CNBC: NXP and Freescale Announce $40 Billion Merger - Page 1
Forum section: electronics / general

author: JoeN
author_rank: Frequent Contributor
timestamp: March 02, 2015, 03:13:16 am
content: I hope the combined company has Freescale's sample policy and not NXPs. That's all I will say. Any other comments?http://money.cnn.com/news/newsfeeds/articles/globenewswire/10122568.htmQuote from: .

author: photon
author_rank: Frequent Contributor
timestamp: March 02, 2015, 03:15:10 am
content: Looks like NXP is the survivor and Freescale shareholders get paid. Let the layoffs begin.cf.http://www.eetimes.com/document.asp?doc_id=1325871

author: westfw
author_rank: Super Contributor
timestamp: March 02, 2015, 03:35:54 am
content: Whoooooaaa...

author: BravoV
author_rank: Super Contributor
timestamp: March 02, 2015, 04:00:43 am
content: Quoting EEtimes ....... at a time of rapid consolidation as the semiconductor industry generally lumbers to single-digit growth rates.Wonder how long these big players can sustain with this kind of growth if this is the reality ? CMIIWMore giant consolidations to come ? May be its time to review thoroughly related stocks portfolios ?

author: ehughes
author_rank: Frequent Contributor
timestamp: March 02, 2015, 04:16:24 am
content: I wonder if FTF is still going to happen. It is a good time!

author: andersm
author_rank: Super Contributor
timestamp: March 02, 2015, 04:43:19 am
content: I guess Freescale will be a direct competitor to ON Semiconductor now? There's some overlap in the Cortex-M segment, but NXP have very little in the microprocessor segment where Freescale's i.MX have been quite successful. On the other hand, Freescale still have a lot of marginal legacy architectures that I doubt will survive for much longer. Also, what will this new thing be called, MotoLips?

author: miguelvp
author_rank: Super Contributor
timestamp: March 02, 2015, 04:48:59 am
content: Motolips sounds better than Phirola

author: westfw
author_rank: Super Contributor
timestamp: March 02, 2015, 05:08:07 am
content: (I have a general dislike and distrust of mega-mergers. They're HARD. I have personally benefited when my company's major competitors tried stuff like that, and failed badly.)(OTOH, starting to be happy that I didn't spend as much time on Coldfire as I had hoped to.)

author: free_electron
author_rank: Super Contributor
timestamp: March 02, 2015, 05:39:23 am
content: Quote from: BravoV on March 02, 2015, 04:00:43 amYou bet more consolidation is coming. i left the semiconductor industry 6 months ago. The writing is on the wall. All the 'old boys' are hurting like hell. No investment , the new technologies are super expensive to implement and they get their lunch eaten by megafabs like TSMC and UMC and Chartered that have the technologies.The time of the traditional design-fab semicon house if over. Nimble design houses can spin a design much faster than the big lumbering companies.Here is the dirty laundry :- the big semicon companies have outdated fabs, or fabs with some specialty technologies. if they can't monetize in the specialty techs their fabs are worthless. They cannot compete against the far east. they are two or three generations behind. Only the true big boys (Intel , Samsung , Toshiba ) can still do that. All the rest is obsolete tech. There have been instances where top 10 or top 15 ( but not top 3 ) companies have put in money to build a fab together to try to get into this really hi end stuff. and failed miserably. you can not compete against tsmc and umc.- so they need to monetize their fabs somehow. so they restrict their designs to stuff they can run in their own fab. This again is fine for specialty stuff , but does not work for the mass volume stuff. By forcing your design team to use sub-par technology you are slitting your own throat.Look at what is happening with ESP, skyworks and some others right now. It is a bloodbath. they are machine gunning the big boys.For those not in the know :ESP and skyworks make wifi, bluetooth and gps chipsets. These companies are fabless. they design the chip and have it made by tsmc.They are not restricted to outdated technology, they don't have the cost overhead of sustaining a fab, can use the latest technology. These guys spin those kinds of chips faster than any 'desgin+fab' company out there.The traditional suppliers are still screwing around with 'modules' ( a circuit board with a chip , some passives, and external combiner and an antenna ) , where the 'new generation' guys have single chips , all integrated (including the antenna) chips. 1/4 of the size , 1/2 the power consumption and 1/2 the price. So what are you going to do ?the big boys are caught between two dilemma' :- killing their fab and laying off 4/5 off their workforce to become design only. That's not going to fly, for multiple reasons, customer trust being 1, discontinuation of a lot of products being 2 .- keep lumbering on with existing technology that hampers their progress.the third alternative would be selling the fab , but nobody wants em as they are outdated.The only remaining solution is mega-mergers. But my feeling is that is just postponing the inevitable...The only traditional players ( in the sense of being fab+design) are the niche players like Analog devices , Linear Tech. They don't have to deal with second-source , nor are they doing second-source.Look at the others. How much money can you really still make of an LM324 if there are at least 5 companies making that thing. Why do you even keep that in your fab...The big boys survive on their specialty technology and one or two high flying products. The rest is just 'filler material'.An additional damper is the fact that devices are sold for the cost of the surface area. a power diode that is 1mm x 1mm of silicon sells for 0.5 $. A chip with 100.000 transistors and complex mixed signal circuitry that is 1mmx1mm also sells for 0.5 $ ... it just cost 100.000 times more to develop. why bother ?The semiconductor business has hit rock bottom ,apart from RAM, Flash ,cpu and smortphoney / tablety things.

