Mr. Donald Rheault

GLG News by Mr. Donald Rheault, Founder

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Intel technology opens way into smart phones and tablets.

July 19, 2011

Analysis of:Press Release: Intel Vies to Stave Off ARM Challenge with Low-Power Technology | www.intel.com

By the end of 2011 Intel will be producing a Tri-Gate 3-D transistor technology in 22nm. This is directly aimed at ARM and Marvel's dominance of the mobile device market. Intel devices will offer half of the power of existing devices with the same capabilities thereby extending battery life. It will also blunt ARM's attempt to enter the notebook market with the help of Microsoft.

Great chance for some semicondutor companies to gain market share.

April 1, 2011

Because of the earthquake and Tsunami in Japan there are spot shortages developing in the semiconductor supply chain. For the last several years large OEMs have made it very difficult to qualify a new vendor because there was no real part shortage' and many of these companies laid off their component engineers who did these qualifications, leaving only a few for end of quarter emergencies.

Cisco Must Qualify Additional Sources to Broaden Its Supply Base.

July 30, 2010

Analysis of:Cisco's supply chain woes lead users to consider alternatives. | searchnetworking.techtarget.com.au

Over the past several years Cisco and others have kept a tight approved vendor list (AVL) and no problems of supply existed.It was becoming clearer over one year ago that there was little component inventory in the pipelines of OEMs, IC suppliers, distributors and contact manufacturers.Now that Kyocera, TI, Kemet, Cirrus Logic, Broadcom and other big suppliers are having trouble with deliveries smaller suppliers will be qualified by agile competitors.

Sales outsourcing is alive and well in electronic components.

February 11, 2010

Analysis of:Sales Outsourcing through Channels | www.channelvission.com

Many companies selling ICs use a mixed direct and manufacturer's rep model. They are able to grow with a variable cost of sales. There is a new, non-exclusive model at www.oursalesrep.com .

No bailout unless it is the cheapest alternative and is without moral hazard.

January 15, 2010

Analysis of:HP and Microsoft Simplify Technology Environments with Solutions Built on New Infrastructure-to-application Model | www10.aeccafe.com

Governments the world over have been notoriously bad about picking commercial winners. If companies become "too big to fail" and have political support from many state political entities they often become dinosaurs and eventually fall to more agile competitors.One must study the immediate cost of failure in jobs,waste and money to pick an alternative. With the global market it is also imperative to review the impact of a foreign competitor.

The Impact of Teleconferencing on Sales

December 25, 2009

Analysis of:Technology predictions for 2010 | www.telegraph.co.uk

Teleconferencing at the customers site enables a salesperson to answer technical objections, offer special pricing, and overcome obstacles. This dramatically speeds up the sales process and makes for a more impressive sales presentation.

The need for Cloud Selling and Lean Selling

September 7, 2009

Analysis of:How to Stay Relevant in Sales | blog.inc.com

Sales forces are structured now as they have been for decades, even as some of the software management tools have evolved. A basic redesign is necessary.Those companies using reps will come out of the recession with better balance sheets and more orders because of a continual presence at their customers versus companies that have cut their direct sales forces..

Companies losing market share

June 8, 2009

Analysis of:10 companies in trouble | www.eetimes.com

There are many companies selling electronic components that are losing market share quietly and persistently. This will be evident after the rebound. And they are heavily concentrated in the analog IC area. There are several ways to sell your ICs into the OEM market: a direct sales force, through distribution, and through manufacturer's reps. Intel has a fine, dominant direct force with a fairly small, identified account base. The analog/mixed signal and discrete IC companies need to win designs at a broad base of accounts necessitating a large sales force. In a declining market the rep force earns less but keeps their number of sales people intact- a variable cost of sales. Companies such as Analog Devices, National, and Fairchild among others are decreasing their sales people because they don't have a variable cost of sales model. This will result in fewer deign wins now, resulting in a slower emergence from the downturn and a significant loss of market share.

Infineon should gain market share coming out of this downturn.

February 6, 2009

Analysis of:Infineon Gains After Boosting Savings Target, Reducing Spending | www.bloomberg.com

Infineon has recently cut costs by reducing capital spending and layoffs, but it has wisely kept its independent rep force in place. The benefit of this force is in its variable cost of sales: the number of sales people remain constant but cost less and get hungrier. Many of Infineons competitors have a direct, fixed sales cost force. Some of these competitors have even been laying off sales personnel. By capturing design slots during the downturn Infineon should come out quicker and stronger than TI, National etc.

SMIC may have bottomed due to increased demand in China but US semi companies may not benefit.

February 6, 2009

Analysis of:Semi Manufacturing Says Orders May Have ‘Bottomed’ (Update1) | www.bloomberg.com

If there is a turning point in demand ahead for US companies only some will see it because some have been "eating their seed corn". If the market does turn this summer a large number of semi companies ,especially in the analog/mixed signal market, will not be on the new systems being developed because they have cut their sales forces when they should have gone to a variable cost of sales. The one saving grace of this recession is that it has demonstrated the superiority of the manufacturing foundry model-variable, not fixed manufacturing cost. National Semi in the old days always picked up market share on TI and Fairchild because they kept their independent rep sales force in place-although making less money, and hungrier- gathering design wins during the down time. If the semi companies at least haven't aggressively redone their sales budgets and commission plans they will end up with a demoralized and less aggressive sales force.

