According to foreign media reports, the past few decades the semiconductor industry has been one of the foundations of the silicon valley. This line has revenue more than $335 billion a year, but growth rate is gradually slow. In the past few years, more business for decades and a number of veteran chip manufacturer acquired by competitors.

In 2015 alone, the semiconductor industry mergers and acquisitions amount more than $100 billion, including Mr Anwar technology (Avago Technologies) $37 billion acquisition of Broadcom (Broadcom), Intel's $17 billion takeover of Altera, Microchip technology (Microchip) $3.6 billion acquisition of Atmel, Western Digital (Western Digital) $16 billion acquisition of SanDisk (SanDisk) the four big deal. Since 2013, the composition of the Philadelphia semiconductor index 30 semiconductor a quarter have been mergers and acquisitions of listed companies. Bring the negative effect of such deals now has appeared, such as Microsoft announced in April this year lay off 12000 employees.

The prospect of this industry? Foreign media Venturebeat recently interviewed ShaNa Model N, vice President and general manager - Mr Greenberg (Chanan Greenberg), which company is amd, Atmel, Intel and other 12 top semiconductor company provide revenue management services.

Semiconductor merger will continue to be two key trend is worth attention

VB: why these mergers and acquisitions at the same time? Whether because of some kind of opportunity? I have been reported in the past twenty years, industry news, such as heat "merge" only in the past two years.

Greenberg: some macroeconomic factors, but also because the industry is more and more mature. Every industry will appear such circumstance, but also a macroeconomic reasons, making the industry must make such a change.

For example, do we really need to eight different vendors to make memory chips? Five years ago, or eight years ago, the market may have 16 companies, manufacturing sizes of memory chips. Then have a series of professional organizations and industry standards are established. Many manufacturers by samsung, micron such big alligator merger is a natural thing, can say it is the inevitable process of natural development.

Micro controller field as well. Although chip research and development will invest a lot of money, but the chip itself does not there is a huge difference. Many widespread thinking, strategic thinking, the company will no longer and chip of relevant intellectual property rights as their biggest difference.

In addition there are also some macroeconomic factors finally led to the mergers and acquisitions. Two years ago I took part in the Global Semiconductor union (Global Semiconductor Alliance) summit, the meeting participants including qualcomm CEO, Worldcom (Worldcom) industry leaders such as CEO, together to discuss the development of the industry in the future.

TSMC's executive vice President of a paragraph is quite interesting: "I don't know what are you talking about, but the industry scale is not big changes. We are a $300 billion industry, the past five years the number fluctuated between $280 billion and $330 billion. You discuss how great, cloud computing will produce how much profit, but it just put money in another pocket. Cloud computing brings growth, but a lot of big companies server group business is shrinking. We are all excited for the sell like hot cakes, but gradually decline in notebook sales. We have some area of rapid growth, but these growth without falling over."

Due to some natural economy, the industry as a whole is depressed. In the United States and other developed countries, emerging technology products procurement rate began to fall. I is the iPhone 5 c in hand, I did not buy the iPhone 6 or other new apple products. I also don't want to own the Air into the Air Pro, maybe I can change again wait for a year or two. Technology products procurement rate is falling.

We just put the money in the pocket of another, the overall size of the industry has no change. From laptops to tablets, and to the cloud server from the server group, chip sales generally are less.

VB: what does it mean?

Greenberg: in India, China and the developing countries in Africa, for example, we are all looking forward to these markets can have some great things to happen, they do have the astonishing growth, however, these countries to buy are some of the less scientific and technological content in the solution. In some developing countries, from not to have a flip phone, cell phone has is a kind of progress. These countries are not buy smartphones. In the developing countries, economic growth, driven by science and technology, did not carry the growth of the high-end market.

Semiconductor business in developing countries is growing, but overall growth and the growth of high-end solutions is so fast than we expected. Partly caused by stagnation of semiconductor industry. Semiconductor industry over the next year are expected to be 3% to 4% growth, this is not an attractive figure.

Now, the large company CEO and CFO need to please the company's investors, investors want to see is business growth, but growth is not from pure product sales. These big companies began to actively, carefully planning another thing: it is to buy revenue. They need to remove the industry competition, guarantee is that they buy others, instead of being acquired. Heard a horn "into" many, many company, they need to find the revenue growth, and then want to do is to buy.

Of course there are exceptions. There are some very large scale semiconductor company produce very quickly for one or two customers, a disproportionate share of growth. The most obvious example is that "fruit company" cupertino, the benefit of a number of semiconductor companies. Yet these companies also realized that, first of all, they are in a business period of stagnation and second their earnings from the point of view of investors risk is very high.

So some of these companies have to go to the acquisition, display additional business growth, more important is the diversification of customer base, reduce the risk of earnings. But only two or three pens in 10 acquisitions is for this reason, most purely on the basis of purchase revenue purposes.

VB: I never think big acquisition of companies will bring more effective.

Greenberg: I agree with your point of view. Technology trends, such as wearable devices, driverless cars, consumption level of medical equipment and so on, these all look great potential, but eventually they become industry revenue source of many large companies still need three to five years. This is what these solutions development, and market to accept they need time.

Three to five years, the annual growth for the single digits, only the big companies clearly can't stand this, investors also is same. They need to do something.

Questions about the efficiency, what you said is right. That looks great on paper, the fact is another matter. If I am a manufacturing Semiconductor (ON Semiconductor), I want to buy the majority, everything is fine ON the Excel document, is more effective in operation, there will be more products can be sold, also can improve the efficiency of sales, everything is great ON paper. In fact from the majority of sales people only know how to sell image sensor, but don't know how to promote ansion beauty products, anson beauty sales as well. So my feeling is that the company's sales in the short term cost will increase, and the reason is that sales are efficient enough.

To sum up, now is not the discussion of efficiency, now everyone is concerned with growth. Industry is the CEO of a major corporation, they discuss is the topic of revenue growth. They consider not profit or efficiency. If the company does not develop, these companies are the worst.

VB: Intel said it will cut 12000 jobs, this is about 10% of the number of employees. Is this a harbinger of something? We will see the same level of semiconductor company layoffs generally take place? Or is this kind of situation occurs mainly at the completion of mergers and acquisitions of companies?

Greenberg: each company will be different. Those completed mergers and acquisitions company called transfer migration efficiency productivity actions will be taken. Every company promises to investors to save $200 million to $1 billion. First, these measures, and second is cut.

For Intel, if you look at department layoffs happen, you will find that these departments are business growth is slow, or not much prospect of department. Intel's fastest growing Internet sector, there is no any layoffs. Main laying off employees are related to the PC business. Considering the troubles in the PC market over the past few years, the staff is going to happen anyway.

VB: what do you think about these topics is there anything in particular?

Greenberg: I think the merger will continue, and the industry has two key trend deserve special attention. Bear the brunt of the problem is: "I how good salespeople? They know how to buy their product? How can I sell products effectively?" If you have the right talent and tools, it can effectively.

In addition channel is also very important. Qualcomm CSR before channels is very limited, very few several clients with most of the revenue. The supply and demand is very personal and has significant limitations. Now they need hundreds of thousands of customers and that they do not adapt. They are not logistics, supply chain, and around the business to build infrastructure. Semiconductor company for the dependence of the channel is more and more big, the whole industry.