Category Archives: Manufacturing

By Emir Demircan

SEMI Position on the European Commission’s Proposal for a Regulation Establishing a Framework for Screening Foreign Direct Investments into the European Union

In response to the European Commission’s (EC) proposed framework for screening foreign direct investments (FDI), SEMI, representing the global electronics manufacturing supply chain, offers three recommendations for consideration by EU policymakers:

To support the sophisticated global ecosystem of semiconductor manufacturers, the EU should remain open to global investment. More efforts should be made to form trade and investment agreements that support European businesses’ access to foreign markets.

The global micro- and nano-electronics (MNE) industry consists of organizations specializing in research, design, equipment, materials, semiconductor manufacturing, assembly and applications – a complex global ecosystem that contributes 2 trillion USD (SEMI data) to the world economy. With its production of smaller, faster, more reliable products with higher performance, the MNE industry is one of the world’s most capital- and research-intensive sectors. Today, a state-of-the-art semiconductor manufacturing fab can easily cost billions of euros and might require international investment to deliver cutting-edge solutions.

Europe’s MNE industry plays a pivotal role in this global value chain through its investments in emerging technologies such as autonomous driving, smart healthcare, artificial intelligence and industrial automation. The region’s MNE industry features leading electronics manufacturing equipment and materials businesses, world-class research and development (R&D) and educational institutions, and vital semiconductor manufacturing hubs that are home to multinationals headquartered both inside and outside of the EU.

In the proposed framework, the EU recognizes that FDI is an important engine of economic growth, jobs and innovation. Its work to maintain a climate of open investment and connect European businesses with leading innovators and investors around the world has laid the groundwork for the success of European industrial technologies sector. These efforts have set an example for rich cross-border business relations even in the face of rising protectionist practices around the world.

The proposed EC regulation aims to establish an EU-level framework for exchanging information related to a broad range of technologies between the EC and Member States, and to assess, investigate, authorize, condition, prohibit, or unwind FDI in certain technologies on the grounds of security or public order. EU policymakers should bear in mind that a new EU-level FDI screening mechanism must be implemented very carefully. Stakeholders must clearly understand how FDI can pose a threat to security and public order in the EU.

Only transparent and precise definitions of FDI, security and public order and a limited scope of targeted technologies can provide the regulatory certainty for the EU to remain an attractive destination for foreign investors and European investees alike. On the contrary, unclear regulations could sow insecurity amongst potential investors, leading to delays or cancellation of much-needed investments and choking access to finance in capital-intensive sectors such as MNE.

MNE is a key enabling technology and advances in semiconductors enable market adoption of game-changing technologies such as artificial intelligence. The EU should ensure that future regulations do not cause lock-in effects or limit the growth of key technologies in Europe.

In the interest of security and public order, the proposed EU regulation permits Member States and the EC to screen FDI in critical infrastructure such as energy, transportation, communications and critical technologies including semiconductors, artificial intelligence and cybersecurity.  While it might be easier to screen critical infrastructure and the large-scale public services it provides for potential threats in security and public order, applying the same FDI filter to critical technologies can be extremely challenging.

Semiconductors are embedded in virtually all smart devices and systems including computers, mobile phones, cars, and aircraft. The ubiquity of chips raises the prospect that FDI in European smart technologies – and the supply chain that develops them – could be subject to screening. This level of regulatory oversight is likely to hamper not only EU’s competitiveness in key enabling technologies such as MNE but also ever-evolving applications including artificial intelligence. Also, the proposed screening framework calls for the assessment of FDI risks to security or public order by determining if an investor is controlled by foreign governments through “significant funding.” In the context of FDI, differentiating between state and private actors in other countries can be extremely challenging or even impossible, and the term “significant funding” is not clearly defined. Under this light, SEMI recommends:

  1. Defining a limited scope with clear conditions, explaining in quantitative and qualitative terms how FDI in key enabling technologies can threaten public order and security, and
  2. Introducing criteria that identifies whether an FDI leads to market distortions in Europe because a government investment program is not aligned with EU state-aid rules.

FDI is a powerful tool to support economic growth and competitiveness. Many Member States already screen FDI on the grounds of security and public order. Future regulations should ensure that additional screening neither duplicates national and EU-level assessments nor hampers Member States’ competitiveness.

Under the proposed regulation, the EC could screen FDI at the Union level. However, because many Member States already have detailed screening procedures in place to protect national security and public order, the draft regulation could increase red tape by duplicating administrative processes and regulations at the national and EU levels. Policymakers should keep in mind that FDI must in principle remain a national competence, with each Member State establishing its own national policy aimed at attracting FDI and supporting its economic growth. Many Member States compete to increase their share of EU FDI in key technologies that underpin national economic growth. Likewise, international investors already subject each Member State to their own investment criteria before making significant FDI decisions. Any proposed regulation that pushes Member States to share national-level FDI information could dilute successful FDI policies of some Member States and hamper the EU’s overall competitiveness.

