The thing about the financial community is that they all think alike. What did Jerome Ramel, head of the semiconductor analyst team at the French bank BNP Paribas, tell the recent European Nanoelectronics Forum 2009 in
Here are the main recommendations:
Companies should become specialists
Companies should go fab-lite asap
Companies should merge with eachother
Companies should narrow the scope of their R&D
Companies should have fewer products.
All five recommendations can just as easily be disadvantageous for an IC company as an advantage.
For instance:
Few mergers have shown any benefit;
A recent study showed fabless companies were no more profitable than fabbed companies. While giving up fab means :1. Giving up a significant competitive differentiator; 2, Losing the ability to supply when foundry capacity gets tight (as it is now).
Narrowing the scope of R&D diminishes the chance of coming up with a significant research breakthrough;
Becoming a specialist means you sink or swim by the fate of a single market sector instead of broadening your risk;
Having fewer products works against an opportunistic diversification into a hot new area.
TOMORROW MORNING: Top Ten Chip Companies at the end of Q309.
I think we know where these numpties learn all this bobbins. If you look at the staff rosters of business schools they read like a who's whom of finance sector has-beens.
As it happens these institutions, whilst being older than a working generation have only really had a strangle hold over finance sector employability for one working generation, so the has-beens are business school educated too. They've had 25 years in "industry" to sharpen their prejudices. This is natural result of having to compete in a soulless alpha-male environment entirely motivated by the generation of cash and scornful of anything socialist like, for instance, a vision of a better future. They are now back in the kindergarten to nurture a new generation of masters of the universe.
Brings to mind the BSE crisis - we got into a spot of bother feeding our tender young calves with the poisoned brains of sour old milkers. Nearly killed a whole industry, and it was a narrow squeak that we escaped introducing a new human plague which makes HIV look like a sniffle.
We got out of that one by having a pretty serious cull - what are the chances in the financial industry?
Stooriefuit, you're so right. It's pitiful. I had dinner with a VC last month who told me all businesses are alike although all businesses think they're different from any other business.
So the numpties apply these pathetic universal rules they've learnt at business school and cause mayhem in the industries they influence. Nowhere more so than in their own industry.
I'm afraid this years's European Nanoelectronics Forum was a stitch up - you either trod the party line to the letter or you weren't speaking. Even the panel section was a waste of time as you heard identical views from all of them. I suspect Malcolm or I won't be invited to present an alternative solution next year either.
They seem to have lost heart a bit, Mike, there's a poverty of ambition about the projects. Probably that's because the projects are tailored to what is acceptable to the politicians (& therefore fundable) rather than to what the technologists want..
Well the electric car project spread across ENIAC, Artemis and FP7 shows there is still the ambition for big important projects in the EC, even if for some unfathomable reason it doesn't currenly have a fuel cell.
But the semi people are using this project to say that existing fabs making power devices, MEMS and sensors is all that the industry is calling for. We need something big and Euro-centric like the original GSM programme was to drive consumer semi demand in Europe once more.
Yes, Mike, the electric car is a big project but an electric car without fuel cell development lookks like a programme driven by what politiicans will fund rather than what technologists see as vital. And this, I think, has become an obstacle to getting pan-European R&D programmes engaged in basic research..