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

11th December 2009

Evolving face of EDA

There has been a lot of talk recently over the blogosphere (& elsewhere!) about the changing face of EDA, EDA is doomed, EDA needs to change its biz model in order to survive etc.
What needs to be kept in perspective is the evolving value-proposition & risk sharing perceived by the chip designing company from an EDA vendor’s offering; especially in these times of the escalating costs (and diminishing success rates) of  chip designs in the higher technos.
I see the following path for the EDA vendors

  • EDA vendors’ offering to be more service oriented and I do not mean tool based trouble shooting here.  

  • Point tools across EDA vendors are losing their differentiation but are essential for basic design flow. I do not see chip vendors getting into developing these.  

  • EDA vendors will partner for point tools. These tools will evolve as per market requirements and be available on a pay-per-use model and bolstered by cloud computing.  

  • As a service, EDA vendors will closely work with the chip developers to see the project from specs to manufacturing. This is the service part of the tool+ service offering of the EDA vendors. The major chunk of the EDA vendor’s revenue will come from this service part and this will be the deciding criteria for the EDA vendors’ ranking in the chip designing world.  

Recommend a couple of interesting articles

What EDA needs to do to start growing again and Cadence goes two-dimensional

 

posted in EDA, Business | 0 Comments

3rd December 2009

Indian Doctors use iPhone for remote diagnostics

I had mentioned about technology fitting serendipitously in developing countries in an earlier post. Just came across this news item which shows yet another use of a consumer device for an unintended but highly useful application.

Pediatric eye surgeons in India and elsewhere find that the iPhone’s security and features makes it the best platform to be used in tele-opthalmology to cure Retinopathy of Prematurity (RoP). An Indian eye hospital is piloting software that will push retinal images collected from patients in remote locations to the doctors’ iPhones. They can then quickly send their diagnosis and recommendations from their iPhones to the doctors in the location nearest to the patient. Laboratory assistants take pictures of the retinas of prematurely born babies and transmit them via broadband to pediatric eye surgeons, who could be hundreds or thousands of miles away.
It is envisioning of applications like these that will help to bridge the digital divide

posted in Technology | 0 Comments

21st October 2009

Who drives the car??

Read an interesting article in the latest edition (Oct 26) of Fortune magazine. It is “An App store for autos?” written by Michael V. Copeland.

Michael writes that car’s dashboards should take a cue from iPhone. Car is the ultimate mobile device and automakers need to start acting more like consumer electronics companies if they do not want to cede one of their last great opportunities to Apple, RIM or Google. It would be interesting to have car appropriate applications, something akin to iTunes??

In fact, the writer talks about a driver less car – a team of computer scientists in Stanford University were given a Passat Wagon by Volswagen and they turned it into a driver less car – done by a series of sensors, navigation system and programming.

Reminds me of a management workshop which I attended more than a decade back while I was working with STMicro. The facilitator was talking about the various gizmos in the futuristic car when some one popped the question: Amongst all these gizmos and entertainment, who drives the car?? Well, the answer’s here now!!

posted in Business, Automotive | 0 Comments

20th October 2009

Fab allocation back on the agenda

As mentioned 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. The normal ratio of capex to sales over the industry’s history is 20%. Last year it was 12% and this year it will be 4%. The industry’s overall capacity is now 14% less than it was in Q3.’08. With the economy and market’s forecasted recovery, foundries will be hard pressed next year to meet the demands.
 

And that is where the “C” word comes in – Collaboration and Consolidation.
 

There has also been a lot of talk on consolidation in the foundry biz – as in other areas of the semiconductor industry. 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.

.

posted in Semiconductor, Business, Foundry, Mergers & Acquistions | 0 Comments

3rd March 2009

Intel teams up with TSMC for Atom

Intel will port unspecified Atom processor cores to TSMC’s technology platform, including processes, IP, libraries and design flows under the terms of an agreement between the two companies announced yesterday.
 

The deal will expand the TAM for Atom. It allows TSMC & Intel to go after newer market segments together - namely the embedded, CE, netbooks and handheld market.

Some interesting highlights on this deal:

  • It is indeed a rare event for Intel to allow its processor to be manufactured by another company.
  • Intel has no plans to license or transfer its high-k process to TSMC. It is doubtful the TSMC Atom devices will include high-k and metal gates. Hence it’s unlikely that the core from TSMC will have the same performance level as that from Intel.
  • With PC shipments failing, Intel needs to aggressively penetrate into other markets.
  • Intel goes head-on with leading embedded core provider, ARM. While ARM is trying to move to larger devices (from handsets etc.) for its cores, Intel is moving in the opposite direction (PC to smaller devices)
  • We may see two strong foundry-IP camps emerging: ARM-IBM alliance and Intel-TSMC for the much sought after mid size converging devices in the embedded space.
  • Point to be noted is that while there are 2 different market segments for the processor – higher end processors for PCs and the lower (& cheaper ones) for MIDs, Intel will need to do a real balancing act here so as not to have its profits from the upper segment being eaten away substantially by the lesser profits of the lower end processors.

 

posted in Business, Foundry, IP, Industry Events | 0 Comments

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

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