You bet more consolidation is coming. i left the semiconductor industry 6 months ago. The writing is on the wall. All the 'old boys' are hurting like hell. No investment , the new technologies are super expensive to implement and they get their lunch eaten by megafabs like TSMC and UMC and Chartered that have the technologies.
The time of the traditional design-fab semicon house if over. Nimble design houses can spin a design much faster than the big lumbering companies.
...
The only traditional players ( in the sense of being fab+design) are the niche players like Analog devices , Linear Tech. They don't have to deal with second-source , nor are they doing second-source.
Exactly, but on the other hand there are plenty of niche players. Things like wifi chips and ARM processors are one thing but there is much more to semiconductor business than that. Special processes is the key here and companies like Infineon, AMS, Bosch, Osram and ABB are doing quite well.
Then there are also some companies who can sell products made with older processes. For example look at Microchip they are certainly not doing badly. Thought in this case the "selling" part may be more important than the "making chips" part.
Look at the others. How much money can you really still make of an LM324 if there are at least 5 companies making that thing. Why do you even keep that in your fab...
Well at least there is no fabless company designing LM324 and getting them made at TSMC, I suppose...
Then there is also the usual clausule from fabless chipmaker website:
During downturns in the semiconductor economic cycle, reduction in overall demand for semiconductor products could
financially stress certain of the company’s subcontractors. If
the financial resources of such subcontractors are stressed,
the company may experience future product shortages,
quality assurance problems, increased manufacturing costs
or other supply chain disruptions.
During upturns in the semiconductor cycle, it is not always
possible to respond adequately to unexpected increases in
customer demand due to capacity constraints. The company
may be unable to obtain adequate foundry, assembly or test
capacity from third-party subcontractors to meet customers’
delivery requirements even if the company adequately forecasts customer demand.
IC design is their core business the production could easily be outsourced. NXP earns a lot of money on patents like I2C that probably expired by now but the point is that they made money with designs.
For Freescale that is the case but NXP is more into jellybean parts - if you need BC847 NXP will sell you one.