Intel and the Mobile Phone Market

In Intel and TSMC Strategic Partnership we observed the signing of a cooperative agreement between Intel and TSMC to enable Intel ans system on chip (SoC) designers to integrated Atom processor technology into their SoC. In an analysis of the agreement between TSMC and Intel Electronics Weekly argue this is to enable Intel to more effectively penetrate the mobile/smartphone processor market and to start challenging ARM in a serious way. The article is a good read. Follow the link below for more.

Electronics Weekly: Analysis: Atom Exposes Intel's Mobile Dilemma

Ex-TSMC Employees Protest Redundancies

It is always sad in these economic times when people are laid off from work but if what the Taiwan News is reporting, its sad. Sadly employee practices and treatment in Taiwan can be pretty harsh and most of the labor laws (at least from my perspective) favor the employer with very little support for the employee. Anyway, Taiwan Times reports some former TSMC employees were forced to sign letters saying they voluntarily resigned from the company when in fact they were made redundant. Because they "resigned" they lost any benefits accrued to them. Of course there are two sides to every story, but this would be very sad if true.

More than 20 former employees of Taiwan Semiconductor Manufacturing Co. (TSMC) who recently lost their jobs complained to the Hsinchu Science Park Administration yesterday that they had been unfairly treated by the company.

The workers applied to the park administration to mediate their dispute with the company after accusing TSMC at an earlier protest rally of firing them but forcing them to sign a document certifying that they left TSMC, the world's largest contract chip manufacturer, voluntarily. Some 50 policemen were called in to maintain order.

The workers made a number of demands, including that TSMC issue a certificate saying they did not resign voluntarily and that they be compensated based on retirement or preferential severance terms.

They also insisted that TSMC apologize for describing their redundancies as a company policy to "eliminate the less competent ... employees" and demanded they be given preference if TSMC increases its work force in the future.

Responding to claims, a member of TSMC management said the former TSMC employees could contact the company directly if they had any requests.

"The company will demonstrate the greatest sincerity in helping solve their problems," the TSMC official said.

Kao Shih-nan, secretary-general of the Hsinchu Science Park Administration, said his office accepted the former workers' applications and will help arbitrate the dispute between the two sides.

Hopefully TSMC is not putting in bad employment practices. They have a good reputation. I also hope the laid off employees will be able to find gainful employment soon somewhere else.

Taiwan News: Former Taiwan Semiconductor employees protest loss of jobs

ASUS to Reorg Again

In Clashes at Pegatron and ASUS we shed some light on the internal politics at ASUS and the different power struggles that are starting to effect the company. Power struggles are never good especially in an economic downturn and especially in the face of first ever quarterly losses. Well anyway, hot on the heels of the power struggle news comes a Reuters report suggesting ASUS are planning another major reorg, the second this year. The first cut their departments from 12 to 6 and now rumours sugges they might cut their departments to three and lay off between 5% to 10% of their workforce. According to Reuters:

Netbook PC pioneer Asustek (2357.TW) is planning a reorganisation, its second this year, to further streamline its operations, a company official said on Thursday.

No concrete plans or specific timeframe have been finalised, including the possibility of layoffs, said the official, speaking on condition that his name not be used because he was not authorised to speak to the media on the company's behalf.

"Nothing has been officially announced yet, we're still in the process of planning but the current framework is to further cut our business into fewer departments," he said.

Local media reports on Thursday said the company could cut its number of departments to three from six, and lay off 5-10 percent of its staff.

That reduction would come after Asustek said in January it was halving its number of departments to six following its first-ever quarterly loss in the last three months of 2008. [ID:nTPU001101]

The company pioneered the wildly successful low-cost netbook PC in 2007, but has been gradually losing market share as bigger players such as Acer (2353.TW), Hewlett-Packard (HPQ.N) and Dell (DELL.O) enter the market.

It seems all is not well at the founder of the netbook. A couple of years ago (18-months ago) ASUS were riding high on the launch of their Eee PC but now are being hammered in the market. Why? Who knows? They seem to be a ship without a rudder (strategy) right now and when that happens people reorginze the company! Heck you have to appear to be doing something right!

I really hope ASUS pulls through and pulls through fast. Lets face it they are a good company that have produced good products in the past. They are not afraid to innovate organizationally or product-wise. Spinning off their manufacturing to focus on brand-building wasn't a bad idea, but they should have tried to appease everyone in the process and ensure the transition was smoother than what it has been.

I know ASUS is not finished yet and that they are being severely affected by the current economic climate but being reactionary at this point won't suffice. The Eee PC was a sustainable product and their strategy in this market sector was good. One wonders if they have indeed lost direction and if they have when and why?

Reuters: Taiwan's Asustek plans further reorganisation-source

The Dream is Gone: No Gvt. Backed Merger for Taiwanese Memory Industry

The dream is gone! Sounds like a Pink Floyd song! Oh dear, the floundering industry here in Taiwan seemed to be putting their hopes on a government led initiative to consolidate the industry here in Taiwan. In Taiwan Government to Invest in DRAM Industry we gave some insight into what the government plans to do with the industry but today, Bloomberg has more:

Taiwan’s economic affairs minister ruled out a state-led merger of its computer-memory chipmakers, signaling the government is scaling back its plans to reorganize the $23.6 billion industry.

