"Careful, careful
Careful with that axe, Eugene
The stars are screaming loud
-- "Careful With That Axe, Eugene," by Pink Floyd

Fairchild Semiconductor (NYSE: FCS) is taking Roger Waters' whispered words to heart -- perhaps a little too closely.

You see, Fairchild isn't exactly a master of cost-cutting. As first-quarter sales rose 9.2% year-over-year, operating costs raced ahead at a 12.9% clip. This was just about what analysts had expected, but investors seem concerned about the future. Costs will continue to grow faster than sales, and adjusted profits aren't expected to grow at all in the second quarter.

The company has a healthy backlog from which to fill orders, so there's plenty of visibility into coming sales. With a bit of judiciously applied fiscal discipline, that position should result in strong profits. Fairchild isn't aiming for such a target, though.

That could be a fatal mistake, considering the current state of the analog chip industry. Texas Instruments (NYSE: TXN) is buying National Semiconductor (NYSE: NSM) in a landmark deal that looks like the opening of the floodgates. With more deals likely, Fairchild isn't doing much to prettify itself for potential suitors. CFO Mark Frey promises "significant structural cost reduction actions during the year," but saving those moves for the second half of the year will let the deal-making winds die out, unsailed.

Buyouts aren't every CEO's preferred exit strategy, of course, but it would be silly not to take advantage of the prevailing winds while they last. Add Fairchild Semiconductor to your watchlist, and see whether Eugene ever takes his axe to the company's rising costs.