29th August 2008

Synopsys, Magma eye opportunities in solar market

The solar industry challenged semiconductor equipment manufacturers during the Photon Technology show in Munich in April this year, to better address their needs. While in the past, they had to make do with equipment originally developed for the semicon industry, they are pushing the equipment suppliers to build specifically for them.

Looks like, not only the equipment and yield management solutions/services vendors (like KLA-Tencor, Applied Materials etc.), but also the EDA vendors are jumping on this bandwagon; in the process also attempting to improve their bottom line by leveraging from this rapidly growing industry; especially important in times when the forecasts for the semicon industry do not appear too rosy.

With limited resources and the present state of economy, hope this does not come at the cost of inadequately addressed solutions to UDSM design related challenges.

posted in Semiconductor, Business, Solar | 1 Comment

20th August 2008

Designed in China: Domestically conceived chip market booms in nation

The story is familiar – Foreign companies come into a country to tap into its low cost labour. Sooner or later the low cost factor erodes and those foreign companies move out to newer pastures.

This is what also happened to the semiconductor industry in China. Foreign electronic equipment manufacturers come to tap into its relatively low cost labour. With the global economy going south, they decelerate the pace of their manufacturing outsourcing to China resulting into negative impact of the country. However, this negative impact has partially been off-set by a transformation in the country wherein there is now an increased focus on designing chips for electronic products that are popular in the nation - and thus tapping its own vast domestic market.

Demand for these locally designed chips is being driven mainly by China and Hong Kong-based electronics OEMs and contract manufacturers with foreign ODMs that develop and manufacture goods for Chinese OEMs also chipping in.

The initial manufacturing outsourcing to China had resulted into a large number of local design houses – they are now tapping the domestic market.

The largest application for Chinese designed semiconductors in 2007 was Mobile handsets followed by notebook PCs. But the fastest growing segment for domestically designed semiconductors over the next few years will be mobile communications infrastructure equipment - not surprising as the country is home to two of teh world’s bigger players i.e. Huawei and ZTE who incidentally are aggresively targetting the international markets for their growth.

posted in Semiconductor, Business | 0 Comments

23rd July 2008

Co-creativity through global networks

Am reading an interesting book, “The new age of innovation” by CK Prahalad and MS Krishnan. Prahalad was named “The world’s most influential management thinker” in 2007 by the Times of London. 

The book cites driving co-creativity through global networks as the new global standard for innovation & corporate growth. The 2 basic pillars in this transformation of biz are:   

  1. Value based on unique, personalized experiences of consumers, designated as N=1 (one consumer experience at a time). This is not to be confused with vendors offering customized solutions or multiple options. This is working together with the customer in providing him a solution tailored for him. The focus is on the centrality of the individual.   

  2. This is R=G pillar where R is the resources from multiple vendors and G is the global resources. As no single firm is, and will be, able to satisfy the experiences of 1 consumer at a time, all firms will access resources from a wider pool – the global ecosystem. 

Interesting examples cited not only drive home the point but it also gives pointers on building up for such a transformation.   

 

posted in Business | 0 Comments

21st July 2008

Japan’s cellphone firms target senior citizens

In the land of the technical gizmos’ (especially cellphones) savvy a.k.a –the land of the rising sun, the cellphone firms are targeting the senior citizens. With the maturing of cellphone market for teenagers, companies do need another segment to sell their wares to; and countries with growing senior citizens’ population are an ideal target for the same. 

The combination of real need and marketing savvy could explain the high penetration rate of mobile phones among older Japanese. And success in this market can be replicated in other countries. As I cited in an earlier post (Nov ’06), I’ve found it rather strange why the cellphone vendors had not capitalized on this viable market segment  

 

posted in Business, Communciation | 0 Comments

20th July 2008

Semiconductor fab tool & electronics materials vendors gravitating towards solar market

Reports that Samsung, the world’s largest buyer of capital equipment, is now putting the brakes on its capital spending, has exacerbated the doom-and-gloom sentiment. Poor memory environment coupled with economic woes have been cited as the main reasons behind semicon equipment vendors’ woes.

