Category Archives: Displays

As more smartphone manufacturers build designs using flexible display technology, shipments of flexible displays are expected to reach 139 million units in 2017, an increase of 135 percent compared to 2016. According to IHS Markit (NASDAQ: INFO), flexible displays are expected to comprise 3.8 percent of total display unit shipments in 2017.

Vivo and Xiaomi launched their first smartphones with flexible active-matrix organic light-emitting diode (AMOLED) displays in 2016, while many other manufacturers have plans to develop their own foldable (or bendable, dual-edge curved) smartphone designs. In particular, Apple is expected to launch its new iPhone using flexible AMOLED display in 2017, which would dramatically drive up expected demand for flexible AMOLED panels. Flexible AMOLEDs are expected to comprise 20 percent of total OLED display unit shipments in 2017.

IHS_Markit_Flexible_display_shipments_forecast

“During 2016, many smartphone manufacturers have pressured display panel makers to supply them with more flexible AMOLEDs for their new smartphone designs, however, due to limited production capacity only a few players had their orders met in quantity,” said Jerry Kang, principal analyst of display research for IHS Markit.

However, tight supply conditions are expected to change in 2017 once Samsung Display and LG Display start operating their new fabs to increase supply capacity for flexible displays, resulting in earlier availability of new smartphone entrants in the market.

“With new form factors entering the marketplace next year to entice consumers, smartphone manufacturers will find themselves locked in a fierce battle with one another as they jostle to win marketshare for their new smartphone models featuring dual-edge curved and foldable AMOLED displays,” Kang said.

According to the latest IHS Markit Flexible Display Market Tracker report, smartphones took up 76 percent of the total flexible display supply in 2016 with the remainder taken up by smartwatches. However, flexible display supply for other applications, including tablet PCs, near-eye virtual reality devices, automotive monitors and OLED TVs, is not expected to be significant until 2023.

“Consumer device manufacturers will eventually move from conventionally designed flat and rectangular form factors to the latest curved, foldable or rollable screens, but only once their product roadmap for newer, innovative devices becomes more mature,” Kang said.

The semi-annual IHS Markit Flexible Display Market Tracker covers the latest flexible display market forecast, and panel manufacturer’s strategies, technologies and patent trends.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced worldwide sales of semiconductors reached $30.5 billion for the month of October 2016, an increase of 3.4 percent from last month’s total of $29.5 billion and 5.1 percent higher than the October 2015 total of $29.0 billion. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. Additionally, a new WSTS industry forecast projects roughly flat annual semiconductor sales in 2016, followed by slight market growth in 2017 and 2018.

“The global semiconductor market has rebounded in recent months, with October marking the largest year-to-year sales increase since March 2015,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Sales increased compared to last month across all regional markets and nearly every major semiconductor product category. Meanwhile, the latest industry forecast has been revised upward and now calls for flat annual sales in 2016 and small increases in 2017 and 2018. All told, the industry is well-positioned for a strong close to 2016.

Regionally, year-to-year sales increased in China (14.0 percent), Japan (7.2 percent), Asia Pacific/All Other (1.9 percent), and the Americas (0.1 percent), but decreased in Europe (-3.0 percent). Compared with last month, sales were up across all regional markets: the Americas (6.5 percent), China (3.2 percent), Japan (3.0 percent), Europe (2.2 percent), and Asia Pacific/All Other (2.0 percent).

Additionally, SIA today endorsed the WSTS Autumn 2016 global semiconductor sales forecast, which projects the industry’s worldwide sales will be $335.0 billion in 2016, a 0.1 percent decrease from the 2015 sales total. WSTS projects a year-to-year increase in Japan (3.2 percent) and Asia Pacific (2.5 percent), with decreases expected in Europe (-4.9 percent) and the Americas (-6.5 percent). Among major semiconductor product categories, WSTS forecasts growth in 2016 for sensors (22.6 percent), discretes (4.2 percent), analog (4.8 percent) and MOS micro ICs (2.3 percent), which include microprocessors and microcontrollers.

Beyond 2016, the semiconductor market is expected to grow at a modest pace across all regions. WSTS forecasts 3.3 percent growth globally for 2017 ($346.1 billion in total sales) and 2.3 percent growth for 2018 ($354.0 billion). WSTS tabulates its semi-annual industry forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.

