The semiconductor industry is 53 years old, accounts for 0.6 percent of worldwide GDP, and should account for more in years to come, according to Tien Wu, chief operating officer of test and packaging provider ASE Inc., and a keynoter at the 2011 Semicon West fab vendor tool trade show here.

Wu described two types of successful companies — "opening door" companies,

which promote innovation by pushing many technologies, some of which ultimately succeed, and "closing door" companies, which promote fewer technologies and succeed by building scale, efficiency, entry barriers, and evolving standards with limited investment.

Traditionally, both business models can make money, said Wu, but not models in between. But Wu described a new "smart hybrid zone," where companies can create new markets "by mutation and integration without extreme cost."

"Innovation without extreme cost will drive growth in hybrids and opportunities in hardware, software and middleware interfaces," Wu said.

"Power houses are natural products of a recurring business paradigm of  any maturing industry," Wu said. "Opening door, closing door—this has been around with us for hundreds of years. Semiconductor is no different."

Wu recounted the drivers for the semiconductor industry over the past several decades—aerospace in the 1970s, mainframe computers in the 1980s, PCs in the 1990s and cell phones in the 2000s. Today and in the near future, the chip industry will be driven by smart computing and "ambient intelligence," Wu said.

"All of the things we started are still running huge volumes for our industry," Wu said. "By all means, they are not dead."

Wu closed his talk by delivering separate messages to the audience members — and semiconductor industry players—older and younger than him  (like the semiconductor industry, Wu says he is 53 years old). Wu urged chip industry workers older than him to "carry on," saying "we still need your wisdom and experience."

To those younger than him, Wu said, "dream on, you have the responsibility to explore what are the middle kingdoms and hybrid zones."