Our intrepid recruiter " always a good indicator of what's going on out there " is back with a new barometer on the analog IC industry. Despite the 3rd and 4th quarter backups we're seeing, there's still high demand for seasoned engineering talent, he says. And deals like the Intersil-Xicor merger will drive demand rather than kill it.
The hiring scene in the analog sector has been quite strong in the second half of 04. As we saw earlier in the year it is still very much a candidate driven market. This will continue to a challenge for employers. We expect 2004 will be a record year as a result of a strong push by the many start-ups who have received rounds of funding this year.
Private investment remains strong as evidenced by the numerous Early Stage funding and my VC contacts indicate that this will continue in 05, thus driving the continued need for seasoned analog talent. The investors still believe there is value in investing in Analog with the Gross Margins it offers. Several of our recruiting associates are all extremely busy as well. The hottest areas remain: Data Conversion, Wireless and Power Management.
There is a strong need by many companies for "Hands On" Design Managers and Team Leaders. The demand however has not included the more junior level people. The demand for junior-level people did not show in this last quarter either, at least among the large public companies in our space. Fiscal restraint continues for most of the public companies and most have frozen all of their reqs as a result of the uncertainty over whether the industry is in an inventory correction mode, a downturn, or just taking a breather from the upturn.
The stock prices have taken a beating in the second half as investors can't get a handle on the direction either. I anticipate that we will see a loosening of the hiring restraints after the New Year as most firms have accepted the weakness in Q4 and are now focusing on Q-1 and Q-2. Many have lowered guidance for Q-1 but not by any serious amount. As far as the demand for entry and junior level people, I am not as optimistic on the short haul. I don't see demand for entry-level talent improving until the second half of 05 to early 06. It will increase when both start-ups and mid-to-large companies get caught up on critical projects and can afford time to mentor and train.
In discussions with my contacts in the Investment Banking world, mergers-and-acquisitions (M/A's) have gone down and will continue be down through 2005 with expected recovery in 2006. The overall consensus is that analog does move with the market and thus vacillates with cycles seen by the semiconductor industry at large. What drives the acquisition market is scalability and competition. There will no doubt be a handful of companies that will go against the market direction which has been down the second half of the year i.e. Sigmatel, Maxim and a few others. There will be other big deals in the future similar to Intersil/Xicor as this is the only way to achieve scalability for most companies. Revenue and earnings will continue to drive these kinds on mergers. Even high flying acquiring companies like Broadcom seem concerned now with a strategy involving acreativeness.
In conclusion, I am optimistic that we are close to the mid to late 90's hiring scenario and confident enough to hire staff here at Analog Solutions to accommodate the demand!
If you're a company looking for analog or mixed-signal talent, contact me at www.analogsolutions.com.
If you are a candidate looking up new opportunities, visit our sister site www.careeranalog.com.