November 2009 Issue

Your free monthly digest which aims to provide you a round up of the semiconductor headlines with a special focus to the Asian arena - direct to your inbox. Simply click on the relevant links provided to get the details.

Key Take-Away Local Asia-Pacific News Industry Headlines Financial Watch

Mergers, Acquisition, Joint Ventures, Spin-offs and People Market Outlook Views and Opinions Stock Watch

	LOCAL ASIA-PACIFIC NEWS
	Applied opens solar research and customer demo facility in China Source: Alexander Braun, PV Society – 26^th October 2009 The Solar Technology Center is the largest non-government solar energy research facility in the world and contains an entire Applied SunFab thin-film manufacturing line and a complete crystalline silicon pilot process NXP wins supply contract for Chinese ePassport chips Source: Reuters – 19^th October 2009 NXP is currently involved in more than 80% of all ePassport schemes having shipped about 150 million ICs to date. In total, 68 out of 79 countries which have deployed ePassports are using NXP SmartMX chip technology including the US, United Kingdom and Singapore. CSMC Asia to access IBM’s 0.18um RF CMOS Source: EuroAsia Semiconductor– 19^th October 2009 The licenses are granted for use in CSMC’s 200mm wafer fab in Wuxi, China. The 200mm wafer fab commenced production in 2009 with a planned installed capacity of 60,000 wafers per month. This is the second foundry licensing deal for IBM in China. In 2007, Chinese foundry provider SMIC licensed IBM's 45nm bulk CMOS technology. Flextronics opens new design centre in China Source: Reuters – 15^th October 2009 In addition to the present manufacturing facility in Wujiang, Suzhou, Flextronics currently also has computing design centers in Shanghai and Wujiang (Suzhou). Wuzhong will be positioned as the company's main development center in China for computing products Nokia Siemens scores pan-Indian network deal Source: EE Times – 15^th October 2009 Unitech Wireless has selected Nokia Siemens Networks as its exclusive pan-India supplier to roll out and manage its GPRS core network under a three year contract. SVTC and TSMC create innovation incubation alliance Source: Marketwire – 14^th October 2009 Under the new alliance, SVTC and TSMC will work with developers to bring to market new applications in emerging technologies such as MEMS, biochips and other devices incorporating new materials and novel structures. Alcatel-Lucent offers 3G solutions to Shanghai Telecom Source: TradingMarkets.com – 10^th October 2009 Shanghai Telecom, the municipal branch of China Telecom, has finished the test and verification of the EVDO Rev. B solutions provided by Alcatel-Lucent who will accelerate the network speed of Shanghai Telecom up by three times for supporting the increasingly complicated 3G business UMC’s Singapore fab 12i migrates to 45/40nm Source: Suzanne Deffree, Electronic News – 9^th October 2009 UMC noted growing customer demand for leading edge capacity and expansion of the company's market share for advanced process technologies as its reasons behind the migration. TSMC, IMEC team for ‘more-than-Moore’ platform Source: Suzanne Deffree, Electronic News – 7^th October 2009 IMEC and TSMC forge an Innovation Incubation Alliance, focused on moving emerging "more-than-Moore" technology options from design to manufacturing to product stages. KSK taps Applied SunFab to India PV facility Source: BusinessWire – 7^th October 2009 KSK Surya Photovoltaic Venture, a subsidiary of KSK Power Venture plc, a leading independent power provider in India has signed a contract with Applied Materials to purchase two Applied SunFab Thin Film Lines for manufacturing high-power output 5.7m^2solar panels. The new lines will be installed in a state-of-the-art facility, including an R&D center, which KSK plans to build in the “Fab City” located in Hyderabad, India. MindTree enters mobile handset business Source: The Hindu – 6^th October 2009 The Indian company has created a new business of developing ready-to-brand mobile handset products, N!Mo (Next in Mobility). It will be a part of MindTree’s product engineering services group. The new business will offer feature-rich, white-labeled mobile handsets to telecom service providers and original equipment manufacturers. The recent acquisition of Kyocera Wireless India by the company will provide the foundation in terms of skill sets and technology. Bharti Airtel, Cisco form strategic business alliance Source: CBR telecoms – 6^th October 2009 Bharti Airtel, a integrated telecom service provider, and Cisco have formed a strategic business alliance to help drive growth for Indian enterprises. The companies will work together to create and sell in a phased manner a set of products and services - including managed data services, hosted unified communications, connected branch services and Cisco TelePresence. Back to top
