Amid all the pain are some interesting new trends that likely will stick around for quite awhile.
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The big companies felt the pain first, or at least they acknowledged it. In big companies, pain is felt in dollars. In smaller companies, it’s felt everywhere because every person counts.
What the big IDMs did first was offload their fabs, or at least open them up for enough business to sustain their investments in new technology. That’s the strategy taken by IBM, and it appears to be the same at Intel and Toshiba. It was simply too expensive to do it alone.
Those who couldn’t sustain a fab, with the massive investment in equipment and process technology for each new node, became fabless. And many companies that started out fabless because there was no need to own a fab either thrived because they were in the right markets—think Broadcom, Qualcomm and a handful of others—or they struggled to raise their visibility because they didn’t own fabs and didn’t have that kind of direct communication.
Things are changing again. Outsourcing is on the rise, new business models are emerging and technology that was once considered an interim step—think FPGAs and off-the-shelf IP—has now gotten to the point where it’s sometimes as good if not better than what companies can create themselves, particularly with their ever-shrinking payrolls.
The interesting part of all this is that coming out of a downturn companies are more open to trying new things that can add efficiency or improve their final product. Downturns bring plenty of pain, both before and after, but they also bring some interesting changes that tend to stick around for quite awhile.
-Ed Sperling
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