The story behind the story

Welcome to Linley Chips In, a new blog on the semiconductor industry from The Linley Group.

We are a technology analysis firm focusing on chips for networking and communications equipment as well as mobile systems such as cell phones and navigation devices. As the principal analyst of the firm, I will be providing many of the blog entries, but you'll also be hearing from our other analysts--Bob Wheeler, Jag Bolaria, and Joe Byrne--who will address their special areas of interest.

Our goal is to provide you with story behind the story--after you read about the newest product announcement, acquisition, or major design win, check here to find out how it will impact your product design, your technology roadmap, or your supply chain.

As many of you know, I have been analyzing the microprocessor industry for nearly two decades, and as a former engineer myself, I know what engineers are interested in. Bob, Jag, and Joe all have technical backgrounds as well, but instead of designing products, our full-time job is to follow the industry, track technology trends--and to share our insight with you.

Let me kick things off by saying that I feel pretty good about the semiconductor industry right now. In the segments I cover, demand bottomed out in Q1 and is already headed upward, although it will take some time to get back to where we were in early 2008.

Furthermore, the downturn has accelerated some needed consolidation in certain segments, as companies with cash stockpiles have acquired cash-poor companies at bargain prices. Other companies have taken the opportunity to reorganize and restructure, shedding unprofitable product lines and excess employees. It's not good if you are one of those laid-off employees, but in the long run, these moves are making the industry stronger and more efficient.

I think we are at the beginning of another long boom cycle for semiconductors. I hope this blog will help you enjoy the ride. --Linley

Linley Gwennap, president and principal analyst