Category Archives: Top Story Right

SIA reports flat semiconductor sales in June with Eastern edge

August 3, 2012

August 3, 2012 — Global semiconductor sales stayed flat in June 2012, hitting $24.38 billion (a decline of 0.1% from May 2012), reports the Semiconductor Industry Association (SIA). Year-over-year (Y/Y), sales fell just 2% in June, a slower decline than the semiconductor industry has seen since October 2011.

Figure. Worldwide semiconductor revenues, Y/Y percent change. SOURCE: WSTS, SIA.

“The semiconductor industry continues to navigate the turbulent global economy better than most sectors, but macroeconomic uncertainties are limiting overall recovery and growth,” said Brian Toohey, president & CEO, Semiconductor Industry Association. “Congress can help ease economic uncertainty by enacting effective and dependable policies that promote American competitiveness and spur economic growth.”

Regionally, semiconductor sales increased on a sequential monthly basis in Japan (2%) and Asia Pacific (0.6%) but declined in Europe (-0.7%) and the Americas (-3.6%). Compared to June 2011, sales in June 2012 increased in Japan (3.7%) and Asia Pacific (1.0%) but fell steeply in the Americas (-8.1%) and Europe (-12.1%). “The Japan and Asia Pacific sequential increases are encouraging signs, but are tempered by continued weakness in Europe and the Americas,” said Toohey. This is the first time since September 2010 that Japan and Asia Pacific attained month-over-month and year-over-year growth simultaneously.

All monthly sales numbers represent a three-month moving average.

June 2012
Billions
Month-to-Month Sales
Market	Last Month	Current Month	% Change
Americas	4.48	4.32	-3.6%
Europe	2.84	2.82	-0.7%
Japan	3.36	3.43	2.0%
Asia Pacific	13.72	13.81	0.6%
Total	24.40	24.38	-0.1%
Year-to-Year Sales
Market	Last Year	Current Month	% Change
Americas	4.70	4.32	-8.1%
Europe	3.21	2.82	-12.1%
Japan	3.30	3.43	3.7%
Asia Pacific	13.67	13.81	1.0%
Total	24.89	24.38	-2.0%
Three-Month-Moving Average Sales
Market	Jan/Feb/Mar	Apr/May/June	% Change
Americas	4.46	4.32	-3.1%
Europe	2.83	2.82	-0.2%
Japan	3.42	3.43	0.2%
Asia Pacific	12.58	13.81	9.8%
Total	23.28	24.38	4.7%

The Semiconductor Industry Association (SIA) represents the US semiconductor industry. Learn more at www.sia-online.org.

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Thin glass or polymers for display substrates?

August 3, 2012

Charles Annis, DisplaySearch, reports on new thin glass products for lighter, thinner, and flexible displays. The full article is available in the DisplaySearch Monitor publication for July. In this article, thin FPD glass refers to 0.4mm or thinner, while ultra-thin glass means 0.2mm or thinner.

August 3, 2012 — The flat panel display (FPD) industry is continuously researching thinner glass substrates, to reduce the glass volume and weight of displays. Thinner glass substrates can be more expensive despite the lower raw material quantities, due to the engineering work to create them. With time, thinner glass results in lower display manufacturing costs.

Thinner glass is of interest for mobile displays. Ultra-thin substrates are an enabling technology for flexible displays, including flexible active matrix organic light-emitting diode (AMOLED) displays, which are on the verge of commercialization. However, DisplaySearch warns that many display fabs are set up to handle glass 0.5mm and thicker, and will need to be retrofitted to process 0.4mm glass, and will need even more handling tools for 0.3mm and thinner.

Corning recently brought its 0.3mm EAGLE XG Slim glass to Gen 6 substrates, targeting mobile displays. The glass avoids or reduces wet etching by hydrofluoric acid for thinning.

Figure. The glass-thinning segment will grow at a 29% CAGR between 2010 and 2015. SOURCE: DisplaySearch, TFT LCD Process Roadmap Report

Corning also presented “Ultra-Slim Flexible Glass Substrates for Display Applications” at the Society for Information Display’s Display Week, this June in Boston, discussing 0.2mm glass that can be rolled up on spools. It can be used as touch panels, cover glass, lighting, color filters, substrate, and encapsulation glass.

