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Transforming the U.S. semiconductor business model

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phlei
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re: Transforming the U.S. semiconductor business model
phlei   1/6/2011 5:53:55 PM
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USA is giving up the semi industry,just like the textile industry in the past. The IP model won't work for majority of the semi start-ups since the rev is one hundred fold less than making a product to sell. A lot of Talents are flocking to the emerging market in Asia , like Morning Star and Ralink in Taiwan. They are all founded by the Veterans from the Silicon Valley. Another one is the Sequoia Microelectronics, they sepcialize in the LED lighting ACDC offline drivers SQ9910 series. Check out the website. www.sqme.com.tw

DrFPGA
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re: Transforming the U.S. semiconductor business model
DrFPGA   12/22/2010 6:20:03 PM
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The real issue seems to be lack of funding. Don't you think that the VCs would put up their $ if they believed a good return was possible? There seems to be a lack of good examples to show a big return is possible. Until we get a few funding may continue to be diverted to those industries that show the VCs the money...

anon
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re: Transforming the U.S. semiconductor business model
anon   12/16/2010 5:22:34 AM
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As others have pointed out, design and manufacturing complement each other. Companies with the strongest IP portfolios are not the pure play IP companies but the ones with their own manufacturing or at least have their own products. By moving up the value chains, you start to lose more and more controls to others. Not only you become a smaller player but your quality also suffers especially in the advanced technologies. Being smaller also means you become more dependent on and have less leverage over the big players. The US semiconductor industry will become irrelevant if this is the direction to go. Regarding why investors are not hot on the IP start ups, I personally believe that they would rather be looking for the next Intel or Marvell who has the potential to make it big. If it is not in the semiconductor industry, they’ll try other industries.

KB3001
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re: Transforming the U.S. semiconductor business model
KB3001   12/15/2010 4:12:37 PM
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I agree with you no.name_#4, the US has what it takes to be strong at all steps of the value chain. Smaller countries with small economies and markets should specialise in one or few steps and divest from others, but the US does not have to IMO.

no.name_#4
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re: Transforming the U.S. semiconductor business model
no.name_#4   12/15/2010 1:07:40 AM
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This debate seems to have the U.S. conceding its significant and growing semiconductor manufacturing base with state of the art 300mm fabs (Intel, SAMSUNG and GF). Yes ARM and IBM both do indeed have a significant global chip market share and business in intellectual property (SIP) licensing. However, there seems to be some overlooked elephants in this room. Also it’s not certain if cutting edge chip manufacturing (with latest chip IP) can truly be economically ported to any foundry with out significant yield impacts. When it comes to world’s best manufacturing and much envied IP, Intel has it. They have it because they never brought wholesale into off-shoring or conceded world class quality. Their Chip design feeds into their manufacturing which feeds back into their design. Only Intel is doing this well, it seems. There was a point when Intel’s chip design had fallen behind AMD; but, they bounce back way stronger and opened up another market front in netbooks. Intel’s manufacturing die yields and throughput has never lagged behind any fab! SAMSUNG and GF both are spending billions in CapEx to equip new US 300mm fabs and so is Intel. As Intel, SAMSUNG, GF and TI show; IDM, FAB less/light and Foundry models are continuing to grow a larger significant US manufacturing base with state of the art 300mm fabs.

tektonikshift
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re: Transforming the U.S. semiconductor business model
tektonikshift   12/14/2010 11:41:58 PM
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Another way to look at it, its a move higher up the margin chain. Most IP companies enjoy +70% GPM, even 90% GPM is reachable. My concern, silicon valley investors are not so hot on IP start ups. We need more execs like Charlie to show the way.

scva550i
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re: Transforming the U.S. semiconductor business model
scva550i   12/14/2010 5:23:03 AM
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Exactly, that's why I'm not so sure if it is something to be optimistic about.

..
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re: Transforming the U.S. semiconductor business model
..   12/14/2010 3:13:46 AM
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The US semiconductor industry exited the semiconductor manufacturing, now it is quitting designing chips and building them offshore and trying to survive from IPs. Another step to oblivion...

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