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Semiconductor industry deconsolidation

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Wally Rhines
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re: Semiconductor industry deconsolidation
Wally Rhines   8/18/2011 11:44:49 PM
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Rene, The data is provided by IC Insights and Semico. They receive semiconductor revenue data from the companies and then scrub it for consistency with other sources like SIA data and financial reports of the companies. While there is room for slight errors in company classification of their semiconductor vs non-semiconductor revenue, trend data is collected with consistent methodology and should have a high degree of accuracy.

gatorfan
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re: Semiconductor industry deconsolidation
gatorfan   8/12/2011 9:37:45 PM
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Frankly this indicates the maturation of an industry which then brings some basic strategic characteristics along with it. Two that come to mind immediately are the "Rule of 3" and the function of the specialist firm, or sometimes put the niche player. The goal of all is to make money, specifically ROI. Market share is just one way to do it through economies of scale, that's the "Rule of 3". But the specialists do it through differentiation whether product, service, or a combination of the two. There is a lot of business to be had and money to be made with such a model.

docdivakar
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re: Semiconductor industry deconsolidation
docdivakar   8/12/2011 4:36:24 PM
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Subsequent to my post above, I found this in yesterday's ElectroIQ updates: "MEMS tracker report shows sensors outpacing semiconductor growth" http://www.electroiq.com/articles/stm/2011/08/mems-tracker-report-shows-sensors-outpacing-semiconductor-growth.html For tier-1 fabs like TSMC which also provides MEMS fabrication services, the traditional 'semiconductor' business no longer fits the old definition! MP Divakar

rraman940
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re: Semiconductor industry deconsolidation
rraman940   8/10/2011 1:58:47 AM
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Over the past 10 years there has been not been a significant new semiconductor company that appeared. The last 2 were MRVL and BRCM. ATHR could have been, but its gone. Which tells me that alhtough the market share is declining, there is a long tail of companies getting created but no significant one has emerged. For the industry to be robust we need a MRVL and BRCM to emerge every decade or so and that has not happened. All the smaller companies and startups are purely prey to the top ones. The feeder pool of startups are in decline. That will show up in this decade. rkr

ReneCardenas
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re: Semiconductor industry deconsolidation
ReneCardenas   8/9/2011 5:19:20 PM
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Not much of a statistical wiz, but what is the margin of error in this data?. From an independet perspective, this analysis seems purely speculative in nature. My intention is not to be too harsh with author, but message not clear.

KB3001
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re: Semiconductor industry deconsolidation
KB3001   8/9/2011 11:24:49 AM
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Yes, the picture should be split into foundry and fabless segments. The former has been consolidating whereas the latter has not. I am not sure about deconsolidation though, it looks more flat to me. Essentially, it's more or less the same people moving around or creating their own enterprises to eat into the share of their previous company. The supply of business-savvy engineers is not going up and it takes a long time to get trained and learn the ropes, hence the revolving door trend... when will this change? when some sort of standardisation takes hold in this new wave of SoC technologies, which I agree is still some way ahead....

Sheetal.Pandey
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re: Semiconductor industry deconsolidation
Sheetal.Pandey   8/9/2011 5:08:15 AM
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Well the world came out of recession slowly and everyone is having second thoughts before investing big time. But definitely things are getting better.

ManasK.RayChaudhuri
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re: Semiconductor industry deconsolidation
ManasK.RayChaudhuri   8/9/2011 4:33:47 AM
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Agreed weholly with you.

Cowan LRA Model
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re: Semiconductor industry deconsolidation
Cowan LRA Model   8/8/2011 10:03:44 PM
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DONE! Now it definitely reads better. Mike C.

docdivakar
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re: Semiconductor industry deconsolidation
docdivakar   8/8/2011 9:46:39 PM
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@Dr.Rhines: I am tempted to say figure 2 above doesn't include MEMS foundries, a majority of which are IDM's and that sector has grown over the years. @iniewski: looks to me that de-consolidation or staying flat types of scenarios is not completely up to the fabless companies, it is also upto the application companies. By that definition, Apple has now become a major fabless company although it may not want to classify itself as one! If Tom Friedman were to be reading this column, he can easily find a title for his next book! MP Divakar

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