Non-alkali glass is the substrate of choice for conventional FPDs, and is desirable for flexible applications. It offers thin form factor with smooth surface quality and high transmission, among other benefits. Polymer substrates are stronger and lighter, but suffer from significantly higher surface roughness and lower optical transmission than glass. Glass also offers a significantly better hermetic seal than polymer substrates, of high interest for AMOLED displays.

Figure 2. Qualities of polymer film versus glass for flexible displays. SOURCE: Corning,“Ultra-Slim Flexible Glass Substrates for Display Applications,” SID 2012.

Glassmakers are developing hybrid substrates that combine polymer films with glass. Their purpose is to overcome the tradeoffs with each of the materials, providing the high quality of glass while adding the strength of polymer films.

To read the full article, including information about AGC’s carrier technology for 100µm glass, register for the DisplaySearch Monitor publication at http://www.displaysearch.com/cps/rde/xchg/displaysearch/hs.xsl/displaysearch_monitor_newsletter_with_fpd_market_news_flash_reports.asp

DisplaySearch LLC, an NPD Group Company, reports and articles can be accessed at www.displaysearch.com

Also read: The view from Display Week 2012: Glass tech at AGC

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Foundries take win, place, and show in H1 semiconductor company growth race

August 2, 2012

August 2, 2012 — IC Insights released a Q2 update to its top-20 ranking of semiconductor companies. Three pure-play foundries are in the top 20 ranking, with a cumulative increase of 20% from Q1 2012 to Q2 2012.

As fabless companies continue to thrive, and many integrated device manufactures (IDMs) move to a fab-lite business model, IC foundries will continue to see strong demand over the next few years.

TSMC’s capacity utilization rate in 2Q12 was 102% (exceeding 100% because of the way the company defines its utilization rate).

GLOBALFOUNDRIES’ 2Q12 sales jumped by 18%, which helped move the company past UMC to become the second-largest foundry in the world. GlobalFoundries is ranked as the 16th largest semiconductor supplier worldwide. IC Insights believes the company has a good chance of surpassing Fujitsu in the rankings in full-year 2012 sales.

Table 1. H1 2012 top 20 semiconductor companies, by sales (including foundries). Revenue in $M. SOURCE: IC Insights.

H1 2012 rank	2011 rank	Company	HQ	2011 total semiconductor sales	Q1 2012 semi sales	Q2 2012 semi sales	H1 2012 semi sales	Q2/ Q1 % change
1	1	Intel	US	49697	11874	12422	24296	5
2	2	Samsung	South Korea	33483	7067	7484	14551	6
3	3	TSMC	Taiwan	14600	3568	4337	7905	22
4	4	TI	US	12900	2934	3135	6069	7
5	7	Qualcomm	US	9828	3059	2869	5928	-6
6	5	Toshiba	Japan	12745	3232	2382	5614	-26
7	6	Renesas	Japan	10653	2344	2099	4443	-10
8	9	SK Hynix	South Korea	9403	2115	2291	4406	8
9	10	Micron	US	8571	2102	2210	4312	5
10	8	ST	Europe	9631	1997	2126	4123	6
11	11	Broadcom	US	7160	1770	1917	3687	8
12	13	Sony	Japan	6093	1514	1560	3074	3
13	12	AMD	US	6568	1585	1413	2998	-11
14	14	Infineon	Europe	5599	1292	1272	2564	-2
15	15	Fujitsu	Japan	4430	1216	931	2147	-23
16	21	GLOBAL FOUNDRIES	US	3480	945	1115	2060	18
17	17	NXP	Europe	4147	969	1084	2053	12
18	18	Nvidia	US	3939	935	990	1925	6
19	16	Freescale	US	4391	912	988	1900	8
20	20	UMC	Taiwan	3760	834	970	1804	16
Top 20 Total				221078	52264	53595	105859	3

The combined sales of the 4 Japanese companies in the top 20 ranking (Toshiba, Renesas, Sony, and Fujitsu) dropped 16% sequentially, with Sony being the only Japanese company to register quarterly growth. This region may see a boost in Q3.

Renesas is currently expecting a sequential semiconductor sales increase of 24% in Q3.

Toshiba has not yet changed its relatively aggressive full-year fiscal 2013 (ending March 2013) guidance, which suggests it may be expecting a strong rebound in sales later this year.

When Micron (#9) completes its acquisition of bankrupt Elpida (#24), the memory maker likely will add $2.5 billion to $3.0 billion in revenue annually. This could bump Micron up in the rankings by as many as 2 slots.

