Decades-old market research cooperations are breaking down. A few of the big guys don't want to play nice any more, perhaps because they think things have come to the point where they are just giving their rivals a helping hand. Peter Clarke says they mess with the system at everyone's peril.
What's going on?
I feel like the nerdy schoolkid who has just had one of the lenses in his spectacles broken. I can still see but everthing is a bit blurred and fractured.
First it was the dropping of the chip market's book-to-bill ratio for the global chip industry. OK that was some time ago in January 1997. But it still represented the passing of useful market indicator that shows whether the market was going up, down or was on the turn.
But more recently has been the withdrawal of foundries Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp. from the SICAS project (Semiconductor International Capacity Statistics) to measure semiconductor wafer production capacity. And now it is the similar withdrawal of Advanced Micro Devices Inc. and Intel Corp. from the World Semiconductor Trade Statistics (WSTS) organization.
The latest we have heard is that the Semiconductor Industry Association has pulled the plug on the whole SICAS report.
Both the SICAS and WSTS programs rely on being able to capture and aggregate data from multiple companies to give the larger market picture. In the case of WSTS the raw numbers are then multiplied up to give a global figure based on a factor that is cross-correlated with other market research data.
Some people think that the semiconductor industry is maturing and becoming more like the automotive industry – a market dominated by a few large players and showing single-digit annual percentage growth. Others think there is plenty of life in a youthful chip business that has just been going through some growing pains recently.
One thing's for sure is that the chip business continues to change.
In the U.S., CFIUS is bringing new levels of scrutiny to M&A’s, especially those involving foreign capital. But national security needs to be balanced with the benefits of investment capital coming into the country.