The New York Times (NYT) analysis pointed out that many chipmakers are usually technical experts who have retired or quit the industry in recent years, replacing them with proactive executives who can speed up large-scale mergers and acquisitions and cut costs quickly increase profit.
The heat of the chip industry is due to the focus on shareholder value such as Broadcom's $ 105 billion acquisition of Qualcomm and Analog Devices' $ 14.8 billion acquisition of Linear Technology ), Brian Krzanich, Intel's sixth-largest leader, spent a combined $ 32 billion to acquire two large companies since 2015. While M & A in the industry is not new, as chip sales are slowing and the cost of developing new chips is high Costs have led these CEOs to seek bigger deals and reduce spending on technology projects that could take years to recover.
Broadcom is a leader, with approximately 30% of the five chip companies acquired or more than 5,000 losing jobs after the deal ended in 2013. Hock Tan said the layoff strategy is facing a slowdown in industry growth and market share Difficult to expand the reasonable reflection of the many chip companies think they can manage to solve the problem, but Tan believes that "they are still fighting the past."
At Microchip Technology, Microchip acquired 17 chipmakers since 2007, of which Atmel, which was acquired for $ 3.6 billion in 2016, was even bankrupt at the time and has a current operating margin of 30%. Microchip inked $ 839 million Micrel, another Silicon Valley-based company that acquired the company, increased its margins from 6% to over 30%, but at the same time, it was accused by internal staff of breach of contract and discredited with Micrel's founder.
Marvell, taken over by Matthew Murphy, was in a mess, including late filings, accounting irregularities and other allegations. Immediately after he took office, he released financial reports and then started reorganizing the chip business to focus on what makes money. Murphy also made Marvell's first Annual sales meeting, meeting analysts for the first time, sending regular emails to all employees and informal Friday afternoon meetings with employee groups, after which Murphy offered $ 6 billion to Cavium, arguing that Cavium could help Marvell penetrate the Internet giant's operations Cloud data center, so that it can compete with Broadcom.