This Week's Winners & Losers

Why is Intel having second thoughts about crushing AMD? Why is Lenovo opening a plant in Mexico? Why is Synopsys’ CEO joining Applied Materials’ board? All this and more…

Who’s Up?
Aart de Geus, CEO of Synopsys, has accepted a seat on Applied Materials’ board. Consider this an unequivocal sign from high above that front end design and back-end design and manufacturing are converging. Now that’s all settled, what’s next? Acquisitions?

China is using 3G licenses as leverage to force the country’s telcos to offer both voice and wireless services. This is the velvet hammer approach. Ignore the offer and your competitors consume you—or maybe worse. 

Speaking of China, the company’s largest PC maker, Lenovo, will spend $30 million on new plants in India and Mexico. Lenovo, which bought IBM’s PC division, has been looking for a better way into the North American market for the past couple years. The move is a way of locating manufacturing closer to consumers—something most politicians would consider offshoring of jobs. Funny how this is playing out.

It also looks like Lenovo isn’t the only company moving into North America. Samsung inked a North American distribution deal with Avnet. That’s not TVs they’re selling, either.

Intel is strengthening its R&D and manufacturing capabilities, now that it has AMD on the ropes. Expect Intel’s costs of manufacturing to drop sometime next year, particularly as PC sales begin picking up.

Who’s Down?
It wasn’t all good news for Intel, though. The company’s strength is also its weakness, according to the European Commission. The EC slapped Intel with antitrust charges following a six-year investigation. Looks like taking a hard stance against AMD has its pitfalls, after all. IBM learned that the hard way with its former mainframe rivals.

It was a bad week for Ken Schroeder, KLA-Tencor’s former CEO, www.edn.com/article/CA6463261.html and an even worse week for Robert Therrien, the former CEO of Brooks Automation. www.edn.com/article/CA6463237.html   The U.S. Securities and Exchange Commission has filed civil charges against Schroeder for backdating options, seeking monetary damages and barring him from serving as CEO of any public company—something that may prove more symbolic than punitive because Schroeder is retired. Therrien, meanwhile, is under the gun from both the SEC and the U.S. Attorney’s Office, which filed criminal charges against him. He’s retired, too, but this should keep him busy for years to come.

It was a bad week for STMicroelectronics and Qimonda, too, both of which posted big losses.  That may help explain why ST is now abandoning the Crolles2 Alliance—it was the last significant remaining member, anyway—and joining IBM’s ecosystem. It’s cheaper. 

NXP, meanwhile, saw its numbers sink on soft market conditions. The company, formerly known as Philips Semiconductor. posted a $367 million loss for the second quarter. How do you say ouch in Dutch?

When it rains, it pours. Just ask Zarlink. The company had to close its U.K. analog fab due to flooding. Britain hasn’t seen flooding like this since the Spanish Armada went down in 1588.

–Ed Sperling, editor in chief