“It’s too complicated and difficult to have an outright merger,” Economic Affairs Minister Yiin Chii-ming told reporters in Taipei yesterday. Newly formed Taiwan Memory Co. “will focus on obtaining technologies and then look for existing plants in Taiwan for manufacturing needs.”

Yiin joins John Hsuan, appointed by the state to oversee the creation of Taiwan Memory, in raising doubts this week about the scale of the island’s plans to revive its unprofitable semiconductor industry. Since last year, the economic affairs ministry has said Taiwan may push for consolidation, fueling speculation that the six domestic chipmakers would merge in a so-called “Big Bang.”

So then, what is Taiwan Memory all about. Well according to Bloomberg:

Hsuan, an honorary vice chairman at United Microelectronics Corp., was named last week by Taiwan’s government to create a domestic chipmaker that could challenge global industry leader Samsung Electronics Co.

The island’s six computer-memory chipmakers, saddled with about $11 billion of debt, should consolidate with Taiwan Memory because having more than one producer “makes no economic sense,” according to Morgan Stanley analysts Frank Wang and Jerry Su. The company should also merge with or invest in Elpida Memory Inc. to access the Japanese chipmaker’s technology and collaborate with Boise, Idaho-based Micron Technology Inc., they wrote in a March 10 report.

Instead of pursuing mergers and building its own multi- billion-dollar semiconductor factories, Taiwan Memory may acquire manufacturing plants from the domestic chipmakers, Minister Yiin said yesterday.

Mmm. Interesting. There have been rumours flying around about industry consolidation for sometime but now it seems Taiwan Memory will be added as a competitor and the industry will become even more fragmented. Is this good for Taiwan's memory industry? I have absolutely no idea. On the one hand they will buy assets from struggling companies to help them alleviate their debt but then the existence of these companies will be jeopordized especially, if as speculated, Taiwan Memory imports Elpida's technology. Some of the six memory companies in Taiwan will collapse I fear. However, with the development of Taiwan memory, at least there will be some place for the expertise to go. These deals are becoming more interesting and I will keep you up to date (and do my best to avoid speculation!).

But for now: "I cannot put my finger on it now. The child is grown, the dream is gone. I have become comfortably numb." So says Pink Floyd!

Oh yes, as always, I look forward to your comments!

Bloomberg: Taiwan Rules Out Chip Mergers in Industry Reorganization Plan

Taiwan Government to Invest in DRAM Industry

Thats right, the government is committing close to one billion US dollars to bailing out the industry. The bailout (sounds like a US financial blog with that word doesn't it) is to consolidate the industry. The International Herald Tribune has an interesting article on the bailout:

Taiwan will inject as much as 30 billion Taiwan dollars, or $867 million, into Taiwan Memory, the new computer memory chip company that it is setting up to bail out its struggling memory chip sector.

"The less money the government invests, the better," said John Hsuan, an industry veteran named last week by the economics ministry to oversee establishment of the new maker of dynamic random access memory, or DRAM, chips. He said that he expected "no more" than 30 billion dollars from a national development fund to be invested in it.

The article continues

Taiwan announced the formation of Taiwan Memory last week and said the government would hold less than half of the company. The company would try to pull together the island's struggling chip makers, including Powerchip and Nanya Tech, and would also bring in technology from Elpida Memory of Japan or U.S.-based Micron Technology.

Actually this kind of stepping in by the government does not surprise me. The government have long been the silent overlords of the technology sector in Taiwan with the initiation of ITRI, ESRO, the Science Parks and so much more. To their credit, once things get going they step aside and let the entrepreneurs take charge. Even here we see the alliance is a little unwilling. The government doesn't want a majority stake in the company and I am pretty sure once the ship is sailing they will slowly disengage. I don't think the government is looking to nationalize the industry, they are just trying to strengthen it and make it more competitive, which isn't a bad thing.

International Herald Tribune: Taiwan set to inject $867 million for DRAMs

Globalfoundries Getting in on the Game

Competition in the pure play foundry industry is about to heat up. ars technica has an interesting blog article on AMD's spinoff company Globalfoundries who seem to be on thr prowl for TSMC and UMC customers. ars technica writes:

It's launched, online, and the now-independent Globalfoundries is searching for its non-AMD customers. CEO Doug Grose is reportedly visiting Taiwan to seek relationships with companies that may be currently contracting with TSMC or UMC for their semiconductor foundry needs. If true, this would raise questions regarding the future of AMD's relationship with TSMC. That company currently fabricates Radeon processors for Advanced Micro Devices, and while Globalfoundries and AMD are now separate entities, they are separate entities that remain joined at the hip. Globalfoundries will probably take over fabbing ATI Radeon processors at some point, but is not yet believed to have the bulk silicon production in place to do so.