EV Group (EVG), a supplier of wafer bonding and lithography equipment, together with the Korea National NanoFab Center (President Jae Young Lee, NNFC), a nano-technology R&D infrastructure for academia, research institutes and the industry, announced preliminary results on improved transparent nanostructured anti-reflective coatings for next-generation displays. The ongoing work has been carried out within a joint-development program (JDP) established between the two partners in November 2015. This collaborative research has been partly funded by the Nano-Open-Innovation-Lab Project of the NNFC.

Korea National NanoFab Center (NNFC)

Korea National NanoFab Center (NNFC)

The goal of the EVG-NNFC JDP is the development of optimized materials, the process technology for structure replication, and the industrial implementation of the AR coatings for large-area substrates. The NNFC research team under its director Dr. Jae Hong Park is responsible for the development of the materials and the “reversible nano-molding” process, which can be compatible with EVG’s proprietary SmartNIL UV-nanoimprint lithography (UV-NIL) technology. EVG is responsible for optimizing the UV-NIL replication process and transferring the technology from the R&D phase on current 200mm round substrates to large panel sizes.

Outstanding preliminary results

EVG and the NNFC have successfully demonstrated an anti-reflective coating with excellent structure replication that provides over 97-percent transmittance and a surface hardness of 3H, which is superior to most other polymeric coatings. By contrast, current commercial thin-film coatings only provide up to 92-percent transmittance. The JDP partners achieved these results by applying EVG’s SmartNIL technology on 200-mm round substrates using a polymer material developed by the NNFC. This material was developed for performing the reversible nano molding process at the NNFC, and is compliant with commercial standards for display coating.

In the next phase of the program, EVG and the NNFC plan to promote these promising results to initiate partnerships with end-users that are interested in joining the JDP to help commercialize the new AR coating. The goal of this next phase is the qualification of the novel anti-reflective coating technology for industrial use through the NNFC, and the implementation of the process by EVG to high-volume panel manufacturing on large screen sizes, such as Gen 2 (370 mm x 470 mm) panels and beyond. In addition to this specific project, EVG and the NNFC plan to investigate other application areas leveraging nanostructures and NIL technology.

“As part of our Triple-i philosophy of invent-innovate-implement, EV Group has a long history of engagements with groups across the nanotechnology value chain–from research institutes and materials suppliers to manufacturers–to develop new processes and devices, and bring them into production,” stated WeonSik Yang, general manager of EV Group Korea, Ltd. “We’re pleased to have the opportunity to participate in this level of cooperation with our partners in Korea, namely the NNFC, and see the efforts of our previous cooperation bearing fruit. On behalf of EVG, I would like to extend my sincerest thanks to Dr. Jae Hong Park as well as NNFC President Jae Young Lee for their dedication and support for this project. We look forward to working with local industrial partners to commercialize this novel display coating technology and process to support large-area display manufacturing.”

EVG and the NNFC presented the results of this JDP at the recent NANO KOREA symposium and exhibition in Goyang, Korea. A copy of the poster summarizing the results can be downloaded at http://www.evgroup.com/en/about/news/2016_12_NNFC/.

 

The National NanoFab Center (NNFC) is a nanotechnology and semiconductors R&D center, located in Daejeon City, Korea.

All our smart phones have shiny flat AMOLED displays. Behind each single pixel of these displays hide at least two silicon transistors which were mass-manufactured using laser annealing technologies. While the traditional methods to make them uses temperatures above 1,000°C, the laser technique reaches the same results at low temperatures even on plastic substrates (melting temperature below 300°C). Interestingly, a similar procedure can be used to generate crystals of graphene. Graphene is a strong and thin nano-material made of carbon, its electric and heat-conductive properties have attracted the attention of scientists worldwide.

High-resolution transmission electron microscopy shows that after just one laser pulse of 30 nanoseconds, the silicon carbide (SiC) substrate is melted and separates into a carbon and a silicon layer. More pulses cause the carbon layer to organize into graphene and the silicon to leave as gas. Credit: IBS

High-resolution transmission electron microscopy shows that after just one laser pulse of 30 nanoseconds, the silicon carbide (SiC) substrate is melted and separates into a carbon and a silicon layer. More pulses cause the carbon layer to organize into graphene and the silicon to leave as gas. Credit: IBS

Prof. KEON Jae Lee’s research group at the Center for Multidimensional Carbon Materials within the Institute for Basic Science (IBS) and Prof. CHOI Sung-Yool’s team at KAIST discovered graphene synthesis mechanism using laser-induced solid-state phase separation of single-crystal silicon carbide (SiC). This study, available on Nature Communications, clarifies how this laser technology can separate a complex compound (SiC) into its ultrathin elements of carbon and silicon.

