4 ms·

ON Semiconductor to Acquire Fairchild Semiconductor for $2.4B in Cash

36 points by iliis 11y ago

hwstar 11y ago
First, National Semiconductor buys Fairchild Semiconductor, then spits then out before they are acquired by TI, now On Semiconductor wants to work them over. These mergers and acquisitions tell me that the epoch of non-linear growth is over in the semiconductor industry.
- petra 11y ago
  True, It's the end of growth, plus the availability of cheap capital giving executives the idea they can grow through mergers. Usually it doesn't work out too well.
- bsder 11y ago
  It's a couple of things. First, cell phones ate EVERYTHING. So, the only volume is in cell phones. Cell phones only need a few different types of chips but they need them in massive quantities. Second, the cost of creating a chip is too high. The "maker" culture relies on the fact that creating a PCB is cheap. Between the cost for EDA VLSI tools and the NRE for creating a mask set, you blow $100K before you even get started making a chip. I suspect that we probably have the ability to digitally image 1.0um or larger features so we don't have to cut a mask set, but it's a chicken/egg problem. Since nobody wants 1.0um+ processes anymore, nobody will develop the technology for them, so nobody will design for them, so nobody will want 1.0um+ processes. Third, modern fab capacity is ridiculous. A single 300mm wafer can produce 70,000 1mm^2 chips or 700 1cm^2 (a big chip nowadays). How many customers can consume those kinds of volumes?
  - mbell 11y ago
    > First, cell phones ate EVERYTHING. So, the only volume is in cell phones. Not sure where your getting this. The MCU market dwarfs the cellular market, last time I looked it was on the order of 25B MCUs sold per year and the majority are still 8bit MCU. There are only ~1B cell phones produced per year. I don't think the discrete market is really all that driven by cell phones.
    - bsder 11y ago
      The problem with you argument is that 8-bit MCU's are a rounding error. The Cortex A series cores are around 2mmx2mm. The Cortex M series are something like .2mmx.2mm. It looks like my 10mmx10mm comment was way off. So, let's assume that the 8-bit MCU's are .1mmx.1mm. That's probably WAY too big, but let's start somewhere. That means that you can fit 7,000,000 on a wafer. For roughly 3,500 wafers for the entire, worldwide capacity of embedded MCU's. The entire, worldwide, annual market for MCU's is 3,500 silicon wafers per year. That's the same number of wafer starts that a big fab has IN A WEEK. And that was 2008. http://www.eetimes.com/document.asp?doc_id=1169357 http://www.eetimes.com/document.asp?doc_id=1169357 Modern fabs can pump out a million a week: electroiq.com/blog/2014/01/tsmc-samsung-and-micron-top-list-of-ic-industry-capacity-leaders/ This is why everybody wants to produce bigger chips like SOC's and why Intel will never switch to ARM until it's about to go under. If your chip is too small, you can't move enough to fill your fab even if you give them away free.
      - msravi 11y ago
        > It looks like my 10mmx10mm comment was way off. Not by too much. A mobile baseband SoC that supports 2G+3G+LTE-Cat-6 will end up in the 7mmx7mm range with a 28nm process.
      - jdc 11y ago
        Why would Intel switch to ARM?
        bsder 11y ago
        They won't. But it's a standard refrain that Intel should produce ARM chips.
      - nascentmind 11y ago
        What will be the impact of this on jobs? I see a lot of layoffs in the semiconductor industry. I don't know what is the impact on jobs for a firmware engineer. I don't see anything new coming soon in the embedded space and IoT looks like more of a hype than anything else.
jimmyswimmy 11y ago
It's an interesting combination. ON would become the predominant manufacturer of discretes. There's still competition at IR, Vishay and Infineon (and ST if you can get past their horrible datasheets). But it doesn't really add to their portfolio, just takes away a competitor. I haven't done the math but it doesn't seem like a great deal or a good plan.
- thrownaway2424 11y ago
  Doesn't Vishay own IR (and everybody else)? What about the Japanese (Hitachi, Toshiba, Sanyo, Panasonic) are they in the game?
  - WallWextra 11y ago
    Infineon owns IR.
    - thrownaway2424 11y ago
      My mistake. The SKUs I used to order from IRF are now sold by Vishay.

