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After Covid, MCU Makers Gambled … and Lost. What’s Next?

After Covid, MCU Makers Gambled … and Lost. What’s Next?

By Bolaji Ojo

What’s at stake:

The microcontroller market is in shambles because suppliers let their guards down, excessively adding production capacities because of wildly optimistic forecasts and doubled orders for components from customers. The recovery of the MCU market will take several years. As they rebuild, vendors must also review their recent experiences and try (again) to install safeguards against reoccurrence of the errors that are today hurting the sector.

In June, 2023, the Ojo-Yoshida Report asked: What’s Next for Microchip’s Steve Sanghi? The answer came in a sudden rush this week.

Sanghi, founder and former CEO of Microchip Technology Inc., is back again in the corner office, having stepped in temporarily to assume leadership of the company from Ganesh Moorthy, who will retire as of the end of November.

A scamp might say Moorthy, a 23-year veteran of Microchip who took over from Sanghi in 2021, was pushed out due to sales problems at the microcontroller vendor. That would not be totally untrue. Microchip is hurting, alongside the rest of the microcontroller market. Other MCU CEOs may be spared, but most suppliers in the sector are rambling through the roughest gloom in the history of the market with at least one year of tepid growth ahead.

It’s rough saying it – and perhaps a tad unfair – but microcontroller vendors mainly have themselves to blame for the mess.

Read More »After Covid, MCU Makers Gambled … and Lost. What’s Next?

Chip Industry’s Talent Drain: Can Apple Buck the Trend?

By Junko Yoshida

What’s at stake:
Despite passage of the CHIPS and Science Act, the U.S. semiconductor industry will continue to struggle with workforce problems. Issues include the absent “pipeline” (of engineering students aspiring to the semiconductor industry), and the long “ramp up” period (as long as eighteen months) before newly hired graduates can contribute to VLSI designs. At stake is the U.S. industry’s talent level for leadership in the global electronics industry.

First some background.

Many reports from think tanks, consulting firms (Deloitte, McKinsey, Brookings) and semiconductor industry associations (SEMI, SIA), are sounding the alarm of a widening talent shortage in the U.S. chip industry.

Deloitte analysts bluntly declared that the industry is facing “looming talent cliff and low industry appeal.” This is happening despite forecasts that the industry will reach a market size of $1 trillion by 2030, driven by increasing demand for advanced chips across sectors like AI, automotive, and industrial applications.

Read More »Chip Industry’s Talent Drain: Can Apple Buck the Trend?
Who Decides Edge AI Winners in Embedded?

Who Decides Edge AI Winners in Embedded?

By Junko Yoshida

What’s at stake:
Edge AI – or AIOT (Artificial Intelligence of Things) – on the embedded market has been a hot notion among MCU vendors for more than a few years. So, how’s it going? Will AI skate on every edge?

It’s coming, say edge AI proponents, but very slowly.

One reality that must be acknowledged is that edge AI, despite its hype, was never previously a fait accompli, nor is it today.

Read More »Who Decides Edge AI Winners in Embedded?

TSMC Won the Foundry War. Now the Fallout Begins

By Bolaji Ojo

What’s at stake:

It’s not just that TSMC’s competitors cannot match the Taiwanese foundry in revenue, production volume or leading-edge technology, they are even unable to mount a spirited defense. TSMC’s overwhelming dominance could be a problem with anti-trust investigators. Yet, the company cannot dial back its technology innovations or on its commitment to customers just to let rivals catch up. Still, it may be in TSMC’s long-term interest to help foster the growth of a more competitive, viable and vibrant foundry landscape.

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) dominates the foundry business so thoroughly its overwhelming sales position and technology leadership have spawned challenges and anti-trust speculations it is racing to terminate before they mushroom into a full-blown crisis.

Anti-monopoly investigators are reportedly sniffing around the company with one question in mind: Has the Taiwanese foundry become so big and such a threat to the supply chain that it must be reined in?

Read More »TSMC Won the Foundry War. Now the Fallout Begins
Chiplets: 'Kluge' or answer to OEMs' automotive SoC dilemma?

Chiplets: ‘Kluge’ or Answer to OEMs’ Automotive SoC Dilemma?

By Junko Yoshida

What’s at stake:
We’ve all heard promises about “Lego block” chiplets, supposedly enabling customers to snap together chiplets from different manufacturers to build a custom SoC. Our recent interviews, however, reveal that such an open chiplet ecosystem doesn’t exist. Companies like Intel and Tenstorrent are pursuing automotive chiplets within single-company ecosystems. Have automotive chiplets already splintered into proprietary fragments?  At stake is how effectively Imec, with its Automotive Chiplet Program (ACP), could herd the cats now rampant in the automotive and semiconductor industries.

Read More »Chiplets: ‘Kluge’ or Answer to OEMs’ Automotive SoC Dilemma?
War Over Taiwan Is Doubtful, and Unaffordable by China or Anyone

China ‘War Games’ Threaten Fragile Electronics Ecosystem

By Bolaji Ojo

What’s at stake:

China’s claim over Taiwan is creating a negative effect the communist nation may not want. Signs are emerging that Taipei is warming to the idea of TSMC setting up more overseas fabs, possibly depriving China of future access to the foundry’s world-class semiconductor fabrication plants. Western fabless IC suppliers will have more sourcing options, but at a higher price. Is the tradeoff going to be worth it?

If China has its eyes on Taiwan’s jewel semiconductor fabs – in addition, of course, to reunifying the island and mainland – it is going about it in a way that may produce the opposite result.

In the last week, the Communist nation has ringed Taiwan with warships, battle aircrafts, naval assault ships, and military personnel, all in a bid to reinforce its opposition to any move towards independence by Taipei.

There are implications for the island’s technology industry, especially its world-leading semiconductor manufacturing ecosystem. China’s threats may have finally spurred the government in Taipei to greenlight a major move it had previously opposed: the establishment of more fabs by Taiwan’s top chipmaker in locations outside the island.

Read More »China ‘War Games’ Threaten Fragile Electronics Ecosystem

Tech Leaders Struggle to Mount Opposition to Geopolitics

By Bolaji Ojo

What’s at stake:

Tech enterprises are chafing under severe export and manufacturing restriction terms set by Western and Chinese political leaders. In the semiconductor sector, regular operational functions involving capex, IP, R&D, and other activities are being dictated or influenced by state actors. The relentless use of technology restrictions to achieve political goals now threaten large swaths of the market although the totality of the impact remains hidden.

The barriers to Nvidia Corp. selling its most advanced AI chips and systems in China are artificially created. But they are no less formidable.

Soon, too, under rules that are under consideration, electric vehicles (EVs) made in China or with Chinese components will be banned, severely restricted or attract heavy tariffs in the United States and EU.

The actions of these governments are being executed sometimes with but often without the total consent of Western semiconductor suppliers, electronicsOEMs, systems builders, automotive makers, and tier-one suppliers.

So far, the response of the industry has been muted, even from companies like Nvidia, AMD and Intel that are experiencing downward sales pressures in China. Determining winners and losers in this environment will be difficult, at least until the dust settles, which may take several years.

Read More »Tech Leaders Struggle to Mount Opposition to Geopolitics