A shake-out in the fab tool & electronics materials industries is expected.  While consolidation through acquisitions & mergers loom on the horizon (Applied vying for ASMI, Aquest for Asyst etc.), we also see the semicon fab tool vendors gravitating towards the booming solar industry.  Applied has been diversifying out of chip cap-ex and equipment dominance into a strategy of being a solar player, KLA Tencor also entered the solar market with purchase of ICOS vision systems, a company whose primary business is inspection equipment for semiconductor packaging but which has been successful in the more cost-conscious solar wafer inspection market at key processing steps.

The recent SEMICON West had more than 250 exhibitors that had offerings for both the photovoltaics and the semiconductor markets. But it seemed that nearly every exhibitor had some sort of solar story to tell. From manufacturers of high purity chemicals used for microelectronics selling solar cell surface cleaner to Synopsys providing modeling software for the PV industry, there’s a range of interesting synergies being tapped across the two spaces – recommend you to read Semiconductor International’s write-up on some interesting solar stories from the floor

posted in Semiconductor, Business, Solar | 0 Comments

11th July 2008

If they come, we will build it…..

Gartner Dataquest has cut its semiconductor capital spending forecast by an additional 2.6%, projecting a 22.4% decline for 2008. The company said that the foundry investment pattern could change from, “If we build it, they will come,” to “If they come, we will build it.

Now, that’s something to chew on. With the mantra” If we build it, they will come”, foundries like TSMC moved from pure play foundries towards design support (including not just producing their reference design flows but also developing IPs) and later with the advent of DFM, towards further lowering the gray wall between design & manufacturing by providing access to manufacturing data through unified DFM architecture – all to ensure that their expensive fabs don’t run empty. Whatever the critics may say and apart from treading on the feet of different entities, one of the positive outcomes for the overall industry from this is that this process catalyzed collaboration – forcefully or voluntarily. 

Now moving towards “If they come, we will build it”, we need to see how well that bodes for an industry which is facing growing challenges of shorter time to market as well as shorter product life spans, especially in the consumer area.

A tough balance of bringing capacity more in line with demand – not only for existing but also for the mid term – especially in this period of economic gloom and market down turn.

posted in Business, Foundry | 0 Comments

10th July 2008

Diminishing semiconductor content ??

According to a recent research in Semiconductor DQ report from Gartner, it is noted that the top 100 OEMs consumed semiconductors worth $209 billion in 2007 or a total 76% of semiconductors sold last year. However their semiconductor consumption did not grow as fast as their revenues. The report highlights 2 ongoing issues faced by the semiconductor industry - significant erosion of semiconductor content and average selling prices (ASPs),
 

While ASP’s have long been an issue especially in the computer and cell phone market, the other aspect of decreasing semiconductor content is a worrying trend for the semicon industry. True, we are seeing some signs of new and innovative uses of semiconductors, such as sensors being implemented in products by firms such as Nintendo & interesting new touchscreen-based products, but then that by itself may not be enough.
 

Reverse trends include:

 

 

  • Talks of Apple selling newer versions of its iPhone s/w through its iTunes stores. Unlike traditional mobile handsets, where users change their handsets quite frequently (hence more semicon content demand), iPhone users may not change their handsets so often and upgrade their phones mostly through relevant s/w upgrades.
  • Recently there was this interesting news article in Biz section of International Herald Tribune (dt. June 23 ’08). It reports that Nokia wants to transform itself into the next generation entertainment company. It has already created (last August) an Internet service and online music store, Ovi, said to compete directly against Apple.
     Nokia predicts that in the next 5 years, phone users will create 25% of entertainment watched on smartphones. – and that Nokia will share that entertainment.
     

Both these examples indicate a growing dominance of s/w content and potentially diminishing h/w demand in the computing and consumer industry – areas which already show a pricing weakness (Gartner made note that the semiconductor content pricing in these areas decreased almost 9% in 2007 compared with 2006).
 

How does this bode for the semicon industry???   

 

posted in Semiconductor, Business, Forecasts | 0 Comments

14th March 2008

Chasing wafer fab projects in Singapore

I recently read this article in a book, Heart Works, which is a compilation of snippets by various high profilers on how the Economic Development Board (EDB), Singapore steered the country into the 21st century.

The article, authored by Mr. Lim Swee Say who held several senior appointments in EDB, recalls how they chased the wafer fab projects in Singapore in around 1994. In a great show of synergy, several players pitched in - banking community for funding, specialist manpower, training and knowledge upgrading schemes were made available to graduates and universities were roped in, National Science and Technology Board (now A*STAR) helped to build capabilities in wafer fab process and IC design technology and JTC Corporation pitched in with developing & servicing the fabs along with the service utility entities.