Although several fundamental studies understood the effect of excimer lasers in transforming elemental materials like silicon, the laser interaction with more complex compounds like SiC has rarely been studied due to the complexity of compound phase transition and ultra-short processing time.

With high resolution microscope images and molecular dynamic simulations, scientists found that a single-pulse irradiation of xenon chloride excimer laser of 30 nanoseconds melts SiC, leading to the separation of a liquid SiC layer, a disordered carbon layer with graphitic domains (about 2.5 nm thick) on top surface and a polycrystalline silicon layer (about 5 nm) below carbon layer. Giving additional pulses causes the sublimation of the separated silicon, while the disordered carbon layer is transformed into a multilayer graphene.

“This research shows that the laser material interaction technology can be a powerful tool for next generation of two dimensional nanomaterials,” said Prof. Keon. Prof. Choi added: “Using laser-induced phase separation of complex compounds, new types of two dimensional materials can be synthesized in the future.” IBS Prof. Keon is affiliated with the School of Materials Science and Engineering, KAIST and Prof. Choi with the School of Electrical Engineering and Graphene Research Center, KAIST.

Kateeva Co-Founder, President and COO, Dr. Conor Madigan

Kateeva Co-Founder, President and COO, Dr. Conor Madigan

Kateeva, the OLED production equipment leader, today announced that President and COO, Conor Madigan, Ph.D., was named “Inventor of the Year” for 2016 by the Silicon Valley Intellectual Property Law Association (SVIPLA). To date, he is listed as an inventor on more than 100 issued and pending patents.

Madigan was recognized for his pioneering work to develop a manufacturing equipment solution to mass produce Organic Light Emitting Diodes (OLEDs). OLED technology has revolutionized the flat panel display industry. It’s the gateway technology for flexible displays that enable bendable, foldable and even roll-able consumer electronics products. In a breakthrough for the display industry, Madigan and his team at Kateeva commercialized the industry’s first inkjet printer engineered specifically to mass produce OLEDs. The solution, called the YIELDjet platform, made high-volume OLED production cost-effective for the first time, giving display manufacturers an essential tool to accelerate their adoption of the transformative technology.

The SVIPLA has extended the annual award since 1977. Recipients include individuals whose innovations have changed industries and created new ones. Among them are the inventors of the barcode, the blue LED, and other esteemed contributors to the advancement of science and technology.

Madigan co-founded Kateeva in 2008 following a decade of OLED-related research at MIT, where he also earned his Ph.D. degree. Since then, he and the Kateeva team have accumulated more than 200 issued and pending patents surrounding the YIELDjet platform and related products.

“Given the immense talent in Silicon Valley, selecting a winner was no easy task,” said SVIPLA President, Carlos Rosario. “Conor is an obvious choice, however. Not just because his inventions helped set the display industry on a game-changing technology transition, or that he’s perpetually contemplating ways to enable new display breakthroughs. But also because he combined technical ingenuity with practical execution. That’s the difficult part. Pretty soon, when consumers can fold their laptops into a wallet-size square, or unfurl their smartphones to form a sturdy notebook, they’ll owe much of that innovation to Kateeva. We admire how Conor has built a strong company to commercialize Kateeva IP, and we’re thrilled to name him “Inventor of the Year”.

“I’m honored to be recognized by the SVIPLA,” said Madigan. “Considering the caliber of previous recipients, I’m also humbled. We’re proud of our role in helping display manufacturers shift to cost-effective OLED mass production and seize hold of a large new market opportunity. We did this in the time-honored Silicon Valley way: by applying innovation to solve difficult technical problems that conventional technology solutions couldn’t master. Thanks to the efforts of everyone at Kateeva, we were able to deliver a complex product to customers that is highly enabling and differentiated by valuable IP. For that collective achievement, I share the accolade with my colleagues.”

YIELDjet is trademarked by Kateeva, Inc.

ChipMOS TECHNOLOGIES INC. and Tsinghua Unigroup Ltd. (“Tsinghua Unigroup”) today announced an agreement to form a joint-venture and to mutually terminate Tsinghua Unigroup’s earlier private placement plan.