	INDUSTRY HEADLINES
	Xilinx and ARM announce development collaboration Source: RTTNews – 19^th October 2009 The 2 companies have revealed a collaboration to enable ARM processor and interconnect technology on Xilinx Field-Programmable Gate Array to provide customers and ecosystem developers with flexible computing platforms where their IP and software development can be shared and re-used on a broad scale. ARM forces rethink on low power process technology Source: Richard Wilson, Electronic Weekly – 8^th October 2009 ARM is claiming potential power savings of up to 40% using a silicon-on-insulator (SOI) 45nm test chip. The SOI process, an alternative to the traditional bulk CMOS process used to fab ARM-based processors, was demonstrated on a test chip based on an ARM 1176 processor. ARM GlobalFoundries partner on 28nm HKMG for Cortex-A9 Source: Suzanne Deffree, Electronic  News – 6^th October 2009 With the agreement, GlobalFoundries said it will be the first foundry to work with ARM to enable a 28-nm Cortex-A9 SOC solution. Back to top
	FINANCIAL WATCH
	Digital media, semiconductor sales drive record Samsung profit Source: David Manners, Electronics Weekly – 30^th October 2009 The company reported a record profit of $3bn for Q3, three times the profit of Q308, and forecasts a 'solid' Q4. Sales were up 19% on Q308. Semiconductor sales were 7.4trn won ($6.3bn) up from 6.1trn won in Q2 and 6trn in Q308, LCD sales were 6.7trn won ($5.6bn) up from 5.1trn in Q2 and 5.6trn in Q308, Telecom sales were 10.7trn won up from 10trn in Q2 and 9trn in Q308 and Digital media sales were 12.4trn won ($10.5bn) up from 12trn inn Q2 and 11trn in Q308. Toshiba chip turns profit, aims to up outlook Source: Reuters – 30^th October 2009 Japan's biggest chipmaker said its semiconductor operations sprang back to a quarterly profit on cost cuts and more stable prices and it said it aimed to lift its annual outlook. The world's No.2 maker of NAND flash memory is eyeing stronger demand for the chips used in Apple’s iPhone, and for its system chips used in Sony’s PlayStation3 game console Chartered cuts Q3 loss to $4.7m Source: Winston Chai, The Business Times Singapore – 24^th October 2009 Plant utilization rate was 75%, down from 85% for the year-ago quarter but up from 60% from the second quarter. NXP sees sales jump 19%, remains cautious on chip outlook Source: Richard Wilson, Electronics Weekly – 23^rd October 2009 Q3 sales were $1.03bn which was 20.7% up on the second quarter. The increase in sales on a sequential basis was visible across all business segments and regions. Bookings rise y/y for first time since May 2007, industry continues to improve: SEMI Source: Suzanne Deffree, Electronic News – 16^th October 2009 North America-based manufacturers of semiconductor equipment posted $732.8 million in orders last month and an improved book-to-bill ratio of 1.17, according to SEMI's September book-to-bill report. AMD shows 18% Q3 revenue gain Source: Suzanne Deffree, Electronic News – 16^th October 2009 While cautious on Q4, AMD reports revenues of nearly $1.4 billion and a slimmer $128 million net loss. Intel reports ‘blowout’ Q3 financials, Q4 guidance Source: Suzanne Deffree, Electronic News – 14^th October 2009 Industry watchers applaud the company and its Q4 revenue guidance of $10.1 billion, which would show a 23% year-over-year increase and would place sales back at levels achieved before the economic meltdown Netbooks drive Acer to #2 PC vendor in world Source: Mark Hachman, PC Magazine – 14^th October 2009 IDC released its third-quarter PC estimates placing Taiwan's Acer in the number-two spot. Dell suffered an 8.4 percent drop in unit shipments, the only vendor in the top five worldwide to record lower overall unit sales on a worldwide basis. Dell's U.S shipments declined as well. Overall, global PC shipments rose by 2.3 percent to 78.1 million units. TSMC’s consolidated sales up in Q3 Source: China Knowledge Newswire – 12^th October 2009 The world's largest contract manufacturer of microchips by revenue, recorded $89NT.9 billion of consolidated sales in the third quarter of this year, 21% more than a quarter earlier. TSMC has spent a lot of money this year to increase the production capacity of its advanced technologies, especially those below 65nm because it is confident that it will receive plenty of orders for 45nm and 40nm products from clients such as Altera and NVIDIA. Dutch ASML seen returning to profit in Q3 ‘09 Source: ADP News Netherlands – 9^th October 2009 The Dutch chip-equipment maker is expected to announce next week a profit for the third quarter of 2009, according to recent analysts’ estimates. The company has been making losses for three quarters in a row. UMC sees Q3 revenues surge Source: China Knowledge