P
philippelambinet
Guest
In the history of our industry, Analog and Digital products and technologies always followed separate paths.
Digital has been, almost from day one, racing towards more integration, cost reduction, consolidation and Digital saw the emergence of the fabless business model. Analog, on the other side, enjoyed much longer product/process life cycles, higher margins and much higher ROI and RONA. Also, many small and mid-size players were able to remain healthy doing their business in comfortable niches, having their own fabs.
Times have changed. Analog is now following trends that are very similar to what the digital world has seen for a long time.
Integration: More and more, thanks to competitive mixed-signal technologies, full system solutions are being integrated in what could be called "Analog SOCs". Analog ASSP category is enjoying faster growth than all other analog categories.
Shorter life-cycles: Consumer applications use just as much analog as they use digital. Their life cycle is very short and customers expect more and more functionality for each new generation. This is obviously true for smartphones but it is also true for many other markets even outside of the consumer domain. Sure, you can still find 20 yr old Op-Amps but this General Purpose part of the market is less and less prevalent, especially in fast growth markets.
Fabless model: Many old analog fabs are closing or being sold. Several major players in the analog market are moving significant portion of their business to foundries. Maxim is a good example and they are far from being the only ones.
Consolidation: TI buying National Semiconductors and launching 12" analog fabs started a new era for Analog Semiconductors. It is an era in which size matters just like in Digital. If you are sub-scale, it becomes really hard to compete with TI in the Analog General Purpose arena and it is very hard to compete in the ASSP arena because you will miss some critical IPs in the race for integration or you will lack the R&D mass to compete with the likes of Maxim, Analog Devices, NXP, Infineon and TI. As a consequence, we see a wave of consolidation happening in Analog, something which we did not see before. We also see companies like ST going down inexorably in the analog ranking for the very same reasons they went down in the digital ranking.
As Analog and Digital business models get closer and closer, a natural consequence is the consolidation inside "platform" companies of both analog and digital products in order to develop and market complete solutions including analog+digital+software. Qualcomm is an obvious example. If you look at the history of their acquisitions, you will find that they acquired many analog companies even if they are seen as the ultimate digital platform player.
It is quite clear that GP analog will not disappear any time soon. TI is so strong there that it won't be easy for their competitors.
It is also clear that some big niches will continue to exist for certain analog players. Linear Technologies is a good example of a big niche player, leveraging exceptional expertise to remain very significant and fully relevant. These are counter examples but they do not change the fact that, for the most part, Analog and Digital are now following very similar paths.
Digital has been, almost from day one, racing towards more integration, cost reduction, consolidation and Digital saw the emergence of the fabless business model. Analog, on the other side, enjoyed much longer product/process life cycles, higher margins and much higher ROI and RONA. Also, many small and mid-size players were able to remain healthy doing their business in comfortable niches, having their own fabs.
Times have changed. Analog is now following trends that are very similar to what the digital world has seen for a long time.
Integration: More and more, thanks to competitive mixed-signal technologies, full system solutions are being integrated in what could be called "Analog SOCs". Analog ASSP category is enjoying faster growth than all other analog categories.
Shorter life-cycles: Consumer applications use just as much analog as they use digital. Their life cycle is very short and customers expect more and more functionality for each new generation. This is obviously true for smartphones but it is also true for many other markets even outside of the consumer domain. Sure, you can still find 20 yr old Op-Amps but this General Purpose part of the market is less and less prevalent, especially in fast growth markets.
Fabless model: Many old analog fabs are closing or being sold. Several major players in the analog market are moving significant portion of their business to foundries. Maxim is a good example and they are far from being the only ones.
Consolidation: TI buying National Semiconductors and launching 12" analog fabs started a new era for Analog Semiconductors. It is an era in which size matters just like in Digital. If you are sub-scale, it becomes really hard to compete with TI in the Analog General Purpose arena and it is very hard to compete in the ASSP arena because you will miss some critical IPs in the race for integration or you will lack the R&D mass to compete with the likes of Maxim, Analog Devices, NXP, Infineon and TI. As a consequence, we see a wave of consolidation happening in Analog, something which we did not see before. We also see companies like ST going down inexorably in the analog ranking for the very same reasons they went down in the digital ranking.
As Analog and Digital business models get closer and closer, a natural consequence is the consolidation inside "platform" companies of both analog and digital products in order to develop and market complete solutions including analog+digital+software. Qualcomm is an obvious example. If you look at the history of their acquisitions, you will find that they acquired many analog companies even if they are seen as the ultimate digital platform player.
It is quite clear that GP analog will not disappear any time soon. TI is so strong there that it won't be easy for their competitors.
It is also clear that some big niches will continue to exist for certain analog players. Linear Technologies is a good example of a big niche player, leveraging exceptional expertise to remain very significant and fully relevant. These are counter examples but they do not change the fact that, for the most part, Analog and Digital are now following very similar paths.