Only a few bricks left in the Semiconductor Industry.

Most semiconductor companies have outsourced all or some of their wafer manufacturing to foundry services. This has a positive impact on free cashflow with a possible negative impact on gross margins. Outsourcing manufacturing is not unique to the semiconductor industry but particularly attractive because of the massive investments needed to participate in the technology race. All outsourcing comes with a loss of control of your supply chain and only time can tell if it is a good strategic choice for a semiconductor company.

If you want to be a memory company, you need factories. As memories are highly competitive and either extremly profitable or running at a loss it require a highly specialised business model. When times are good you invest, when times are bad – you wait.

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