Competition is strong because of the speed of the technological changes and stronger still because of the current economic situation.? In response to this competition, semiconductor designers have to maintain a strong focus on research and development as well as a vigilant defense of intellectual property, their main (although not financially tangible) asset.
Microtune, a semiconductor designer, competes directly with companies that both design and manufacture chips for similar applications. Entry into the semiconductor manufacturing business is a very costly, capital-intensive endeavor. Many semiconductor companies, therefore, do not have manufacturing facilities. Instead, these companies, like Microtune, have contracts with semiconductor manufacturers to fabricate the semiconductor chips. They maintain all rights to the intellectual property of the chip design as well as sell the chips after they are fabricated and packaged. Microtune did own, via purchase, a tuner can assembly plant that was responsible for placing several chips together to form the can, however the company sold the plant in 2002.
Many of the more successful semiconductor companies offer a broad array of products that can include everything from chips to end-products. These companies have usually been in the semiconductor market for a long time and have had time to expand product lines as well as grow vertically. Microtunes direct competitors have these characteristics. In comparison, Microtune does not offer a broad array of products. The company has chosen to focus itself on radio frequency and baseband tuners and systems and semiconductors for wireless applications. Its current strategy for growth focuses not on expanding outward into new fields, but instead on providing solutions for all sectors of a current market. For example, Microtune provides tuners for cable modems and set-top boxes used in the home. Their strategy is to expand their product line so that they provide the tuners and upconvertors to the cable head-end office that streams the information to the set-top boxes and cable modems in the home.
