Summary
The stage is set for consolidation in the semiconductor industry. The firms that will be hit hardest with this are those that make commodity products in low-growth markets. In particular this will impact Samsung, Hynix, Micron, Qimonda, Elpida, Powerchip, and Nanya.
Analysis
Gordon Moore in the subject article explains that he finds it likely that a some semiconductor companies will merge or disappear. Our research at Objective Analysis indicates how and why this will occur in an important way for the DRAM side of the semiconductor business both now, and in an ongoing manner over future years.
The following is excerpted from a report available at www.Objective-Analysis.com :
"The cost to construct/equip a competitive [DRAM] fab is growing at an average annual rate of about 12%. [DRAM] Industry revenues are growing at an average annual rate of less than 5%"
"...any company that wants to remain in the business must grow faster than the market, gaining market share. A reasonable way to accomplish this is to consolidate."
