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abraxalito
Why - you want some too?
Mark1980
I think AMD pulled out first to confuse intel of the direction AMD is heading or ...
Why it’s wrong for Intel, AMD to abandon WSTS
Junko Yoshida
2/29/2012 12:52 PM EST
NEW YORK – The news that Intel is pulling out of the World Semiconductor Trade Statistics (WSTS) – after AMD took the same powder last year – should set off alarms for everyone in the industry.
Clearly, this action tends to cast doubt on the validity of all future data published by WSTS. That sort of uncertainty has a huge ripple effect. It will impact chip companies doing planning and forecasting, market research analysts who depend on WSTS numbers — interpret them and predict market trends, and broad-spectrum media outlets like EE Times.
But beyond these obvious implications, Intel deserves censure for its wrongheaded, short-sighted and arrogant desertion of WSTS – for two reasons: “disclosure” and “bargaining power.”
In my opinion, any industry, whether it’s automobiles, semiconductor or veeblefetzers, will begin — once it stops collecting data within the industry — to lose a significant measure of its economic and political power in the greater world. Without a credible trade association backed up credible industry data, the industry has no legitimate representation beyond its own membership, thus compromising its bargaining power.
OK. You may say that this is just about WSTS; it’s not like Intel is leaving the Semiconductor Industry Association (SIA). True. And yet, the WSTS activities do go hand in hand with SIA’s mission. In fact, we are also hearing some disturbing stories about a few companies beginning to leave SIA. (An SIA spokeswoman said Wednesday [Feb. 29] "there has been no change in SIA's membership," but Xilinx left the group several years ago.)
Rank-and-file members of an industry that does not publish and distribute credible data that demonstrate its size, sales and social significance — the semiconductor industry, for example — place themselves at the mercy of the largest, loudest and most powerful companies within the industry. This usually means that only the interests of the largest, loudest and most powerful companies end up being served.
Disclosure of data among members is the basic, first step in building an industry association. Once shared, these vital statistics allow members to see where the industry is going. They help members take the necessary actions. That often forestalls problems and assures a higher level of mutual prosperity.
Without trusted data, every company is left to its own devices, to fend for itself. Of course, if your company is already the largest and the richest, you probably don’t care about that.
I can’t help recall the time of trade disputes – in the 1980’s and early 1990’s – specifically the Japan-U.S. semiconductor negotiations.
As EE Times’ Washington correspondent George Leopold called it, this was “the defining moment” for SIA in the United States. Without all the monthly book-to-bill ratios and other stats put together by WSTS, the SIA had virtually no ammunition for the U.S. government’s negotiations with Japan.
No credible industry data and no credible industry representation equal no bargaining power.
The enemy for the U.S. semiconductor then was Japan. As Leopold said then, a trade association always needs a good enemy to thrive, and right now no “good enemy” is evident. But who’s to say that the U.S. industry will never see another enemy in the future?
Of course, in an age of “globalization,” and in an era when almost everyone is either “fab-lite” or no longer interested in “manufacturing,” the industry association seems increasingly to be a thing of the past.
Really?
I beg to differ. We are standing at a crossroads for U.S.-based companies and American policymakers, where the way lies open to restore a measure of our historic manufacturing growth. Possibly, the chip industry isn’t interested in joining such a revival. Perhaps, as I’ve heard suggested, it’s already too late for the semiconductor industry to come back.
In the face of such pessimism, however, I offer this assurance. With the first sight, on the horizon of any viable new nano-technologies, the chip industry — aided by the U.S. government and academia — is going to seize the opportunity. When that golden goose hatches, this industry will need, more than ever, a good effective trade association — rather than one big, rich, winner-take-all company — to negotiate the resulting deals and spread the wealth.
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junko.yoshida
2/29/2012 2:03 PM EST
I am having some interesting discussions with my editors in our virtual newsroom.
