Semiconductor industry Face Tough Times?

According to Microchip’s CEO, Steve Sanghi, the semiconductor industry business model is really broken and he felt that there would be more belt tightening and consolidation ahead. He was quoted in EE times:

“Three years ago you wouldn’t have forecasted Texas Instruments would buy National, and Avago and LSI would merge. Who would have thought Fujitsu’s semiconductor group would be no more — now part of Spansion — or that Sanyo would not be making chips? It’s all a sign there’s not enough growth.”

He didn’t include the pending merger of RFMD and Triqiunt, acquisition of Mindspeed by MA/COM and the possible acquisition of Renasas by Apple. So, it seems like the chip industry will continue to face tough times ahead.

I can see his point of view but I am not as pessimistic and I feel that innovation and responding to market demands and solving real world problems are key to winning in the semiconductor industry. I feel that despite the tough environment, the future is still bright. Companies will find ways to innovate and to grow.



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