TORONTO – Medical and digital imaging applications are just a few of the potential commercial drivers for the Canadian semiconductor industry over the next 10 years, but high development costs are still an obstacle, according to speakers at ITAC’s 12th Executive Forum on Microelectronics.

One of the big opportunities for semiconductor companies is in the medical field with diagnosis and monitoring, said Peter Burke, senior vice-president and general manager of network communications with Zarlink Semiconductor Inc. The company is developing a pill with a camera inside, which can then be used to take photos inside the small intestine, esophagus and colon.

“If I had a choice between a small camera I could swallow or a camera attached to a flexible tripod, I think I’m going to choose the camera I can swallow,” said Burke, who spoke at the ITAC event late last week. The pills are single use and self-destruct after several hours.

Another hot area is video and image processing; other areas include life sciences, lab-on-a-chip applications, point-of-care diagnostics and implantable drug delivery. There’s also potential in all manner of sensing devices, such as seismic sensors for the oil and gas industry, said Derek Hudson, CFO of Micralyne Inc.

Environmental applications and security are up-and-coming areas for potential business. Micralyne is working with one company to develop microvalves for automotive applications to save energy. It is also working with a couple of companies on bioterrorism applications where, for example, sniffers or sensors could be used to detect anthrax.

“But it’s still a very immature technology,” said Hudson. “It’s still not very standardized.”

There are still a few elements the industry needs to get right, said Burke, and one of those is marketing. “We quickly learned a pill is really cheap, but doctors aren’t going to move because they get $1,000 for putting an endoscope down your throat,” he said.

The problem in the health-care industry is the funding model, said Hudson. While money is available for medical research, the missing link is the commercial part of that. Another challenge is that companies won’t spend money on technology unless they have to. In the oil and gas industry, for example, there’s no incentive to invest in technology until eventually the price of oil comes down.

The industry has already “gone consumer” and pricing is aggressive. But it’s not aggressive enough for Canadian companies to sell into China, for example. “Canada has a lot of experience, but we have to learn to run our businesses so we can afford development costs,” said Burke. “Can we cluster back-end development? Are there ways we can work together to get the best fab pricing?” As an industry, he said, semiconductor companies are going to have to learn how to run their businesses faster and at lower margins – and look for the value in services, not technology, they can bring to the customer.

The industry also has to learn to manage the supply chain, migrate niche products to mass-produced consumer products and move to different types of products, said David Lynch, senior vice-president and general manager of video products with Gennum Corp. Despite the need to create economies of scale, he said these opportunities are growing at a much faster rate than those in telecom.

But telecom is still big business. “It’s a very profitable business and it’s not going away,” said Burke, adding that his company is seeing resurgence in optical fibre for storage and supercomputing applications.

Comment: info@itbusiness.ca

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