Industry mergers are driving semiconductor obsolescence

Business news |
By Nick Flaherty

“2015 saw a massive increase in the mergers and acquisitions in the semiconductor industry and that continued in 2016,” said Peter Marston, a consultant to Rochester Electronics, speaking at the International Institute of Obsolescence Management pan-European conference in Bristol this week. Rochester is the largest supplier of end of life devices with a bank of 12 billion die from 70 chip makers.

“When a company buys another company they want to get the benefits from the assets they bought, and to get the full benefit of the merger other assets are likely to be disposed of and that needs to be done in the first couple of years,” said Marston. “That leads, we believe, to product lines being discontinued – we think that in the next two to three years the rate of PDNs (product discontinuation notices) will be 3 to 4 times of today’s number – that number will go up very dramatically over the next couple of years.” For example there is already a massive EOL notice from Altera following the Intel takeover, he says.

The recent merger of Qualcomm and NXP/Frescale Semiconductor, should it go ahead, will have implications for iconic devices. “With Freescale probably some of the older processors will disappear such as PowerPC and 68xxx. That’s the direction we believe the merger is going. We don’t see where they fit in in the newer growth markets,” he added.

There will also likely be packaging fall out, he says. This has implications for older designs that want to replace a failed component. “One package that has pretty well gone is the 40pin DIL (dual in line). We can’t get a subcontractor to package these so we have had to install our own packaging line,” said Marston. That also applies to PQFP plastic quad flat packs. “The higher pin count 240 packages will be first, followed by others,” he said.


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