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Comment: Is IC industry poised for consolidation?

Posted: 07 Apr 2010 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? semiconductor industry? IC consolidation? NAND flash?

Handheld wireless is the only major change in the makeup of the semiconductor macro TAM (Click on image to enlarge.)

What does all this say about our future as an industry? As long as transistor unit volume continues to grow at such high rates, we will continue to enable new applications that grow the total market. On the surface, the makeup of the semiconductor market looks very stable, with the only change in the last 15 years being the five point gain of wireless communications at the expense of computing. But underneath, there have been dramatic changes. The market for desktop personal computers has matured while the market for notebooks and netbooks is growing rapidly. Consumer electronics has remained a relatively constant percent of the semiconductor TAM in the last fifteen years but the growth of video games, flat screen TVs, MP3 players, digital cameras, etc. has dramatically altered the content of that segment.

2009 semiconductor revenue (Click on image to enlarge.)

For the future, new applications will continue to change the character of the semiconductor market as it grows. New companies will enter the semiconductor industry with new architectures, new device structures and new packaging techniques to satisfy emerging needs.

What about consolidation of the semiconductor industry in the years ahead? It's possible that our industry will mature and broad consolidation will occur. But if history has anything to teach us, it is that new applications will create new challenges. Companies that innovate to meet those challenges will move ahead. And semiconductor companies that continually reinvent themselves will successfully compete with new comers for the top ten positions.

- Walden Rhines
Chairman and CEO, Mentor Graphics

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