Emir Demircan is Senior Manager Public Policy at SEMI Europe. Contact Emir at [email protected] , 0032484903114. 

Originally published on the SEMI blog.

Cohu, Inc. (NASDAQ:COHU) and Xcerra Corporation (NASDAQ:XCRA) today announced they have entered into a definitive merger agreement pursuant to which Cohu will acquire Xcerra for a combination of cash and stock. The acquisition is expected to make Cohu a global leader in semiconductor test, with combined sales for Cohu and Xcerra in excess of $800 million for the last twelve months.

Upon the closing of the transaction, Xcerra shareholders will be entitled to receive $9.00 in cash and 0.2109 of a share of Cohu common stock, subject to the terms of the definitive agreement. Based on the closing price of Cohu common stock as of May 7, 2018, the transaction values Xcerra at $13.92 per share, or approximately $796 million in equity value, with a total enterprise value of approximately $627 million, after excluding Xcerra’s cash and marketable securities net of the debt on its balance sheet as of January 31, 2018. The transaction value represents a premium of 8.4% to Xcerra’s closing price on May 7, 2018, and a premium of 15.4% to Xcerra’s 30-day average closing price.

“This proposed acquisition is a powerful combination of two complementary companies that will accelerate our strategy to diversify our product offerings and strengthen Cohu’s position as a global leader in back-end semiconductor equipment. The depth and breadth of the combined product portfolios, engineering and product development resources, as well as the global customer support platforms will enable us to deliver comprehensive semiconductor back-end solutions that better meet the future needs of our customers,” commented Luis Müller, Cohu’s President and CEO.

Mr. Müller continued, “The acquisition of Xcerra increases our addressable market to approximately $5 billion across handlers, contactors, test and inspection, further strengthening our ability to fully capitalize on the secular growth opportunities in the automotive, IoT, industrial and mobility markets. We are excited to welcome the Xcerra team to Cohu and look forward to an efficient completion of the transaction, with a focus on delivering long-term value to our customers, employees and shareholders.”

Commenting on the proposed acquisition, David Tacelli, Xcerra’s President and CEO, stated, “We are very pleased to be joining forces with Cohu to create a global leader in back-end semiconductor test. Together, we will be an even stronger and more competitive company with far reaching long-term benefits to our customers and employees. I am extremely proud of what the Xcerra team has accomplished over the past several years and look forward to the exciting possibilities we can achieve together with Cohu.”

The transaction is expected to be immediately accretive to non-GAAP earnings per share and generate over $20 million of annual run-rate cost synergies within 2 years of closing, excluding stock-based compensation and other charges.

 

By Heidi Hoffman, Sr. Director of FHE, MEMS and Sensors Marketing, SEMI

Peel-and-stick simplicity isn’t just for adhesive bandages any more. IoT and flexible hybrid electronics (FHE) are bound to change hardware business models. And flexible displays will breathe life into any surface.

These were among the insights foreshadowing the future of the FHE, electronic textiles, IoT, MEMS and sensors industries at the FLEX Japan and MEMS & Sensors Forum Japan 2018. At the April event, organized by SEMI-FlexTech-MSIG, nearly 200 attendees shared their observations and lessons learned in the development of processes, products and applications. Presentations and discussions revealed these five takeaways.

1. Expect the unexpected with FHE development

Flexible Hybrid Electronics (FHE) continues to shrink the size and weight of products, enabling new markets and concepts. “FHE takes printed electronics and adds ICs for getting performance out of the PE structure,” said Wilfried Bair of NextFlex, adding that “peel- and-stick electronic products are one example of unexpected new markets enabled by FHE capabilities.” One potential application is large peel-and-stick safety sensors adhered to buildings to warn of structural dangers.

2018FLEX Japan

 

Another surprising turn: With new insights into OLED technology originally developed for flexible displays, Cambridge Display Technology (CDT) has devised an innovative medical diagnostic tool for markets such as biomedical and agricultural monitoring. The tool features an atmosphere-processable OLED component with a simplified OLED structure encapsulated in aluminum foil.

2. IoT and FHE devices should change hardware business models

This is the standard business model for many new FHE products: develop a product, manufacture it, find customers and sell. FHE and IOT device developers were encouraged by Jam Kahn of Gemalto to consider flipping the script: During FHE product development, explore building an after-market revenue stream by controlling and mining the data for trends it reveals. Because of its data harvesting potential, IoT is an excellent emerging technology for this strategy.

The “Experience Economy” could create 200 connectable items per person, generating strong revenue streams from the collection and analysis of massive amounts of sensor-generated data. The key is for the data to be actionable. That means hardware suppliers must extend their focus to software development. “A recent study of California investors found that by 2025, 60 percent of global business profits will be from data,“ noted Harri Koopla of VTT, who advised hardware producers to examine business models that produce continuous value by leveraging software. “With FHE, we are creating the path to digitization for non-digital industries, and these industries need complete solutions,” he said.

