In a Supercycle, ‘Skate to Where the Puck is Going’
Here are lessons learned from the latest semiconductor market downturn and suggestions from a senior industry executive on resolving supply chain challenges in the sector.
News & Analysis
Memory Makers’ Fat Years are Here but for How Long?
By Bolaji Ojo
What’s at stake:
The memory semiconductor market is characterized by dizzying price swings, none more severe than the recent rounds. DRAM makers are soaring again after a severe dip, but this upswing is riding on the wings of artificial intelligence and high-bandwidth memory. It rests on nothing stronger. With the leading players rushing to build more fabs, within the next few years, the sector is certain to slide into another depression. The next one may be even more severe.
Sanjay Mehrotra must have skins tougher than the hides of a rhinoceros.
It’s hard to see how else Mehrotra, president and CEO of memory semiconductor vendor Micron Technology Inc., managed to cope with the market’s sharp downturn over the last couple of years. That swing, which resulted in negative margins, has suddenly reversed.
Micron is thriving again, enjoying a massive 62 percent increase in annual sales and the prospects of another round of double-digit revenue growth in the next two years.
The Boise, Idaho-based company is not alone. Demand for memory is hot, especially high-bandwidth memory (HBM), the much sought after components AI vendor Nvidia and its rivals crave so much for.
It would be tempting to believe the memory market has overcome its notorious challenges of overcapacity, undercapacity, pricing and margin swings and market opacity. It hasn’t. In fact, even as the market swings higher now, a wary eye must be kept on the veracity of current orders to avoid a repeat of recent errors.
Read More »Memory Makers’ Fat Years are Here but for How Long?
Lab to Fab: CHIPS Act Funding Stresses Versatility, Cooperation
If we follow the spirit of CHIPS and Science Act, now is not the time to ditch manufacturing. To compete in the future of chiplets and secure their supply, research in advanced packaging is critical.
Proposed US Rule Threatens China-made Cars in America
By Bolaji Ojo
What’s at stake:
China’s dream of seizing a large chunk of the US autonomous vehicle market may be heading straight for a brick wall as the Commerce Dept. moves advances its proposal for a ban on the sale and importation of Chinese vehicles equipped with connectivity devices, systems and components. American automakers may rue the move one day, but for now, the proposal favors them.
Shed some tears for China’s automotive manufacturers. Their aspiration for domination of the global automotive market may be about to implode, courtesy of the US Department of Commerce’s Bureau of Industry & Security (BIS).
While you are at it, though, spare a few moments to cry for Detroit’s big automakers, and perhaps even Tesla, too. Their production operations or intentions in China may need to be aborted and shifted to more favorable terrains.
Read More »Proposed US Rule Threatens China-made Cars in America
Intel’s Last Hope: Private Equity LBO?
By Bolaji Ojo
What’s at stake:
The US government’s multi-billion dollar bet on Intel is at risk under the company’s current leadership, which continues to vacillate, doling out timid reorganization moves when what the business requires is radical surgery. A new player not tied to its past may be Intel’s last hope.
Intel Corp., the giant of America’s chip world, is at risk of becoming a plaything of richer enterprises.
Speculations are rife about rivals circling Intel, seeking to purchase it even as many analysts a deal for the microprocessor vendor will be difficult to seal due to regulatory hurdles at home and abroad. In the process, Intel – once the undisputed leader of the chip world in both sales and market capitalization – has become an object of pity and scorn. It’s a very sad turn of events for the company, its customers and supporters in the American government.
The unconfirmed speculations about who is in talks to acquire the company continues to swirl. If the current trend persists, Intel is at risk of being poked, inspected and weighed for break-up value like a rusty, unserviceable truck at a vehicle auction. Still, the speculations may be masking a route to eventual recovery for Intel in the form of a buyout by private equity investors using the famed leverage buyout (LBO) tool of the past to gain control of the company and accelerate its reorganization.
Read More »Intel’s Last Hope: Private Equity LBO?
When Is an SDV Update an Update Too Far?
The promise of AI-driven, data-rich, software-defined products keeps the electronics industry going. But have system designers given much thought about the lifecycles of their AI products?
Can Intel Auto Chip Chart a New Course?
What’s at stake:
By all accounts, Intel Automotive is an underdog. But as automakers go through radical changes in vehicle architecture, electrification and the balance of market power, Intel sees an opening in automotive chips. However, in the midst of its internal turmoil, will Intel stick with automotive as “a must-seize” segment? And will CEO Pat Gelsinger stick with Intel?
Among the businesses in which competitors have outplayed Intel, Intel Automotive is an outlier.
Read More »Can Intel Auto Chip Chart a New Course?
The Engineering of the CHIPS Act
What’s at stake:
The CHIPS and Science Act is one of the most ambitious industrial policies the U.S. government has launched since the New Deal. Federal involvement in private industry ground to a halt in the administration of Ronald Reagan, which enforced the libertarian view that government guidelines are “business interferences” and financial assistance “handouts.” Given this recent history, the Department of Commerce has much to prove in executing the CHIPS Act fairly, effectively, transparently and on time.
Infineon: Bellwether for a Semiconductor Market in Transition
By Bolaji Ojo
What’s at stake?
Infineon Technologies should be closely tracked by technology companies and investors trying to make sense of the semiconductor industry’s cycles. Its wide range of products aimed at the broadest range of technology sectors, and the Munich-company’s critical financial metrics such as book-to-bill, gross profit margin, lead-times and inventory stats more closely reflect the industry’s fundamentals than those of rivals serving hot markets like artificial intelligence.
Infineon Technologies AG executives call the company a “… global player, clear No. 1 in power semiconductors, and ranked No. 2 in the overall microcontroller market.” That description is adequate, but it doesn’t completely reflect the company’s growing role in the semiconductor world.
To complement that brief, the Ojo-Yoshida Report is also classifying Infineon as the chip industry’s latest and probably most accurate bellwether.
This designation has significant implications for the semiconductor market and the larger electronics industry.
Read More »Infineon: Bellwether for a Semiconductor Market in Transition
India’s ‘Brain Gainers’ Target Chip Startups
What’s at stake:
Despite thousands of trained, experienced design engineers in India, no branded semiconductor companies exist in India. Why? Expats returning to India are poised for change.
The semiconductor industry is global. However, a startup’s birthplace matters because it — which could become the next Nvidia — will anchor its nation’s industry and affect the whole world.
But to reach that status, India must measure its economic health, the readiness of its social infrastructure and the maturity of its industrial policies.
Register free for The Business of Semiconductor Summit (Set 9 – 11), a virtual conference organized by the Ojo-Yoshida Report. A panel entitled “India: Ripe for Next Steps” will be held on Sept. 9.
After decades of dismissal by skeptics and doubters, India seems to be emerging from the shadows. Ajit Manocha, CEO of SEMI, recently told us, “For the first time, stars are aligned in India.”
Read More »India’s ‘Brain Gainers’ Target Chip Startups