When the going gets tough ...

1 min read

One of the imperatives in business is to make a profit, particularly when times are tough. Failing that, the driver is to do better than the competition.

So what are we to make of the latest figures from iSuppli, which tell us that six of the top 10 semiconductor manufacturers failed in the latter challenge? One discussion point which may be on the agenda at board meetings across the industry is focus. Two of the underperformers are dram specialists. Another relies heavily on one particular business sector, but two others have broader portfolios. This debate has been conducted for some time now: does a company essentially put all its eggs in one basket and focus on being the most efficient at its chosen technology or should it maintain a broad focus, with the possibility of being a Jack of all trades. The eggs in one basket approach – the choice of the dram specialists – is all very well, but when the market goes away, life becomes a bit grim. The same applies when demand from your main market collapses. Jacks of all trades, of course, are liable to become masters of none. In certain respects, this is the story of the independent device manufacturer (IDM) of old. They attempted to manufacture all kinds of product and, in general, failed. The current economic turmoil is a suitable time to review strategies. Will we see consolidation, as companies attempt to broaden their appeal, or will we see a return to the IDMs of old? One thing is for sure: sitting behind your big shiny CEO desk and waiting for the good times to reappear won’t cut it.