STMicro exec predicts dramatic chip industry consolidation
By Junko Yoshida, EE Times
Oct 24, 2002 (8:21 AM)
STRESA, Italy — Although STMicroelectronics has refuted rumors of its plans to purchase Motorola Inc.'s Semiconductor Products Sector, a high-level executive at STMicroelectronics said Wednesday (Oct. 23) that a dramatic consolidation of the semiconductor industry is inevitable.
Andrea Cuomo, corporate vice president at STMicro, said: "If the market downturn continues another year, there will be only five or six of us left." He named five possible survivors: "Intel, IBM, TSMC, us, and maybe one Japanese company."
Most semiconductor and electronics industry executives are shying away from predicting an upturn anytime soon, but Cuomo's consolidation scenario suggested that ST's acquisition of Motorola's chip business may be moving closer to reality.
On one hand, "You'd have to be pretty desperate" to pursue a series of mergers at this time, Cuomo said. But on the other hand, "You'd have to be the size of Intel or IBM" to sustain oneself in the electronics industry today, he said.
Any merger or acquisition requires a good deal of restructuring of the companies involved, and Cuomo indicated that discussions of "who bears the cost of restructuring" could be a big hurdle to concluding such deals.
Referring to the Motorola acquisition, Cuomo said, "It's still too early, in my personal opinion."
STMicro on Tuesday reported sales of $1.6 billion for the third quarter of 2002, up 7.5 percent from $1.5 billion in the second quarter, and up 17.5 percent from $1.4 billion in the like period a year ago. |
