TriQuint Semiconductor has announced the acquisition of one of its foundry customers, TriAccess Technologies. Could this be the start of a trend?
I have written in this blog about how the semiconductor market will look in a post-recession world. One aspect of this is how online services will change the way components are sourced.
Another aspect will be a consolidation of the supply chain, with large companies taking on a wider role of activities.
The reason for this is that as profit margins are squeezed in each separate activity, larger organisations must take on a wider range of skills in order to sustain their business models.
The adoption of design capabilities and IP by chip manufacturers is the most obvious example of this. Price pressure in the foundry business is inevitable, despite current talk of capacity issues.
That is just evidence of how foundries are having to keep costs as lean as possible until demand returns to long term growth trends.
There is nothing new in chip makers also designing products and even controlling IP, of course. Not so many years ago it was the traditional chip-making model, and ithas never gone away.
The success of Intel, Samsung and TI are clear evidence of how the ODM model still works.
So there is an obvious logic in TriQuint, a foundry for specialised RF devices, acquiring design IP and a product development business and in picking TriAccess, a specialist in cable TV and fibre access devices, it has identified a business which fits well with its own business.
for the amplification of high-quality multimedia content, effective today. Previously, TriQuint served as TriAccess' foundry supplier.
As Brian Balut, v-p in TriQuint's Network Products, points out: "The combined resources of TriQuint and TriAccess put the company in a leadership position in these growing markets."
May be the recession will put an end to fragmentation of the semiconductor supply chain, which has been taking place over the last decade or so?
Big will be beautiful in the post-recessionary world.
You're making too much of this. It simply is an end market Tqnt wants to be in themselves and now can enter easily without misgivings: They already have confidence in the working relationship with TriAccess, and TriAccess was already partially in-house. How could a more sure acquisition be made?