Evolving complexity and cost dynamics in the semiconductor industry

The evolving complexity of the relationship between cost and technical capacity is illustrated within the context of the industrial linkage between equipment suppliers and device producers. Extending previous work that demonstrated looming equipment affordability problems facing semiconductor manufacturers, the evidence presented here suggests that the same affordability pressures can afflict semiconductor equipment suppliers, perhaps even more severely. These circumstances have the potential to set in motion a series of adjustment responses so vigorous that they may well substantially rework long-familiar industry fundamentals.