Nikon's shame

They make some of the most sophisticated semiconductor fabrication
equipment in the World, but they can't afford to build their own fab
or hire the people needed to implement its use! So they are left to
go hat in hand to Sony for CCDs and CMOS chips.

 

Somewhere I read (and I can't be bothered looking for the source) that
Nikon see the future of sensors as commodity items.
That future may not be too far away.

 

A complete fab costs hundreds of millions of dollars, and includes a
lot of equipment that Nikon does not manufacture. A Nikon stepper
goes for several million dollars, so most of that equipment has to be
bought from others. It is extremely doubtful that Nikon could
cost-justify an internal fab vs. buying sensor chips from others.

Lots of companies don't make their own chips. Aside from IBM, I can't
think of one computer _systems_ company that fabs its own chips. They
all buy from Intel, AMD, and a host of more specialized companies.

Foolish idea on the face of it.

Father Kodak

 

That sums up all of RichA's posts...

 

Not for companies who make their own. Sony and Canon have control the
other mfgs just do not have.

 

Yes, what company wants to diversify or expand? All those thousands
of aquisitions we see happening every year really are for nothing.

 

Acquisitions and takeovers are usually based on taking over competitors
in the market so that (their argument) advantages can be gained by scale
of economy and synergies in marketing etc - or (the reality) so that
competition - a downward force on pricing - is reduced. Diversifying
usually means adding product which compliments what you already have in
the marketplace.

Buying up your suppliers (or customers) is passé - an errant business
philosophy from the late '70s. It often didn't work - because it was
based on an assumption that because you can grow great wheat, then
you're going to be just as great at making fertiliser and baking bread -
and that is wrong.

 

Companies frequently design their chips but outsource the production to
other companies. I'm not suggesting this is the way to go but Nikon
could design their chips and have a 3rd party manufacture the chips.

 

You find in the technology fields aquisition to gain technological
know-how is very common. Biggest example is Microsoft who often
consume smaller companies to gain their technological expertise.
I don't make any claim as to its efficiency.

 

Sure - that fits with what I said. They buy up companies that threaten
their market dominance - but it's not so simple as that. MS's core
products - where they make their $$ are the same as they were over 10
years ago - in operating systems and office software.
They haven't bought out Intel or AMD, and AFAIK they won't.

 

And in Nikon's case, how do you know that they don't already do that?
What about LBCAST? What about the comments that Nikon has unique
versions of Sony-supplied sensors?

To answer all the comments about acquisitions, large chip companies
routinely buy smaller ones. But the smaller companies aren't fabbing
their own chips. A fab is a hugely expensive undertaking, for both
capital and operating expenses.

To make a possibly imperfect analogy, do you see any of the auto
companies buying a steel mill? They are very big users of steel and
other metals.

Father Kodak

 

Fewer and fewer companies make their own chips. Most "semiconductor
manufacturers" are fabless. High end semiconductor manufacturing is
VERY expensive to get into, and takes a lot of expertise to do well.
Most likely the only reason Canon got into making their own sensor is
because they were making some of their own chips for quite some time
( for all the different products they make ). If it wasn't for this,
they too would most likely be outsourcing their sensors. Nikon
doesn't make as wide variety of products as Canon so it most likely
couldn't justify the expense.