3rd November 2010

Intel invests $1b for A&T plant in Vietnam

An emerging “China plus one” strategy for companies looking to diversify from China is a good sign for Vietnam which had seen some roadblocks on its path to a hi-tech industry satellite (if not hub) last year when Intel as well as homegrown V-Caps had stalled their operations there. Countries like Vietnam hope to peel away a significant amount of tech business to become global subsidiaries of the world’s factory floor.

The industry bellwethers’ decision in 2006 to build an assembly & testing plant in a country without a single world-class university and instead of in countries like India and China jolted the global tech world.

Intel has always gone for geographical locations where the local government offers them major tax incentives and subsidies. Labour and other infrastructure costs, while important, do not weigh as heavily in the company’s plant location choice. In this respect, Vietnam gave Intel a virtual hot line to top government officials. Rick Howarth, Intel’s general manager of the 115-acre site in the new Saigon Hi-Tech Park, has reportedly an open invitation to visit the country’s top leaders any time.

However, this new investment in Vietnam does in no way signify the company’s move away from China. No one can ignore the huge customer base there. In fact, besides its existing big presence in China, Intel’s CEO, Otellini, attended the opening of Intel’s first microprocessor manufacturing facility in Dalian, China earlier in the week.

Becoming global subsidiaries of the world’s factory floor…

posted in Semiconductor, Business, A&T | 0 Comments

29th October 2010

TSMC continues record-breaking performance in Q3

The company reported its best quarterly net profit and sales ever - net profit rose 54% year-on-year to US$1.52 billion.

Process Technologies as Percentage of TSMC’s Revenue in Q3 2010

150nm+ 28%
130nm/110nm 14%
90nm/80nm 12%
65nm/55nm 29%
40nm 0.33% 17%

In spite of the slow growth rate predicted of the global chip industry next year - CEO, Morris Chang forecasts a mere 5% revenue growth for the global chip industry in 2011, much less than his 30% forecast for this year - the foundry industry bellwether will up its capital spending in 2011 as compared to this year. New capacity for cutting edge 28-nanometer production technology is twice as expensive as 65nm technology; and TSMC will mass-produce chips using 28nm technology in the fourth quarter of this year

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

29th October 2010

Percello’s acquisition by Broadcom

Broadcom has paid $86m net of cash for Israeli femtocell IC specialist Percello in a bid to lower the BOM, and accelerate time to market, for its femtocell chip offerings. This comes close on the heels of acquiring the WiMAX prpovder, Beceem Communications.

The big fabless company’s acquisition does signify an endorsing of a real demand for femtocells. It is also now well positioned to take advantage of the relationship Percello has already cultivated with Ubiquisys, probably the number one in femtocell access point vendors.

Linley Gwennap, founder and principal analyst at Linley Group had correctly predicted in a talk to EETimes earlier -“The incremental cost of the femto function would be around $10. This could ultimately require the femto processor to integrate Ethernet and Wi-Fi as well as DSL or cable-modem. Broadcom is the obvious company to develop such a chip.”

Interconnectivity is getting more and more interesting! And hey, this is Broadcom’s sixth acquisition in Israel – and it already has 3 development centres there.

posted in Semiconductor, Business, Communciation, Mergers & Acquistions, 3G | 0 Comments

13th October 2010

Logical adjacency or hedging bets?? - Synopsys buys software firm Optical Research

Synopsys has acquired Optical Research Associates, a privately held premier provider of optical design software andl engineering services. The acquisition represents Synopsys’ first move into markets associated with displays and solid state lighting using light emitting diodes. The company said the acquisition will also allow it to expand into markets such as semiconductor lithography equipment and cameras.
Over the last few years, Synopsys has been venturing into various fields - apart from its traditional role of supplying EDA tools for the semiconductor market. Earlier it was tools for the PV systems and now this foray into markets associated with displays and solid state lighting using LEDs
 

With mixed signals on the semiconductor outlook coupled with evolving role of EDA vendors, the line between “hedging bets” and moving into “logical adjacent” areas is quite fine…..
 

posted in Semiconductor, EDA, Mergers & Acquistions | 0 Comments

3rd June 2010

GlobalFoundries invests $3b to expand capacity

News is aplenty of heavy capital investments being done. TI, in April, said that it would double the capacity of its 300mm analog fabs (as I said in my earlier blog - after off-loading its wireless products, it has to expand capacity for analog significantly in order to maintain growth momentum). Then the pure-play foundry world leader, TSMC, approved a capex expansion of $1.65 billion for 2010, followed by the Korean giant, Samsung Electronics announcing that it is investing a whopping $22.6b in capex and R&D. And now joining the other major chip companies seeking to ramp manufacturing production to exploit the recovery in global demand, we have the Abu Dhabi government backed GlobalFoundries planning to spend $3b on expansion.  The previous plan was for it to spend $2.5b on capex in 2010.  Abu Dhabi has pledged to spend about $10 billion to build up GlobalFoundries as a world-class competitor in the foundry business

All this sounds good for the industry which had seen some trough points in the last year and a half.  However, the timescales in semiconductor production for planned expenditures to translate into additional capacity is long enough for the industry to move into price decline because of over capacity.

posted in Semiconductor, Business, Foundry | 0 Comments

25th May 2010

UMC seeks funds

Once the number 2 pure-play foundry in the world, UMC now lags behind TSMC, Samsung and GlobalFoundries in process technology.

The Taiwanese foundry is open to involvement from any strategic partner through private placement of 10% of its total shares or about $400 million for capacity expansion.. TI, ASML and GlobalFoundries are among the potential investors for the placement. GlobalFoundries has a major fab under construction in NY and is eager to add capacity; which can be achieved if it taps UMC. In fact, earlier in the year, it was rumored that ATIC approached UMC with a view to take a stake in it and secure additional production capacity.  A strategic partnership between the two would allow them to better compete with market leader TSMC.
 

