Strategic analysis of PMC-Sierra's enterprise thin client business

PMC-Sierra is a fab-less semiconductor company that designs, develops, markets and supports a broad range of high-performance integrated circuits used primarily in telecommunications, data networking, and enterprise equipment. The growth rates of these equipment markets began to slowdown in 2001 and have forced PMC-Sierra to explore new disruptive markets for future growth. In 2004, one of the markets the company chose to penetrate with an exploratory investment was the thin client market. The thin client semiconductor market environment was analyzed and found to have low barriers of entry, dominated by two competitors, and a need for suppliers to provide cost optimized printed circuit boards. The analysis of PMC-Sierra's internal environment illustrated that the company lacks the required printed circuit board supply chain and technical expertise to build a sustainable competitive advantage. It is recommended that PMC-Sierra exit the business.