

> Market, product and technology expertise > Scenario planning method > Deep technical knowledge, e.g. in semiconductor

chip and assembly technologies

> Market modeling and excellent networks > Implementable go-to-market strategies > Realization of inorganic (M&A) and organic growth

levers

> Engineering efficiency programs > Footprint, manufacturing and supply chain

optimization > Terra Numerata – How to digitize your whole

business system Source: Roland Berger


Our Terra Numerata platform, an ecosystem of best-in-class service providers, gathers all required competence for digital transformation

Awareness

Fab & Ventures

Organization & Process

Culture & Ecosystem

Lab & Prototyping

Vision

Terra Numerata

Process optimization

Agencies & accelerators

Structure & culture

HR & Training

Data scientists

Networking & events

Institutional

Incubators

Start- ups

IT players

Prototypes & labs.

Investors

Our ambition: Become a market maker in digital transformation!



Dr. Michael Alexander is your contact for further discussions

Dr. Michael Alexander Partner Engineered Products & High Tech

Sederanger 1 80538 Munich Tel.: +49 160 744 8244 [email protected]


> More than 10 years of consulting experience in Europe and Asia in electronics & semiconductor industry

> Member of the global RBSC Engineered Products & High Tech team and leader of the Microelectronics and Semiconductor Community > Extensive project experience in strategic, market entry, CDD, and business development projects – organic and M&A based – in the semiconductor, passives, sensors, and modules businesses

> Main functional expertise in strategy development and R&D management > PhD in semiconductor physics from Stuttgart University/Max-Planck-Institute for Solid State Research and apprenticeship in banking as background

> Senior Executive functions in Semiconduc-tors (Development, FE and BE manufacturing, BD, Strategy) and PV in Europe and Asia

changes along the electronics value chain – packaging as a key … · 2017. 2. 17. · 20150915...

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