People ask me is there something wrong with the semiconductor industry if apparently good companies with good technologies such as SiliconBlue Technologies Inc. and PicoChip Ltd. are being sold for less than the venture capital invested in them over several years.
I don't think there is anything fundamentally wrong with the semiconductor industry – but it is in a process of resetting approaches to the market and technology, expectations of investors and transforming itself from something that was just hitching a ride down the escalator of Moore's Law in a race towards the bottom.
What had happened is that many protagonists had got hooked on Moore's Law as a way to get superior performance and reduced unit cost and therefore as a way of making sales by displacing their rivals. This made sense in the past and started in a time when chip companies all made similar building-block components. So, for those chip companies back in the day, the added value was not in the design but in the manufacturing expertise.