author: Chris Jones
author_rank: Regular Contributor
timestamp: March 02, 2015, 06:28:04 am
content: So I'd like to know: Which nice parts are going to be discontinued - so I don't accidentally design one into a product. Also if any really nice parts are about to be discontinued, I might do a lifetime buy for private projects.

author: Stonent
author_rank: Super Contributor
timestamp: March 02, 2015, 07:06:21 am
content: Not much point in having your own fab unless you can corner the market on a making your own product with smaller and faster parts than the next guy like Intel can, or you just want to make a business of stamping out other people's parts.Nvidia was and I think still is a fabless company. When they got started in the 90s, ST (then still known as SGS Thomson) made all of their chips.

author: photon
author_rank: Frequent Contributor
timestamp: March 02, 2015, 07:49:01 am
content: I like to take an histerical view and compare the semiconductor manufacturing business with the automobile business. In the early 20th century, every bicycle manufacturer who learned how to build an engine manufactured a car. Today there are very few auto manufacturers. In the early 1960's, every electronic company who learned how to build a transistor manufactured a chip. Slowly there are fewer semi manufacturers. Same kind of economic forces. Customers will minimize price/value. Scaling allows semi manufactures to drive down price at the same value.

author: Howardlong
author_rank: Super Contributor
timestamp: March 02, 2015, 08:22:31 am
content: Both NXP and Freescale tend to offer 10 year longevity on their microcontrollers. Let us hope that this is adhered to post merger. I would imagine that they have warehouses full of years worth of wafers ready for package assembly and test as needed.What almost certainly will change is the toolchain offering, they are unlikely to offer parallel toolchains indefinitely.Although this merge mania seems somewhat inevitable, I often wonder how much the M&A pointy heads sufficiently consider intangibles such as the cost of uncertainty in the market created by the merger itself? I somehow doubt it, after all turkeys don't vote for Christmas.

author: Kjelt
author_rank: Super Contributor
timestamp: March 02, 2015, 08:55:06 am
content: I am getting worried that competition will end soon. I mean if there are 3 players left (Samsung, TSMC and UMC) that make new microcontrollers for smartphones and flash chips which are the cashcow chips, whats keeping them from increasing prices

author: photon
author_rank: Frequent Contributor
timestamp: March 02, 2015, 09:07:40 am
content: Quote from: Kjelt on March 02, 2015, 08:55:06 amThis is another advantage of scale, you drive your competitors out of business. The only controls are the governments of the world's economies. For example, in the US the FTC will review this merger and must approve it before the merger can take place. I would guess that Europe also has veto power on this merger.

author: mikeselectricstuff
author_rank: Super Contributor
timestamp: March 02, 2015, 09:27:16 am
content: Quote from: free_electron on March 02, 2015, 05:39:23 amI'll give 'em a few quid for teardowns....QuoteQuoteI do wonder about the long-term prospects for high performance analogue market, when the trend is increasingly towards throwing computing power at the problem, SDR and Class D amplifiers being a couple of more obvious examples, but I'm sure there are many other cases were compute cycles can be used to compensate for lower performing analogue.