There was a wide range of sequential quarterly growth rates among the top 20 semiconductor suppliers. In total, the top 20 semiconductor suppliers showed a 3% increase in Q2 sales over Q1. The entire worldwide semiconductor industry growth rate was 6%. When excluding the top three foundries — TSMC, GLOBALFOUNDRIES, and UMC — combined sales of the top companies logged an increase of only 1% sequentially.

Table 2. H1 2012 top 20 semiconductor sales leaders ranked by growth rate (including foundries. Revenues in $M. SOURCE: IC Insights.

H1 2012 rank	Company	HQ	2011 total semiconductor sales	Q1 2012 semi sales	Q2 2012 semi sales	H1 2012 semi sales	Q2/ Q1 % change
1	TSMC	Taiwan	14600	3568	4337	7905	22
2	GLOBAL FOUNDRIES	US	3480	945	1115	2060	18
3	UMC	Taiwan	3760	834	970	1804	16
4	NXP	Europe	4147	969	1084	2053	12
5	Freescale	US	4391	912	988	1900	8
6	SK Hynix	South Korea	9403	2115	2291	4406	8
7	Broadcom	US	7160	1770	1917	3687	8
8	TI	US	12900	2934	3135	6069	7
9	ST	Europe	9631	1997	2126	4123	6
10	Samsung	South Korea	33483	7067	7484	14551	6
11	Nvidia	US	3939	935	990	1925	6
12	Micron	US	8571	2102	2210	4312	5
13	Intel	US	49697	11874	12422	24296	5
14	Sony	Japan	6093	1514	1560	3074	3
15	Infineon	Europe	5599	1292	1272	2564	-2
16	Qualcomm	US	9828	3059	2869	5928	-6
17	Renesas	Japan	10653	2344	2099	4443	-10
18	AMD	US	6568	1585	1413	2998	-11
19	Fujitsu	Japan	4430	1216	931	2147	-23
20	Toshiba	Japan	12745	3232	2382	5614	-26

As shown, Toshiba ranked as the worst performing top-20 company in 2Q12, registering a steep 26% 2Q12/1Q12 sales decline. This drop was due almost entirely to the poor performance of its memory segment (primarily NAND flash), which saw a dramatic 40% 2Q12/1Q12 sales collapse (a decline of about $800 million). As has been recently reported, the company plans to cut its NAND flash production by 30% in response to this situation. In contrast to its memory sales, Toshiba’s 2Q12/1Q12 logic IC sales were down only 9% and its O-S-D (optoelectronics, sensors, and discretes) sales were flat. It is interesting to note that SanDisk, Toshiba’s NAND flash memory partner, encountered a much more moderate 2Q12/1Q12 sales decline of 14%.

After reviewing the top 20 companies’ 3Q12 outlooks, it appears that the top 20 semiconductor suppliers, in total, are likely to show a 5% increase in sales in 3Q12 as compared with 2Q12. While this level of growth is not very exciting, it is only one point below the past 30-year average third quarter total semiconductor market increase of 6%.

Several major product introductions are set to occur in 4Q12 that could potentially bring additional momentum to the semiconductor market at the end of this year. The release of Apple’s newest version of its iPhone (iPhone 5) is expected no later than October. Moreover, Microsoft’s Windows 8 operating system is the first major upgrade to its OS in several years and is scheduled to be released in 4Q12. Also, Intel reports that numerous new ultra-thin but powerful Ultrabook computers will debut in 4Q12, some priced as low as $699. In total, IC Insights expects a 4Q12/3Q12 semiconductor sales increase of 2% and a full-year 2012 semiconductor market increase of 3%.

A ranking of the 1H12 top semiconductor suppliers will be included as part of IC Insights’ upcoming August Update to The McClean Report. IC Insights has released the new 200+ page Mid-Year Update to the 2012 edition of The McClean Report. To review additional information about IC Insights’ new and existing market research products and services please visit our website: www.icinsights.com.

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Siemens to spin off LED and lighting subsidiary OSRAM

August 2, 2012

August 2, 2012 — Facing a difficult capital market environment, Siemens will publicly list OSRAM via a spinoff to Siemens shareholders, rather than an initial public offeing (IPO). Spinning off OSRAM will make the public listing more independent of capital market conditions.

The aim of Siemens’ move is to give OSRAM independence with more flexible financing options.