Xenoma smartshirt features

 

Hardware provider Xenoma, for example, sells an electronic shirt with sensors for measuring muscle movements, heart rate and other health-related data. Xenoma’s Ichiro Amimori said the company offers its open-source software development kit for free under one condition: The developer must share the collection data with Xenoma. The idea is that the more data collected, the greater Xenoma’s ability to improve human health over the long term and achieve its long-term vision of alleviating disease.

3. Roll-to-roll and sheet-to-sheet manufacturing will meet in the middle

One of the big advantages of flexible and printed electronics was its promise to enable the manufacturing of electronics on a roll-to-roll (R2R) process in atmospheric (or close) conditions, like newspaper, rather than one sheet at a time, as with displays or wafers. But as development of inks and interconnects progressed, along with the placement of discrete and thinned-die components and basic flexible substrates on a moving web, most research and development (R&D) and limited-production runs moved to sheet-fed systems to control material costs for experiments and low-volume production. R&D on printing electronics processes split into two camps: the simple printed components camp on R2R, and the camp backing more flexible hybrid electronics development on a sheet-by-sheet basis. But progress didn’t stop.

R2R functional testing

 

Harri Koopla of VTT highlighted new R2R inspection and test capabilities in the VTT pilot line in Finland. R2R processing advances incorporate ideas from biology, chemistry, optics, optoelectronics, advanced inspection and test capability, illustrating the multidisciplinary nature of FHE. While accurate, high-speed, pick and place of thinned, bare die remains the domain of sheet-to-sheet manufacturing, look for more improvements in accuracy and speed.

Another new manufacturing concept that turns business models on their heads – “minimal fabs” – focuses on creating limited-run equipment and processes that use 3D printing and do not require cleanrooms. With a relatively low cost of entry, the approach enables electronics to be produced affordably anywhere.

4. Powering the IoT is a grand challenge

The requirement for edge devices to function without intervention for long periods raises hard questions about how to power the devices. Using organic photovoltaics (OPV) in textiles to harvest energy from light could be one solution, according to Kasimaesttro Sugino of the Suminoe Textile Technical Center.  

ULVAC’s answer to the IoT power issue are requirements for edge device micro-batteries to be environmentally benign, safe, flexible and compatible with semiconductor processing less than .1 mm in height. The micro-batteries must also feature a long life and support continuous power output, high power density, low self-discharge (over 10 years) and mass production, said Shunsuke Sasaki of ULVAC. The batteries are being built on silicon, glass and stainless steel with dry, thin-film vacuum processing.

5. Flexible displays bring any surface to life

With their durability, flexibility, low-cost processing and programmability, flexible displays can transform any surface into a content-rich display with messages that make lives healthier, simpler and safer.

FlexEnable

 

One example is FlexEnable’s organic thin-film transistor (OTFT), a device made possible not only by recent advances such as the ability to build organic material transistors on plastic and the increasing clarity of new film materials but by continuous manufacturing process improvements. These advances are improving switching times and the color and video capabilities of thin-film transistors while retaining their flexibility, low power consumption and communication capabilities. Simon Jone of FlexEnable gave the examples of wrapping a display around the blind spots of automobiles or replacing side-view mirrors with interior monitors showing feeds from an external camera, approaches that would improve safety while reducing wind drag and increasing fuel efficiency.

E Ink’s reflective technology and flexible products are coming to market with a wider color spectrum. The company’s Michael McCreary said its designers are specifying the panels for innovative projects such as the exterior walls of the San Diego International Airport parking garage. Used to communicate with airport visitors, the installation is weather-proof, programmable and self-powered.

Originally published on the SEMI blog.

Analog Devices, Inc. awarded Bob Reay, Leonard Shtargot, Jesper Steensgaard, and Sam Zhang the title of Analog Devices Fellow, a distinguished technical position given to engineers who contribute significantly to the company’s success through exceptional innovation, leadership and an unparalleled ability to unite and mentor others.

“These Fellows exemplify Analog Devices’ unwavering commitment to technological innovation,” said Ray Stata, cofounder and chairman of the board, Analog Devices. “Bob and Leonard hold numerous patents and have mentored many budding innovators. Jesper has a diverse skill set that makes him not only an exceptional engineer, but a passionate teacher and leader. Sam, through his incredible work on inertial MEMS (microelectromechanical systems) sensors, has helped Analog Devices introduce groundbreaking sensors used in a wide range of applications and industries.”

Bob Reay
Bob is an innovator, technologist, teacher and historian who earned both his B.S. and M.S. degrees in Electrical Engineering from Stanford University. During his 30 years at Linear Technology Corp. (LTC), which is now part of Analog Devices, Bob was granted 22 patents. He is credited with helping to build LTC’s CMOS Interface business, opening the company’s first remote design center in Singapore, and serving as the first vice president and general manager of LTC’s Mixed-Signal business unit. Bob’s thoughtful and well-reasoned approach to problem solving has led people to seek his advice for technical and strategic challenges alike.

