IC company status and projection
Some of the industry’s leading companies—the ones that typically rank among the Top 20 by revenue—are either weighed down with huge debts or were excluded from our rankings due to cross-holding ownership structures that make it difficult to determine how much of their available cash can be attributed to the components business.
In this category are many Asian companies, including Toshiba Corp and Samsung
I think Samsung here has most deep pocket once all out competition begins. Diverse products and risk mitigation should allow them more investment power than anybody else.
Intel, the biggest semiconductor company by revenue, sits atop the ranking of the richest chip manufacturers worldwide. The company’s whopping $11.6 billion in cash and a mere $1.2 billion in long-term debt gives it a net cash position of $10.5 billion, enough to keep funding its aggressive R&D programs, next-generation fabs and other capital requirements.
No wonder Intel can afford to continue throwing money at new programs and financing plans to diversify its revenue stream at a time of slowing growth in the microprocessor business. The company’s cash hoard also means it can intensify its repeated efforts to gain a foothold in the wireless IC market without needing to borrow money from the debt markets. In fact, Intel, based on how much money it spends each quarter, could easily outspend any opponents in whatever IC market it dares to venture.
The same could be said about Qualcomm, the No. 2 company in our rankings. The digital wireless IC vendor closed the June quarter with a net cash position of $9.9 billion and zero debt despite a slight fall in sales from the year-ago quarter. What this means is that Qualcomm can stave off the competition by pumping money into new research areas, doubling marketing efforts and adopting the latest technology initiatives to boost productivity and cut costs.
Wafer foundry TSMC is in third place, with $7.5 billion in net cash and less than $140 million in long-term debt. This is no doubt comforting for a company that must remain in top technology shape and stay current with the latest multi-billion dollar fabs to keep customers coming back.
Fourth place Texas Instruments, which closed the second quarter with $2.6 billion in cash and no long-term debt, was followed by Broadcom Corp., another debt-free company that ended the quarter with $2.2 billion in cash
Intel and Qualcomm play in different game. Qualcomm doesnt have to put a lot of money into technology development that requires multiple bilion dollar every year. Qaulcomm can focus on standardization and new application product rather than coming up with new process technology. If Intel wants to compete with Qualcomm, they eventually have to realign themselves to one area, rather than doing all of them in-house.
Process technology becomes more capital game than technical Excellency, so device performance will be equalized within a month period, so the differentiation in process technology becomes very narrow. More importantly, the cost of process technology R&D requires wide collaboration in tool and material, which make proprietary process technology development becomes more difficult, in fact not possible.
In addition, end user would not appreciate slight performance gain in the CPU core in overall user experience for the mobile communication/computing device. The more important differentiator will be the eco system of the service and accessibility of the communication provider.
Intel clearly lacks in this area.
Who can survive in 2018.. Toshba and TI seem tough survivors. Intel and Samsung will stay. Qualcomm has a chance to keep pushed up depending on the outcome of competition in mobile computing area.