Can Intel Catch Samsung? Can Anybody Catch Samsung?

As a professional conference attendee I see a lot of keynotes, some good and some bad. I saw a great one from Kurt Shuler at the SEMICO IP Impact Conference last week. Why this conference was not standing room only I do not know. Kurt’s characterization of the semiconductor industry was well worth the price of admission. I didn’t actually pay to attend of course since I’m an internationally recognized industry expert and soon to be bestselling co-author of “Fabless: The Transition of the Semiconductor Industry”. But I am certainly glad I left my Lazyboy Command Center and made the drive to Silicon Valley, absolutely.

First let’s look at Kurt. We are friends so I’m a bit biased but his credentials are very impressive. He started with a BS in Aeronautical engineering from the Air Force Academy followed by 6 years as a Navigator and Electronic Warfare Officer, Special Operations Forces. During that time Kurt was decorated for courage under fire and outstanding combat leadership after successful missions in Bosnia-Herzegovina, Iraq, and Haiti. He followed that with an MBA from MIT plus stints with Intel, TI and related technology start-ups. Recently, his current employer (Arteris) was purchased by Qualcomm for an obscene amount of money. So yes, Kurt is definitely someone you want to listen too.

Kurt’s keynote (slides) followed his recent article in EETimes “Wake Up, Semi Industry: System OEMs Might Not Need You” which highlights the changes in the semiconductor business climate. It’s a great article and the comments are worth a read too.

“Times have changed dramatically since semiconductor companies ruled the roost. Chip vendors used to control 99 percent of the chip design talent in the industry, but those days are past. In today’s world, perhaps 75 percent of the top silicon design engineers work for chip vendors and the remaining 25 percent are being snapped up by OEMs. That’s because the SoC design determines competitive advantage now more than ever, and software differentiation is not enough.”

Samsung is a frightening example as they can control the entire BOM for a variety of consumer electronics products including mobile devices and the Internet of Things. Yesterday was Samsung’s analyst day, the first one in eight years, and you can find the audio and presentation materials HERE.

“We will expand our mergers-and-acquisitions strategy beyond a few target areas to pursue opportunities across a wide range of fields,” Lee said. The company wants to “enhance the competitive edge of our current businesses and capture new chances for future growth,” he said.

In regards to the System LSI presentation (HERE), even if only half of it is true (which is about right) I do not see how Intel expects to compete with the likes of Samsung without making some revolutionary acquisitions in the very near future. Microsoft bought Nokia, Google bought Motorola Mobile, and through some key acquisitions Apple is now a leading edge fabless semiconductor company. Intel’s own investor meeting is in two weeks and they have some serious questions to answer now.

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