Under the joint-venture agreement, ChipMOS TECHNOLOGIES (BVI) LTD., a wholly owned subsidiary of ChipMOS Taiwan, will sell 54.98% of the equity interests of its wholly owned subsidiary, ChipMOS TECHNOLOGIES (Shanghai) LTD., to a group led by Tsinghua Unigroup, for approximately RMB 498.4 million (approximately NT$2,437 million or US$77 million). After the consummation of such equity interest transfer, ChipMOS BVI will own 45.02% of the equity interests of ChipMOS Shanghai, Tsinghua Unigroup through its subsidiary, Tibet Unigroup Guowei Investment Co., Ltd. (“Unigroup Guowei”) will own 48%, and other strategic investors, including a limited partnership owned by ChipMOS Shanghai’s employees will own 6.98%. The investment will be used to expand the capacity of and services offered by ChipMOS Shanghai. The joint-venture agreement has been approved by the Board of Directors of ChipMOS Taiwan.

S.J. Cheng, Chairman of ChipMOS, commented, “We are pleased to reach this joint-venture agreement with Tsinghua Unigroup, which has been at the forefront of the rapidly evolving global semiconductor value chain. As a leader of the semiconductor assembly and test segment, ChipMOS will be able to leverage our extensive expertise and relationships, R&D resources and technology roadmap to meet a critical need within the Tsinghua Unigroup portfolio as it works to meet expanding domestic China market. The joint-venture will allow us accelerate the planned expansion of ChipMOS Shanghai, while adding on new lines to given the higher demand we are seeing for our LCD driver ICs, touch driver, AMOLED, OLED and memory testing, assembly and bumping services. Tsinghua Unigroup is committed to actively supporting the company across its comprehensive semiconductor supply chain investment portfolio, as we work to mutually grow the sustainable revenue and profit of ChipMOS Shanghai over the long-term, while promoting the interests of all shareholders and employees.”

Details of Joint-Venture Agreement and Termination Agreement: 

  1. A mutual agreement was reached between ChipMOS and Tsinghua Unigroup to terminate Tsinghua Unigroup’s participation in a planned private placement of ChipMOS Taiwan:On December 11, 2015, the Board of Directors of ChipMOS Taiwan adopted a resolution to approve a private placement of common shares in which 299,252,000 private placement shares issued by ChipMOS Taiwan would be subscribed by a controlled entity of Tsinghua Unigroup at NT$ 40 per share, and ChipMOS Taiwan and Tsinghua Unigroup entered into the Share Subscription Agreement with other transaction documents on the same date. The aforementioned private placement was subsequently approved by a resolution of ChipMOS Taiwan’s shareholders meeting on January 28, 2016, and the subscriber, Tibet MaoYeChuangXin Investment LTD., also entered into another Share Subscription Agreement and other transaction documents with ChipMOS Taiwan.All parties have agreed to mutually terminate the Share Subscription Agreement and other transaction documents. ChipMOS Taiwan held a Board meeting to terminate the aforementioned private placement, and entered into the Termination Agreement with Tsinghua Unigroup and the subscriber, respectively.
  2. Under the joint-venture agreement announced today, ChipMOS BVI, a wholly owned subsidiary of ChipMOS Taiwan, will sell 54.98% of the equity interests of its China subsidiary, ChipMOS Shanghai, to strategic investors led by Tsinghua Unigroup, and will further increase the capital of ChipMOS Shanghai with such strategic investors according to their respective shareholding ratio. The sale of the 54.98% equity interest is expected to result in a gain to ChipMOS Taiwan of approximately NT$2,288 million(approximately NT$2.67 per ChipMOS Taiwan share) upon the transaction’s close primarily due to a gain on the appreciation of fixed assets and land use rights.ChipMOS BVI, a wholly owned subsidiary of ChipMOS Taiwan, originally owned 100% of equity interests of ChipMOS Shanghai. ChipMOS and ChipMOS BVI entered into the Equity Interest Purchase Agreement and the Agreement for China-Foreign Joint Venture with each strategic investor respectively, such as Unigroup Guowei, an indirectly wholly owned subsidiary of Tsinghua Unigroup, and the limited partnership owned by ChipMOS Shanghai’s employees, selling 54.98% of equity interests of ChipMOS Shanghai at the price of around RMB 498.4 million to strategic investors including Unigroup Guowei and others, and the limited partnership owned by ChipMOS Shanghai’s employees (hereinafter collectively as “Purchasers”). After the consummation of such equity interest transfer, ChipMOS BVI will own 45.02% of equity interests of ChipMOS Shanghai, Unigroup Guowei will own 48% of equity interests of ChipMOS Shanghai, and other strategic investors and the limited partnership owned by ChipMOS Shanghai’s employees will own 6.98% of equity interests of ChipMOS Shanghai. ChipMOS BVI will increase capital to ChipMOS Shanghai, by the funds obtained from selling equity interests of ChipMOS Shanghai, with the Purchasers according to their respective shareholding ratio, and except the foregoing funds, ChipMOS BVI does not inject any additional funds to ChipMOS Shanghai. ChipMOS Shanghai is expected to gain additional cash of approximately RMB 1,074.0 million from a capital increase after the deal closes.

