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The other day I ran across an article on EETimes.com titled Which chip makers will rule in 2018? While the focus of the article is on the future, probably the most interesting piece of data that it contained was actually a table, depicted below, which showed the top 10 semiconductor supplier from 1978 to 2008 in ten year increments. It is surprising how much information can be gleamed from a simple table such as this one: rise and fall of companies, countries, results of mergers and acquisitions and so on.

Here are a few observations: For those like myself, that cannot call themselves industry veterans quite yet, it might comes as a surprise that in 1978 TI and Motorola where the two dominant companies. Noticeable as well is Intel’s 9th position in the ranking below National and Fairchild. As we all know, over the next few decades Intel would go on and climb the ranking to eventually claim the number one spot. National and Fairchild did not fare nearly as well. By the late 1970s Fairchild was very much past its glory days, and in 1979 it was acquired by Schlumberger Limited – an oil field services company. Not surprisingly, in 1987 Schlumberger sold Fairchild to National, however as can be seen from the table, by the time 1988 rolled around, the combined entity no longer made the top 10 list. The 1988 rankings show the ascend of Japanese suppliers: NEC, Toshiba, and Hitachi claimed the top three spots, respectively, and overall, Japanese companies claimed six of the top 10 spots. In 1998, the picture changed again, with Intel taking the number one spot and with Samsung’s ascend signaling the emergence of South Korea as a major player in the semiconductor field. Interestingly the table also places Infineon in the tenth spot. In actuality, the company still ought to be have been called Siemens at that point since Infineon did not spin out from Siemens until 1999.

The 2008 rankings also showed some major changes in part due to mergers and acquisitions: Renesas, a joint venture between Mitsubishi and Hitachi, joined the list. NEC, which spun out NEC Electronics in 2003, dropped off the list completely. Earlier this year though, Renesas and NEC Electronics announced plans to merge by 2010 and thus create the world’s third largest semiconductor supplier, at least on paper. Motorola and Philips, both of whom spun out their semiconductor divisions as Freescale Semiconductor and NXP Semiconductors, respectively, have failed to translate the spin-outs into sales, and as such both have dropped off the list. Hynix Semiconductor, a spin-out from Hyundai Electronic, joined Samsung as the second South Korean company on the top 10 list, continuing the ascend of Korean companies. The 2008 list also showed the emergence of fabless semiconductor companies, with Qualcomm joining the list in the 8th spot. Strictly going by name recognition and ignoring all the new ventures created through mergers and acquisitions only Intel and Toshiba have remained in the top 10 list over the last three decades. What will the next decade bring is an interesting question indeed, but we’ll have to wait till 2018 to find out.

Jeff Immelt, GE’s chairman and chief executive, has been one busy guy as of late, if not with actual work then at least with giving speeches and publishing articles regarding the future of the Unites States as it pertains to business, technology, and innovation. Consider his latest piece, co-authored with John Doerr who is a partner at Kleiner Perkins Coufield & Byers, that was published the other day in the Washington Post. The article, titled Falling Behind on Green Technology, is more or less a call for the U.S. to get serious about green technology. Two major points are presented: First, the U.S. has the top five leading internet technology companies, but when it comes to green technologies the U.S. has only one of the top five wind power producers, one of the top ten solar panel producers, and two of the top ten next generation battery manufacturers. Second, because long-term guidance from policy makers is lacking, and current policy is detrimental to green technology startups, the U.S. is falling behind significantly when compared to other countries, especially China.

Of course, the statistics above might only become a problem if one truly believes that renewable energy is indeed the next big thing - a very hotly contest topic as is evidenced by the number of comments left by readers. One should not really be completely surprised that Jeff keeps pushing green technologies. GE is heavily vested in wind turbines, heavy machinery, and appliances. Each one of these segments is likely to profit significantly from any regulation requiring higher efficiencies - then again maybe profiting handily while cleaning up the environment might not be so bad after all. The article’s introduction of the China scare is also somewhat amusing; after all, the Russian scare during the cold war era seems to have worked wonders for American ingenuity, so maybe all that is needed now is a green war era? All humor aside, it is a brief article so you can consumer it quickly and decide for yourself.

In case you need a longer dose of Jeff Immelt you might be interested in the video below showing the speech he gave when GE announced a new Manufacturing and Software Technology Center outside of Detroit. The speech, titled American Renewal is rather long one coming in just short of 45 minutes. If you don’t have your coffee handy and a comfortable chair, here is quick synopsis: Jeff argues that the U.S. cannot rely on being a service-led and consumption based economy. It needs to be technology based and export that technology. Further, goals need to be set long term in terms of great undertakings and compensation must be adjusted such that people that truly have brains are valued more than bean counters. Jeff proposes a plan that consists of five fronts: First, an increase in R&D spending is needed since technology makes countries and people wealthy in the long term. Second, the U.S. needs to focus on clean energy and affordable healthcare as the engine for future job growth. Third, the U.S. needs to seriously commit to manufacturing and exports, rather than relying on the American consumer to lead the recovery. Fourth, the U.S. should utilize the government as a catalyst for leadership and change through public/private partnerships, while at the same time be cautious about too much regulation that might stifle innovation. And finally, he encourages business leaders to be responsible for the competitiveness of their own country. In addition to all of the above, Jeff encourages those who have capital to invest, for the best time to invest is when it is hard to do so for others. The video is below, so you can watch it and make up your own mind. Regardless, whether you agree with Jeff regarding renewable energy or affordable healthcare, if either of them comes to pass there ought to be plenty of opportunities to capitalize on this for low-power and analog semiconductor startups.

