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Update: 10 companies in trouble

Posted: 30 Sep 2009 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor industry? foundry? EDA? NOR flash?

Nokia Corp.Look beyond Nokia Corp.'s 39 percent market share in the mobile handset market and you'll see a company trying hard to redefine its role as rivals like Apple Inc. and Samsung pace it in the smart phone segment. Nokia's leading position may not be in immediate jeopardy but if it doesn't dramatically improve its performance in the smart phone area, the company could eventually follow rival Motorola Inc. down a disappointing path. Nokia has a commanding presence in high-volume but margin sensitive markets like China. However, it has been playing catch-up in the more profitable smart phone sector. The greater danger Nokia faces is the growing market perception that it may not be leading innovation in its main industry segment.

NOR supply chainNOR flash customers must be worried and scratching their heads. Is it time to hit the panic button? For some time, NOR supplier Spansion Inc. has been in Chapter 11 bankruptcy, with plans to emerge by year's end. There are also rumors that Micron Technology Inc. and NOR leader Numonyx Inc. will merge. Another supplier, Taiwan's Macronix International Co. Ltd, is running out of capacity and is mulling plans to build two 300mm fabs. Meanwhile, another NOR supplier, Samsung Electronics Co. Ltd., is standing back and enjoying the chaos.

NXP SemiconductorNXP Semiconductor's financial position has improved somewhat over the last one year as the company took steps to whittle down debts and cut interest expenses. Nevertheless, NXP is still a deeply troubled company that is struggling to boost margins, improve sales and reorganize operations to lower costs. The latest economic downturn savaged sales growth at NXP, with second quarter revenue dropping to $903 million, down 41 percent, from $1.52 billion in the year-ago quarter. To remain a viable entity, NXP needs to increase sales, further take down costs and get rid of its huge debt burden. That's a set of tall tasks in this economic environment.

Renesas Technology Corp.-NEC Electronics Corp.After several delays, the two Japanese chip giants have finally merged. NEC Electronics will become the "surviving entity," but the combined entity will be called Renesas. Confused? There are still more questions than answers about the combined company, namely its future product strategy, fab plans and overall integration strategy. The loss-ridden entity will require some major cost-cutting measures, including mass layoffs.

Semiconductor Manufacturing International Corp.The foundry business is seeing a decent recovery. So vendors should be seeing an improved bottom line, right? Wrong! China's SMIC continues to lose money at an alarming rate. At its recent analyst event, SMIC said it intends to show break-even results in 2010. But it continues to fall behind in leading-edge technology: SMIC won't move into 65nm "risk production" until the third quarter of 2009, with mass volumes due in 2010. 45nm is slated for 2010. Next year is a make or break year for SMIC.

- Mark LaPedus, Dylan McGrath, Bolaji Ojo
EE Times

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