Chip Mergers, Impacts Still Ahead

Rick Merritt, EETimes
10/26/2015 08:00 AM EDT

SAN JOSE, Calif.—The consolidation of the semiconductor industry is far from over and most of its impacts on employment and chip pricing are still ahead.

Experts see more mergers in sectors ranging from memory and storage to networking, processors and analog. Just who will be involved is as hard to predict as the numbers of layoffs and impact on prices once the year’s big deals start to close.

What’s clear is the rationale.

“The cost of developing new chips is going up, so you need more revenues [per product] -- the consolidation is good for that because it gives you more pricing power, but it’s bad for [OEM] customers who have less choices in who they deal with and you will have a lot of people on the street,” said Handel Jones, chief executive of International Business Strategies (Los Gatos, Calif.).

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