The short trerm outlook for Taiwan Semi is not good, but the long term looks good.

January 7, 2009

Analysis of:Taiwan Semi Shares Fall on Only ‘Sell’ Recommendation | www.bloomberg.com

Selling Taiwan Semi now would seem to be a bad bet because this might be close to the bottom of the cycle for semi stocks, and particularly for Taiwan Semi, because the outsourcing model is winning.It is predicted that those companies outsourcing their manufacturing are better off now without large, fixed costs. Most analysts argue that the semi market will start to go up by June, and it should go up fast due to lack of a large inventory overhang at customers and distributors. As the feature sizes of semis go below 45nm Taiwan Semi will be in a strong position as their competitors and semi manufacturers slow down capital spending. Apart from normal replacement cycles there is no compelling upgrades to the computer business market. But the emerging Chinese standards and overall demand for mobil phones and small form factor computers should drive the market in 2009.

New opportuniyies open for linear and mixed signal companies due to switch to wireless phones.

December 20, 2008

Analysis of:Fitch: Poor Economy May Boost Pace Of Switch To Wireless | money.cnn.com

People are switching to wireless from land lines in droves, saving money in a bad economy. There are places where that is difficult to do, such as alarm systems in first and second homes. Freeze Alarm is a product made to warn a homeowner  especially in second homes that the furnace is not heating the house properly. It uses the land line connection. The same system is used for home security. The companies that make semiconductor temperature sensors such as National, Maxim,, and Linear Tech can add a second chip or stage for an RF transmitter or a dedicated cell phone to make a call to the homeowner thus eliminating the need for a land line. Frozen pipes are the second leading cause of home damage and rising fast due to unusual weather patterns. Electonic sensors and control mechanisms such as Freeze Valves can cut this damage significantly.

The timing is good for Xilinx to add Samsung as its 40nm foundry, but there are risks.

December 8, 2008

Analysis of:Samsung foundry poaches Xilinx 40-nm business, says report | www.eetimes.com

Xilinx can quicken its entry into 40nm FPGA production using Samsung, but risks losing the capacity if and when Samsung gets busier. Obviously, Samsung would rather sell its own branded products as the margin is higher. The risks for Xilinx are mitigated because of the similar foundries offered by IBM and Chartered where Xilinx can move if bumped by Samsung. A significant risk occurs if Xilinx is repaced at UMC by a FPGA start up- this would set up a time line where as business gets better and Samsung needs the 40nm capacity for its own products Xilinx is forced to go to IBM or Chartered because it cant go back to UMC. The timing is good for Xilinx because it should be a long while for business to get better for Samsung, and it gets Xilinx into 40nm process now.

The potential is great, but the problems waiting to be overcome may be greater.

October 2, 2008

Analysis of:New technology to make smaller, smarter, faster computer chips | www.business-standard.com

There periodically appears seeming breakthroughs in process that could change the fundamental way semiconductors are made or perform. This new technique could be very significant because of its impact on speed and power Ther have been other "breakthroughs" like GaAs and SOS substrates that have limited success due to cost, performance, or other unforseen problems. The good news is this would use the same existing factories with a change in lithographic process. What is not yet known is performance over temperature, unknown quantum effects, potential frequency resonance, etc. The new techniques major impact would be on niche semi companies nibbling on the speed/power edge using exotic processes, and on end use devices by reducing power and increasing processing power- extending  Moore's Law.                

National cannot gain significant market share with its current sales approach.

April 11, 2008

Analysis of:Earnings Preview: National Semiconductor | seekingalpha.com

There are several sales team approaches by the companies in the analog IC business-some are more succesful than others.    You have to balance cost of sales with a successful sales effort. National has too few "feet on the street" to compete for new designs with Analog Devices, On, Intersil, TI, ST Micro and others.

The worst may be just beginning.

January 28, 2008

Analysis of:AMD: Is The Worst Over? | seekingalpha.com

Intel is much stronger in the processing side and as geometries shrink and the price of fabs skyrocket the larger company has a distinct edge going forward. Companies that make computers want a strong AMD to balance Intel's demands and break their almost sole source price stance. AMD has to develop a much stronger graphics chip design as a differentiator to capture market share-much as S-3 did in the nineties. AMD also has the option of combining a less powerful 86 core with the graphic chip and communication chips to position itself between the Intel/ARM battle for non desktop/laptop applications. AMD's sales force has broader coverage in non computer companies and is mostly rep based giving it variable cost-of-sales benefits in probably a down market in 2008.

Good AMD Move to Add Differentiation

January 22, 2007

Analysis of:WSJ: AMD to Buy ATI; Grasp for an Edge Over Intel | online.wsj.com

AMD adds the potential to gobble up more of the PC silicon

The graphics chip is a big differentiator in the consumer PC and game market

Computer companies will look at whole package offering of AMD vs Intel

Moves LSI Into High Growth Standard Products

December 12, 2006

Analysis of:LSI To Buy Agere in $4B Stock deal | online.wsj.com

The move could add new customers to LSI base.

It certainly adds depth to the storage market offerings.

The standard product offerings lessen their problems competing constantly with Altera and other FPGA vendors which are moving up in complexity and number of gates and lowering NRE barrier.

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