2009 Supply Outlook: Electronics suppliers target profitability

Semiconductor price wars are over, and connector suppliers will try to recoup higher materials costs.

By James Carbone -- Purchasing, 8/14/2008

Buyers can expect to see an attitude adjustment on the part of semiconductor suppliers. In fact, if they look closely, they'll see it now in suppliers' decisions to cut back on capacity expansion despite growing demand.

The lack of investment is indicative of changing priorities by chip suppliers about their business. "It is an indication that profitability comes first as opposed to gaining a few points of market share," says Bill McClean, president of IC Insights in Scottsdale, Ariz. "They feel they need to get higher prices and more revenue per wafer and they don't want to see this continual slide in prices. It is a major shift in attitude," he says.