author: janoc
author_rank: Super Contributor
timestamp: March 02, 2015, 10:48:31 am
content: Quote from: Kjelt on March 02, 2015, 08:55:06 amWell, that - and having all the manufacturing capacity concentrated in the hands of 2-3 players geolocated in roughly the same area. All it takes is one big earthquake or a typhoon to cause an enormous disruption. Not like it didn't happen before.Going fabless is good, but someone finally has to build those chips. And if everyone goes to the same place in Asia, at some point there will be capacity problems, competition issues ("you really want to delay/refuse that chip from our competitor or we take our toys elsewhere ..."), availability in case of a natural disaster or some other "force majeure" (e.g. a fire, a labour dispute or some political decision by the Chinese government).It could end up in a similar situation as with Li-ion batteries - when Tesla wanted the cells for their cars, they had to build their own factory because there was nobody left who could supply them in the quantities they needed.

author: Kjelt
author_rank: Super Contributor
timestamp: March 02, 2015, 10:55:56 am
content: I can understand that ic manufacturing is a non core business for most companies just as that most electronic companies don't make their own pcb's anymore. And that the price of a new gen fab is so extremely high (billions of $) that only 365/24/7 production will result in profits.That said I think the biggest problem for the whole industry are the low profit margins on all products, not only the end products (tv's are so cheap nobody repairs them anymore they just buy a new one each 3 years) but also the half products like the integrated circuits.I can not think of any other business where the price eroded so much the last 20 years as in electronics and I do not think it is healthy.

author: photon
author_rank: Frequent Contributor
timestamp: March 02, 2015, 05:11:45 pm
content: Quote from: Kjelt on March 02, 2015, 10:55:56 amIt is due to Moore's law that the price of electronics has so drastically been reduced. It has been a wonderful ride, and is not over by any means but may slow. No exponential is forever.

author: retrolefty
author_rank: Super Contributor
timestamp: March 02, 2015, 05:25:53 pm
content: A related question for those with experience. What is a typical coompanies' design rule on chip availability for new designs?Back in the 70s and 80s when I was in mini-computer field service they would not design in a chip unless there was an approved second source supplier. I guess that has had to change over the decades as certainly I don't think there are many second source suppliers for specific microcontroller chips and such?

author: Howardlong
author_rank: Super Contributor
timestamp: March 02, 2015, 05:32:24 pm
content: Quote from: retrolefty on March 02, 2015, 05:25:53 pmRegretfully you can't do much exciting these days unless you're using something proprietary. It is certainly a risk, I had a supplier go insolvent on me once, it killed a product of mine, I had to redesign it almost from scratch with new parts.

author: nctnico
author_rank: Super Contributor
timestamp: March 02, 2015, 05:47:07 pm
content: Quote from: retrolefty on March 02, 2015, 05:25:53 pmToday most of the R&D value and cost of a product is in the software. If your software is portable to a different platform then the product is basically future proof.

author: dannyf
author_rank: Super Contributor
timestamp: March 02, 2015, 06:22:18 pm
content: QuoteFor NXP/Freescale, ic manufacturing is their core business.QuoteThe cost of a fab comes into play only if you are in the digital side. For the analog guys, the cost of a fab is almost irrelevant - they are perfectly fine with really old stuff.QuoteDepending on what "margin" you are talking about. The beauty of companies like NXP and Freescale is their free cash flow - thus the buy outs on those companies.The play here is cross-sell: offering more products to the same customers so you only incur the cost of selling to them once. The more penetration you achieve at an account, the less likely they can dump you wholesale -> you gain pricing power.

author: Mechanical Menace
author_rank: Super Contributor
timestamp: March 02, 2015, 06:29:15 pm
content: How the mighty have fallen. For a long time Motorola were my favourite brand of CPU, and as far as I was concerned the only reason to get a Mac over a PC, and I still play with my first gen Mac Mini purely because PPC ism't x86.But TBH I'm surprised Freescale have lasted so long since everyone using a PPC went over to IBM, I can only guess they're still popular in telecoms and industrial uses.Quote from: 3roomlab on March 02, 2015, 05:36:59 pmAMD have (somehow) managed to consistently keep at about 20%* of the market size of Intel so probably not. And supplying the APUs for the XB1 and PS4 can only help, especially seeing as they are identical.*They jumped up a bit to like a third when the Athlon 64s were kicking Intel's offerings arses but that didn't last long.

