Viewpoint: Business as 'unusual' for chip makers

By Michel Genard
dspdesignline.com (November 14, 2008)

The economic crisis is having a significant impact on the semiconductor industry, as worldwide semiconductor revenue growth in 2009 is expected to be 1 percent, down by approximately 7 points from previous estimates, according to preliminary projections from Gartner.

"Semiconductor growth was surprisingly strong until recently, given the very weak economic environment, but this will start to change in the fourth quarter of 2008," said Bryan Lewis, research vice president at Gartner. "Mounting evidence suggests that the semiconductor industry will see negative growth starting in the fourth quarter of 2008, and that this will continue throughout most of 2009."

In a bad economy, semiconductor companies can no longer continue business as ususal. Instead, if they are to ride out—or even prosper—in the economic downturn, they need to adopt "business unusual" practices.

From the fabless semiconductor companies to SoC vendors, chip makers are still largely hardware focused. Yet, an examination of industry constraints indicates that that software is the elephant in the room. Product delays, budget overruns and other problems are more often traced to software glitches, not to hardware.

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