Leonard Shtargot
Leonard joined Linear Technology in 2001 as a design engineer with a B.S. EECS from the University of California at Berkeley. Leonard has contributed innovations in power conversion technology and designed several families of high-performance DC/DC switching regulators focusing on new circuits, high-voltage silicon process improvements, advanced flip-chip package designs, and test techniques. These products have been widely adopted by the automotive and industrial technology sectors. Leonard is also a hands-on teacher who mentors other engineers and often can be found in the lab or test floor helping his colleagues solve technical problems.

Jesper Steensgaard
Jesper is another alumnus of Linear Technology and earned his Ph.D. from the Technical University of Denmark in 1999. With 22 U.S. patents, Jesper has contributed to the release of 79 high-performance, successive-approximation-register A/D converters since 2007 and spearheaded the development of a new line of “intrinsically-linear” SAR A/D converters with performance levels that are now the best in the industry. He excels at both detailed circuit design and system-level concepts. Jesper was the founder of his own company, Esion LLC, and has held academic positions at Columbia University and Oregon State University.

Sam Zhang
Sam joined Analog Devices in 2001 after earning a B.S. degree in Electrical Engineering from Tsinghua University and a M.S. degree in Mechanical Engineering from the George Washington University. He has been awarded 21 U.S. patents with another five pending. For more than a decade, Sam has been the principal designer of ADI’s low-G inertial MEMS products, including the company’s first 3-axis accelerometer and MEMS microphone products. He also led the design of several generations of high-performance 3-axis accelerometer products and created a design methodology that accurately predicts inertial sensor offset. His latest groundbreaking contributions have been in the areas of ultra-low noise accelerometers and condition-based monitoring sensors that are re-shaping the way machine health is being addressed.

Samsung Electronics Co., Ltd. today announced that it has begun mass producing 10-nanometer (nm)-class* 16-gigabit (Gb) LPDDR4X DRAM for automobiles. The latest LPDDR4X features high performance and energy efficiency while significantly raising the thermal endurance level for automotive applications that often need to operate in extreme environments. The 10nm-class DRAM will also enable the industry’s fastest automotive DRAM-based LPDDR4X interface with the highest density.

“The 16Gb LPDDR4X DRAM is our most advanced automotive solution yet, offering global automakers outstanding reliability, endurance, speed, capacity and energy efficiency,” said Sewon Chun, senior vice president of memory marketing at Samsung Electronics. “Samsung will continue to closely collaborate with manufacturers developing diverse automotive systems, in delivering premium memory solutions anywhere.”

Moving a step beyond its 20nm-class ‘Automotive Grade 2’ DRAM, which can withstand temperatures from -40°C to 105°C, Samsung’s 16Gb LPDDR4X is Automotive Grade 1-compliant, raising the high-end threshold to 125°C. By more than satisfying the rigorous on-system thermal cycling tests of global auto manufacturers, the 16Gb LPDDR4X has enhanced its reliability for a wide variety of automotive applications in many of the world’s most challenging environments.

Adding to the degree of reliability under high temperatures, production at an advanced 10nm-class node is key to enabling the 16Gb LPDDR4X to deliver its leading-edge performance and power efficiency. Even in environments with extremely high temperatures of up to 125°C, its data processing speed comes in at 4,266 megabits per second (Mbps), a 14 percent increase from the 8Gb LPDDR4 DRAM that is based on 20nm process technology, and the new memory also registers a 30 percent increase in power efficiency.

Along with a 256 gigabyte (GB) embedded Universal Flash Storage (eUFS) drive announced in February, Samsung has expanded its advanced memory solution lineup for future automotive applications with the 10nm-class 16Gb LPDDR4X DRAM, commercially available in 12Gb, 16Gb, 24Gb and 32Gb capacities. While extending its 10nm-class DRAM offerings, the company also plans on bolstering technology partnerships for automotive solutions that include vision ADAS (Advanced Driver Assistance Systems), autonomous driving, infotainment systems and gateways.

Sensera Inc. (MicroDevices) has acquired and qualified a SPTS ASE-HRM etch platform. This etcher adds capability to the fab that was previously outsourced to partners. This is a key process technology development tool to bring complex MicroElectroMechanical Systems (MEMS) to market.

This system offers market leading etch rates while controlling ion damage through a de-coupled plasma source. The HRM is ideal for deep anisotropic silicon etching at high rates with the STS ASE process. This technology eliminates sidewall breakdown, which results in enhanced process performance and a high device yield.

“We are very pleased to bring to our customers additional Deep Reactive Ion Etch (DRIE) capabilities. This equipment supplements Sensera’s existing etch tool set and enables increased throughput and improved etch uniformity to meet our customers’ rapidly growing demand,” said Tim Stucchi, COO of Sensera’s MicroDevices division.

“ClassOne Equipment was happy to provide this advanced etch platform to Sensera. We have worked with many etch platforms and the SPTS ASE-HRM delivers excellent etch performance with a low cost of ownership. ClassOne maintains a close partnership with our customers and is proud of a long history of customer satisfaction. This is our second installation at Sensera, and we recently took the first steps in a new project, look for more exciting news later this year,” said Byron Exarcos, CEO of ClassOne Equipment.