OSRAM’s subsidiary, Osram Opto Semiconductors, makes high-power light-emitting diodes (LEDs), infrared components and high-power laser diodes (LDs). Recent news: Osram devises LED solder pad concept for easier second sourcing and Osram plans LED packaging facility in Wuxi

"The deceleration of the world economy has increased in the past few months…our focus above all is on increasing our productivity and efficiency," said Siemens CEO and president Peter Löscher in the company’s Q3 fiscal report. See Siemen’s full Q3 fiscal report here.

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Crossing Automation intros Spartan sorter options

August 1, 2012

Crossing Automation, Inc. announced three new options for the Spartan 300 that deliver an end-to-end contamination-free sorter environment. The new options target high volume manufacturing at 32nm and below where new levels of contamination control have become a requirement to ensure process performance. Crossing’s advanced environmental controls reduce on-wafer defects, prevent cross-contamination and surface oxidation, as well as reduce required tool maintenance to achieve increased device reliability and manufacturing yields.

The three new options are the Spartan Enerta Purge Option, the industry’s fastest available environmental purge; the Chemical Filter Option for Spartan; and the Low Contact Backside End Effector Option. Available independently, the options can be combined to achieve the most contamination-free sorter environment. All products are currently shipping and have seen strong early adoption, with an installed base of over 100 each for the Chemical Filter Option and Low Contact Backside End Effector Option, and multiple orders received for the Spartan Enerta.

Using pure, ultra-clean nitrogen, the Spartan Enerta Purge Option is able to achieve relative humidity below 5 percent within 85 seconds for incoming FOUPs, making it the fastest N₂ purge available in the industry. It protects the wafers from O₂and H₂O exposure, preventing native oxide growth and corrosion of copper interconnects while reducing the impact of chemical residue that could react with water vapor and create additional damage. It also reduces the impact of critical timing between process steps by reducing exposure to oxygen and water vapor.

The Spartan Enerta is a combination front opening unified pod (FOUP) nozzle purge and door purge. The door purge combines a top and side manifold that allows it to maintain purge with the door open and while wafers are moving in and out of the FOUP. Careful gas management and flow control enable a rapid purge while eliminating the particle contamination associated with conventional purging technologies. The system uses advanced recipe-controlled purging that provides complete user control over ramp and flow rates, all under full manufacturing execution system (MES) control.

The Chemical Filter Option for Spartan addresses the issue of airborne molecular contamination (AMC), which, due to its microscopic size, is able to penetrate standard clean room filters. This causes a number of process yield and reliability issues, particularly at the 32nm node and below. Use of this option eliminates AMC and provides filtered air in the minienvironment to ensure the wafers stay clean between FOUPs.

The Spartan Low Contact Backside End Effector achieves industry-leading cleanliness to eliminate backside particles, which are increasingly impacting process performance as manufacturing nodes shrink. Crossing’s Low Contact Backside End Effector eliminates the migration of edge or backside particles onto the active portion of the wafer to reduce defectivity.

As LED growth switches from backlights to home lamps, phosphors gain importance

July 31, 2012

July 31, 2012 — NanoMarkets issued a new white paper on LED phosphors, "LED Lighting Driving Demand for New Phosphors," that covers the shifting use of phosphors, which modulate the light emitted by LEDs, from LCD backlighting to solid-state lighting.

Today, the majority of phosphors used in light-emitting diodes (LEDs) go into LCD backlighting units. Blue LEDs are coated with yellow or other down-conversion phosphors to make “white” LEDs. In the next several years, saturation will slow growth for LED-based backlighting, phosphor prices will fall, LED-per-unit values will be reduced, display demand will soften, and backlight-free display technologies like active matrix organic light-emitting diodes (AMOLEDs) will take over market share in smartphones/tablets and TVs, NanoMarkets reports.

Figure. Phosphor growth for LED applications, 2012-2019. SOURCE: NanoMarkets.

The situation is very different in the solid-state lighting sector. In fact, a major shift is occurring in the lighting industry toward more-efficient, longer-lifetime, LED-based lighting, which will more than make up for the slowing display market. Governments are encouraging use of higher-efficiency lighting products with new regulations and subsidies. Since LEDs are potentially more efficient than any other alternative lighting source, LED lighting will preferentially enjoy the benefits of these mandates.

Going forward, growth in sales of LED phosphors will be driven by sales to the LED lighting industry. Backlighting LEDs are growing at <5% annually; LED lighting is growing at about 30% compound annual growth rate (CAGR), by LED count.

