One of my favourite Buffett quotes is: “Only when the tide goes out do you learn who has been swimming naked.” While none of the Semiconductor companies using hybrid manufacturing has been swimming naked, some are now revealing the colour of their bathing suits. It is not attractive to cut operational budgets as they typically have a long horizon and effect, but sometimes it is necessary. When things get tough and decisions about limiting operational budgets emerge, the underlying strategy can emerge. I use the Snake Plot to gain insights into the operational strategy, mapping the R&D% vs. the SG&A%. The plot describes the current downturn (7 quarters of snaking) in the Hybrid Semiconductor market with three companies popping out: 1. Microchip's sharp decline in revenue has resulted in operational cuts but not as deep as the revenue decline. The response has been balanced with equal cuts to R&D and Sales/marketing efforts. 2. On Semiconductor is prioritising the R&D effort over Sales 3. Renesas is prioritising sales over R&D efforts. The snake diagram should not stand alone; it is an excellent way to illuminate semiconductor companies' strategies. Read more about the Hybrid Semiconductor Companies here: