Chipmaker Consolidations Continue with Intel & Altera on the Heels of NXP & Freescale
Recent news of major chipmaker consolidations should dispel any doubt about the expanding and shifting nature of the semiconductor and electronics industry. On the heels of the news of NXP's moves to acquire Freescale, valued at roughly US $16.7 billion, we now have, at the end of March, the news that Intel is moving to acquire Altera, valued at US $10.5 billion. These two March deals follow the earlier news of Cypress Semiconductor and Spansion, Lattice Semiconductor and Silicon Image, Qualcomm and CSR, as well as Infineon and International Rectifier, among others in 2014. Importantly, as Bloomberg also comments, these strategic acquisitions will propel more moves by other chipmakers to ensure their market positions and capabilities through acquisitions this year.
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TSMC and Samsung - Capacity constraints and node challenges affecting chip manufacturing and supply
Supply and demand is the constant balance that we watch. Sitting where we do along the global supply chain, as distributors, puts us squarely in the middle of this challenge. As a result, we are keenly aware of when the (unfortunately inevitable) mismatch in supply/demand happens. Presently, we see increased challenges now as nodes continue to shrink, as mobile chip solutions become more complex and require more steps in manufacturing, and as Industrial IoT (IIoT), which includes automotive, continues to quickly ramp up and demand older process nodes. Each of these events are adding constraints to an already tightening supply due to the reduction in the number of fabs and complexities in chip manufacturing processes. A recent article in Semiconductor Engineering explains these challenges very well. One of the outcomes of the growing manufacturing processes that we see are pricing fluctuations, additional supply constraints and shortages, and challenges to come due to interoperability issues that will lead to constraints down the road.
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