26th January 2012

Semiconductor Ecosystem

Recently a friend shared an interesting article, “Restoring American competitiveness” by Gary Pisano and Willy Shih & printed in HBR. While the article focuses on US, it does provide a deep insight and several pointers to the local Singapore context too.

Some of the points I especially liked were the description and importance of “industrial commons “(collective capabilities)” and its role in innovation and development of the ecosystem.

It is increasingly difficult for a company to be competitive in today’s dynamic and cut-throat markets. Being competitive in today’s market requires support of an “ecosystem” of all entities involved in the supply chain like suppliers, equipment makers, customers etc.

Now can an ecosystem be defined as a mere collection or presence of all relevant entities in the same geographical space? We do have several geographies with these entities together. But what is missing – and what turns this conglomeration to an ecosystem is a proactive and broad Collaboration across the entities. And this sort of collaboration is possible only when the users have a stake in the outcome.

And this leads me to ponder – whether Singapore has the ecosystem for the semiconductor industry. And if not, then what’s missing and how do we move towards it? Suggestions??

posted in Semiconductor, Business, Ecosystem | 0 Comments

25th January 2012

Capex disparity…. and the fortifications of the leaders

Add the 2012 planned capex spending of the world’s top two IDMs and you get an almost half of the total ’12 planned semiconductor capital expenditures. Add to it the world’s top pure play foundry’s planned capex and you end up with nearly thrice the amount the group spent in 2009.
This month saw a slew of capex announcements – Intel’s $12.1 to 12.9 billion, Samsung’s 1$2.2 billion and TSMC’s $6 billion; the first two an increase and the last a decrease (18%) from their 2011 capex numbers.

TSMC had already reported their plan to slash their 2012 capex in September last year. The major chunk of their capex this year will be spent on ramping up their 28nm process and their Gigafabs. Incidentally, 28nm accounted for 2% of TSMC’s 2011 revenues while 40nm and 65nm accounted for 27% and 30% each. And remember, they had an oversupply on 65nm capacity while seeing a demand exceeding supply on 28nm. TSMC’s 2012 outlook – a challenging year.

Intel and Samsung have a lot at stake in the mobile internet devices (MID) market. Intel is betting high on its ultrabooks while Samsung owes much of its lucrative foundry biz to Apple. In addition, it is aggressively ramping up for its in-house application processor to ride on the surging MIDs wave.

These two have an advantage of their in-house designs to test and ramp up on leading edge processes while the pure play foundries like TSMC rely much on their customers’ designs for this.

One thing that is getting increasingly visible – the chasm between the leaders and the ROP (Rest of Pack) is steadily increasing. While this beckons consolidation, it also serves as an innovation catalyst for the smaller but niche companies and strategies emerging in and filling this gap.

posted in Semiconductor, Business, Foundry, MIDs, Intel | 0 Comments

14th January 2012

A 2011 snapshot of the Semiconductor Business

This is the time of the year when the digital cooler is abuzz with the gazing into the crystal ball.
Here I take a look at what all that happened in the semiconductor space in the year just gone past….
for is it not the past that also paves the way the New Year pans out?

A snippet into the year that’s just gone and an usher for the next one…. with an Asia-Pacific region focus
A 2011 snapshot of the Semiconductor Business

posted in Semiconductor, Business, Samsung, Qualcomm, MediaTek, Spreadtrum, MStar, Intel | 0 Comments

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