Category Archives: Device Architecture

Despite a slightly down first quarter, the semiconductor industry achieved near record growth in the second quarter of 2017, posting a 6.1 percent growth from the previous quarter, according to IHS Markit (Nasdaq: INFO). Global revenue came in at $101.4 billion, up from $95.6 billion in the first quarter of 2017. This is the highest growth the industry has seen in the second quarter since 2014.

The memory chip market set records in the second quarter, growing 10.7 percent to a new high of $30.2 billion with DRAM and NOR flash memory leading the charge, growing 14 percent and 12.3 percent quarter-on-quarter, respectively.

“The DRAM market had another quarter of record revenues on the strength of higher prices and growth in shipments,” said Mike Howard, director for DRAM memory and storage at IHS Markit. “Anxiety about product availability in the previous third and fourth quarters weighed on the industry. This led many DRAM buyers to build inventory — putting additional pressure on the already tight market. This year is shaping up to smash all DRAM revenue records and will easily pass the $60 billion mark.”

“For NOR, the supply-demand balance has tightened raising average selling prices and revenue,” said Clifford Leimbach, senior analyst for memory and storage at IHS Markit. “This mature memory technology has been in a steady decline for many years, but some market suppliers are reducing supply or leaving the market, which has tightened supply recently, resulting in the increase of revenue.”

In terms of application, consumer electronics and data processing saw the most growth, increasing in revenue by 7.9 percent and 6.8 percent, respectively, quarter-on-quarter. A lot of this growth can be attributed to the continual growth in memory pricing, as supply still remains tight.

Industrial semiconductors showed the third highest growth rate at 6.4 percent during the same period. This growth can be attributable to multiple segments, such as commercial and military avionics, digital signage, network video surveillance, HVAC, smart meters, traction, PV inverters, LED lighting and medical electronics including cardiac equipment, hearing aids and imaging systems.

Another trend in the industrial market is increasing factory automation, which alone is driving growth for discrete power transistors, thyristors, rectifiers and power diodes. The market for these devices is expected to reach $8 billion in 2021, up from $5.7 billion in 2015.

Intel remains the number one semiconductor supplier in the world, followed by Samsung Electronics by a slight margin. IHS Markit does not include foundry operations and other non-semiconductor revenue in the semiconductor market rankings.

Among the top 20 semiconductor suppliers, Advanced Micro Devices (AMD) and nVidia achieved the highest revenue growth quarter over quarter by 24.7 percent and 14.6 percent, respectively. There was no market share movement in the top 10 semiconductor suppliers. However, seven of the 10 companies in the 11 to 20 market share slots did change market share.

top_5_semiconductor_companies

JoshThe Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced Josh Shiode has joined the association as government affairs director. In this role, Shiode will help advance the U.S. semiconductor industry’s key legislative and regulatory priorities related to semiconductor research and technology, product security, and high-skilled immigration, among others. He also will serve as a senior representative of the industry before Congress, the White House, and federal agencies.

“The U.S. semiconductor industry is a key driver of America’s economic strength, national security, and global technology leadership,” said John Neuffer, SIA president and CEO. “Josh Shiode’s extensive knowledge, skills, and experience will make him an ideal advocate for our industry’s policy priorities in Washington, D.C. We’re thrilled to welcome him to the SIA team and look forward to his help advancing initiatives that promote growth and innovation in our industry and throughout the U.S. economy.”

Shiode most recently served as senior government relations officer at the American Association for the Advancement of Science (AAAS), where he helped guide the association’s science and technology advocacy before the executive and legislative branches. Previously, Shiode was a public policy fellow at the American Astronomical Society (AAS), where he helped develop and implement AAS’s government advocacy strategies. Shiode holds a doctorate in astrophysics from the University of California, Berkeley and a bachelor’s degree in astronomy and physics from Boston University.

Researchers from North Carolina State University are rolling out a new manufacturing process and chip design for silicon carbide (SiC) power devices, which can be used to more efficiently regulate power in technologies that use electronics. The process – called PRESiCE – was developed with support from the PowerAmerica Institute funded by the Department of Energy to make it easier for companies to enter the SiC marketplace and develop new products.

“PRESiCE will allow more companies to get into the SiC market, because they won’t have to initially develop their own design and manufacturing process for power devices – an expensive, time-consuming engineering effort,” says Jay Baliga, Distinguished University Professor of Electrical and Computer Engineering at NC State and lead author of a paper on PRESiCE that will be presented later this month. “The companies can instead use the PRESiCE technology to develop their own products. That’s good for the companies, good for consumers, and good for U.S. manufacturing.”