So what are your thoughts? Will Globalfoundries actions in Taiwan threaten the relationship between AMD and TSMC? Will Globalfoundries be able to compete effectively? Are TSMC and UMC in a world of trouble? I will be interested to read your comments. In the meantime, I look forward to see how the pure-play foundry industry landscape changes. (Remember last week TSMC and Intel signed an agreement). The future is always exciting, especially in this industry

ars technica: Globalfoundries on the prowl for non-AMD customers

Clashes at Pegatron and ASUS

I was just pointed to an excellent article on TweakTown.com describing the internal power struggles at ASUS and Pegatron. The article makes for interesting reading and provide powerful insight into the internal mechanism of Taiwan business. We quote the first paragraph below. If it tweaks your interest please follow the link below:

Asus' first ever quarterly loss during the first year of its separation of Brand and OEM businesses indicates a major stumble for Johnny Shih, Chairman of Asustek. Tung Tsu Hsien, who used to be the vice chairman of Asustek and who now holds the position of chairman of Pegatron (the breakaway OEM division of Asustek), still remembers the feeling of achievement after building up the Asus brand, however, he was forced to leave the branded business and handle the OEM business a year ago. The break between former master and apprentice is apparent. Asus' internal clashes are on the stage for everyone to see during this cold winter.

Very interesting article: ASUS internal clashes could create a new brand?

The Survival of Wintel

An interesting piece appeared on the PC Mag website the other day debating the future of the Intel-Microsoft PC duopoly. Intel and Microsoft have both dominated their sectors of the PC industry for almost as long as the PC industry has been around. Both have been ruthless in taking out competition and both have been capable of putting acceptable-to-great products in the consumer market. They are bothed backed by massive marketing machines and gain significant brand recognition benefits, but the landscape is changing with a shift into mobile internet devices and the question is, how significant is the Wintel duopoly in the MID realm?

The rise of ARM based processors in MID and other chip designers like Nvidia getting into the game poses definite challenges to Intel. For Microsoft, emerging mobile phone operating systems like Android are posing another challenge. I suspect both Intel and Microsoft won't give up without a fight and they are tough competitors who have been there and done it before.

The article is interesting. Follow the article link: Can WinTel Survive?

Intel and TSMC Strategic Partnership

Intel and TSMC have struck a deal to co-manufacture Atom system-on-chips. According to PC Mag:

Intel and foundry Taiwan Semiconductor Manufacturing Co. have struck a deal to allow customers to design their own Atom system-on-a-chip processors and manufacture them at TSMC.

Intel is not outsourcing the Atom processor, as this reporter speculated on Friday. Customers who wish to buy standalone Atom chips will buy them from Intel, and Intel has not altered its Atom roadmap or production.

Intel, however, has also made the Atom a cornerstone of a system-on-a-chip strategy, such as the "Moorestown" and "Lincroft" for the mobile Internet device market. Now, an Intel customer will be able to use TSMC's process flow, tools, and intellectual property (both from TSMC and its partners) to create their own Atom-based system-on-a-chip products, which will be sold under the Intel brand.

"It's enabling Atom on TSMC,"said Anand Chandrasekher, general manager of Intel's Ultra Mobility division, during a conference call Monday morning. "It will allow TSMC to go after new market segments and allow Intel and TSMC to go after new market segments together."

This deal will inevitably be more beneficial for TSMC but it will also enable Intel to penetrate other market segments more easily and one would guess enable system-on-chip designers to leverage some of the advantages of the Intel Atom processor for their own designs. Its an interesting partnership to say the least.

PC Mag: Intel, TSMC Strike Atom Design, Foundry Deal

New Computers, Hard Disk Crashes and a Birthday

This morning I woke up deciding to do some backups of videos and pictures of a recent vacation I had stored on my Dell Latitude E6400. Of course when I turned the computer on there was this strange cracking sound and the message saying there was no bootable drive. Sh*t! HDD crashes just cause a whole world of trouble and a lot of work and personal data is lost. I am usually pretty good about backing up but this time I just didn't have a chance and so I didn't back things up for a while. I am hoping some of the data can be recovered.

The irony is that today is my wife's birthday. We were thinking of buying a new computer and up until today I was pretty impressed with my Dell and thinking of buying one for her as a birthday present. But, when a four month old computer has a HDD crash for no apparent reason I would be mad to buy another one? So Dell lost a sale especially since there was no support available. So we went and bought a new Acer Aspire 4935G. The computer isn't bad so far. Our last computer was an Acer Tablet that we ran into the ground over five years. We have always been happy with Acer and the support and performance offered. We were almost tempted into buying a Lenovo but the addition US$300 price tag didn't seem to make it a worthwhile process. So we will be running this new Acer and see how it goes. If it screws up I will let you know.

Oh yes, today is Hi Tech Taipei's first birthday. So Happy Birthday Hi Tech Taipei. Our first post on the 500 GHz processor has become our Raison d'être. So in one year we have had close to 250 posts, sometimes we have taken a break, other times we have been very active but we are still here alive and kicking.

Anyway, to all of you who have read my blog and participated by commenting, thanks. I appreciate your participation and please continue. As for the rest of you or anyone else, I look forward to your participation in the future.

So happy birthday and may our Aspire live long, longer than my Dell.