Winners & Losers

Why is Sony cutting jobs? Why is Apple likely to boost employment? And does anyone still use Fortran?

Who’s Up?
Engineers at Renssalaer Polytechnic Institute have discovered a way to tightly bundle nanotubes, basically turning them into a manufacturable interconnect. This is an important step for chipmaking, and one that should not be underestimated as a way of extending traditional chip manufacturing, and Moore’s Law, for decades. So what comes after nanometer?

Intel introduced C++ and Fortran (does anyone still use Fortran?) compilers for applications running on multicore chips. That’s one way to sell more chips. Most developers of desktop applications don’t see an advantage in threading. Gaming and 3-D modeling applications are a different matter, though. So is search. Next time you go looking for a part or a price, think about how much time you can save. That could help explain why Google just acquired Peakstream.

Apple’s iPhone is due to hit stores on June 29. Our expectation is that will drive sales of components the way the iPod has. This is something like Jobs creating jobs. The same goes for the next generation of automobiles, where silicon content in high-end models is already the equivalent of an 8-inch wafer. 

The metrology and inspection markets are up. Considering that inspecting chips at 65-nm and 45-nm will require entirely new equipment, that shouldn’t come as a surprise to anyone. At those geometries, you need some pretty sophisticated equipment to spot defects. 

Who’s Down?
Sony is cutting 1,000 jobs in the wake of its $1.9 billion loss in its gaming division. Selling supercomputers for less than $500 may not be a good strategy after all, particularly when rival Nintendo has a more popular interface in its Wii. Incidentally, Wii has been outselling Playstation 3 by about 4:1.  

EDA companies have been telling the world that fewer companies are building their own EDA tools, but the biggest of the big still see homegrown tools as a competitive advantage. That’s not good for EDA vendors, because it means the biggest customers also may be their top competitors.

Competition is heating up inside the giant chip ecosystems run by TSMC, IBM and others. While this may be good for the customer, it’s certainly going to cost more just to stay competitive within these ecosystems. Translation: R&D will continue to skyrocket and barriers to entry will rise.

The SEC settled its enforcement action against IBM for misleading investors about stock option charges in 2005. Given the fact that IBM never gave out huge numbers of options, and that IBM’s earnings releases are so murky and complicated, this investigation was a bit odd. Did the SEC have a deeper motive—as in whether to force IBM to really open up its balance sheet—or was this simply a bookkeeping update?

Avaya agreed to be bought out by a private equity firm. The one-time Lucent subsidiary is the latest to go private in what has become a major buzz factor for the electronics industry. Cadence was rumored to be in negotiations, but our sources tell us everyone is in talks. It’s just a question of who bites and why.