author: Kjelt
author_rank: Super Contributor
timestamp: March 02, 2015, 06:34:33 pm
content: IC design is their core business the production could easily be outsourced. NXP earns a lot of money on patents like I2C that probably expired by now but the point is that they made money with designs.

author: dannyf
author_rank: Super Contributor
timestamp: March 02, 2015, 06:44:15 pm
content: QuoteI'm sure that's the case. However, for the larger guys, the chips are the delivery vehicle for those value-add designs - ie. without selling those chips, they couldn't have sold their designs.That's in sharp contrast to the small "fab-less" design houses who will design modules for others, or to license their chips for others to use, either in another chip or in their own designs. They don't typically sell into end users.The bigger guys usually are not fab-less, and usually don't license designs to others - they market their own chips. This makes sense given their existing design base and their foot print into the end users.

author: Nauris
author_rank: Regular Contributor
timestamp: March 02, 2015, 07:18:48 pm
content: Quote from: free_electron on March 02, 2015, 05:39:23 amExactly, but on the other hand there are plenty of niche players. Things like wifi chips and ARM processors are one thing but there is much more to semiconductor business than that. Special processes is the key here and companies like Infineon, AMS, Bosch, Osram and ABB are doing quite well.Then there are also some companies who can sell products made with older processes. For example look at Microchip they are certainly not doing badly. Thought in this case the "selling" part may be more important than the "making chips" part.QuoteWell at least there is no fabless company designing LM324 and getting them made at TSMC, I suppose...Then there is also the usual clausule from fabless chipmaker website:QuoteQuote from: KjeltFor Freescale that is the case but NXP is more into jellybean parts - if you need BC847 NXP will sell you one.

author: nctnico
author_rank: Super Contributor
timestamp: March 02, 2015, 08:11:36 pm
content: NXP's has many ARM microcontrollers and these work very well. I wouldn't be surprised if the Freescale Kinetis series gets dropped in the end.

author: Marco
author_rank: Super Contributor
timestamp: March 02, 2015, 08:18:11 pm
content: Quote from: free_electron on March 02, 2015, 05:39:23 amST is still hanging in there, 28nm is not obsolete (for logic any way, that's what Toshiba is at too). If they don't get some significant EU support I don't know if they'll be able to make the (glacial) transition to multi-patterning though (or maybe EUV ... hah).

author: dannyf
author_rank: Super Contributor
timestamp: March 02, 2015, 08:40:28 pm
content: QuoteThe Freescale chips are infinitely better than anything NXP has to offer. Not to mention software + field support.If anything, I would bank on the opposite.

author: nctnico
author_rank: Super Contributor
timestamp: March 02, 2015, 08:56:54 pm
content: Quote from: dannyf on March 02, 2015, 08:40:28 pmYeah rightNXP has been in the ARM business for about a decade longer than Freescale! It seems Freescale started to make the Kinetis range in 2010 in a me-too attempt to grab a bit of the ARM market because selling their pre-historic architectures is obviously not going to be a future proof strategy. The limited range of the supported cores by Freescale is a big sign on the wall.

author: Kjelt
author_rank: Super Contributor
timestamp: March 02, 2015, 09:14:37 pm
content: At the news this evening they said Freescale was interesting to NXP mainly for its automotive products.

author: photon
author_rank: Frequent Contributor
timestamp: March 02, 2015, 09:17:57 pm
content: Quote from: nctnico on March 02, 2015, 05:47:07 pmThat is correct, software is currently a labor cost. But, if the Industrial Revolution has taught us anything, it's that labor can be replaced by machines at lesser cost. Until that happens for software, big advantage to India and China with their large, educated labor pool.

