The $350 billion global semiconductor industry is fast approaching what evolutionary biologists call “punctuated equilibrium”. After five decades of the metronomic tick of Moore's Law - which led to smaller, better, faster and cheaper chips every year - technological advance is slowing and fabrication costs are rising as transistor geometries approach atomic scale thereby yielding thermal problems and quantum weirdness.
This report looks at the changing direction of the semiconductor sector and, in particular, how China’s desire to become a global player may impact investors.
- This report is part of the ecosystem of thematic investment research reports, supported by the “thematic engine”.
- About the Thematic Research Ecosystem
- The author has developed a unique thematic methodology for valuing technology, media and telecom companies based on their relative strength in the big investment themes that are impacting their industry. Whilst most investment research is underpinned by backwards looking company valuation models, the author’s thematic methodology identifies which companies are best placed to succeed in a future filled with multiple disruptive threats. To do this, the author tracks the performance of the top 600 technology, media and telecom stocks against the 50 most important themes driving their earnings, generating 30,000 thematic scores. The algorithms in the author’s “thematic engine” help to clearly identify the winners and losers within the TMT sector. The 600 TMT stocks are categorised into 18 sectors. Each sector scorecard has a thematic screen, a risk screen and a valuation screen. The thematic research ecosystem has a three-tiered reporting structure: single theme, multi-theme and sector scorecard. This report is a Single Theme report, offering in-depth research into a specific theme. It identifies winners and losers based on technology leadership, market position and other factors.
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THE CHIP INDUSTRY HAS HIT A TECHNOLOGICAL BRICK WALL
“Moore’s Law” means “more shrinkage” means “more cost”
Meanwhile the technology giants need “more power” from their chips
WHERE IS THE CHIP INDUSTRY HEADING?
The chip industry is no longer fit for purpose
The industry’s customers rather than its producers are designing its new products
Many of these new chip products may be custom-made for the Internet giants
The key players have resorted to M&A
But Chinese bids are likely to face continued resistance
NXP, ST Micro and Infineon
Intel and Qualcomm
Integrated circuit designers
Integrated device manufacturers
Markets by end device and application
Market share analysis
APPENDIX: “THEMATIC” RESEARCH METHODOLOGY
- Advanced Semiconductor
- Analog Devices
- Applied Materials
- ASML Holding
- Cabot Microelectronics
- Cirrus Logic
- Delta Electronics
- Imagination Tech
- Jusung Engineering
- Kulicke & Soffa
- LAM Research
- Linear Technology
- Monolithic Power Systems
- Nanya Tech
- On Semiconductor
- Realtek Semiconductor
- Samsung Electronics
- Silicon Labs
- Silicon Motion
- Siliconware Precision
- SK Hynix
- Texas Instruments
- Tokyo Electron
- Veeco Instruments