“We continue to add new capabilities to our fab in order to drive down cycle time, control quality and improve costs,” stated Ralph Schmitt, CEO of Sensera Inc. “These are important steps as we move many of our customers to commercial volume shipments. This is all part of the strategy of the company to have internal capability to develop complex MEMS.”

Johan Lodenius is joining the Board of JonDeTech, a Swedish company that develops and markets IR sensor technology based on nanotechnology aimed at consumer electronics and mobile phone mass markets. Mr. Lodenius is former Senior Vice President Marketing and Product Management of the American semiconductor and telecom corporation Qualcomm, a position in which he defined the company’s hugely successful strategy of marketing turn-key chip and software solutions to other cellphone manufacturers, one of the world’s most profitable services today.

”As a result of a breakthrough in nanotechnology research, JonDeTech has developed and patented a completely new type of IR sensor that has the potential to become leading in the global marketplace”, said Mr. Johan Lodenius. “I look forward to contribute to this. JonDeTech’s IR sensors are down to a tenth as thick as conventional sensors, and can be manufactured in high volumes at low cost, which opens for a multitude of applications.”

Johan Lodenius also has an entrepreneurial background, leading the Swedish microprocessor company Coresonic to an exit as Taiwanese semiconductor giant MediaTek acquired it in 2012. Mr. Lodenius was part of MediaTek’s executive management team as Chief Marketing Officer until last year. Today he is self employed as business advisor and now also a Board Member of JonDeTech.
”Johan Lodenius brings exceptional technology know-how coupled with deep international business experience from global top-level cellphone and electronics markets to our company”, said JonDeTech’s CEO Robert Ekström. ”He has a deep understanding of how our markets function and act, and will be very valuable for us in our upcoming global expansion.”

The company recently announced that it will apply for a listing on Nasdaq First North Stockholm during the second quarter of this year, and in connection with this, aiming to receive up to SEK 30 million in a public issue.

JonDeTech’s sensors are very small and thin (thickness 0.2 mm) compared to conventional sensors, which allows them to be easily integrated into many different products. JonDeTech is primarily targeting international customers who develop applications within consumer electronics and the Internet of Things.

Global MEMS market for mobile devices to grow at a CAGR of 10.55% during the period 2017-2021.

The report has been prepared based on an in-depth market analysis with inputs from industry experts. The report covers the market landscape and its growth prospects over the coming years. The report also includes a discussion of the key vendors operating in this market.

One trend in the market is advances in the manufacturing technology of MEMS pressure sensors. The OEMs in the global MEMS pressure sensors market are continually adding new features to their products, resulting in the launch of innovative products in the market on a regular basis. The accuracy of MEMS pressure sensors is increasing with these advances.

According to the report, one driver in the market is MEMS becoming an integral part of consumer electronic devices. MEMS devices are increasingly being used in consumer electronics and mobile devices such as smartphones, tablets, and gaming consoles. The mobile devices integrated with MEMS devices can be scrolled, tilted, rotated, and switched from horizontal and vertical displays. Applications such as GPS and gaming, which employ motion sensors, are popular among smartphone and tablet users. For instance, MEMS sensors, when used in GPS applications, help consumers get directions and estimate the distance even in remote locations.

Further, the report states that one challenge in the market is design-related challenges faced by optical MEMS manufacturers. MEMS manufacturers face a lot of difficulties while designing optical MEMS. The optimization of the switching speed of optical MEMS devices needs a clear understanding of the mode shapes and frequencies of oscillations. Optical MEMS devices need to be checked for parameters such as shock dynamics, temperature drift, contact dynamics, and power. Furthermore, the manufacturing of integrated MEMS wafers is very challenging for the manufacturers as the components are manufactured individually and are then assembled on a single chip. This increases the time to market and creates the need for the testing of components at the individual and assembled levels.

Key Vendors

  • Analog Devices
  • Robert Bosch
  • STMicroelectronics

Other Prominent Vendors

  • AAC Technologies
  • Goertek
  • Maxim Integrated
  • Murata Manufacturing
  • Sensata Technologies
  • Silicon Laboratories

Worldwide PC shipments totaled 61.7 million units in the first quarter of 2018, a 1.4 percent decline from the first quarter of 2017, according to preliminary results by Gartner, Inc. The PC market experienced a 14th consecutive quarter of decline, dating back to the second quarter of 2012.

Asia/Pacific and the U.S. experienced declining shipments, while other regions saw some minimal growth, but it was not enough to drive overall growth for the PC industry. In the first quarter of 2018, PC shipments in Asia/Pacific declined 3.9 percent compared with the same period last year, while shipments in the U.S. decreased 2.9 percent.

