But the respite should be of short duration

On 16 October, a delegation from the CGT of the STMicroelectronics, leading European manufacturer of semiconductor group, went to Bercy to share its concern. The rumors about a takeover of the Franco-Italian flagship, number five world of chips, multiply. Especially after the recent acquisition of Philips Semiconductors division by LBO funds, the new terror of the French Union.

If the trade unionists had come to the European Summit of microelectronics which was held in Paris last week, their concern would still grew up. Pasquale Pistorio, STMicroelectronics President-Founder, explained that the flea market would restructure a few big players and a myriad of niche industrial. Average weights were therefore of concern to be. Jean-Philippe Dauvin, Chief Economist of the same company, has been even more specific. "If groups of semiconductors are not able to renew itself deeply, others received for them", he threatened before adding, tragic: "the barbarians are at our door." Refer to the LBO Fund, including the most famous, KKR acquired precisely Philips chips, was named so after its assault on RJR Nabisco in 1988 follow-up to its whaling.

After the Mittal bid for Arcelor, the transatlantic marriage between Alcatel and Lucent merger Suez-gas of France, the next great politico-industriel folder might well be called "STMicroelectronics". Because, as with his illustrious colleagues of the CAC 40, the ingredients of a history rich in twists and turns are met. With a strategic sector (material first of the information society), a significant participation of French and Italian States in the capital, and an industry changing to the concentration of the players.

The first cause of the unrest is the change in depth of the market. Sales growth slowed, with the arrival at maturity (in rich countries) of the industries computer and telecoms, the first two consumers of chips, and the absence of a new revolutionary application to take the relay. It went from an average of 12 to 15, there is a decade, 7 to 8 today. However, dramatic cycles that had knowledge of this industry, with 15, tend to diminish greatly, which is rather good news.

There is therefore no risk in the remains if costs were required. However the design and production of ever more powerful and sophisticated chips becomes expensive. While a plant cost about 1 billion twenty years ago, the latest generation returned to almost $ 3 billion. Should generate an annual turnover well above to cushion a new unit while the growth is lower than before. Not to mention the inflation of the cost of research following the same slope. In other words, the business is more expensive and reported less and less.

There are only two ways out of this squaring of the circle: grow to impose its prices or to specialize on a link in the chain of value. Great intuition of Dr. Chang, head of the Taiwanese company TSMC, paved the way in the 1970s. Now, number of Asian companies manufacture as to how the world's chips. Mirror respond them more and electronics without factory, focusing on research and marketing. A division of labour in the spirit of the "post-industrial society" Dear economist Daniel Cohen (1). After all, Nike had paved the way with his shoes and Americans Apple or Cisco have proven that it can be a large industrial without making nothing. The tide now affects the microelectronics industry. STMicroelectronics also announced recently that it would reduce its investment and more call to the subcontract.

Last ingredient to add to the already explosive cocktail: the fragmentation of the offer. The number one U.S. Intel holds 15 of the global market and Samsung, the King of memories, less than 8. The following, as Texas Instruments, Toshiba, STMicroelectronics and Renesas have all from 3 to 4 each, while being less specialized. Because, except for the Japan, the concentration of the market that is talked about for years is never produced. However, alliances, including research, have multiplied. It would therefore be a spark... An unstable market, an economic model in full upheaval, affordable valuations, it takes more to attract the "barbaric" funds on the lookout for opportunities and seemingly infinite ways. They intend to take advantage of the next consolidation, even if the cause.

At the regional level, the Franco-Italian has only two competitors: ex-Philips Semiconductors, renamed "nxp" since its takeover by the Fund, and Infineon, the former division of Siemens. They are clearly more critical size to play in the big leagues, especially since that Infineon is separated from its memory DRAM branch in the marking on the stock exchange last month. A merger "in the European" with one of the two or both would be the more "politically correct" solution for the public authorities, but the less complementary in terms of customers or products. An American or Asian marriage would be more promising, but much more complex. Fortunately, STMicroelectronics, which experienced a low in 2005, it is seriously restated this year and is progressing faster than the market. This tightened the embrace, gives him time to choose and a good negotiating position. The prospect of the presidential election should reduces the chances of a movement in the very short term. This is why that trade unions try to politicize this sensitive issue to the maximum. But the respite should be of short duration.