Recent M&A activity has left many semiconductor makers with sprawling portfolios that include businesses beyond their main areas of focus. Ideally, waves of M&A are followed by periods of rationalization, as companies divest less valuable businesses so they can concentrate on those closer to their core. And as the industry evolves, so too should portfolio strategy. Chipmakers once viewed their businesses primarily from a product perspective, but increasingly, it’s also important to develop expertise across systems and applications. Understanding the true boundaries of the business—and identifying synergies among costs, customer relationships and other capabilities—has become more complex, but it’s even more essential for a truly strategic approach to portfolio management.
Hans Joachim Heider and Daniel Suter are partners in Bain & Company’s Global Technology practice. Hans Joachim is based in Munich, and Daniel is in Zurich.
The shift from products to systems changes the game for chipmakers.