“The major contributor to the decline came from China, where unit shipments declined 5.7 percent year over year,” said Mikako Kitagawa, principal analyst at Gartner. “This was driven by China’s business market, where some state-owned and large enterprises postponed new purchases or upgrades, awaiting new policies and officials’ reassignments after the session of the National People’s Congress in early March.

“In the first quarter of 2018, there was some inventory carryover from the fourth quarter of 2017,” Ms. Kitagawa said. “At the same time, vendors were cautious in overstocking due to the upcoming release of new models in the second quarter of 2018 with Intel’s new eighth-generation core processors.”

The top three vendors — HP, Lenovo and Dell — accounted for 56.9 percent of global PC shipments in the first quarter of 2018, compared with 54.5 percent of shipments in the first quarter of 2017 (see Table 1). Dell experienced the strongest growth rate among the top six vendors worldwide, as its shipments increased 6.5 percent.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 1Q18 (Thousands of Units)

Company

1Q18 Shipments

1Q18 Market Share (%)

1Q17 Shipments

1Q17 Market Share (%)

1Q18-1Q17 Growth (%)

HP Inc.

12,856

20.8

12,505

20.0

2.8

Lenovo

12,346

20.0

12,305

19.7

0.3

Dell

9,883

16.0

9,277

14.8

6.5

Apple

4,264

6.9

4,199

6.7

1.5

Asus

3,900

6.3

4,458

7.1

-12.5

Acer Group

3,828

6.2

4,189

6.7

-8.6

Others

14,609

23.7

15,637

25.0

6.6

Total

61,686

100.0

62,569

100.0

-1.4

Notes: Data includes desk-based PCs, notebook PCs and ultramobile premiums (such as Microsoft Surface), but not Chromebooks or iPads. All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels. Numbers may not add up to totals shown due to rounding.
Source: Gartner (April 2018)

HP Inc.’s worldwide PC shipments increased 2.8 percent in the first quarter of 2018 versus the same period last year. In EMEA, HP Inc. recorded double-digit growth in both desktop and mobile PCs. This was contrasted with a small decline in other regions. HP Inc. was adversely impacted by declining demand in the U.S., which generally accounts for one-third of its total shipments.

Lenovo’s global PC shipments remained flat in the first quarter of 2018. Lenovo achieved 6 percent growth in EMEA and double-digit shipment growth in Latin America. However, in Asia/Pacific (its largest market), PC shipments declined 4 percent.

After record holiday sales for consumer and gaming products in the fourth quarter of 2017, Dell continued to perform well in the first quarter of 2018. With double-digit shipment increases in EMEA, North America and Latin America, Dell grew in all regions except Asia/Pacific. Desktop and mobile PCs grew in equal measures, showing Dell’s strength in the business segment.

Rising ASPs

The average selling prices (ASPs) of PCs continue to rise. Acknowledging deceleration in the smartphone market, and uncertainty in PC replacement demand, component companies remain cautious about expanding their production capabilities. Therefore, persistent component shortages and a rising bill of materials continue to create an environment conductive to higher prices.

“In contrast to other DRAM-related price spikes, PC vendors are not reacting by reducing DRAM content. Rather they have passed the cost increase to consumers,” Ms. Kitagawa said. “With fewer people buying new machines, manufacturers need to get the highest profit margin from each sale. To do that, they are raising the selling points and focusing on customer experience or perception of value.”

Regional Overview

In the U.S., PC shipments totaled 11.8 million units in the first quarter of 2018, a 2.9 percent decrease from the first quarter of 2017. Dell moved into the No. 1 position in the U.S. based on shipments, as its market share increased to 29.1 percent. HP Inc. moved into the No. 2 position as its shipments declined 4.8 percent, and its market share totaled 28.4 percent in the first quarter of 2018 (see Table 2).

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 1Q18 (Thousands of Units)

Company

1Q18 Shipments

1Q18 Market Share (%)

1Q17 Shipments

1Q17 Market Share (%)

1Q18-1Q17 Growth (%)

Dell

3,440

29.1

3,198

26.2

7.6

HP Inc.

3,363

28.4

3,532

29.0

-4.8

Lenovo

1,632

13.8

1,714

14.1

-4.8

Apple

1,491

12.6

1,484

12.2

0.5

Acer Group

321

2.7

429

3.5

-25.1

Others

1,586

13.4

1,836

15.1

-13.6

Total

11,833

100.0

12,193

100.0

-2.9

Notes: Data includes desk-based PCs, notebook PCs and ultramobile premiums (such as Microsoft Surface), but not Chromebooks or iPads. All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels. Numbers may not add up to totals shown due to rounding.
Source: Gartner (April 2018)

PC shipments in EMEA totaled 18.6 million units in the first quarter of 2018, a 1.7 percent increase year over year. Enterprise shipments increased as many Windows 10 projects that were put on hold in 2017 began to be implemented. The fast approach of the compliance deadline for the General Data Protection Regulation (GDPR) in Europe, as well as earlier reports of cybersecurity breaches, made security a strong priority in the hardware refresh cycle among enterprises. Eurasia continued to be a bright spot for EMEA, as several countries, such as Russia, Ukraine and Kazakhstan, saw strong demand in the first quarter of 2018.