author: free_electron
author_rank: Super Contributor
timestamp: March 03, 2015, 07:37:11 am
content: Quote from: mikeselectricstuff on March 02, 2015, 09:27:16 amThey may give you money to take em !Dirty secret number 2:IBM offloaded their semiconductor fabs last october... to GlobalFoundries.IBM PAID , yes PAID, you read that right : PAID !!! , 1.5 billion dollar so Globalfoundries would take them !Basically they offloaded the fabs and paid enough money so Globalfoundries could upgrade them to do processes the market wants.The thing exploded lat week when the investors got wind of it ( IBM wrote it off as a 4.7 Billion $ charge. Split between value of the fabs and the money to take em )Globalfoundries was after the technology patents , the fabs themselves, as they are are virtually worthless as they are outdated.That pot is boiling over right now...http://www.theregister.co.uk/2015/03/03/ibm_sued_for_talking_up_chip_business_it_couldnt_give_away/And it ain't the only one. The whole industry is going to come crashing down. I predict at least two or three more of these mergers.

author: free_electron
author_rank: Super Contributor
timestamp: March 03, 2015, 07:39:20 am
content: Quote from: Kjelt on March 02, 2015, 10:55:56 amit is. i gave the example of the 1 square millimeter diode.The race to the bottom is over. They have found it.And now they are all standing there looking around where the exit hole is... Hint : it's above them , yet they still believe it is between their buttocks...

author: dannyf
author_rank: Super Contributor
timestamp: March 03, 2015, 02:14:03 pm
content: QuoteYeah. Freescale and Renesas absolutely dominate that market. Infineon to a less extent.

author: zapta
author_rank: Super Contributor
timestamp: March 03, 2015, 03:29:27 pm
content: Quote from: photon on March 02, 2015, 09:17:57 pmThe cost of manufacturing software is virtually zero and it's already very automated.

author: photon
author_rank: Frequent Contributor
timestamp: March 03, 2015, 07:34:44 pm
content: Quote from: zapta on March 03, 2015, 03:29:27 pmYes, the beauty of a software only company is that the end product is just a file of binary digits. The capital costs are only computers which are plentiful and inexpensive. However, that statements masks the true costs of software. It is very, very difficult to make such a file of just the right binary digits. So, to meet time to market, companies end up hiring lots of people mostly to verify and quality check the code written by the programmers. If you look at these labor costs they are high. Yes, software production is highly automated, but there is significant economic pressure to automate it more.

author: coppice
author_rank: Super Contributor
timestamp: March 04, 2015, 05:56:59 am
content: Quote from: dannyf on March 02, 2015, 06:44:15 pmMost fabless semiconductor companies market their own chips. If you look at who has risen to become big in the last few years, they are fabless companies. Qualcomm has become huge, and never made any of its silicon in house. nVidia and others aren't small, either. On the other hand many semiconductor companies with fabs, like Freescale, have shrunk considerably - 20 years ago only Intel was bigger than Motorola Semiconductors, as it was then. Most semiconductor companies with fabs now have their finest geometry parts fabricated by a foundry. For better or worse, they currently put most of their fresh investment into silicon design, not new state of the art fabs.

author: free_electron
author_rank: Super Contributor
timestamp: March 16, 2015, 05:56:28 pm
content: Here's the next one : Cypress just announced they will merge with Spansion in a 5 Billion dollar merger...so far we got- ibm sold off ( gave away ) all their fabs to Chartered- NXP merges with freescale- Cypress merges with Spansion.i predict two more ...

author: JohnnyBerg
author_rank: Frequent Contributor
timestamp: March 16, 2015, 06:01:26 pm
content: @free_electron: obviously being a insider in the chip business, how do you see the future?Will prices of common stuff more erode?Is there over capacity, and what will that do with prices?

author: ataradov
author_rank: Super Contributor
timestamp: March 16, 2015, 06:50:30 pm
content: Quote from: free_electron on March 16, 2015, 05:56:28 pmThe trick is to predict companies, not counts

author: free_electron
author_rank: Super Contributor
timestamp: October 15, 2015, 03:46:52 pm
content: AD and Maxim ...and since i'm at it :Fairchild with Infineon or On Semi ...DUCK !

