The massive semiconductor industry consolidation that occurred during the last decade, coupled with the successful introduction of 300mm wafer production equipment, has left the semi equipment producers chasing an increasingly smaller number of tool sales. The increase in tool complexity has dramatically lengthened development times and raised costs of next-generation platforms, with the average new platform taking three to five years. As a result, the equipment industry has turned to mergers, acquisitions, and reorganizations to realign product strategies and provide the cost-efficient product offerings demanded by the rapidly consolidating supply chain. This has strained the ability of many companies to develop effective technology strategies that support realigned business objectives while avoiding inflation of the R&D budget to a larger
percentage of revenue. As a result, consolidating companies continue to experience cost overruns, long product acceptances, unsuccessful technology integration and deferred revenue, all of which severely impact shareholder value. As the semiconductor equipment industry continues to recover and drive a new cycle of innovation, the winners of the battle for market share—the survivors of the continuing consolidation—inevitably will be those who can best leverage their combined technology assets to provide differentiable value to both their customers and shareholders. This paper examines the factors that are critical in aligning business and technology strategies to extract the most market leverage and top-line growth from combined or restructured product lines. The paper draws from approaches achieving success in other heavily consolidating industries and applies them to the unique challenges facing semi.
percentage of revenue. As a result, consolidating companies continue to experience cost overruns, long product acceptances, unsuccessful technology integration and deferred revenue, all of which severely impact shareholder value. As the semiconductor equipment industry continues to recover and drive a new cycle of innovation, the winners of the battle for market share—the survivors of the continuing consolidation—inevitably will be those who can best leverage their combined technology assets to provide differentiable value to both their customers and shareholders. This paper examines the factors that are critical in aligning business and technology strategies to extract the most market leverage and top-line growth from combined or restructured product lines. The paper draws from approaches achieving success in other heavily consolidating industries and applies them to the unique challenges facing semi.
