The semiconductor industry runs on silicon. What are some of the challenges there with supply and demand?
Silicon has had a tough time – over supply, over capacity. Prices have dropped and plants have closed; this leads us to believe the price will eventually go up again because the supply will be more constrained. Overall, the market has been learning, not overbuilding and not installing too much capacity like in the past.
The semiconductor industry is so cyclical in nature. How have companies gotten better at responding to the cycles?
The leading edge materials space is still squirrely. In regards to the commodity side, people are now much more disciplined at how to plan and forecast. It just depends on what material set you’re looking at.
We’re seeing an awful lot of consolidations and mergers. Where do you see further opportunities for consolidation or expansions?
What I’m hearing is the challenge is that large companies don’t want to invest more capital right now. I just had a conversation with someone about how large companies are also so fraught with bureaucracy they have a tough time doing development in an cost-effective manner. That being said, I think large companies will continue to look at small, entrepreneurial type companies to buy.
There’s not a lot more room for consolidation on the materials side right now.
The semiconductor industry sometimes struggles to tell their stories well. Do you see this problem and what’s the solution?
Telling stories is a struggle for most companies in our space. The small companies out there are at the disposal of the large companies, so the type of branding that Zone 5 can provide would be very helpful for them. Help with branding will help increase value to their potential buying parties.