author: Richard Crowley
author_rank: Super Contributor
timestamp: October 15, 2015, 04:18:11 pm
content: Quote from: free_electron on March 02, 2015, 05:39:23 amOver on an audio forum (GearSlutz) there is general moaning about a bunch of specialty products from TI that are being discontinued. A few with "replacements" of various suitability, but more of them with no replacement, from TI or anyone else. The reason given is that TI is shutting down a 6-inch fab. I was rather surprised that there were still 6 inch fabs still running. My employer shut down our 6-inch development fab 20 years ago.https://www.gearslutz.com/board/geekslutz-forum/1035492-lme49710-lme49720-end-life.html

author: free_electron
author_rank: Super Contributor
timestamp: October 15, 2015, 04:30:40 pm
content: oh yes, there's plenty of 6 inch stuff still running. most old school analog stuff that has been in production for 15+ years is still ran there.the equipment has no residual value and is written off. spare parts are cheap. processes are mature and dialed in. those things are basically made at near zero cost. it is more costly to redesign the silicon and port it to new technologies. These products are so low cost they could never recuperate the porting costs.The semiconductor business is going through a massive merger wave because it is untenable. a 5 million transistor chip sized 1mmx1mm costs as much as a 1n4007 which is also 1mmx1mm. just the development cost is a million times larger.After the consolidaion wave i predict a lot of 'old product' will get the axe. simply because there will be overlap in production lines and they will shut down the bottom half of products. : take a look at what we now make after merging and chop of anything that makes less than X amount.TI started with axing a bunch of old school NatSemi stuff. the rest will follow. after all , do we really need 7314 different opamps ? if we got a few good ones we're set.

author: kfnight
author_rank: Regular Contributor
timestamp: October 15, 2015, 06:05:30 pm
content: Quote from: free_electron on October 15, 2015, 03:46:52 pmThe story...http://www.eetimes.com/document.asp?doc_id=1328023&

author: zapta
author_rank: Super Contributor
timestamp: October 15, 2015, 06:47:29 pm
content: Quote from: free_electron on October 15, 2015, 04:30:40 pmI used to write real-time software for those machines. The buzzword at the time was 'clusters' and one of the protocols was called SECS. That's all I remember.

author: Richard Crowley
author_rank: Super Contributor
timestamp: October 15, 2015, 07:57:08 pm
content: SECS = SEMI Equipment Communication Standard - the protocol for communicating with fab tools.SEMI = Semiconductor Equipment & Materials InstitutePresumably, "cluster" referred to groups of identical machines (like diffusion furnace tubes) grouped together for control purposes.We now have AMHS (Automated Material Handling System) for moving boxes ("FOUPS") of wafers from one machine to the next on an automatic routing system. Working towards a "lights-out" factory some day that won't require technicians to implement routine movement of product.

author: zapta
author_rank: Super Contributor
timestamp: October 15, 2015, 08:40:28 pm
content: Quote from: Richard Crowley on October 15, 2015, 07:57:08 pmI presume the software used fancy internet technology these days. SECS was originally a serial wire RPC protocol (so the term RPC) was not used and then we used OSI and then IP as transports.Mechanic was very clever with special consideration to avoid friction between parts.

author: free_electron
author_rank: Super Contributor
timestamp: October 15, 2015, 08:57:16 pm
content: SECS ... i remember that one.i once made controllers for the wet etch line in our fab. i implemented SECS so we could hook em up to the VAX. We had a VAX cluster running the fab tracking software ( called COMETS) . you would type in the lot number on the wet etch controller and it woudl request from the VAX if the lot was supposed to be there, what recipe was supposed to be run and then do a move-in and move-out . Based on an 80528 cpu with membrane keypad an 2x24 char lcd displaythose were the days ... 1991

author: Richard Crowley
author_rank: Super Contributor
timestamp: October 16, 2015, 03:50:16 am
content: Yeah, back in the bad old days of VAXen and COMETS. I once wrote an 80x24 character-mode simulator for COMETS to train new fab technicians and operators. It ran in an MSwin window(!)Then we migrated to Sun servers running everything in the fab. The models that used our own CPU chips, of course. ("Eat your own dogfood.") And then when the Sun went down, we migrated to running all the fabs on ordinary Windows servers (and clients), typically Dell and HP last time I checked.