News & Analysis
10 companies in trouble
Dylan McGrath, Mark LaPedus
5/29/2009 3:42 PM EDT
The list of semiconductor industry companies that are posting banner numbers these days is short and thin. Every firm is in trouble, to some degree.
But EE Times has assembled a list of 10 companies (or more) that seem in particular danger of continuing to spill red ink, being acquired, seeking bankruptcy protection or just not being around in current form a year from now. We've also listed some ''honorable mentions'' as well. The list is just our opinion. Post a comment if you want.
In alphabetical order, here's our "10 companies in trouble:"
Advanced Micro Devices Inc. AMD is now a fabless company and it remains to be seen if that model will work for the processor vendor. It's also unclear if it can stop the bleeding and keep up with Intel. What happened in Q1?
(tie) Automatic test equipment (ATE) industry All vendors are in bad shape. Advantest, Credence/LTX, Teradyne, Verigy and others are losing vast sums of money. How long can the pain last? Look for more consolidation.
Cadence Design Systems Inc. After being the No. 1 EDA vendor for most of two decades, Cadence hit a rough patch last year and lost its No. 1 standing (along with a lot of money and its management team). The company reported a loss of $1.85 billion for 2008, much of which was due to a non-cash impairment charge of $1.36 billion. Cadence reported a first-quarter GAAP net loss of $63 million on revenue or $206 million (down from $271 million in the year ago quarter), and some analysts responded favorably.
Chartered Semiconductor Manufacturing Pte. Ltd. Rumors have been flying that the loss-ridden foundry is the subject of a takeover bid. The latest one is from the Middle East, of which Chartered denied. That story can be read here.
Freescale Semiconductor Inc. The chip vendor has posted a string of big losses over the past several quarters and is saddled with crushing debts. The company's long-term debts have fallen to $7.5 billion from almost $10 billion, but the cost of servicing that debt still amounts to several hundred million dollars per year.
Next: More trouble
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Equipment guy
6/1/2009 2:11 PM EDT
You included Micron on the list of honorable mentions?! They have positive cash flow from operatoins, and a piggy bank of about 1.4B in cash after readily getting 450M from capital markets recently. That is not political-pandering govt money, it is money from beaten-down and wary big investors. It is more likely that Micron will be a beneficiary of the downturn rather than a victim.
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infras
6/1/2009 2:27 PM EDT
Obviously a scattershoot... Everyone is hurting but it is hard to understand how Aviza, FSI International and Brooks Automation (along with a list as long as my arm) did not make either list well before companies like Lam were given a hint of consideration.
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dothead
6/1/2009 8:27 PM EDT
I agree with infras... these clowns are just trying to make headlines with their list of companies. There are plenty of others that should be included, and some of the ones on the list are stronger than these bozos give credit to.
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JTTTT
6/2/2009 12:35 PM EDT
I would put companies including Freescale, Renesas, and Cadence (others? - i.e. parts of Infineon) in a different group from many of the others. The big difference is that these companies are not suppliers of an easily replaced commodity. Other companies rely on them heavily for their existance, whether it is product deeply embedded in their own end product, and/or a tool chain that is heavily embedded into how they do business.
While these companies may declare a bankruptcy for restructuring, i.e. Freescale, unlike the demise of a GM or Chrysler, they are not easily replaced and hence significant portions of their operation WILL continue no matter what. Someone will always buy and keep their major product lines going.
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routing_algorithm
6/3/2009 11:36 AM EDT
CDNS is dead duck. Somebody needs to replace
its BOD and ensure they fire the 70 or so VPS
still on its payroll.
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jcup2306
6/10/2009 12:23 PM EDT
what about ST Micro? They have been receiving bailouts from the French Government for a while.
http://eetimes.eu/design/217400708
http://www.eetimes.com/showArticle.jhtml;jsessionid=FANNYJWJOYKMSQSNDLPCKHSCJUNN2JVN?articleID=216402472
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cuau
7/3/2009 7:05 PM EDT
It is an error to have Freescale in such a list.
Freescale has a strong cash flow position and business is good, check www.freescale.com under investors area.
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