Power devices consist of a diode and transistor, and are used to regulate the flow of power in electrical devices. For decades, electronics have used silicon-based power devices. In recent years, however, some companies have begun using SiC power devices, which have two key advantages.

First, SiC power devices are more efficient, because SiC transistors lose less power. Conventional silicon transistors lose 10 percent of their energy to waste heat. SiC transistors lose only 7 percent. This is not only more efficient, but means that product designers need to do less to address cooling for the devices.

Second, SiC devices can also switch at a higher frequency. That means electronics incorporating SiC devices can have smaller capacitors and inductors – allowing designers to create smaller, lighter electronic products.

But there’s a problem.

Up to this point, companies that have developed manufacturing processes for creating SiC power devices have kept their processes proprietary – making it difficult for other companies to get into the field. This has limited the participation of other companies and kept the cost of SiC devices high.

The NC State researchers developed PRESiCE to address this bottleneck, with the goal of lowering the barrier of entry to the field for companies and increasing innovation.

The PRESiCE team worked with a Texas-based foundry called X-Fab to implement the manufacturing process and have now qualified it – showing that it has the high yield and tight statistical distribution of electrical properties for SiC power devices necessary to make them attractive to industry.

“If more companies get involved in manufacturing SiC power devices, it will increase the volume of production at the foundry, significantly driving down costs,” Baliga says.

Right now, SiC devices cost about five times more than silicon power devices.

“Our goal is to get it down to 1.5 times the cost of silicon devices,” Baliga says. “Hopefully that will begin the ‘virtuous cycle’: lower cost will lead to higher use; higher use leads to greater production volume; greater production volume further reduces cost, and so on. And consumers are getting a better, more energy-efficient product.”

The researchers have already licensed the PRESiCE process and chip design to one company, and are in talks with several others.

“I conceived the development of wide bandgap semiconductor (SiC) power devices in 1979 and have been promoting the technology for more than three decades,” Baliga says. “Now, I feel privileged to have created PRESiCE as the nation’s technology for manufacturing SiC power devices to generate high-paying jobs in the U.S. We’re optimistic that our technology can expedite the commercialization of SiC devices and contribute to a competitive manufacturing sector here in the U.S.,” Baliga says.

The paper, “PRESiCE: PRocess Engineered for manufacturing SiC Electronic-devices,” will be presented at the International Conference on Silicon Carbide and Related Materials, being held Sept. 17-22 in Washington, D.C. The paper is co-authored by W. Sung, now at State University of New York Polytechnic Institute; K. Han and J. Harmon, who are Ph.D. students at NC State; and A. Tucker and S. Syed, who are undergraduates at NC State.

SEMI, the global industry association representing the electronics manufacturing supply chain, today reported that worldwide semiconductor manufacturing equipment billings reached US$14.1 billion for the second quarter of 2017.

Quarterly billings of US$14.1 billion represent an all-time historic record for quarterly billings, exceeding the record level set in the first quarter of this year. Billings for the most recent quarter are 8 percent higher than the first quarter of 2017 and 35 percent higher than the same quarter a year ago. Sequential regional growth was mixed for the most recent quarter with the strongest growth exhibited by Korea. Korea maintained the largest market for semiconductor equipment for the year, followed by Taiwan and China. The data are gathered jointly with the Semiconductor Equipment Association of Japan (SEAJ) from over 95 global equipment companies that provide data on a monthly basis.

The quarterly billings data by region in billions of U.S. dollars, quarter-over-quarter growth and year-over-year rates by region are as follows:

2Q2017
1Q2017
2Q2016
2Q2017/1Q2017

(Qtr-over-Qtr)
2Q2017/2Q2016

(Year-over-Year)
Korea
4.79
3.53
1.53
36%
212%
Taiwan
2.76
3.48
2.73
-21%
1%
China
2.51
2.01
2.27
25%
11%
Japan
1.55
1.25
1.05
24%
47%
North America
1.23
1.27
1.20
-3%
3%
Europe
0.66
0.92
0.37
-29%
76%
Rest of World
0.62
0.63
1.31
-1%
-53%
Total
14.11
13.08
10.46
8%
35%

Source: SEMI (http://www.semi.org) and SEAJ (http://www.seaj.or.jp)

The Equipment Market Data Subscription (EMDS) from SEMI provides comprehensive market data for the global semiconductor equipment market.

Historically, the DRAM market has been the most volatile of the major IC product segments. Figure 1 reinforces that statement by showing that the average selling price (ASP) for DRAM has more than doubled in just one year. In fact, the September Update to The McClean Report will discuss IC Insights’ forecast that the 2017 price per bit of DRAM will register a greater than 40% jump, its largest annual increase ever!

