The move by STMicroelectronics NV and NXP BV, two of Europe's leading semiconductor companies, to merge their wireless businesses, giving ST an 80 percent ownership of the resulting JV while NXP — left with 20 percent stake — is enriched to the tune of $1.55 billion, is a radical step.
But it is likely not be the last. Creating fine-grained, fabless, niche-market champions has become the name of the semiconductor game.
But the move begs many questions about the way forward for European semiconductor companies and for integrated device manufacturers (IDMs) in general. We could be witnessing the next stage in the triumph of the fabless over the fabbed.
Some of those questions have already been raised by Joseph Borel, a former executive vice president in central research and development at ST, who recently sent a 12-page proposal to the French government calling for the consolidation of Infineon Technologies, NXP and ST into a European champion chip company.
One can argue that Borel is old school. Borel's call for the creation of a champion that aggregates everything that moves in semiconductors in Europe and holds on tight to manufacturing and manufacturing R&D was criticized by analysts for overvaluing size and seeing economies of scale where they no longer exist.
出處/From：[EETimes]
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酷評：吵什麼吵，要是大家都fabless了，就不怕什麼時候fab來個限產什麼的？看到時候哭都哭不出來了。不過要說semicon是越來越難做了，要fab虧錢，不要fab也危險，我看大家都轉行吧～～～
Monday, April 14, 2008
Analysis: Is the ST, NXP wireless JV the start of IDM break-up?
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In contrast, the proposed plan from ST and NXP sees the semiconductor industry in terms of individual application sectors. But does that view also mean we are seeing the break-up of what are top ten IDMs? Carlo Bozotti, president and CEO of ST, gave a hint of what is on his mind in a conference call when he said: "We said we are determined to improve return."
ReplyDeleteIt was put to Bozotti that with the creation of flash memory company Numonyx BV and an as yet unnamed wireless and fabless JV — taking billions of dollars of revenue and thousands of jobs out of ST — he is presiding over the break-up of the fifth largest company in the semiconductor market. As another part of ST's love affair with partnership, the company has a significant automotive alliance with Freescale Semiconductor Inc. dating back to February 2006.
Bozotti responded by saying: "It is all about portfolio management. Numonyx is an independent company. In that case we wanted to deconsolidate the flash memory business and create a global leader. In this case [the JV with NXP] we will create a global leader but we WILL consolidate the dimension of scale in ST."
But creating economies of scale within the joint venture also — to some degree — removes them from ST and definitely does so from NXP. The role that remains for the parent companies is to act as foundries for the invigorated youthful offspring. But this is a role in which they must compete against the likes of TSMC or, more likely, gradually exit as legacy products are moved to foundry and the parents also go fabless.
The exit strategy from the JV for NXP is defined in terms of options on shares at defined prices, exercisable three years after the formation of the JV. However, Bozotti did not state definitively whether the JV would be folded back into ST at that time.
Bozotti and van Houten did not rule out that other such joint ventures could be formed between NXP and ST, but instead said that the topic for discussion was the wireless joint venture, which would require their focus and attention.
But if Bozotti's argument that, "We intend to maintain the financial consolidation within ST," is a defense against the charge of breaking up ST, what about NXP?
The Dutch company is held by equity partners who may be fazed by the 25 percent write-down they are carrying on the 2006 investment which created NXP. Perhaps they perceive breaking up the company into a series of joint ventures as the most efficient way to get their cash out?
"Many large IDMs are playing in very large fields but they can't all succeed. Scale is needed which is why we are creating the JV. On the product sector scale that is realistic," said NXP's van Houten.
But does that mean all the other NXP business units are suitable cases for the same treatment? "NXP intends to use the proceeds [$1.55 billion] to strengthen our other businesses. It is not the plan to move other businesses out of NXP," van Houten said.
Perhaps, but the sweep of history shows where the pressure is. And if the wireless joint venture is successful that pressure can only increase.