Semiconductor manufacturers work together to deal with the economic phase

2011 is returning to normal According to the forecast of various market research companies and companies, the semiconductor industry will remain in the scale of US$300 billion in 2010 and the relative low season in the first half of 2011. At the same time, it will return to normal in 2011 and will not oscillate violently like a roller coaster in the past two years.

Looking back, how did some companies grow in the crisis and how will they prepare for the coming off-season? Do successful companies have some experience to follow? Where is the root of the growth of China's domestic semiconductor companies?

Rapid Growth Through M&A and Cooperation Currently in the memory industry, Micron is one of the brightest growing stars. With the US$1.27 billion acquisition of Numonyx and other strategies in 2010, the company is rated by iSuppli for US$9.2 billion. It is the ninth largest semiconductor sales company in 2010. In 1992, Micron was still a memory manufacturer with an annual turnover of only 500 million U.S. dollars and no business in Asia. The key to its growth is cooperation with partners and mergers and acquisitions.

How does M&A and self-developed technology harmonize? "When developing our business, our first choice is of course to develop related technologies ourselves. However, there are many smart people in the world, so we can't do anything for the world." said Mike Sadler, vice president of global corporate development at Micron Technology, while developing their own products. Micron also specifically has a team to find other people's good technology. The team went to various conferences, read related articles, papers, etc., and searched for items or technologies that Micron was interested in. This allows Micron to integrate Micron's resources and related technologies through acquisitions or other methods as early as possible.

There are also some semiconductor companies that have grown up mainly through the acquisition of business models, such as LSI Logic and Intersil. In addition, more companies rely on the acquisition of small companies or cooperation to make up for their own business vacancies and enter new markets such as Intel and TI.

Downward phase coping strategies: Scrutiny Overall, the semiconductor industry is a relatively oscillating industry, especially the memory market is known for its sensitivity and volatility. It is predicted that, starting in 2011, the DRAM industry will begin to face the down cycle. But slightly different from the previous down cycle, this cycle is not caused by insufficient supply, but is driven by oversupply. But this time, the down cycle will not be as serious as before because there is no new production capacity.

In spite of this, Micron strictly controls expenditures according to the forecasted cash flow situation so that it will not run out of cash regardless of whether it is a capital project or an operating project. Therefore, Micron will continue to promote the most important capital investment projects; but for those second- and third-level projects that can or cannot be promoted, they will be suspended and wait until the market stabilizes before making judgments. The degree of rebound in the next year or two.

TSMC (Taiwan Semiconductor Manufacturing Co., Ltd.) was one of the few large-scale foundry companies that did not experience quarterly losses during the financial tsunami at the end of 2008. Talking about experience, Luo Zhenqiu, TSMC's deputy general manager of business development in China, said: "As far as the market economy is concerned, you have to plan for the worst at any time. So no matter whether your cost is controlled or people's The quantity is also good and should be controlled at any time.” For this reason, TSMC is asking itself to not grow fat anytime and anywhere, and to compete within the organization. There is a saying in China: “Invincible foreign patients, the country will always die.” Even if TSMC has run ahead, TSMC still creates a hypothetical enemy for itself, is ready to compete with itself, and any project has personnel competition. When newcomers come in, it is necessary to cultivate such a competitive culture and have a set of strict assessment and reward and punishment mechanisms.

The fact that many enterprises, large in scale and well-funded, are not the most important, attribute the main reason for their unsatisfactory growth to inadequate scale and financial strength. However, TSMC Luo Zhenqiu does not think so. He thinks that a large scale will help; but if you only look at the scale, the United States’s GM will also lose money. So a large company may not be easy to lose money, but it is not guaranteed not to lose.

From a TSMC perspective, there are three things that are important in a foundry. The first is good process, so TSMC makes a lot of investment here; the second is high production efficiency, production efficiency includes yield, production cycle or total production capacity; the third is service, if the fab's IP core is not enough, the crystal Can Yuanyuan integrate some partners outside to provide it? After the fabless (Fabled Chip Design Company) project is completed, whether the fab business or sales staff can give fabless customers good advice and share fabs' experience with fabless.

Micron, which ranks among companies such as Samsung in the storage industry, also looks at the importance of tapping potentials such as technology. Micron's Mike analyzed that Samsung's size is more than double that of Micron, Samsung 35% in the memory market, Micron's share is 15%. Micron currently does not want to exceed Samsung. Conversely, Samsung is unlikely to drive Micron out of the market. Micron's goal is to grow at a pace that is basically the same as the market's expansion rate, while investing in research and development. Micron only wants to ensure that investment can be the most sensible and effective given the resources.

Micron believes that in the semiconductor industry, if a large company does not have a strong IP (intellectual property) portfolio, it will not be successful. Having a very good patent pool means that the company not only has very good industry experience in manufacturing, but also can compete better with its competitors. According to PatentScorecard, each year is ranked according to the quality and quantity of the company's patents and intellectual property rights. Micron has always been ranked in the top ten and ranked third in 2010.