Their first wafer fab project was for Hitachi and an amusing anecdote is about how midway through digging up and preparing the land for the fab, they hit on a rubbish dump which had to be cleared away.

The news would have read “Singapore’s most modern fab sited on a rubbish dump”!

posted in Foundry, Trivia | 1 Comment

11th March 2008

Infineon sells HDD biz to LSI

Not too long back, quite a few companies, mostly ranking in the semicon top 10, counted a diverse portfolio as their strength. With the brutal and dynamic market conditions, this is becoming a luxury that only a few can afford. 

Following the trend of consolidation and focusing on core biz activities, Infineon will sell its hard disk drive (HDD) design and manufacture business to LSI Corp. LSI expects the acquisition will further its goal of becoming the leading worldwide provider of silicon solutions for hard-drive makers, especially at a time when the HDD market is going from mechanical to solid state drives. And they get an inlet to a top-tier customer, Hitachi Global Storage Technologies.

For Infineon, it is shedding a non-core biz, an area where they did not stand much of a chance amongst competitors like Marvell, LSI, TI and STMicroelectronics – and to focus its resources on its core businesses where it can be among the top few.

Just a year back, another acquisition between the same companies took place; albeit in a reverse direction - last August, Infineon agreed to pay $563.6 million to acquire LSI’s mobility products business to strengthen their position in mobile phone market. And the top tier customer base to be tapped there was Samsung.

They sure dig each others’ technology!!

 

posted in Semiconductor, Business, Mergers & Acquistions | 1 Comment

18th February 2008

KLA-Tencor invests in EDA firm

KT Venture Group LLC, the investment arm of KLA-Tencor Corp has invested in the latest round of funding of Pyxis Technology, an EDA company selling IC routing software and service solutions. The new funds will be used to accelerate deployment of the Pyxis NexusRoute yield-aware, auto-router, which was announced last September.

This is yet another example of the trend where different players are “crossing over” or getting the various adjacencies into the fold, in their pursuit of a better and integrated solution for the market; and thus increasing their share of the pie.

We saw this with Cadence acquiring Clear Shape Technologies and also with Verigy’s acquisition of Inovys.

posted in Semiconductor, EDA | 0 Comments

8th February 2008

Denali software moves to become fabless IC IP provider

Denali Software is on the trend of IP providers morphing to provide a complete solution/platform instead of standalone IP blocks. Starting with an offering of memory modules, then adding on semiconductor-related memory IPs to its portfolio, it has now introduced FlashPoint -  a full PCI Express interface platform. The platform includes a complete hardware design ready for fabrication plus a complete software stack and all necessary drivers.

From offering all the separate IP components and related software & firmware needed, a platform for PCI Express seems a natural progression - all the more logical and practical to survive the wave of consolidation.

posted in IP, Fabless | 0 Comments

7th February 2008

SMIC’s virtual fab strategy

SMIC’s CEO, Dr. Richard Chang announced late last month of the starting of a new IC production project in Shenzhen. Unlike its predecessors, in this project SMIC will register an independent legal entity, the Semiconductor Manufacturing International (Shenzhen) Corporation Ltd., which will set up an IC technology research and development center, an 8-inch wafer production line and a 12-inch fab.” SMIC will use the 300mm facility for 45nm bulk CMOS fabrication in relation to the recent process licensing deal it has struck with IBM.  

SMIC has been successful in gaining significant financial support and services from Chinese regional governments in establishing semiconductor manufacturing facilities in specific regions in the last 18 months. A number of such facilities have been termed as “virtual fabs” - Under this approach, a municipality owns the facility and SMIC manages it, garnering fees and a share of the profit for its troubles. (Though it may receive some government funding for the fabs announced last month, SMIC apparently will own them.)

Now while pure play foundries like TSMC, UMC and Chartered have reduced their capital spending plans keeping in mind a probable recession, SMIC plans to buck the trend and boost its capacity by 31% by year end – prompting fears of a capacity glut which may kick off a price war.