Just one year ago, DRAM buyers took full advantage of the oversupply (excess capacity) portion of the cycle and negotiated the lowest price possible with the DRAM manufacturers, regardless of whether the DRAM suppliers lost money on the deal. Now, with tight capacity in the market, DRAM suppliers are getting their “payback” and charging whatever the market will bear, regardless of whether the price increases hurt the users’ electronic system sales or causes it to lose money.

Figure 1

Figure 1

The three remaining major DRAM suppliers—Samsung, SK Hynix, and Micron—are each currently enjoying record profits from their memory sales.  For example, Micron reported net income of $1.65 billion on $5.57 billion in sales—a 30% profit margin—in its fiscal 3Q17 (ending in May 2017).  In contrast, the company lost $170 million in its fiscal 4Q16 (ending August 2016).  A similar turnaround has occurred at SK Hynix.  In 2Q17, SK Hynix had a net profit of $2.19 billion on sales of $5.94 billion—a 37% profit margin.  In contrast, SK Hynix had a net profit of only $246 million on $3.39 billion in sales one year ago in 2Q16.

Previously, when DRAM capacity was tight and suppliers were enjoying record profits, one or more suppliers eventually would break rank and begin adding additional DRAM capacity to capture additional sales and marketshare. At that time, there were six, eight, or a dozen DRAM suppliers.  If the supplier was equipping an existing fab shell, new capacity could be brought on-line relatively quickly (i.e., six months).  A greenfield wafer fab—one constructed on a new site—took about two years to reach high-volume production.  Will the same situation play out with only three DRAM suppliers left to serve the market?

Recently, Micron stated that it does not intend to add DRAM wafer capacity in the foreseeable future. Instead, it will attempt to increase its DRAM output by reducing feature size that, in turn, reduces die size.   Eventually, as the company moves down the learning curve, it will be able to ship an increasing number of good die per wafer.  However, SK Hynix, in its 2Q17 financial analyst conference call, stated that it plans to begin adding DRAM wafer capacity since it is not able to meet increasing demand by technology advancements alone.  Samsung has been less forthcoming in its plans for future DRAM production capacity.

Although Samsung and Micron may tolerate SK Hynix’s DRAM expansion efforts for a short while, IC Insights believes that both companies will eventually step up and add DRAM wafer start capacity to protect their marketshare—and DRAM ASPs will begin to fall.  As the old saying goes, it only takes two companies to engage in a price war—and there are still three major DRAM suppliers left.

The latest update to the World Fab Forecast report, published on September 5, 2017 by SEMI, again reveals record spending for fab equipment. Out of the 296 Front End facilities and lines tracked by SEMI, the report shows 30 facilities and lines with over $500 million in fab equipment spending.  2017 fab equipment spending (new and refurbished) is expected to increase by 37 percent, reaching a new annual spending record of about US$55 billion. The SEMI World Fab Forecast also forecasts that in 2018, fab equipment spending will increase even more, another 5 percent, for another record high of about $58 billion. The last record spending was in 2011 with about $40 billion. The spending in 2017 is now expected to top that by about $15 billion.

fab equipment spending

Figure 1: Fab equipment spending (new and refurbished) for Front End facilities

Examining 2017 spending by region, SEMI reports that the largest equipment spending region is Korea, which increases to about $19.5 billion in spending for 2017 from the $8.5 billion reported in 2016. This represents 130 percent growth year-over-year. In 2018, the World Fab Forecast report predicts that Korea will remain the largest spending region, while China will move up to second place with $12.5 billion (66 percent growth YoY) in equipment spending. Double-digit growth is also projected for Americas, Japan, and Europe/Mideast, while other regions growth is projected to remain below 10 percent.

The World Fab Forecast report estimates that Samsung is expected to more than double its fab equipment spending in 2017, to $16-$17 billion for Front End equipment, with another $15 billion in spending for 2018. Other memory companies are also forecast to make major spending increases, accounting for a total of $30 billion in memory-related spending for the year. Other market segments, such as Foundry ($17.8 billion), MPU ($3 billion), Logic ($1.8 billion), and Discrete with Power and LED ($1.8 billion), will also invest huge amounts on equipment. These same product segments also dominate spending into 2018.

In both 2017 and 2018, Samsung will drive the largest level in fab spending the industry has ever seen. While a single company can dominate spending trends, SEMI’s World Fab Forecast report also shows that a single region, China, can surge ahead and significantly impact spending. Worldwide, the World Fab Forecast tracks 62 active construction projects in 2017 and 42 projects for 2018, with many of these in China.

