Monday, January 25, 2016

CEO Chattershoot

I am desperately trying to avoid mainstream media right now. Doom and gloom sells. Idiots running rampant. Exclamation points are working overtime.  

Such is life on today's Internet.

2016 is not looking like a great year for those focused on the broadest measures of the semiconductor industry. The biggest markets, smartphones and PCs, are mature and saturated. There is anticipation in the analyst ranks that a bounce in PC sales, after an abysmal stretch, is forthcoming. Given the misplaced optimism of the past I wouldn't bet the ranch on it. These two product lines, smartphones and PCs, have become replacement markets and while there is still growth, the pace is far from what we have experienced over the last 30 years. The emerging market, 3rd Wave, IoT, IoE, Sensorization, however you want to define it, is not going to blow chip demand through the roof in the very near future. Long term, there is no denying the possibilities. I'll be writing more about this in future posts.


Ed Sperling serves up 10 high level interviews with CEOs representing parts of the chip industry:

The subjects expressed by these executives are not all that surprising: Continuing M&A, the emerging market known as IoT, continued growth of semiconductor content in automobiles, questionable demand for new smartphones, the need for better power management, more innovation, more R&D spending and macroeconomic turbulence.

ARM' CEO, Simon Segars, comments that the outlook for market growth in 2016 is not fantastic and that pricing pressures will lead to more M&A. Synergy and innovation, in Mr. Segars view, are the positives that come from these trends.

Amkor's CEO, Steve Kelley. pins success in 2016 to the embrace of new smartphones from Apple and Samsung. He points out that 55% of the semiconductor market is tied to the mobile world.  Have to admit, that's sort of frightening when one considers recent news about weak demand for smartphones.

Jack Harding voiced a realistic opinion that looked positively at the long term impact of the IoT but at the same time downplayed the near term. Like Mr. Segars, Mr, Harding is hopeful that M&A ultimately generates innovation and more dollars for R&D. Mr. Harding voiced concerns about the macroeconomic scene - a question mark for everyone these days.

I am not going to go through each one....  You can read the rest here:   


Mentor Graphics CEO Wally Rhines has offered a review and preview at several publications over the last few years. His take on 2015 and 2016 can be found at the Tech Design Forum:

Part I:

In my opinion the comments about chipsets becoming commoditized, another part I've talked about over the years and one that is definitely related to the maturation process, is something for investors to keep in mind.
"Until recently, the emergence and rapid growth of smart phones kept the semiconductor market growing, despite some dramatic changes in leadership among the chip providers. But the growth to enormous volumes of cell phone units, the changes in handset and service provider models (like the Xiaomi low-hardware margin approach) and the relative stabilization of standards has reduced the number of suppliers as well as the chip prices. The same thing happened in the PC industry, as the industry consolidated from more than 100 manufacturers of IBM-compatible PCs. While temporarily painful, those remaining companies become very efficient. And, as always, semiconductor companies can prepare for the next great wave of applications that will drive billion-unit volumes of products that are yet to be identified and developed."
Part II contains an outlook for 2016:

Yes, there is much more to write about..... 

1 comment:

  1. Anonymous12:40 PM

    Thanks for the associated links as ceo comments are more usefull than main stream dart throwers.