SMIC’s virtual fab strategy has drawn its share of critics who claim that it does not give a level playing field from the financial point of view. However, it’s to be noted that government investment in semicon industry is not new. The point is whether this has given SMIC the initial boost to catch up with the top players. Also with the Shenzhen deal with SMIC owned fabs, SMIC may be re evaluating its virtual fab strategy. 

With China’s semiconductor market, driven by computing & consumer electronics demand predicted by IDC to top  $28 B in 2008 & coupled with the fact that SMIC has distanced itself from it’s initial focus on DRAMs, this expansion may not be such a bad idea for SMIC.

posted in Foundry | 0 Comments

24th January 2008

Wall Street wary of equipment stocks, but there are some bright spots

Read this insightful analysis of the woes of the semicon industry and surviving in a period of “profitless prosperity” by Steve Newberry, president and CEO of Lam Research, as reported by Bob Haavind, Editorial Director, Solid State Technology.

I summarize his main points here:

  • The current period is marked by accelerating IC growth at a time of declining profitability. However, companies “can’t be prosperous if prices are declining faster than costs.”
  • 15 of the top 40 companies are losing money and 23 are making less profit than needed to stay in the business.
  • The trouble is overinvesting to create excess capacity, trying to force-feed a much larger industry than exists. Too many vendors are trying to capture the same market share through rapid supply line ramps that don’t allow much differentiation.
  • The only sectors found to be financially healthy were analog and fabless, which have low capital investment requirements.
  • In the logic sector, no integrated device manufacturer (IDM) can achieve enough volume to effectively compete with the economy of scale of the foundries. Even Texas Instruments, the only IDM with profit over 10%, is moving from a fab-lite to fab-liter strategy.
  • Even in the foundry sector, all the profits in the past five years were made by TSMC, while UMC, Chartered, and SMIC are not generating sufficient operating profits to sustain growth. An important factor here is that TSMC is able to command a price/wafer premium by offering superior value to its customers in terms of libraries, extra services, design aid, etc.
  • The major effort of most chipmakers was to solve the profitability problem through cutting costs — but a quick analysis showed that even if toolmakers cut their costs enough so that the entire process tool industry made zero profit, it would only offer chipmakers savings of perhaps $5.7 billion, when they need about $11.2 billion to close the profit gap, he believes.
  • Thus, Newberry suggested that chipmakers must focus on better value creation for customers, differentiating themselves while also becoming leaders in efficiency.

 

 

posted in Semiconductor, Business, Forecasts | 0 Comments

21st January 2008

Chip makers must shift from fabs to systems

In the interview to EETimes’ Rick Merritt, Infineon’s CEO, Ziebart mentioned that semiconductor companies need to shift their focus from building fabs to building systems, and they must engage with customers at deep technical levels if they are to survive the current wave of consolidation.

“The major thing giving semiconductor makers a competitive advantage has evaporated. Today everyone has access to the same process technology at roughly the same time. This access used to be what differentiated the best from the worst semiconductor companies, but now it has evaporated, What’s replacing process technology as a differentiator is systems know how, and it must be specific to a market area”, he said.

This has initiated several comments on the blogosphere. Let me add my two penny’ worth to that:

In the past, the process technology was the competitive edge. Later the escalating costs (& risks) involved with building new fabs & developing new processes left one with little option but to pool in resources and consolidate (to compete with the rising prominence of  original pure-play foundries); giving rise to alliance like Crolles and later the Common Platform Alliance. IDMs shared their resources for the basic process and individually derived some spin-offs for differentiation & niche. This competitive edge was further complemented and later more or less replaced with strong IP portfolio which has grown over the years from a block to platform to “platform plus services”.

Moving to system level is a natural progression in this path.

Yes, the differentiator has moved from process technology; but it is due to access to the process techno. This access has become cost prohibitive for any single semiconductor company (perhaps leaving aside a couple with really deep pockets) and hence the scramble to find an alternate place in the value chain to survive.

A point to be noted here is to follow how the foundries have also evolved over this period –  from pure play to design support to building an IP portfolio to……. “systems know how”???

posted in Semiconductor, Process, Business, Foundry | 0 Comments

16th January 2008

Cheap phones bring chip opportunities

There are 2 different markets for the handsets: feature-rich 3G phones and ultra low-cost (ULC) phones. The former is predominantly the developed countries and the developing countries form the latter.

According to ABI Research, “The developed markets’ high saturation rates mean that over 80 percent of new mobile phone subscribers in the next five years will come from emerging markets.”