S.J. Cheng, Chairman of ChipMOS, added, “We have been steadily ramping production at ChipMOS Shanghai as part of a three-year capacity expansion plan, which is aligned with the increasing customer demand levels for semiconductor testing and assembly services in Mainland China and our goal of achieving sustainable profitability at ChipMOS Shanghai. Other than the US$42 millioncapital contribution invested and US$33 million bank loan facility secured formerly, the additional RMB 1,074.0 million capital contribution will help us achieve our targeted economies of scale and our long-term goals. We are also pleased as the joint-venture structure brings powerful strategic partners to ChipMOS Shanghai in a structure that will benefit all shareholders.”

Restructuring of older display fabs, migration to larger-sized LCD TV panels and business strategy adjustments are some of the factors prompting LCD TV panel manufacturers to set a conservative shipment goal of 258.4 million units in 2017, a 1.2 percent decline from 2016, according to IHS Markit (Nasdaq: INFO).

LCD_TV_Display_Makers_Target

“LCD TV panel unit shipments in 2016 are forecast to decline 5 percent on year-on-year basis with 261.6 million. Among the top six panel makers, BOE and China Star continue to make the largest contribution to the growth of TV panel shipments in 2016, helped by a shortage of 32-inch panels,” said Deborah Yang, director of display supply chain at IHS Markit.

“However, this is not enough to offset declines in shipments from South Korean and Taiwanese panel makers, all of which are undergoing the process of moving to larger panel sizes, facing production yields issues, or experiencing drastic declines in demand for 23.6-inch panels.”

According to the latest IHS Markit TV Display Intelligence Service report, LCD TV panel makers continue to remain cautious with their business plans going into 2017, even as the likes of BOE, Innolux and China Star are contributing to new capacities. BOE’s shipments have shown positive growth in past years; however, the company is projecting a decline of 14 percent year-on-year in 2017 due to a production shift to larger panel sizes, in particular 43-inch and 55-inch displays, where production capacity will be shared with IT panels.

Instead of ramping up the current supply of TV panels, panel makers are now busy diversifying into larger-sized panels and other premium products, such as 4K panels. According to IHS Markit analysis, TV panel makers are planning to ship 63 million units of 4K panels in 2016, making up a 24 percent in UHD (ultra-high definition) penetration, and later to 86.4 million units in 2017, increasing their UHD penetration to 33 percent.

LG Display remains the world’s top maker of TV panels with a target of over 51 million unit shipments. Innolux will take the second largest position with 46.6 million units. However, should Innolux decides to produce smaller-size TV panels as well as to utilize its relationship with Sharp’s fabs in Japan, its unit shipments could be expected to jump to 53 million, even eclipsing LG Display to gain top spot.

HKC, a sizeable LCD TV OEM and ODM maker, which recently entered the LCD TV display market with backing from the Chinese government, represents a new vertical integration business model for the industry.

“While TV makers are suffering a profit loss, HKC’s vertical integration business model could prove that a certain level of profit can be maintained through in-house supply in spite of TV panel price fluctuations. However, the biggest challenge for HKC is whether it can overcome the technical challenge that comes with ramping up a brand new fab,” Yang said.

The overall utilization rate at fabrication plants (fabs) used for display panel production is expected to reach 90 percent in the fourth quarter of 2016, up 7 percentage points from the same period in the previous year, and up 1 percentage point from the previous quarter, according to IHS Markit (Nasdaq: INFO).