Newswire – 9^th October 2009 The foundry’s monthly revenue grew 5.23% in September to $9NT.54 billion, reaching the highest level in 23 months. High wafer prices were the main contributor to this when the firm saw orders for products made using 65nm technology increase sharply. UMC is expanding its capacity at its 12-inch wafer plant in Singapore that uses advanced 45nm and 40-nm technologies. Global chip sales increase sequentially for sixth straight month, SIA reports Source: Suzanne Deffree, Electronic News – 2^nd October 2009 Worldwide sales of semiconductors in August were $19.1 billion, an increase of 5% from July when sales were $18.2 billion. SIA President George Scalise says that the group is "encouraged that industry momentum has turned positive following the steepest downturn in more than a decade." EDA posts sixth consecutive dip in Q2 Source: EE Times – 2^nd October 2009 EDA revenue slipped y-on-y for the sixth consecutive quarter in Q2, the longest string of successive declines since at least 1997, according to the EDA Consortium (EDAC). Back to top
	MERGERS, ACQUISITIONS, JOINT VENTURES, SPIN OFFS AND PEOPLE
	Renesas agrees transfer of chip equipment to Hitachi Source: Richard Wilson, Electronics Weekly – 28^th October 2009 Hitachi has reached an agreement with Renesas for the transfer of its Japan-based semiconductor manufacturing equipment business to Hitachi High-Tech Instruments Co. The business transfer comes as Renesas is in the process of merging its semiconductor product business with NEC. Tektronix buys US based test services business Source: Richard Wilson, Electronics Weekly – 26^th October 2009 Tektronix has completed the acquisition of the test business from Sypris Solutions for $39m. The Sypris test business will bring with it a number of US locations which will offer on-site, mobile, or service offerings to Tektronix customers. Hynix Semiconductor to sell US chip plant Source: Associated Press – 21^st October 2009 Uni-chem will take over Hynix's memory chip plant and the accompanying land in Eugene, Ore., for $45 million Cisco to buy wireless gear maker Starent Source: Ritsuko Ando, Reuters – 13^th October 2009 In its second major acquisition this month, the top US network equipment maker plans to buy advanced wireless equipment maker Starent Networks for $2.9 billion to boost its product offerings as phone carriers build out next-generation networks Mentor Graphics to buy Valor for $82 million Source: Reuters – 12^th October 2009 Valor, which is traded in Frankfurt, provides software solutions for makers of printed circuit boards. It has development centres in Israel, Finland and Denmark. NXP and Virage Logic establish strategic alliance Source: Reuters – 12^th October 2009 The agreement calls for the transfer of a part of NXP’s advanced CMOS IP rights and certain engineering talent and equipment to Virage Logic. This arrangement includes a long-term-licensing and IP development relationship between the two companies, enabling NXP to significantly reduce costs without compromising its design capability. Virage Logic will establish an R&D centre in Eindhoven providing on-going support to NXP and developing new products based on the acquired advanced CMOS I/O, analog, mixed signal and SoC infrastructure IP. National Semiconductor CEO Halla to retire Source: Benjamin Pimental, MarketWatch – 9^th October 2009 The company’s CEO Brian Halla will step down effective Nov. 30 and will remain as the company's executive chairman. He will be replaced by current COO, Donald Macleod. FormFactor acquires technology assets of Electroglas Source: Marketwire – 6^th October 2009 In February 2009, Electroglas and FormFactor entered into an agreement for Electroglas to supply tools and technology to FormFactor. In July 2009, Electroglas announced it had filed for Chapter 11 bankruptcy protection NXP merges STB business with Trident Source: Telecom Paper – 5^th October 2009 NXP Semiconductors has agreed to sell its TV and set-top box business to Trident Microsystems in exchange for a 60 percent stake in the company Cisco to buy video firm Tandberg Source: Georgina Prodhan and Aasa Stoltz, Reuters – 1^st October 2009 Cisco said buying Tandberg would strengthen its position in a $34 billion market for remote business collaboration tools and help it make underused videoconferencing more useful and less clumsy. Back to top
	MARKET OUTLOOK
