Strategic analysis of a fabless semiconductor company for setting up off-shore design center

SEMILINK is a fabless semiconductor company that primarily focused on the communication chips industry before 2001. Since the meltdown of the Internet bubble, the communication industry that was closely related to the Internet has suffered the tremendous pressure of shrinking demand and increasing competition. This paper involves extensive analysis of the industry landscape and the competitive forces that shape the industry and companies within by using powerful tools such as Porter’s Five Forces and Industry Value Chain Analysis. Based on the discussion, Key Success Factors (KSF) is introduced. A comparison amongst compet itors including SEMILINK against the KSFs is undertaken in an effort to identify any steps that SEMILINK should take to be more strategically competitive. As a result, the study found that SEMILINK should consider setting up offshore design centres in China to fundamentally improve its cost structure for the current R&D operations. Internal Analysis was deployed in evaluating SEMILINK’s fit/capabilities of adopting the China Design Centre option.