Chips are a Fine European Alphabet Soup
Chips are a Fine European Alphabet Soup
(Bloomberg) -- Hi —it's Giles, writing from Europe. I want to talk to you about semiconductors. And Scrabble™.
Let's be honest, semiconductors used to be boring. The Traitorous Eight? Actually a bunch of badly dressed men in oversized suits. And nobody is telling their grandchildren about the great Integrated Circuit Patent Wars of the 1960s.
But now the chips business is pretty cool. It's taken the same trajectory as tech geeks who graduated overnight from college dorm obscurity to the billionaire limelight. The leap is arguably down to the ubiquity of smartphones, but autonomous cars, artificial intelligence and cloud computing are all adding lustre to the industry.
At least in the U.S.
In Europe, the semiconductor business is still overlooked, compared with their U.S. and Asian rivals. Which I find odd, because it's full of interesting companies. Really.
Look at ARM Holdings, one of the most important firms in terms of smartphone development, which went out of its way to be boring before someone with a $93 billion vision turned up. And take ASML —it’s a $66 billion Dutch company that makes semiconductor manufacturing equipment the size of buses. They are selling a lot of them. Or AMS, the Austrian sensor company based in a medieval château. Or how about ASM International, another semiconductor-equipment maker from the Netherlands that's currently battling an activist?
ARM, ASML, AMS, ASMI. Ok, maybe you've spotted the problem. It's not that they are dull companies; it's that they've got boring names that start with the letter 'A'.
Personally, I can't decide whether this is one of the reasons why European tech doesn't get enough attention; we're just terrible at names. Look at what happens when a manufacturer does have an interesting name. NXP, based in Eindhoven, is the biggest supplier of chips to the automotive industry. It used to be called Philips Semiconductors. Boring. Then just over 10 years ago it threw an X in its name, then floated, and is now getting bought by a U.S. company (beginning with the letter Q) for at least $47 billion.
In short, European semiconductor executives need to be more imaginative with their company names if they want to grab headlines. Like Scrabble™, adding Q, Z and other high-value letters might be a winning strategy. These names starting with A are never going to score big. Which is a shame because, wordplay aside, Europe is selling chips at a faster rate than any other region.
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To contact the author of this story: Giles Turner in London at gturner35@bloomberg.net.
To contact the editor responsible for this story: Reed Stevenson at rstevenson15@bloomberg.net.