	China’s IC industry mending and to see full recovery in 2010 Source: Xinhua Economic News Service – 26^th October 2009 Influenced by the recovery of industrial prosperity, China's IC firms saw revived revenues. Considering China's IC industry is leading the way to recovery, analysts generally regard it a result from a series of economic stimulus policies, namely the booster plan for the electronics and information industry, rural household appliance subsidy program, household appliance old-for-new subsidy program, the third generation (3G) network construction and domestic demand. Bookings rise y/y for first time since May ’07: SEMI Source: Suzanne Deffree, Electronic News – 21^st October 2009 North America-based manufacturers of semiconductor equipment posted $732.8 million in orders last month and an improved book-to-bill ratio of 1.17, according to SEMI's September book-to-bill report. Digital TVs vie to bring internet connectivity to living room- In-Stat Source: Business Wire – 19^th October 2009 A recent research shows that 36% of digital sets sold in 2013 will be network-enabled, DTV revenue in Asia-Pacific will see a 6.3% Compound Annual Growth Rate (CAGR) from 2008 to 2013 - the fastest growth among the major regions, except for Rest-of-World and that DTVs are now the only TVs available in most of North America, Western Europe, and Japan. PC shipments back on the rise Source: Suzanne Deffree, Electronic News – 15^th October 2009 On a regional basis, both Gartner and IDC said the United States showed the largest percentage of PC shipment growth. IDC noted that the competitive landscape, the transition to portables, new and low power designs, growth in retail and consumer segments and the impact of falling prices all contributed to overall market growth. Manufacturing trending away from China Source: Rob Spiegel, Electronic Business – 13^th October 2009 The challenges of manufacturing in China and the still recovering global economy cause electronics supply chain jitters among OEMs and encourage second looks at the shift to outsource and the potential benefits of keeping manufacturing closer to home. Foundry revenues rise amidst intensifying competition Source: David Lammers, Semiconductor International – 13^th October 2009 IC Insights and iSuppli separately forecast increasing foundry revenues, but much tougher competition as GlobalFoundries and Samsung create pricing pressure. A wave of consolidation may winnow out the weaker players as it gets more expensive to stay at the leading edge. "The fast-follower strategy now serves only as a route to the fringes" of the foundry business, said iSuppli analyst Len Jelinek. Signs of recovery seen in electronics supply chain, IPC reports Source: IPC – 13^th October 2009 The EMS (electronics manufacturing services) industry was the last segment in the electronics supply chain to feel the effects of the recession and it looks as if EMS will be the last to start its recovery. EMS shipments seem to have hit the bottom and remained flat in August. Smart phones apps battle spreads to car market Source: Kevin Hamlin, iSuppli – 12^th October 2009 The market for smart phone applications has emerged as a central battlefront in the global technology industry, packed with device manufacturers, wireless service providers and software developers fighting it out for a share of this fast-growing market. Nanomarkets: Printed silicon electronics to reach $1.8B by 2016 Source: PR Newswire – 7^th October 2009 The biggest opportunity will come from photovoltaics. Printed nanosilicon PV panels will generate well over $1 billion in revenue by 2016.Printed silicon may also be the solution to the industry's growing impatience with organic TFTs (OTFTs). Foundry industry to consolidate Source: David Manners, Electronics Weekly – 6^th October 2009 Consolidation in the silicon foundry industry will see the industry dominated by three main players, TSMC, UMC and Global Foundries, according to US analyst, iSuppli, citing a wave of mergers in the industry. These include: the pending merger between Hua Hong NEC and Grace Semiconductor; Tower Semiconductor's 2008 purchase of Jazz Semiconductor; the proposed acquisition of HeJian Technologies by UMC; the purchase of Chartered by Global Foundries. Back to top
	VIEWS AND OPINIONS
	Mouser’s Mark Burr-Lonnon on changing distribution business Source: Electronics Weekly – 13^th October 2009 Mark Burr-Lonnon, VP of Mouser International, talks about how the internet is changing the distribution business and the proportion of business going online Qualcomm’s Nowak: 3-D faces cost issues Source: Phillip Garrou, Semiconductor International – 6^th October 2009 In a plenary speech at the IEEE 3-D IC conference in San Francisco, Qualcomm Director of Advanced Technology, Matt Nowak said 3-D interconnects face plenty of issues that must be dealt with before the benefits of the approach can be realized. Pasquale Pistorio on the credit crunch and semi CEOs Source: David Manners, Electronics Weekly – 2^nd October 2009 Pasquale Pistorio, Honorary Chairman of STMicroelectronics and Chairman of Sagem Wireless was asked at the International Electronics Forum in Geneva how the credit crunch had changed the world for semiconductor CEOs; some insights. Back to top

