It’s kind of funny that I’m writing today about Semiconductors. After all, I am the “consumer guy” at Carmel, and I haven’t been doing anything that’s even remotely close to semiconductor investing. But still, I’m going to try and get your attention on that topic for the next few minutes.
The world of semiconductors has been a crucial part of the Israeli hi-tech story. For years, our local semi entrepreneurs were true leaders, and local semi startups were very successful, generating nice returns for investors. Yet in the past decade we have seen a global decline in semiconductor entrepreneurship, along with a real slowdown in local semi innovation.
From my perspective, it’s always interesting to look at the cycle of technology categories. 15 years ago (and many years before) semiconductors were the center of innovation, but eventually there was a consolidation where the big guys ate the little guys. Startups were either acquired or shut down. That all happened over the past 5-10 years. Recently, we’ve been seeing another step in the consolidation process, where the big companies are merging. The latest deal (one of many) was the acquisition of Linear Technology by Analog Devices for $14.8 billion.
Last week, I had an interesting opportunity to chat about all of this with Daniel Amir, Corporate VP of Business Development at DSP Group (San Francisco), who is visiting Israel at the moment. Daniel is a friend, a really smart guy, and someone that knows a lot about the industry. We had a short conversation about the current state of the semi industry, the very interesting acquisition of Arm by Softbank, and a little about what’s trendy now in hardware innovation. We even spent a minute or two on the hot topic of autonomous driving.
Hope you enjoy watching the interview below. One side comment: We are going to try and make a series of these chats, so hopefully I will have the opportunity to chat with many interesting people on all kind of topics, including topics that are close to my heart, like consumer internet and social media.
Some of the topics covered in this video:
Implications of SoftBank’s recent acquisition of UK chip-design powerhouse ARM for $32B
How the consolidation of the market has led to a plateauing of new semiconductor startups
The state of investment in hardware, wearables, VR/AR, drones (it seems that most VCs don’t understand semiconductors)
Semiconductor investments still strong in Asia (China/Taiwan)
The quality of semi talent in Israel
Large semiconductor companies are moving more towards vertical integration
Trends that are currently being influenced by semiconductors, including Voice, IoT, automotive, and more.