PC shipments in Asia/Pacific totaled 21.9 million units in the first quarter of 2018, a 3.9 percent decline from the first quarter of 2017. As previously mentioned, the PC market in China drove the decline in Asia/Pacific. There is no significant sign of strong upgrading to the special version of Windows 10 from the Chinese government institutions. Consumer demand was weak as most buyers already took advantage of the aggressive promotions offered in the fourth quarter of 2017.

These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.

 

By Emir Demircan, Senior Manager Advocacy and Public Policy, SEMI Europe

With its leading research and development hubs, materials and equipment companies and chipmakers, the EU is in a strategic position in the global electronics value chain to support the growth of emerging applications such as autonomous driving, internet of things, artificial intelligence and deep learning. Underpinning the European electronics industry’s competitive muscle requires a new EU-wide strategy aimed at strengthening the value chain and connecting various players. Specializing and investing in key application segments, such as automotive where the EU enjoys a central place at global level, is crucial to help European electronics industry hold its ground.  In parallel, Europe’s production capabilities need bolstered, requiring effective use of Important Projects of Common European Interest (IPCEI).

On research, development and innovation (RD&I), the upcoming Framework Programme 9 (FP9) must provide unprecedented collaboration and funding opportunities to Europe’s electronics players. Concerning small and medium enterprises (SMEs) and startups, it is vital that EU policies are aligned with global trends and small and young companies benefit from a business-friendly regulatory framework. And as an overarching action, building a younger, bigger and more diverse talent pipeline is paramount for Europe to innovate in the digital economy.

Laith Altimime, President at SEMI Europe, opening speech at ISS Europe 2018

Laith Altimime, President at SEMI Europe, opening speech at ISS Europe 2018

These were the clarion messages that emerged from the Industry Strategy Symposium (ISS) Europe organized by SEMI in March, an event that brought together more than 100 industry, research and government representatives for in-depth discussions on strategies and innovations for Europe to compete globally. Here are the key takeaways:

1) Build a strong electronics value chain with a focus on emerging demands

In recent years the EU has focused on beefing up semiconductor production in Europe within the 2020-25 window, starting with the EU 10|100|20 Electronic Strategy of 2013. The strategy aims to secure about 20 percent of global semiconductor manufacturing by 2020 with the help of € 10 billion in public and private funding and € 100 billion investment from the industry. Today, Europe is not nearly on track to achieving this target. Supply-side policies have done little to help grow the EU semiconductor industry. Now is the time to change our thinking.

To nourish the electronics industry in Europe, we need to shift our focus to demand. Semiconductors are a key-enabling technology for autonomous driving, wearables, healthcare, virtual and augmented reality (VR/AR), artificial intelligence (AI) and all other internet of things (IoT) and big data applications. To become a world leader in the data economy and energize its semiconductor industry, Europe needs to start by better understanding the evolution of data technologies and their requirements from electronics players, then design and implement an EU-wide strategy focused on strengthening collaboration within the value chain.

2) Specialize and invest in Europe’s strengths that are enabled by electronics

Jens Knut Fabrowsky, Executive VP Automotive Electronics at Bosch

Jens Knut Fabrowsky, Executive VP Automotive Electronics at Bosch

Fueled by increasing demand for smaller, faster and more reliable products with greater power, the global electronics industry has developed a sophisticated global value chain. Europe brings to this ecosystem leading equipment and materials businesses, world-class R&D and education organizations, and key microelectronics hubs throughout Europe that are home to multinationals headquartered both in and outside of the EU. Nevertheless, global competition is growing ever fiercer in the sectors where the European microelectronics industry is most competitive: automotive, energy, healthcare and industrial automation. In the future, Europe is likely to be more challenged between the disruptive business models of North America and the manufacturing capacity of East Asia. The European electronics industry must re-evaluate its strengths and set a strategic direction.

Make no mistake: Europe is in a strong position to advance its microelectronics industry. The EU already boasts leading industries that rely on advances made by electronics design and manufacturing. Take the automotive industry – crucial to Europe’s prosperity. Accounting for 4 percent of the EU GDP and providing 12 million jobs in Europe, according to the European Commission, the EU automotive industry exerts an important multiplier effect in the economy. Automotive is essential to both upstream and downstream industries such as electronics – a level of importance not lost on the EU’s GEAR 2030 Group. Since the 1980s, automotive industry components have increasingly migrated from mechanical to electrochemical and electronics.

Today, electronic components represent close to a third of the cost of an automobile, a proportion that will grow to as high as 50 percent by 2030 with the rise of autonomous and connected vehicles. Automotive experts anticipate that over the next five to 10 years, new cars will feature at least some basic automated driving and data exchange capabilities as electronics deepen their penetration into the automotive value chain. Europe’s leadership position and competitive edge in automotive are under threat by competitors across the world as they invest heavily in information and communications technologies (ICT) and electronics for autonomous driving and connected vehicles. Investing in next-generation cars will help the European electronics industry retain its strong competitive position, as will investments in other key application areas such as healthcare, energy and industrial automation where Europe is a global power.