Better phosphors are needed to bring LED lighting into wider use. Phosphors are one of the keys to achieving the ambitious LED lighting market penetration goals and differentiating the quality of LED lighting products versus other technologies, NanoMarkets reports. Phosphors can improve the quality of LED light to meet what consumers want, an important factor when LEDs are still many times more expensive than incandescent bulbs.

NanoMarkets tracks and analyzes emerging market opportunities in energy, electronics and other markets created by developments in advanced materials. Access the white paper at http://www.nanomarkets.net/Downloads/LEDPhosphors.pdf.

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Larger displays and advanced features enable Q2 TV prices to rise in US

July 31, 2012

July 31, 2012 — Average retail pricing for U.S. flat-panel televisions rose to the highest level in 2.5 years during Q2, thanks to advanced features and larger displays in a growing proportion of TV sets, according to IHS (NYSE:IHS).

Pricing for U.S. flat-panel televisions hit $1,224 in Q2, up 3% from $1,190 in Q1, and up 9% year-over-year (Y/Y). This is a peak price point for the US since the start of 2010, 10 quarters ago.

US TV pricing, average per quarter. SOURCE: IHS iSuppli.

Advanced and cost-premium features include 3D display, integrated interactivity and Web 2.0 or “smart” features, and light-emitting diode (LED) backlights in LCDs, explained Edward Border, analyst for TV technology at IHS. Aiding in the pricing increase, 3D displays’ share of the TV market grew to 30.9 from 27.8% sequentially. A similar increase occurred for Smart TVs, growing to 44.3% from 40.9%; and for LED-backlit LCD sets, rising to 63.5% from 59.2%.

The US market is dominated by liquid crystal display (LCD) TVs, along with a small plasma segment. Average pricing in the second quarter for plasma displays as a whole reached $1,628, while that for LCD TVs amounted to $1,120 during the same period.

Some large-sized displays in both LCDs and plasmas increased their share in Q2. The 46” LCD’s share in retail rose to 12.2% from 11.8% sequentially, and share for 60” LCDs increased to 5.2% from 4.2%. Note that pricing in June for the 42” LCD TV category plunged to an all-time low of $761, down from $807 in May, after two consecutive months of price hikes. Within the LCD TV space, the majority of the smaller, below-42-inch screen sizes saw their average retail price increase, as features including Full HD, LED and Internet connectivity became more widespread in 2012 models.

Large-sized plasma sets saw an even greater expansion, with 50” rising to 23.8% from 21.2%, 60” increasing to 23.6% from 18.6%, and 65” growing to 6.9% from 6.1% of the market in Q1. For plasma sets in the 42” and 65” categories, prices fell in Q2.

The 32” TV sector was the only area to see a decline, with average set prices at $435, down from $495 in Q1.

Also read: Flat-panel TV market: Bigger is better

In the Smart TV sector, average pricing in June fell to $1,907 from $2,015 in May, but it was up significantly compared to $1,724 in June last year. From a pricing perspective then, the Smart TV can be considered a major technological success so far this year, appealing to consumers with its dynamic mix of interactive features, easy integration with set-top boxes, emphasis on online streaming capabilities and access to over-the-top cable content.

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. For more information, visit www.ihs.com.

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FEIâs extreme-high-resolution SEM enables metrology on semiconductors <22nm

July 30, 2012

July 30, 2012 — FEI (NASDAQ:FEIC), imaging and analysis systems maker, launched the Verios extreme-high-resolution (XHR) scanning electron microscope (SEM) for metrology on beam-sensitive and sub-namometer-scale materials in advanced semiconductors.

The SEM can be used for process control at the 22nm semiconductor technology node and below, combined with FEI’s IC3D software. The SEM also suits materials science imaging, extending SEM into areas previously only served by tunneling electron microscopy (TEM) or other techniques.

The Verios provides sub-nanometer resolution and enhanced contrast for beam-sensitive materials. A second-generation FEI XHR SEM, it enables sensitivity to surface detail even at low kV, thanks to advanced optics. Users can switch quickly between various operating conditions, maintain sample cleanliness, and obtain sub-nanometer resolution at any accelerating voltage from 1 kV to 30 kV. New detection technologies come from optimized signal collection and advanced filtering abilities, for better contrast generation and metrology on a greater range of samples such as non-conductive or beam-sensitive materials.

