Ok. Let's be honest. While we do have internal problems that we need to deal with, the bigger issue is that in general, the semiconductor industry is entering a period of a huge slump. We're not alone. Look at all the earnings that are coming out recently. Micron got totally bitch slapped. Intel's not exactly doing great. Broadcom's not doing great. Neither is TI. The only ones doing alright are the low cost companies (asian companies)...Most U.S. companies are having a tough time to compete outside the U.S. It's just finally caught up to us.
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Yes and while everything is going to pot, QCOM gives "retention" bonuses to high level management. All this when planning layoffs, cutting raises and bonuses. Isn't there something wrong with this picture?
First, there's a difference between problems caused by a soft economy and the state of the industry as a whole. During the recent economic slowdown, technology--particularly technology related to cell phones and tablets--has been one of the bright spots. During the depths of the recession, when people were losing their houses and patching their cars, furniture and heavy appliances together with duct tape instead of buying new, the one thing people were still buying was cell phones. When homeless people are walking around with Blackberrys, you know the industry has plateued. We are at a point where the industries make communications equipment with comparable functionality, and any innovations are nice but not essential. There are only three areas of competition: Price, innovation and quality. US workers can't win a price war simply because US employers can't pay slave wages. Innovation, is limited for the time being, by the contraints of the network, and by corporate practice of milking the IP for every last drop of profit they can wring from it. Innovation also takes a while to pay off. Recently, the attitude of Q's officers and directors has been if can't make immediate profit from something they aren't interested, and thus they start getting rid of their most innovative engineers. Quality is also problematic for the Q. When you have contracts to manufacture that support another company's six sigma/lean manufacturing process, you wind up sacrificing quality. (Think Wal-Mart and major auto manufacturers. These are industries that no longer waste money storing component parts in warehouses. Same for many other industries, nowadays, including electronics manufacturers.) When you have a company order a few million chips by a date certain so they can meet their production and supply deadlines, one of the things that suffers is quality control. This is particularly problematic in the Q, where divisive politics between departments/divisions hinders cooperation. In the end, what doesn't work is quickly "patched" with Q's proprietary fake-linux crapware. And when deadlines are not met, it is the engineers who are downgraded and fired, instead of PMs, directors and VPs.