I think this is a big deal. But others say that if they can't justify the ROI in investing in WSTS, they are making the right business decision.
Now, that's where I start to worry.
Business people often like to say "do the right thing." But the reality is that they like to talk about their occasional "doing the right thing" moments, because it happens so rarely.
In most cases, business/financial reasons trump everything. Forget about doing anything for the greater good.
Do we need WSTS?
Do we need SIA?
Let us know what you think.
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george.leopold
2/29/2012 2:56 PM EST
Any backlash about Intel's leaving WSTS won't be lost on the chip giant. Intel's leadership is politically astute, as they've shown in past settling antitrust cases before they go to trial.
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dylan.mcgrath
2/29/2012 3:55 PM EST
I believe that both AMD and Intel should continue to participate in the WSTS. But this does raise an interesting question? Why? What's in it for them specifically? In my opinion, Intel and AMD participating in WSTS serves "the greater good" for the industry as a whole, and a rising tide lifts all boats. But I can understand why some business leaders would ask how this participation is helping their bottom line. It's an interesting thing, to me, how companies choose between doing the right thing to help the community, when in some ways they wish some members of that community would die off completely.
In this case, I personally fault AMD. I can see where Intel is coming from. If AMD left the WSTS first, what is the value of Intel's participation? I hope that both firms will reconsider this matter.
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junko.yoshida
2/29/2012 4:00 PM EST
I guess what we want to hear from our readers is, as exactly Dylan put it, "what's in it for you?"
Why do chip companies need to participate in WSTS? Anyone care to answer that question for us?
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Brutus_II
2/29/2012 4:01 PM EST
It's unfortunate for the other players and will come back to bite them both when there are more frequent supply chain hiccups.
ROI for membership is impractical if not impossible to determine and is best just assumed worth the cost (within reason, of course).
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Dave.Dykstra
2/29/2012 5:49 PM EST
A well thought out article. However, since the largest companies already know how much of which products they are selling, and they can readily find out how many end products are being sold, it becomes relatively easy for them to determine what part of market share they do and do not have. If you then throw in some product teardowns to determine the component mix, the industry status becomes pretty apparent.
For the smaller companies, this is not so easy, but at the same time, they can readily determine where they need to place more product in order to continue to grow.
That said, that makes it much more difficult for the rest of us to determine the state of the industry and where it is going relative to the economy as we see it at any point in time. IMHO, chip orders appear to be a good leading indicator in general and that is going to be very difficult to see without the participation of the larger companies.
So, the question of whether we need WSTS or not depends largely on how much you really need the data they supply, and whether or not there is another way to readily get that data.
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SusieInouye
2/29/2012 6:21 PM EST
I agree with Dylan 100% about AMD instigating this matter. Why should intel report if all they are doing is practically giving the competition monthly sales data. I understand they don't qualify for an associate membership, but there is a lot of press each month on results, plus you can purchase it.
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abraxalito
3/1/2012 12:10 AM EST
I don't see this as about 'the industry' as a whole, rather ISTM all about x86. Its dying and its just too embarrassing to make its death throes public.
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me
3/1/2012 11:43 AM EST
What are you smoking?
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abraxalito
3/14/2012 5:38 AM EDT
Why - you want some too?
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krwada
3/1/2012 8:54 PM EST
I am not entirely sure how relevant the SIA is anymore. A lot of this uncertainty of the relevance of the SIA came about with the advent of the super-fabs and the fab-less semiconductor companies.
The model is a lot different now than it was in the 1980's
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Mark1980
3/3/2012 2:33 AM EST
I think AMD pulled out first to confuse intel of the direction AMD is heading or wants to go (Rory Read is a smart guy). clearly AMD is at an disadvantage against big Intel and its underhand tactics.. By Doing this, AMD has become a moving target for intel and its monopoly/money/customer links advantage. little stuff like this matter allot when you are up against intel (intel has been known/caught to play shady).
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