William Trent_

The Semiconductor Industry Desperately Needs to Go Private

Much of the capital could be replaced by increased reliance on the foundries. You don't want 3 companies building multi-billion dollar fabs when one will do. Instead, the three design firms should lease foundry capacity.

The Semiconductor Industry Desperately Needs to Go Private

The semis won't pay out a massive cash dividend, or they already would have. The idea is that PE firms would come in and instill capital discipline. Yes, FSL is capital intensive. The PE firm can reduce Capex and use the additional cash flow to pay out more dividends. If they can consolidate several firms so the overall industry becomes more capital-rational, mission accomplished and they IPO them back.

I agree, though, that the LBO firms have more money than they know what to do with, and may likely not know what they are doing by going into something so capital-intensive and cyclical.