Chip Sales: Hang in There, It’s Getting Better
Semiconductor suppliers are getting ready for the industry’s next cyclical upswing. It has started for some companies already. 2025 will see stronger sales across all market sectors.
News & Analysis
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
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.
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.