For insight into semiconductor manufacturing in 2017 and 2018 with more details about capex for construction projects, fab equipping, technology levels, and products, visit the SEMI Fab Database webpage (www.semi.org/en/MarketInfo/FabDatabase) and order the SEMI World Fab Forecast Report. The report, in Excel format, tracks spending and capacities for over 1,200 facilities including over 80 future facilities, across industry segments from Analog, Power, Logic, MPU, Memory, and Foundry to MEMS and LEDs facilities.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced worldwide sales of semiconductors reached $33.6 billion for the month of July 2017, an increase of 24.0 percent compared to the July 2016 total of $27.1 billion and 3.1 percent more than the June 2017 total of $32.6 billion. All major regional markets posted both year-to-year and month-to-month increases in July, and the Americas market led the way with growth of 36.1 percent year-to-year and 5.4 percent month-to-month. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Worldwide semiconductor sales increased on a year-to-year basis for the twelfth consecutive month in July, reflecting impressive and sustained growth for the global semiconductor market,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Sales in July increased throughout every major regional market and semiconductor product category, demonstrating the breadth of the global market’s recent upswing, and the industry is on track for another record sales total in 2017.”

Year-to-year sales increased in the Americas (36.1 percent), China (24.1 percent), Asia Pacific/All Other (20.5 percent), Europe (18.9 percent), and Japan (16.7 percent). Month-to-month sales increased in the Americas (5.4 percent), Asia Pacific/All Other (2.8 percent), China (2.7 percent), Japan (2.1 percent), and Europe (1.2 percent).

To find out how to purchase the WSTS Subscription Package, which includes comprehensive monthly semiconductor sales data and detailed WSTS Forecasts, please visit http://www.semiconductors.org/industry_statistics/wsts_subscription_package/. For detailed data on the global and U.S. semiconductor industry and market, consider purchasing the 2017 SIA Databook: https://www.semiconductors.org/forms/sia_databook/.

Jul 2017

Billions

Month-to-Month Sales                              

Market

Last Month

Current Month

% Change

Americas

6.59

6.94

5.4%

Europe

3.16

3.20

1.2%

Japan

2.98

3.04

2.1%

China

10.41

10.69

2.7%

Asia Pacific/All Other

9.50

9.77

2.8%

Total

32.64

33.65

3.1%

Year-to-Year Sales                         

Market

Last Year

Current Month

% Change

Americas

5.10

6.94

36.1%

Europe

2.69

3.20

18.9%

Japan

2.60

3.04

16.7%

China

8.61

10.69

24.1%

Asia Pacific/All Other

8.11

9.77

20.5%

Total

27.13

33.65

24.0%

Three-Month-Moving Average Sales

Market

Feb/Mar/Apr

May/Jun/Jul

% Change

Americas

6.08

6.94

14.2%

Europe

2.99

3.20

7.3%

Japan

2.88

3.04

5.7%

China

10.13

10.69

5.6%

Asia Pacific/All Other

9.21

9.77

6.0%

Total

31.29

33.65

7.5%

Microsemi Corporation (Nasdaq: MSCC), a provider of semiconductor solutions differentiated by power, security, reliability and performance, today announced the appointment of Richard M. Beyer to its board of directors.

Beyer was chairman and CEO of Freescale Semiconductor from 2008 through June 2012. Prior to Freescale, he served as president, CEO and director of Intersil Corporation from 2002 to 2008. He has also previously served in executive management roles at Elantec Semiconductor, FVC.com, VLSI Technology Inc. and National Semiconductor Corporation. Beyer currently serves as chairman of the board at Dialog Semiconductor PLC and sits on the board at Micron Technology Inc. In addition, he served three years as an officer in the United States Marine Corps.

Cypress Semiconductor Corp. (Nasdaq: CY) today announced the appointment of Catherine P. Lego to its board of directors. She will serve on the company’s Audit Committee. Lego brings to Cypress an established board record with public technology companies and more than a dozen private enterprises, plus invaluable experience supporting executive teams to drive the strategic growth of component, module and systems businesses.

“We are pleased to have Cathy Lego join Cypress’ board,” said Steve Albrecht, Cypress’ chairman. “She will be an excellent addition. Cathy brings a wealth of high tech board experience that aligns well with Cypress’ strategic evolution to become a high-growth leader of embedded solutions. We expect her to be an outstanding resource who will help the management team continue its strong execution of the Cypress 3.0 strategy.”

