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Europe asks if it is time for an Airbus of chips

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KB3001
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re: Europe asks if it is time for an Airbus of chips
KB3001   6/18/2012 12:36:36 PM
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This makes perfect sense and it should have been the case already if it were not for short term "nationalistic" tendencies within the European community. Let's hope that the current crisis will push for a European chip super company (among other consolidations). I say this more in hope than expectation though....

Bert22306
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re: Europe asks if it is time for an Airbus of chips
Bert22306   6/18/2012 7:20:34 PM
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These strategic, often government-sponsored decisions are a difficult proposition. Sometimes they can succeed, e.g. when the playing field is more or less level, as is the case of Airbus vs Boeing. Sometimes, like this instance, it might be more of a risk. You're going up against super low cost manufacturing in China. I don't think this is a slam dunk. The worst case scenario being, even with governments going further in debt than they already are, the costs might still favor the Chinese sources.

PJames
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re: Europe asks if it is time for an Airbus of chips
PJames   6/18/2012 8:11:29 PM
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Perhaps individual governments should make clear that they won't stand in the way of consolidation, but it seems misguided for governments to try to force consolidation.

krh
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re: Europe asks if it is time for an Airbus of chips
krh   6/19/2012 3:19:17 AM
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I agree with Bert22306, and besides China I would also add USA (Intel) and Korea (Samsung) as real world-wide competition that both perpetually stay in the "paranoid competition" mode for silicon. The Airbus vs. Boeing analogy is looking backwards...good historical info but not "shooting ahead of the year 20xx silicon puck". Intel and Samsung do not compete like Boeing.

timemerchant
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re: Europe asks if it is time for an Airbus of chips
timemerchant   6/19/2012 5:43:18 AM
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some commercial success - producing half the world's airlines! Understatement indeed. The debt crisis has politicians focusing on the next vote, which means numbers. There are more dumb people than smart people, so why would the majority vote for jobs for a few smart people? Nokia is shedding 40,000 jobs since 2010. The people smart enough for a smart chip don't rely on handouts or welfare, so if Europe cannot deliver, they go elsewhere. The unemployed remain. Funding is unlikely.

rick merritt
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re: Europe asks if it is time for an Airbus of chips
rick merritt   6/19/2012 6:40:49 AM
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I can't imagine a Euro conglomerate born of ailing national companies being a market-driven successful semiconductor company. But then I know next to nothing about Airbus.

KB3001
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re: Europe asks if it is time for an Airbus of chips
KB3001   6/19/2012 7:51:31 AM
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Folks, national European companies are failing partly because they are relatively small and scattered. If they pool their market potential, they would be a major international force. I find the EADS analogy pertinent. On their own, defence and aerospace companies in Europe were no match for their US counterparts. When a political decision was made to pool them together, things changed quickly. If BAE Systems were to join forces with EADS (not a realistic proposition these days I know) they would be the biggest defence and aerospace company in the world. I have always believed in one super European chip company. As it is, ST/Infineon/NXP etc. are too small on their own and often compete with each other. If Eurocrats get their act together to facilitate a conglomerate of these companies, I believe it would result in a major viable international player. Do not forget that the Europe is the largest common market in the world. Not capitalising on the ensuing economies of scale is madness in my opinion, and I firmly believe that narrow nationalistic concerns are the stumbling block here.

KB3001
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CEO
re: Europe asks if it is time for an Airbus of chips
KB3001   6/19/2012 8:01:16 AM
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I am not sure this is true. Germany proved that it is possible to compete and win in the car industry through a mixture of labour reforms, strategic and stable management, diversification of risk, and constant improvements/innovation. I believe the same principles could be applied to the semiconductor industry despite ferocious competition from the far east. Europe has to use its economies of scale to ensure a large market for its indigenous industries.

Peter Clarke
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re: Europe asks if it is time for an Airbus of chips
Peter Clarke   6/19/2012 11:29:46 AM
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@KB3001 The other take on this and one I am hearing from the Eurocrats is the penalty for NOT driving consolidation. If Europe falls out of chip manufacturing (and manufacturing more generally) it will have reduced opportunities to take part in the coming nanotechnology wave. This wave is likely to be more significant than microelectronics. We have the academic and innovative capacity to take part, but we seem to lack the will to invest in the manufacturing part, which is where much of the value is likely to be contained and paid for. A final thought: the lesson is not lost in Europe that the one country that has maintained an emphasis on innovation AND manufacturing is leading the continent economically and is the country that all other service-oriented European countries must go to for a bail out.

krisi
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re: Europe asks if it is time for an Airbus of chips
krisi   6/19/2012 12:56:37 PM
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This move makes perfect sense, Europe can't afford to get out of the chip business! Kris

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