KEY TAKE-AWAY

Fab allocation back on the agenda

As cited by Malcolm Penn of Future Horizons in the IEF 2009, "The 'A' word is back on the agenda", But it is not all smooth sailing for the foundry biz. The semiconductor industry’s capex has hit alarmingly low levels. With the economy and market’s forecasted recovery, foundries will be hard pressed next year to meet the demands.

NXP and Virage Logic ‘s strategic alliance

This strategic alliance underscores the semiconductor industry’s continuing trend for companies to focus on their core competencies while out-sourcing non-differentiating elements of their business. However, this has also raised questions on NXP’s future plans. Recent transactions, including the agreement to sell the wireless IC business to fellow European IC vendor STMicroelectronics, raises the spectre of a company being slowly broken up into pieces to be gobbled up by bigger competitors – an impression clearly rejected by Rick Clemmer, NXP’s President and CEO.

Foundry consolidation

There has also been a lot of talk on consolidation in the foundry biz There are some pending mergers - between Hua Hong NEC and Grace Semiconductor; Tower Semiconductor's 2008 purchase of Jazz Semiconductor, proposed acquisition of HeJian Technologies by UMC and the recent purchase of Chartered by GlobalFoundries. Possible future mergers are: SMIC acquiring Cension Semiconductor Manufacturing International and Wuhan Xinxin Semiconductor Manufacturing - two companies which SMIC is managing. And then there are small foundries like Silterra, Altis and Landshunt which are struggling and open to speculation regarding a merger with another manufacturer. “In all likelihood, as cited by iSuppli, there may be 3 major pure-play foundries left standing after the consolidation – TSMC, UMC and GlobalFoundries.

CSMC Technologies’ deal with IBM

This is the second foundry licensing deal for IBM in China. In 2007, Chinese foundry provider Semiconductor Manufacturing International Corp. licensed IBM's 45nm bulk CMOS technology.

2010 Survey

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STOCK WATCH

Source: NASDAQ

1 month chart for Intel, TSMC, TI, Broadcom, STM, Xilinx, KLA-Tencor, Chartered Semiconductor, LSI, UMC, Applied Materials, Teradyne, Toshiba and Infineon

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The Semiconductor Biz Insight is compiled by VLSI Consultancy. The newsletter includes a compilation of news-stories that appeared on the internet in leading company and news sites. We provide the links for your ease and urge and encourage you to read the original story at the respective website following the URL/Link of the news-item.