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We help clients decide how to approach the marketplace, invest in intellectual property, and think about branding.

Fabless players have a special set of challenges to address, beyond reference designs and relationships with foundries. These include developing efficient manufacturing strategies, sharp brand positioning, and targeted investment strategies.

We help fabless clients address a number of key challenges. First, the go-to-market concerns: where to play and how to play. Second, we advise on operational topics such as pricing and procurement, as well as negotiations with suppliers and subcontractors. The third challenge covers setting long-term strategy, such as rethinking approaches to customers and suppliers given the ongoing evolution of the fabless/foundry model.

In the years ahead, fabless-semiconductor companies will also need to improve R&D productivity and profitability—as both their supplier and the customer bases continue to consolidate. In addition to these challenges, we also help them to better monetize the software embedded on their chip designs.

With a group of more than 300 practitioners, we can offer clients a deep pool of sector-specific expertise. In fact, many of our consultants worked in the semiconductor industry before joining McKinsey. The balance has advanced degrees in mathematics, engineering, and physics. As a group, they understand all phases of the semiconductor market, as well as the suppliers and customers that semiconductor companies buy from and sell to.

Examples of our work

  • helping a large fabless player negotiate a new contract with its lead foundry and a set of subcontractors. With a new negotiating strategy in place, the client was able to capture a 14 percent reduction in direct-materials cost
  • working with another fabless player to set pricing for a proprietary product to be sold into a new market. After establishing a new pricing model, the company saw revenues increase by 6 percent
  • helping a fabless player develop a foundry-sourcing strategy after it ran into an unexpected capacity constraint
  • developing branding insights and consumer-marketing strategies for a number of fabless clients over the last 12 months
  • working with a large fabless player to select and deploy analytics software to identify the go-to-market and R&D resources it would need for a new software-as-a-service offering


Harald Bauer

Senior Partner, EMEA, Frankfurt



Semiconductor design and manufacturing: Achieving leading-edge capabilities

– As chips get smaller and competition increases, semiconductor companies need a new strategy that considers everything from fab... size to supply-chain issues.

How the semiconductor industry can emerge stronger after the COVID-19 crisis

– Semiconductor companies that begin revising their long-term strategies now may emerge stronger in the next normal.