Speaking at the Dataquest Predicts '99 conference in Paris today, Bauer was upbeat about the recovery of the industry, which has been in slump for the last three years. Excited by the prospects for chip technology in Biometric devices, Bauer also highlights communications, smart cards and the car industry as sources for increased chip production.
Biometrics -- such as fingerprinting, facial recognition and iris identification -- has massive potential as a replacement for passwords, PIN numbers and traditional security devices.
Biometric-enabled chips are already being incorporated into computers, and with suitably equipped mobile phones and cars waiting in the wings, the demand for chips is set to increase. The main hurdle to adoption will be public acceptance.
Bauer predicts a growth of around 10 to 20 per cent for the semi-conductor industry in the next few years. Although he concedes "it is not going to be easy," he maintains that "after three bad years the industry is generating the hope of recovery."
Bauer predicts chip incorporation in cars is set to explode, for in-car entertainment and information devices, body and comfort features and safety. By 2020 Bauer predicts £2,000 will be spent on semi-conductor content per car. Infineon, formerly Siemens Semiconductors and spun off as a separate entity in April, is focusing nearly a quarter of its development on chips for cars.
Bauer is not as gloomy as some pundits about the chip industry in Europe and points to the $30bn revenues in 1998, which put Europe ahead of Japan and Asia Pacific firms. "Europe's close contact with the communications and automative industries should be enough for new fabs in Europe," he said.
R&D spending will continue to be crucial and Infineon is committed to continue its high spend -- around 21 per cent of revenues -- in 1999 and beyond. Bauer's predictions for semi-conductors is borne out by the growth in capital expenditure for firms like Samsung, TSMC and STMicro-electronics.
Bauer confirmed that Infineon is developing a Blue-tooth enabled chip although was not able to say when this will be announced. It is reported that chip design firm Cambridge Silicon Radio (CRS) has made a bid to become a leading seller of Bluetooth chips.