Today’s semiconductor industry is undergoing rampant changes, primarily led by shifting end-market requirements and major consolidations. The industry of decades ago, comprised of individual RF companies playing in chiefly the same markets, has been replaced by a new landscape—one decorated with new markets and major mergers and acquisitions of Silicon Valley companies with legacy chipmakers. So what exactly is driving this changing landscape?
What’s Driving the Change?
The changing landscape of the semiconductor industry is fundamentally driven by two requirements: the desire for ubiquitous sensing and demand for connectivity. People want efficient communication and safety, and they want it on a global scale – with each other, in their homes, at work, around the world. The market is no longer simply saturated with demand for cellular handsets; handheld devices have evolved from the days of simple pagers to essentially portable computers in the form of smartphones and smart devices. People now expect unlimited data, instant streaming, flawless connectivity and monitoring from their phones to their cars to their homes, drones delivering groceries, control of their household appliances and more. As these demands open the door to new large volume markets, companies are sprinting to be among the first to service them and obtain market share.
Evolving technology is another key factor driving change. To benefit these new high-volume, consumer applications, companies are shifting from traditional Gallium Arsenide (GaAs) solutions to silicon-based solutions offering more integration, superior technical performance, scalability and affordability supporting high volume production. RF components servicing smaller, standalone markets are moving from GaAs to Gallium Nitride (GaN), offering higher performance and reliability.
To accommodate these new requirements and evolving technology, mergers and acquisitions have abounded across the industry as companies look to enter new serviceable markets, or acquire those already playing in them, to offer more complete solutions to their target markets. As a result, manufacturing and technical experience are combining under one roof to service these new, large volume markets.
There have been plenty of consolidations over the decades, including notable historic ones such as Siemens and Infineon to Intel, but with today’s emerging markets and accelerating demands, consolidation efforts seem to be proliferating: RFMD and Triquint to Qorvo, Microsemi to Microchip, Avago and Broadcom and recent efforts such as Broadcom’s bid for Qualcomm and Qualcomm’s offer to NXP. Further, many historically standalone and general purpose RF companies that broadly address the market have narrowed their focus to largely consumerist high-volume markets, where the cost of highly integrated semiconductor content becomes affordable.
What’s the Result?
The evolution of technology and new serviceable markets has been exciting, yet as companies shift their focus to these high-volume, consumer-focused markets, the high-performance RF market is becoming an afterthought for many. A void is being created—one that MACOM continues to play in and maximize.
Lower volume markets such as Aerospace and Defense, Test and Measurement and Industrial, Scientific and Medical (ISM), where product life cycles span years and longevity/surety of supply is essential, are facing potential cracks as vendors retreat from these markets. The good news is, MACOM remains committed to servicing these changes and serving customers with our broad and innovative RF portfolio, because RF Matters Here.
MACOM’s 65-year legacy of innovation is driving toward the industry’s broadest portfolio of MMICs, diodes and transistors for the entire RF signal chain, meeting the performance requirements to enable next-generation applications, aided by our extensive expertise in switching, GaN-on-Silicon and Coherent Beamforming technologies. MACOM is dedicated to delivering true competitive advantage with our breakthrough semiconductor technologies, broad product portfolio, surety of supply and applications expertise.
All financial guidance projections referenced in this post were made as of the publication date or another historical date noted herein, and any references to such projections herein are not intended to reaffirm them as of any later date. MACOM undertakes no obligation to update any forward-looking statement or projection at any future date. This post may include information and projections derived from third-party sources concerning addressable market size and growth rates and similar general economic or industry data. MACOM has not independently verified any information and projections from third party sources incorporated herein. This post may also contain market statistics and industry data that are subject to uncertainty and are not necessarily reflective of market conditions. Although MACOM believes that these statistics and data are reasonable, they have been derived from third party sources and have not been independently verified by MACOM.