These ULC handsets have changed the dynamics of business.

Using commoditized technology (read “multiple providers”), has given handset makers a wide array of vendors to choose from e.g. Nokia has moved from relying exclusively on TI for baseband chips to partnerships with STMicro, Broadcom and Infineon – thus providing it design flexibility as well as price negotiating power.

A fine example of a low cost phone is Tianyu 8811 which has achieved low costs by using proven, mature technology and adopting a minimalist approach. For a tear down on this product, I suggest to read Jeff Brown’s article 

The recently unveiled $2500 car (named Nano) from India’s Tata is a prime example of achieving low costs with minimalist approach

As cited by C. K. Prahalad, professor of corporate strategy at the University of Michigan Business School, a huge market awaits at The Bottom of the Pyramid.  

posted in Business, Communciation | 0 Comments

15th January 2008

Used semicon equipment market - expected strong growth this year

Amidst the bleak forecasts for the semicon industry for 2008 including the projected decline by 10% in capital spending, a sector expected to post strong growth this year is the used semiconductor equipment market. According to a report from Semiconductor Partners in conjunction with Semicon Research, Used semiconductor equipment market is expected to reach $8 billion in 2009


 “As leading edge digital memory and logic manufacturers build 300mm fabs for process technologies of 65nm or less, this will obsolete their 200mm fabs at 130nm or 90nm and some of their 300mm fabs at 90nm,” noted Morry Marshall, Partner – Strategic Technologies at Semiconductor Partners. “Analog and mixed signal manufacturers will have a need for these fabs to meet for expansion to satisfy the growing analog, mixed signal and RF markets.  This creates an opportunity for companies that finance, resell or refurbish used equipment.”

IDMs have re-aligned their fab strategies and are going towards fabless or fablite. Plus the ASP declines have catalysed foundries towards the 300mm wafer path, thus giving a boost to the 200mm used equipment market; in particular  from foundries in Asia. While on foundries in Asia, Chartered has been on the speculation radar

  • Toshiba has recently extended its 2 year collaboration with IBM on 32nm and below to include 32nm bulk CMOS process techno. Chartered with its ties to IBM (Common Platform Alliance) looks set to leverage on this and take away biz with Japanese foundry customers from TSMC and UMC
  • Rumors on SMIC being acquired have been afloat since last year. In April ’07, it was rumored to be taken over by venture capital companies. The latest one this year is that Chartered may acquire SMIC.

With the increasing prominence of the foundries in the semicon space and being pitted against the formidable Taiwanese foundries, the others are poised to increase their share of the pie.

 

 

posted in Semiconductor, Business, Foundry, Forecasts | 0 Comments

10th January 2008

ARM vs. Intel

There is an interesting article on ARM vs. Intel competing in the lucrative evolving product category placed in the gap between the smart phone and the laptop computer.

Intel looks set to invade the low power handhelds – a traditional domain of ARM. And its strategy to this effect involves offering X86 processors with leading performance while reducing the power consumption and footprint. ARM meanwhile continues to come up with various processor architectures and cores optimized for its customers’ needs and semiconductor manufacturing capabilities of its licensees.

The question is: Will future mobile handhelds run on an X86 or ARM instruction set architecture?

I summarize here a few points for both parties:

Advantage ARM:

  • The ARM processor was built for mobility from the ground up
  • ARM’s strategy looks to be targeted more on “needs of its customers” vs. Intel’s “what it can do with technology”
  • ARM works along with partners to develop an ecosystem where various entities contribute by building the system with ARM’s core while retaining their differentiating features; vs. Intel’s strategy of setting out a standard, defining the platform architecture and letting others build upon that. The latter has worked for PC and laptop market but may not get the same success in the volatile, different features for different people consumer market.
  • ARM’s TrustZone technology which gives an ARM CPU a secure state

Advantage Intel:

  • It is big & its pockets are deep
  • It has the silicon manufacturing edge
  • It can help OEMs with their branding & marketing
  • Apple may be leading the way in this market and Intel can buy its way back into telephone silicon

The coming months will tell how flat the world has become…… 

posted in Semiconductor, Business, IP | 0 Comments

  • Calendar

  • November 2019
    M T W T F S S
    « Nov    
     123
    45678910
    11121314151617
    18192021222324
    252627282930  

Search