2016_Display_Panel_Manufacturing_Monthly_Utilization_Rates_-_IHS_Markit

One of the contributing factors for driving up the fab utilization rate is the sudden rise in demand for larger TV panels, notably in 2016, when the average area size of overall TV panels increase by 1.9 inches from the previous year, raising the unit area by about 10 percent.

TV display panels, which account for about 70 percent of overall display area demand, suffered a fall in unit demand in recent times, but the area demand is expected to increase by 6 percent in 2016. A rise in TV panel demand is now projected to raise overall display panel area demand by 5 percent in 2016 compared to a year ago.

As a result, display panel makers are increasing the utilization rate of Gen 7 fabs and later Gen fabs, used mainly to produce TV panels, and can be expected to stay high in the fourth quarter of 2016 and beyond, according to the latest IHS Markit Display Production & Inventory Tracker report.

“Such a high utilization rate would suggest that these fabs are running at full loading, considering the remaining capacity is already allotted for test runs and maintenance,” said Alex Kang, senior analyst of display research at IHS Markit.

“This increase in display panel area demand has allowed panel manufacturers to sustain inventory levels that are considered healthy, and has prevented a sharp drop in utilization rate this year,” Kang added.

IHS Markit expects that panel manufacturers’ year-end panel inventory level will remain healthy at under four weeks. This will allow panel manufacturers to maintain a high utilization rate for a certain period of time regardless of demand fluctuations with sufficient space to pile up extra production stock.

With a healthy inventory outlook, panel manufacturers are projected to reach a fab utilization rate of between 85 and 90 percent in the first quarter of 2017 after the year-end peak season, which is up by between 5 and 10 percentage points since the first quarter of 2016.

 

Last night at the Printed Electronics USA conference in Santa Clara, Calif., Kateeva’s YIELDjet FLEX inkjet printing system was named the winner of the prestigious Technical Development Manufacturing Award. Presented annually by conference organizer IDTechEx, the award honors the most significant development of a manufacturing device process or production plant in the printed electronics industry over the previous 24 months. In particular, manufacturing developments that optimize the process of lab-scale or mass-scale production by improving productivity, quality, reliability, uniformity, or scale.

Since its debut in late 2014, Kateeva’s YIELDjet FLEX system has become the leading high-yield mass-production tool for the key organic layer deposition step in the OLED Thin Film Encapsulation (TFE) market. Customers include the world’s largest flat panel display manufacturers located in Asia. With its novel features and capabilities, it solves critical technical problems that previously made it economically impractical to mass produce flexible OLEDs.

Raghu Das, CEO of IDTechEx, reports: “This is printed electronics in action, where inkjet printing is used to enable commercial consumer electronics devices today. Kateeva has built a system that continuously provides uniform, reliable and precise function required for the demanding display business.”

In accepting the award, Kateeva’s Chief Product Officer Eli Vronsky thanked the Judging Panel and called the accolade a considerable honor. “Engineering the YIELDjet FLEX system was an extraordinary opportunity for our team,” he said. “But as any product designer will confess, watching it catalyze an industry shift is the greater thrill. We’re proud that by solving certain OLED mass-production challenges, our tool has helped customers clear the path for exciting mobile products that are bendable, foldable and even roll-able. We’re grateful to be recognized for this achievement by our friends in the printed electronics industry.”

Today at the Printed Electronics USA Conference, Kateeva technologist, Xiao Chen, Ph.D. will reveal how YIELDjet technology will soon be applied to mass produce the RGB OLED layer to enable affordable OLED TVs. Dr. Chen’s talk begins at 11:40am.

IC Insights will release its November Update to the 2016 McClean Report later this month and will release its 20th anniversary edition of The McClean Report in January of next year.  The November Update includes the latest semiconductor industry capital spending forecast, a detailed forecast of the IC industry by product type through 2020, and a look at the top-25 semiconductor suppliers expected for 2016. The top-20 2016 semiconductor suppliers are covered in this research bulletin.

The forecasted top-20 worldwide semiconductor (IC and O S D—optoelectronic, sensor, and discrete) sales ranking for 2016 is shown in Figure 1.  It includes eight suppliers headquartered in the U.S., three in Japan, three in Taiwan, three in Europe, two in South Korea, and one in Singapore, a relatively broad representation of geographic regions.