3) Make better use of Important Projects of Common European Interest (IPCEI)

Microelectronics is capital-intensive, with a state-of-the-art fab easily costing billions of euros. That’s why countries around the world are making heavy government-backed investments to build domestic fabs. For instance, China’s “Made in China 2025” initiative, which establishes an Integrated Circuit Fund to support the development of the electronics industry, calls for 150 billion USD in funding to replace imported semiconductors with homegrown devices. In 2014, the European Commission adopted new rules to IPCEI, giving Member States a tool for financing large, strategically important transnational projects. IPCEI should help Member States fill funding gaps to overcome market failures and reinvigorate projects that otherwise would not have taken off. To fully benefit from the IPCEI, the industry requires Member States involved in a specific IPCEI to work in parallel and at the same pace and faster approvals of state-supported manufacturing projects.

4) Use FP9 to strengthen Europe’s RD&I capabilities

Panel Discussion on growing Europe in the global value chain. (L-R) Bryan Rice, GLOBALFOUNDRIES; James Robson, Applied Materials Europe; Joe De Boeck, imec; Leo Clancy, IDA Ireland; James O’Riordan, S3; Colette Maloney, European Commission; Moderator: Andreas Wild

Panel Discussion on growing Europe in the global value chain. (L-R) Bryan Rice, GLOBALFOUNDRIES; James Robson, Applied Materials Europe; Joe De Boeck, imec; Leo Clancy, IDA Ireland; James O’Riordan, S3; Colette Maloney, European Commission; Moderator: Andreas Wild

A top EU priority in recent years has been to enhance Europe’s position as a world leader in the digital economy. Fulfilling this mission requires an innovative electronics industry in Europe. To this end, FP9 should encourage greater collaboration between large and small companies to leverage their complementary strengths – the dynamism, agility and innovation of smaller companies and the ability of larger companies to mature and scale new product ideas on the strength of their extensive private funding instruments and testing and demonstration facilities. Also, future EU-funded research actions should prioritize electronics projects involving players across the value chain, starting with materials and equipment providers and spanning chipmakers, system integrators and players from emerging “smart” verticals such as automotive, medical technology and energy. FP9 should also play the pivotal role of setting clear objectives, increasing investments, and easing rules for funding. These measures would help expand the European electronics ecosystem, accelerate R&D results and defray the rising costs of developing cutting-edge solutions key to the growth of emerging industry verticals.

5) Support high-tech SMEs, entrepreneurship and startups to become globally competitive

European SMEs, the backbone of EU’s manufacturing, are already strong players in the global economy, making outsize contributions to Europe’s innovation. Yet more of Europe’s small and young businesses with limited resources are challenged in Europe’s regulatory labyrinth. Only by improving the European regulatory environment in a way that supports young and small businesses can Europe fulfill its vision of a dynamic electronics ecosystem and digital economy. Access to finance must also be easier, particularly as underinvested startups struggle under a European venture capital apparatus that is smaller and more fragmented than those in North America and Asia. Early-stage funding instruments such as bank loans are essential for young businesses but they often face barriers to finance due to the sophistication of their proposed business models that are difficult to be understood and supported by banks.

One answer is to better familiarize Europe’s financial sector with industrial SMEs and startups so they can co-develop financial tools that support the growth of small and young businesses. Also, the narrow European definition of SME with staff headcount limited to 250 block innovative companies from access to financial tools exclusively provided to SMEs. By contrast, the United States defines SMEs as businesses with as many as 500 employees, placing their EU counterparts at distinct funding disadvantage. EU should ensure that its SME policy is aligned with global trends and industry needs.

6) Create a bigger and more diverse talent pipeline with a hybrid skills set 

Europe’s world-class education and research capabilities help supply the electronics industry with skilled workforce. Yet the blistering pace of technology innovation calls for rapidly evolving skills sets, a trend that has led to worker shortages at electronics companies and left the sector fighting to diversify its workforce and strengthen its talent pipeline. The deepening penetration of electronics in AI, IoT, AR/VR, high-performance computing (HPC), cybersecurity and smart verticals is giving rise to a new set of skills that blend production technologies, software and data analytics. As more technologies converge, the gap between university education and business needs continues to widen.

One solution is work-based learning – allowing students to build job skills in a setting related to their career pathway. Encouraging higher female participation in STEM education programs at the high school and university levels is also a must to overcome the traditionally low number of females entering high technology. To build on its reputation as “a place to work” in the eyes of the international job seekers, Europe also needs a more flexible immigration framework to attract skilled labour to high-tech jobs.

Save the Date: Industry leaders, research and government representatives will meet again next year at the ISS Europe organized by SEMI on 28-30 April 2019 in Milan, Italy. More details regarding the event will be published soon on www.semi.org/eu.