The Week In Review: Manufacturing

At one time, China’s Xiaomi was a high-flying smartphone vendor. The privately-held company had a market capitalization of $45 billion. But the bottom has fallen out of the company amid share losses. “By early 2015, it was clear that problems were emerging as growth ground to a halt and nothing that Xiaomi has done since has been able to re-start it. Xiaomi has ground to halt because there is only so much volume that can be sold through the Internet. This has been compounded by competitors catching on and mimicking its style meaning that it no longer really stands out from the crowd,” said Richard Windsor, analyst at Edison Investment Research, in a research note.

“This is why the ecosystem is so important. By developing its own ecosystem, Xiaomi will have something that no one else can copy and I (think) this is the only route that Xiaomi has to reaching substantially better profitability. Xiaomi must either start growing its volumes again or create value for its devices through the development of an ecosystem,” he said. “Both of these routes require significant investment in the short-term which puts Xiaomi in a very difficult position. Its Android competitors, Samsung and Huawei, and its ecosystem competitors – Baidu, Tencent and Alibaba – all have strong internal cash flow giving them the ability to invest. Xiaomi does not as it is barely profitable meaning that a big increase in investments will require it to return to the market for more money.”

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Samsung is producing the industry’s first through-silicon via (TSV) double-data-rate-4 (DDR4) memory in 128-gigabyte modules. The module is designed for enterprise servers and data centers.

Synopsys announced that its IC Compiler II place and route solution has been qualified for use on Samsung’s 10nm foundry process.

The rumors continue to swirl around GlobalFoundries. The Chinese government has talked to the foundry provider. So has the Tsinghua Group, according to a report from the Albany Times Union.

It’s merger mania again. Skyworks Solutions has scrapped its plans to acquire PMC-Sierra. Instead, Microsemi will acquire PMC-Sierra. The transaction is valued at approximately $2.5 billion.

Diodes has completed its acquisition of Pericom Semiconductor. Pericom was also pursued by a Chinese chipmaker. And not to be outdone, Silicon Labs has announced the acquisition of Telegesis, a supplier of wireless mesh networking modules.