Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
There’s never been such a time of turmoil. Sharp management warns it may go under – swamped by debts of over $12 billion and a forecast of a $5.6 billion loss this year. State aid for the company is under consideration..
Nokia’s market cap – over $150 billion in 2007 is $10 billion. RIM’s market cap – $78 billion in 2008 is under $5 billion.
Sony has been losing money for years capping it with a $5.7 billion loss last year.
Renesas needed a bail out worth about $6 billion from banks, shareholders and over a dozen Japanese industrial companies.
Loss-making Alcatel-Lucent has to find $3 billion to repay debts between 2013 and 2015 while it’s expected to lose $400 million this year and next.
Even Intel which seemed as solid as a rock has seen its cash in hand halve from $22 billion at the end of 2010 to $10 billion now while its debt has risen from $2 billion at the end of 2010 to $7 billion now.
When you’re in a capital hungry business like semiconductors, having only $3 billion of net cash when you need to keep building factories costing $5 billion apiece now, and $7-8 billion for future 450mm fabs, makes Intel look a tad down-at-heel.
Intel may regret spending a lot of cash to buy back its own shares and to maintain its dividend in an attempt to keep its share price high. Even so the shares have fallen from $29 to $22 since May.
And Intel’s CEO Paul Otellini, who sits on President Obama’s Jobs and Competiveness Committee, may be feeling a bit silly this morning after his public last-minute statement of support for Governor Romney.
Sometimes you wonder if the way of choosing CEOs has a lot to do with today’s struggling companies.
When was the last time any of these strugglers did something exciting, innovative and bold?
You remember when the Apple board, forced to choose between John Sculley and Steve Jobs, chose Sculley.
And you wonder if these sober-sides chaps who sit on major company boards will ever appoint a CEO capable of transformation. Form shows that company directors prefer people like themselves i.e. Mr Safe n’ Steady rather than Mr Risk n’ Go-For-It.
But success in business means taking risk, betting bid, leading.
So it looks like these strugglers will continue to struggle.Tags: apple board, governor romney, lucent, paul otellini, solid as a rock