Lego currently serves on the boards of Lam Research Corporation and IPG Photonics Corporation. At Lam Research, she chairs the Compensation Committee and is a member of the Nominating and Governance Committee. From 2009 until 2014, she chaired the Audit Committee. At IPG Photonics, her roles include chair of the Compensation Committee and member of the Audit Committee. She was previously on the board of Fairchild Semiconductor from 2013 until its 2016 acquisition by ON Semiconductor. In addition, she served on the boards of SanDisk Corporation and JDS Uniphase. During her tenure of more than 25 years contributing in various committee roles, Lego has been trusted as chair or member of Audit Committees for almost every public or private company board she has been affiliated with. In 2015, she received a Directors 100 award from the National Association of Corporate Directors (NACD) for her board service.

Lego previously was a partner at two venture capital funds and practiced as a certified public accountant with Coopers & Lybrand (now PwC). She is the founder, owner and principal of Lego Ventures, LLC, where she consults with early-stage technology companies, develops business plans, obtains seed and expansion financing, and advises on strategic growth through mergers or acquisitions.

Lego, 60, holds a B.A. in economics and biology from Williams College and an M.S. in accounting from the New York University Graduate School of Business.

By Ajit Manocha, president and CEO, SEMI

In my first six months at SEMI, I’ve visited with many member companies and industry leaders.  One theme I hear repeatedly is a concern about our most fundamental source of innovation and productivity – people.

Our industry has a significant need for additional workers and several trends are working against us.

For one, only 11 percent of elementary students in the U.S. indicate an interest in science, technology, engineering, and mathematics (STEM) education according to the National Science Foundation.  In other regions, recruiting and retaining high-skilled workers remains a constant challenge.

Ironically, the incredible electronics manufacturing technology that we create has enabled many of the new-tech industries in software, social media, internet services and applications that now directly compete for the best and brightest technical talent.  Young engineers have other choices and many are lured to newer growth industries with familiar internet brands.

Today, due to continued industry advancement and robust growth, capital equipment companies, device makers and materials companies collectively have thousands to tens-of-thousands of open unfilled positions. Furthermore, the representation of women in the high-tech workplace remains disproportionately low.

We have long been aware of the need to support a diverse pipeline for high-skilled workers.  In 2001, the SEMI Foundation was established to encourage STEM education and stimulate interest in high-tech careers. SEMI and its Foundation launched the High-Tech U (HTU) program to engage and excite high school students. HTU enlists industry volunteers to work with local high school students in a three-day interactive hands-on curriculum. Young people get a fun and inspirational exposure to binary logic, circuit making, a fab or electronics manufacturing setting and other aspects of professional development.

To date, we’ve delivered 216 HTU programs and reached nearly 7,000 students in 12 states and nine countries.  The results are compelling.  Our 2016 survey of HTU alumni shows that they enter college at five times the national rates and 70 percent that graduated college are employed in a STEM field.   By any measure, the initiative is successful and worthwhile.

However, the talent problem statement has grown. Industry needs are greater and the time has come to redouble our effort to attract and retain talent for our high-skilled manufacturing sector.  Therefore, SEMI is elevating workforce development as a top strategic priority.

The SEMI HTU team is already engaged with key member companies to develop our enhanced roadmap for workforce development including a comprehensive study with Deloitte Consulting to underpin the key problems and solutions in areas of focus for decisive and systematic SEMI action.

Belle Wei, SEMI Foundation Board member and the Carolyn Guidry Chair in Engineering Education and Innovative Learning at San Jose State University said, “It is critical that we work to prepare the future workforce.  This requires a high level of collaboration between industry and higher education.  We appreciate SEMI’s leadership role in this collaboration to further develop the workforce pipeline.”

We have launched a HTU Certified Partner Program (CPP) with the goal of reaching more students through industry partners who commit to long-term participation and independent delivery of High Tech U.  In addition, we are expanding outreach to universities and community colleges and preparing to launch an industry image campaign to better tell the remarkable story of opportunity in our industry.

The capacity to innovate and the skills to manage complex design, engineering and manufacturing processes are essential factors that sustains our high-tech industry – and they are dependent on people.

Finally, as mentioned above, we have already started some new initiatives to enhance our HTU. A SEMI workforce development roadmap and execution plan will be detailed in a future SEMI Global Update article following the upcoming SEMI International Board Meeting.  SEMI welcomes any inputs in addition to your continued support.

This endeavor is increasingly urgent and recruiting the industry’s future innovators is well-aligned with SEMI’s mantra to connect, collaborate, innovate, grow and prosper.