36 points by iliis 11y ago

First, National Semiconductor buys Fairchild Semiconductor, then spits then out before they are acquired by TI, now On Semiconductor wants to work them over. These mergers and acquisitions tell me that the epoch of non-linear growth is over in the semiconductor industry.

petra 11y ago
True, It's the end of growth, plus the availability of cheap capital giving executives the idea they can grow through mergers. Usually it doesn't work out too well.
bsder 11y ago
It's a couple of things. First, cell phones ate EVERYTHING. So, the only volume is in cell phones. Cell phones only need a few different types of chips but they need them in massive quantities. Second, the cost of creating a chip is too high. The "maker" culture relies on the fact that creating a PCB is cheap. Between the cost for EDA VLSI tools and the NRE for creating a mask set, you blow $100K before you even get started making a chip. I suspect that we probably have the ability to digitally image 1.0um or larger features so we don't have to cut a mask set, but it's a chicken/egg problem. Since nobody wants 1.0um+ processes anymore, nobody will develop the technology for them, so nobody will design for them, so nobody will want 1.0um+ processes. Third, modern fab capacity is ridiculous. A single 300mm wafer can produce 70,000 1mm^2 chips or 700 1cm^2 (a big chip nowadays). How many customers can consume those kinds of volumes?
- mbell 11y ago
  > First, cell phones ate EVERYTHING. So, the only volume is in cell phones. Not sure where your getting this. The MCU market dwarfs the cellular market, last time I looked it was on the order of 25B MCUs sold per year and the majority are still 8bit MCU. There are only ~1B cell phones produced per year. I don't think the discrete market is really all that driven by cell phones.
  - bsder 11y ago
    The problem with you argument is that 8-bit MCU's are a rounding error. The Cortex A series cores are around 2mmx2mm. The Cortex M series are something like .2mmx.2mm. It looks like my 10mmx10mm comment was way off. So, let's assume that the 8-bit MCU's are .1mmx.1mm. That's probably WAY too big, but let's start somewhere. That means that you can fit 7,000,000 on a wafer. For roughly 3,500 wafers for the entire, worldwide capacity of embedded MCU's. The entire, worldwide, annual market for MCU's is 3,500 silicon wafers per year. That's the same number of wafer starts that a big fab has IN A WEEK. And that was 2008. http://www.eetimes.com/document.asp?doc_id=1169357 http://www.eetimes.com/document.asp?doc_id=1169357 Modern fabs can pump out a million a week: electroiq.com/blog/2014/01/tsmc-samsung-and-micron-top-list-of-ic-industry-capacity-leaders/ This is why everybody wants to produce bigger chips like SOC's and why Intel will never switch to ARM until it's about to go under. If your chip is too small, you can't move enough to fill your fab even if you give them away free.
    - msravi 11y ago
      > It looks like my 10mmx10mm comment was way off. Not by too much. A mobile baseband SoC that supports 2G+3G+LTE-Cat-6 will end up in the 7mmx7mm range with a 28nm process.
    - jdc 11y ago
      Why would Intel switch to ARM?
      - bsder 11y ago
        They won't. But it's a standard refrain that Intel should produce ARM chips.
    - nascentmind 11y ago
      What will be the impact of this on jobs? I see a lot of layoffs in the semiconductor industry. I don't know what is the impact on jobs for a firmware engineer. I don't see anything new coming soon in the embedded space and IoT looks like more of a hype than anything else.

jimmyswimmy 11y ago

It's an interesting combination. ON would become the predominant manufacturer of discretes. There's still competition at IR, Vishay and Infineon (and ST if you can get past their horrible datasheets). But it doesn't really add to their portfolio, just takes away a competitor. I haven't done the math but it doesn't seem like a great deal or a good plan.

thrownaway2424 11y ago
Doesn't Vishay own IR (and everybody else)? What about the Japanese (Hitachi, Toshiba, Sanyo, Panasonic) are they in the game?
- WallWextra 11y ago
  Infineon owns IR.
  - thrownaway2424 11y ago
    My mistake. The SKUs I used to order from IRF are now sold by Vishay.