The extended downturn has clarified and accelerated a fundamental shift in the electronics industry. This shift requires semiconductor suppliers to increase system-level expertise by creating new internal capabilities and developing expertise through extended partnership networks.

For semiconductor suppliers, the shift to a systems perspective means that the most successful companies will move from creating "smaller, faster and cheaper" ICs to defining solutions that consumers truly want and need.

Success as a solutions provider will extend the trend toward partnering. This is most evident in manufacturing and technology, where development requirements are best met with shared financial and human capital. Infineon has more than a decade of experience in partnering at this level, and today the company maintains a network of strategic development relationships, joint ventures and foundry agreements.

It is becoming equally important to build relationships across a "value net" representing the complete group of suppliers involved in delivering solutions to the marketplace. In the mobile-phone industry, for example, handset suppliers are rapidly moving toward platform-based designs to support multigeneration product families. The handset designer concentrates on new applications for the user, leaving development of the underlying hardware and software to other companies. To fill that new role, Infineon coordinates a network of companies to deliver handset platforms that are ready to build and program.

Another example of this approach is in the new category of biochips, which are changing the way pharmaceutical companies conduct drug research. Working with an American bioscience startup, and using a proprietary etch process originally developed for trench transistor design, Infineon produced a DNA analysis chip that yields test results six times faster than other methods. A complete test system launched earlier this year supports protocols for research into cancer, immune-system diseases and nervous-system disorders. The ultimate promise of silicon-based biochips, made possible by the same dictates of Moore's Law that have changed other industries, is personalized testing and medication for many types of diseases.

This concept of strengthened partnerships across the value net requires that one company provide a central point of competency as the consolidator of the specialized skill sets resident in the separate partners. Proven success in defining and delivering increasingly complex technical products becomes the benchmark for judging a company's ability to meet market requirements for solutions that bring the benefit of digital technology to everyday lifestyles.