Only the big can survive in this foundry biz. Consolidation will happen. The question is when and who will be the last few standing.

posted in Semiconductor, Business, Foundry | 0 Comments

11th May 2010

ARM’s foray into the server market

Coming close on the heels of ARM’s CEO, Warren East’s remark that ARM based servers will be out in the market in the next 12 months,  comes news from Marvell – the fabless company aims to supply silicon for ARM-based servers with 40-nm multi core processors that it will ship this year. As per EE Times, Marvell and ARM are working with “multiple Tier 1 companies” to build larger trial deployments to validate ARM as a server platform. Separately, Marvell has opened up its dual-core architecture, drivers and board support package so partners can create server software needed to support the new market initiative”

Opinions about ARM’s foray into server market making a dent in Intel’s server biz vary. ARM’s marketing chief, Ian Drew recently pointed out that “We’re an [intellectual property] company — we learned in last two years that we don’t know everything about everything. On the servers, it will take longer than we imagine because it’s a much more complex problem [than smartbooks or phones]”. ARM is running one of its websites (for the ARM Linux Internet Platform) on a cluster of ARM based chips, part of a handful of experiments to test out the viability of using its chip architecture in severs. They are Marvel based.
 

The server market, long dominated by Intel, has lately seen increasing power concerns. Google’s recent acquisition, Agnilux, was rumored to be making servers with ARM architecture. TI is researching the use of DSPs in servers. Intel’s best hope can lie in working along with companies using its low power Atom chips to build power efficient servers.
 

“East wasn’t willing to name the chip foundries that ARM is working with, however he said that information should tip up in the next 12 months.” Now if one of these foundries happens to be GlobalFoundries, it’d be interesting to see how the server market pans out – Intel’s long term rival, AMD and Global Foundries share the same parent company.

posted in Semiconductor, Business, IP | 0 Comments

10th May 2010

What’s happening on the 450mm wafer front?

Speaking at the International Electronic s Forum 2010 early this month, TSMC’s CTO, Jack Sun, said that he believed a move to 450mm wafers is important for cost reduction and that is going to happen; he reckons middle of this decade. 

The three biggest capex spenders -TSMC, Samsung and Intel want 450mm. But none have contributed substantial funding – an estimated $25bn - $30bn R&D investment by suppliers. 300mm was funded by the equipment suppliers. The same may not be expected this time as the fact whether the suppliers have recouped their investments is still uncertain. Plus they have their other expensive baggage – transition to new process nodes, TSVs, materials etc. 

Now come to the equipment makers. To improve their competetiveness and therefore increase their chances to be selected by the tier 1 semiconductor companies in their future 450-mm operations, the European semiconductor equipment and materials makers support the move to 450mm. However, large non-European semiconductor equipment manufacturers, including Applied, Novellus, Lam, TEL and others, have publicly slammed the idea of the 450-mm wafer transition  

Prior to 2002 (before 300mm wafers actually took off), semiconductor and equipment revenues were more or less aligned. However, post 2002, semiconductor revenues have continued to diverge from equipment revenues, and the ratio of equipment to semiconductor revenues is at an all time low - a divergence attributed largely to the impact of 300mm wafers. 

So the question remains: Who funds the 450 mm, if at all??    

 

posted in Semiconductor, Foundry | 0 Comments

7th May 2010

Analysts bump up their forecasts with “blowout” Q1

Q1 has been good for the semiconductor industry. Very good, especially w.r.t the dismal 2009.

With Q1 results ranging from knock out to good and promising, industry analysts (iSuppli, Future Horizons etc.) are also revising up their forecasts. The average forecast points north of 30. iSuppli noted that even though semicon revenues typically declines in the first quarter (compared to forth quarter of previous year), Q1’ 2010 saw chip sales up 1..1% compared with Q4 ’09.  Malcolm Penn of Future Horizons has been quite bullish. While cautioning about the potential for a second dip in the general economy, he maintained that only a monumental disaster of a scale similar to the banking crisis of 2008 could now derail the chip market recovery.

However, companies are still treading warily and hesitant to ramp up capacities – there is not much sign of the supply chain easing up.

posted in Semiconductor, Business, Forecasts | 1 Comment

6th May 2010

Shortages hit LCD Driver IC

Close on the heels of analog chip shortages, comes the LCD driver IC one.
While there is a high demand for LCDs (used in notebooks, desktop PCs and cellular phones), chip makers are reluctant to add capacity – the older, high voltage and older technologies used for making them are considered unprofitable.
Companies are going in for alternate options – Samsung and Toshiba has paired up with Toshiba to start production of a “common-type” driver for 256-color super-twisted nematic LCD drivers and Samsung to produce the complementary “segment-type” driver. NEC, a leading driver supplier, is outsourcing to Sanyo Electric.   

posted in Semiconductor, Product, Business | 0 Comments

6th May 2010

Analog IC market - a sellers market for 2010

The tight supply of analog ICs seems set to continue. The current demand is growing faster than the capacity ramp ups and quite a few analog vendors are turning away business. 

Analog chip makers are struggling with part shortages and extended lead times. Further investments for capacity ramp-up, optimizing fab outputs etc. are taking place in an uncertain backdrop of a “relatively accurate picture of actual demand”.  TI is expanding its 300mm analog fab – though, after off-loading its wireless products, it has to expand capacity for analog significantly in order to maintain growth momentum. Maxim is taking several actions – optimizing existing production lines and increasing loading to foundry partner, Epson.  The analog IC market in particular looks to be a seller’s market for the entire 2010!   

 

posted in Business, Analog | 0 Comments

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