Over the last few months we have seen several innovative semiconductor startups raise some serious money, nevertheless it seem that as a whole, Venture Capitalists (VCs) seem to be a pessimistic bunch at the moment - at least the three guys Rick Merritt interviewed for his "Silicon Stratups get the Squeeze" article. Among the VCs interviewed were Andy Rappaport from August Capital, Mark Stevens from Sequoia Capital, and Lip-Bu Tan from Walden International. The main reason for the pessimism is well know to anyone in the chip industry, namely the prohibitively high cost of bringing a new fabless semiconductor startup to market.

I won't recap Rick's whole article for you can read it on your own, but there were a few interesting takeaways. According to Andy, if companies doing big SoC designs adopt open interfaces, there will be a chance for startups to at least play a part in supplying designs for specific functions to be integrated onto the SoCs. Further, he points out that system designers will have to do more in software in the future as chip choices will become limited. Mark very much agrees with this point of view, adding that with IPO exits largely non-existent these days and with established companies paying less and less for acquisitions, the return on investment (ROI) for funding semiconductor startups is simply no longer there. Lip-Bu is even more pessimistic, arguing that a substantial percentage of the approximately 2,200 companies funded over the last decade will have to fold and that the R&D mantle will pass once more to the big chip makers. He further points out that plenty of talented engineers, who will not be interested in joining these conglomerates, will choose instead to pursue careers in the clean technology and solar areas. Of the three guys interviewed, Lip-Bu seems the one most committed to semiconductors, but you better approach him only if the majority of your company is going to be located in China, India, or Taiwan. He firmly believes that the semiconductor center is moving west rapidly. If green technologies are not your thing and you want to stick with semiconductors, you better brush up on your mixed-signal and analog skills since both Andy and Lip-Bu prefer these areas at the moment.

I'm somewhat surprised that not one of the interviewed VCs discussed opportunities for low-power semiconductor startups in the life-sciences area. It seems to me that this field in particular could benefit from novel analog and mixed-signal designs and should be well suited for startups. I'm also somewhat skeptical about the large sum of money, on the order of $100 to $200 million, that the VCs claim are needed to get a fabless semiconductor startups funded. Additionally, a budget of $2 million dollars for a verification team per month as claimed by Andy seems unreasonable for a startup - even large chip design houses would find this to be expensive. Most companies we have written about on this site fall somewhere in the $20 - $60 million range when it comes to total funding, which while not cheap compared to a software startup is a far cry from the numbers that the VCs are suggesting. It almost seems that the exaggerated price tag that VCs are attaching to semiconductor startups is their indirect way of saying that they have found cheaper investments that have a quicker ROI elsewhere.

If the recent economic events are not gloomy enough for you, why not read about how the American semiconductor industry has been in a slow decline over the last thirty years? To be fair, Brian Bradshaw’s article is not all depressing with a portion devoted to the initial rise of the American semiconductor industry. The fall section however is significantly longer and more detailed, discussing such topics as Japan’s DRAM dominance in the mid 1980s to the limited success of the American Sematech initiative. An interesting observation made by Brian is that Sematech allowed the chip industry to reach a level of maturity at which point the price of capital and labor became the dominant factors in selecting sites for future manufacturing plant location. This, according to Brian, is the reason why of the last 40 chip factories, 35 were built in Asia, and only 5 in the United States (US) and Europe combined. He further examines the ascend of South Korea to DRAM and Flash memory dominance and the emergence of the chip foundry business. Finally, Brian spends a little bit of time musing about the future of the US industry and the major players.

Reading through the article one can’t fail to notice how Texas Instruments to some degree or another is quite connected with the current state of affairs. Whether through joint ventures with other companies, board members, or spin-offs, the company has its fingers in more places than one might imagine - quite fascinating. As far as the discussion on the future is concerned, it would have been nice if Brian had expanded his analysis of some of the major players. For example, many engineers question IBM’s commitment to the semiconductor industry? If they could find a buyer with deep enough pockets would they try to get rid of the division? How about Oracle’s recent acquisition of Sun? How much of Sun’s engineering will survive the acquisition? There have also been rumors of Sun being interested in developing x86 processors. Then there is Intel’s recent success with the Atom processor and the collaboration agreement with TSMC. And finally, increasing amounts of rumors are emerging regarding Apple’s ambitions for chip design as described in a recent Wall Street article. As a matter of fact, quickly browsing through the current Apple job opening yielded several chip design positions ranging from circuit design, to verification, and implementation, all of which seem to be located in the Santa Clara Valley - Maybe the outlook for chip design in the US is not so bleak after all.