The top-20 ranking includes three pure-play foundries (TSMC, GlobalFoundries, and UMC) and five fabless companies. If the three pure-play foundries were excluded from the top-20 ranking, U.S.-based fabless supplier AMD ($4,238 million), China-based fabless supplier HiSilicon ($3,762 million), and Japan-based IDM Sharp ($3,706 million), would have been ranked in the 18th, 19th, and 20th positions, respectively.  In August 2016, China-based contract assembler Foxconn bought a controlling interest (66%) in Sharp for $3.8 billion.

In total, the 17 non-foundry companies in the forecasted top 20-ranking are expected to represent 68% of the total $357.1 billion worldwide semiconductor market this year, up 10 points from the 58% share the top 17 companies held in 2006.

IC Insights includes foundries in the top-20 semiconductor supplier ranking since it has always viewed the ranking as a top supplier list, not a marketshare ranking, and realizes that in some cases the semiconductor sales are double counted.  With many of our clients being vendors to the semiconductor industry (supplying equipment, chemicals, gases, etc.), excluding large IC manufacturers like the foundries would leave significant “holes” in the list of top semiconductor suppliers.  As shown in the listing, the foundries and fabless companies are identified.  In the April Update to The McClean Report, marketshare rankings of IC suppliers by product type were presented and foundries were excluded from these listings.

Overall, the top-20 list shown in Figure 1 is provided as a guideline to identify which companies are the leading semiconductor suppliers, whether they are IDMs, fabless companies, or foundries.

Figure 1

Figure 1

Nine of the top-20 companies are forecast to have sales of at least $10.0 billion this year.  As shown, it is expected to take about $4.5 billion in sales just to make it into the 2016 top-20 semiconductor supplier list. Moreover, if Qualcomm’s purchase of NXP is completed, as is expected in late 2017, the combined annual semiconductor sales of these two companies will likely be over $25 billion going forward. Overall, no new entrants are expected to make it into the top-20 ranking in 2016 as compared to the 2015 ranking.

Intel is forecast to remain firmly in control of the number one spot in the top-20 ranking in 2016.  In fact, it is expected to increase its lead over Samsung’s semiconductor sales from only 24% in 2015 to 29% in 2016.  The biggest upward move in the ranking is forecast to be made by Apple, which is expected to jump up three positions in the 2016 ranking as compared to 2015.  Other companies that are forecast to make noticeable moves up the ranking include MediaTek and Nvidia, with each company expected to improve by two positions.

Apple is an anomaly in the top-20 ranking with regards to major semiconductor suppliers. The company designs and uses its processors only in its own products—there are no sales of the company’s MPUs to other system makers.  IC Insights estimates that Apple’s custom ARM-based SoC processors will have a “sales value” of $6.5 billion in 2016, which will place them in the 14th position in the forecasted top-20 ranking.

In total, the top-20 semiconductor companies’ sales are forecast to increase by 3% this year, which would be two points higher than IC Insights’ current worldwide semiconductor market forecast for 2016. Although, in total, the top-20 2016 semiconductor companies are expected to register a 3% increase, there are five companies that are forecast to display a double-digit 2016 jump in sales (Nvidia, MediaTek, Apple, Toshiba, and TSMC) and four that are expected to register a double-digit decline (SK Hynix, Micron, GlobalFoundries, and NXP).

The fastest growing top-20 company this year is forecast to be U.S.-based Nvidia, which is expected to post a huge 35% year-over-year increase in sales.  The company is riding a surge of demand for its graphics processor devices (GPUs) and Tegra processors with its year-over-year sales in its latest quarter (ended October 30, 2016) up 63% for gaming, 193% for data center, and 61% for automotive applications.

The second-fastest growing top-20 company in 2016 is expected to be Taiwan-based MediaTek, which is forecast to post a strong 29% increase in sales this year.  Although worldwide smartphone unit volume sales are expected to increase by only 4% this year, MediaTek’s application processor shipments to the fast-growing China-based smartphone suppliers (e.g., Oppo and Vivo), are forecast to help drive its stellar 2016 increase.

As expected, given the possible acquisitions and mergers that could/will occur over the next few years (e.g., Qualcomm and NXP), the top-20 ranking is likely to undergo a significant amount of upheaval as the semiconductor industry continues along its path to maturity.