Semiconductor business optimization

admin — Sat, 27 Jun 2009 21:43:17 +0000

The nature of the electronics food chain means that long-term differentiation is difficult. Some companies have it easier: specialized analog, a worldwide franchise in processor design, specialized memory architectures for example. But the bulk of semiconductor companies, while they may start with a strongly differentiated product, quickly find themselves operating in a standards-based, commodity-ridden business environment.

Standards are good: they help get technology adopted. But if your products are simply implementations of the standard, they are subject to commoditization, which leads to pricing pressure and low customer loyalty.

The challenge is that hardware design wins only last one generation, and you have to be the best in some meaningful sense to win each time. A purely hardware-based strategy for differentiation means you have to be clearly the best, generation after generation. You have to be the best in functionality, power consumption, level of integration, and price.

That’s a tall order for any company. It’s also hard to maintain, generation after generation.

Interlink Partners bring a deep understanding of the dynamics of semiconductors and the electronics ecosystem, from startup to Fortune 500, and from analog to digital SoC. From this experience we have distilled a set of processes for optimizing semiconductor companies in terms of a wide range of factors:

Fundamental product differentiation
Roadmapping
Ecosystem plays
Adjunct capabilities to extend the value proposition
User community leverage
System development enablement
Engagement in standards development
Market positioning and message strategy

Each of these areas represent significant and powerful ways to increase the stickiness and market power of your semiconductor products.

Our methodology is customized to your needs, combining executive interviews, practical workshops, hands-on strategy development, and executive support for implementation.

For more information and a confidential diagnostic interview, please contact us.

Differentiation for semiconductor companies

admin — Fri, 26 Jun 2009 23:31:49 +0000

Increasingly, the big winners in electronics are the systems companies that can claim consumer-level differentiation. Apple, for example, has been able to preserve margins and to maintain a powerful corporate brand and consumer loyalty even in the current difficult economic times. At the same time, many of their semiconductor suppliers have struggled to differentiate and to retain a position of value in the ecosystem.

This is a result to some extent of the challenging competitive environment, but it also arises from the high level of standardization in (especially consumer) electronics. DDR memory; ARM cores, USB, 802.11. All these standards mean that a systems company has greater choice, and an easier time switching out one semiconductor vendor for another.

Yet there are ways to strengthen your differentiation as a semiconductor company. Solution-level strategies, the use of proprietary IP, and service-level agreements are just a few of the techniques that can be employed.

If you would like to learn more about how your company can increase its differentiation in a tough market, contact us at info@srbcnetworks.com.

Interlink Partners» Management Consulting / Strategy / Marketing / Mergers and Acquisitions

Semiconductor business optimization

Differentiation for semiconductor companies