"The coming decade may be one of the brightest for chip investors"
Tiernan Ray - BARRON'S
From 11.02.15 issue - "For 50 years, the computer-chip industry has ridden a road of economic miracles, but now it’s reaching an end, and a potential crisis is unfolding for some of the industry’s biggest names.
“The semiconductor industry is up against an economic problem,” says Linley Gwennap, a longtime chip-industry analyst. “Now that you can’t automatically reduce the cost to get the same performance, Intel and the rest are stuck trying to justify the investment.” The industry’s response has been to circle the wagons. This year, there has been more than $136 billion worth of announced semiconductor mergers and acquisitions, according to Bloomberg, an unprecedented volume. Companies are busily streamlining costs and merging portfolios to eke out profit, rather than investing in new innovation. At the same time, another even more important challenge is brewing for traditional chip makers.
The economic impact of the new direction in semiconductors—chips that think rather than simply compute—could lead to a renaissance in the industry.
As a result, the coming decade may be one of the brightest for chip investors. The implications go far beyond Wall Street’s near-term view.
THE VERY NATURE of most chips is archaic and in need of rethinking."
BARRON'S - 11.02.15