Microelectronics

While microelectronics was once considered high technology, it is now viewed as a commodity. Despite this, research and development efforts are still enormous. The industry is extremely cyclical both in terms of volume and price. What's more, market overcapacity and competition from Asia have intensified cost competition. In this environment, we have helped clients become and stay profitable, and have supported them in maintaining their status as major players in a consolidating market.

The semiconductor industry is very cyclical, cost structures are prohibitive and technological advance is rapid. As a result, semiconductor companies are facing increasing pressure as the market reaches maturity – and not all players are likely to survive.

Several trends will shape the future industry landscape:

• Revenue growth will slow to around 7% p.a., or half the rate of the past 20 years, with a focus on APAC
• Cost intensity in development and manufacturing will steadily increase due to the rising complexity of products such as system-on-chip (SoC)
• Products will be commoditized
• Demand will be "consumerized"
• New business models will emerge, e.g. fabless/fablight models
• There will be an increasing need for partnerships

To win the future consolidation game, semiconductor companies must develop a unique value proposition and achieve excellence in cost and execution. To do so, they must actively manage their portfolios, continuously validate their business models and globalize their value networks. Other top priorities include transparent alliance management and operational excellence.

We support leading microelectronics clients in achieving sustainable success in the areas of growth strategies, mergers & acquisitions, PMI and operations.

We have a proven track record of skillfully implementing pragmatic concepts developed jointly with our clients. Our clients also welcome our technological savvy, the financial impact we can create and our strong regional network, particularly in the growth regions of Asia and Eastern Europe.

Increasing operational efficiency by reducing complexity and improving portfolio performance

We analyzed the main cost and complexity drivers of a global IDM. Based on our conclusions, we introduced a product lifecycle concept, redesigned the product portfolio planning process and optimized the volume planning process. We also conducted a project to significantly reduce overhead and IT costs. Cost-cutting actions were determined by adjusting the activity profile, performing an extensive functional analysis and applying selected benchmarks.

Realizing merger synergies

We outlined an ambitious plan to integrate acquisition targets for a leading semiconductor company. We also developed a new organizational structure to ensure smooth integration. At the same time, we planned how to best tap the planned merger synergies. Cross-selling and optimization actions helped realize the full savings potential.

Improving R&D efficiency

A leading semiconductor company needed to adapt its product design methodology to master increasing complexity and improve time to market. This included adapting the V-model type methodology used in chip design processes. We defined the relevant rules and competencies, mapped out a platform strategy and determined how processes should be documented.