FEI (Nasdaq: FEIC) is a leading diversified scientific instruments company providing electron- and ion-beam microscopes and solutions for nanoscale applications across many industries. More information can be found at: www.fei.com.

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Plessey invests in GaN-on-Si HB-LED production, adds AIXTRON reactor

July 30, 2012

July 30, 2012 — Plessey Semiconductors is installing a multi-million-pound (£) high-brightness light-emitting diode (HB-LED) production line at its Plymouth, UK facility.

The semiconductor product maker took delivery of a CRIUS II-XL reactor in a 7 x 6” wafer configuration from AIXTRON for the line, which will make Plessey’s MaGIC (MAnufactured on Gan ICs) gallium nitride (GaN) technology on 6” wafers. Also read: Plessey acquires CamGaN for GaN-on-Si LED technology

Plessey’s GaN-on-Si technology uses a 2.5µm GaN layer, as compared to 6-8µm layers in other GaN-on-Si approaches, said Neil Harper, Plessey’s HBLED product line director. The thinner GaN layer means less deposition time, which allows multiple production cycles in the reactor in 24 hours.

The 6” silicon wafers offer up to 80% cost reduction from silicon carbide (SiC) or sapphire LED substrates. The current design enables more than 14,000 LEDS (1mm² 1W) per wafer. Plessey’s roadmap is to move to 8” substrates for even greater cost savings.

Efficiencies in the new technology will enable outputs in excess of 150 lumens per watt to be achieved. Typical MAGIC HB LEDs are yielding at 95%. The first samples of a blue LED are characterized by peak emission at 460nm with typical current of 350mA. The technology extends to other emission wavelengths: cyan at 500nm and green at 530nm with amber and white output enabled by phosphor conversion. White output will initially achieve 80 lumens/watt with 450mW output from 1W input, which will be available later this year, and 150 lumens/watt devices are planned for June 2013 with the support of British and European partners.

Plessey intends to integrate its MaGIC HBLED products with its EPIC sensor technology to provide smart lighting solutions for even greater energy savings and carbon footprint reductions.

Plessey Semiconductors develops and manufactures semiconductor products used in sensing, measurement and control applications. Learn more at http://www.plesseysemiconductors.com/products/magic.

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TI could struggle with semiconductor fab overcapacity til 2013

July 27, 2012

July 27, 2012 — Texas Instruments Incorporated (TI, NASDAQ:TXN) announced Q2 revenue of $3.34 billion, net income of $446 million and earnings per share of 38 cents. EPS includes 6 cents of charges associated with the company’s September 2011 acquisition of National Semiconductor and restructuring. See the company’s full Q2 report here, via PRNewswire.

Wireless sagged for TI, though analog and embedded processing segments grew. The company ended the quarter with revenues “about as…expected,” said Rich Templeton, TI’s chairman, president and CEO.

Also read: TI tops industrial electronics rankings, growing market share with NatSemi

Q2 was slightly better than Q1, where TI saw $3.12 billion revenue, and $265 million net income. Q1 was the quarter in which TI’s “business cycle bottomed,” said Templeton. TI expects Q3 revenues to be about even with Q2 and below its seasonal average growth rate.

For the full year of 2012, TI expects to spend slightly less on R&D: $1.9 billion, down from the prior expectation of $2.0 billion. The company also has earmarked $0.7 billion for capital expenditures throughout 2012.

Analysts’ takes:

TI’s orders in Q2 grew 5% sequentially, but order patterns weakened in June and stabilized in July at depressed levels, noted FBR Capital Markets, in its analysis of the quarter. FBR assesses TI’s lower-than-expected Q3 guidance as macro weakness driving a broad pause in customer production and purchasing behavior. In addition, “fab under-absorption charges should continue to weigh on TI in 3Q12 with sluggish revenues, and into 4Q12 as baseband and calculator revenue declines affect sales by 3-4% overall. TI could see some relief from under-absorption charges by 2H12 as $100M of annualized cost savings begin to flow in from the closure of two fabs (in 1H13 and mid 2013).”

Barclays Capital sees topline growth and filling its fabs as meaningful next cycle for IT, as opposed to the current one.

While TI is the clear leader in analog ICs, FBR notes that the chipmaker has challenges in its wireless business, gross margin impacts from its die bank inventory build-ahead in 1Q12, and potentially too much capacity following its National Semi acquisition. Baseband headwinds continue to weigh on TI’s potential for growth, Barclays pointed out.

Lowering its R&D expenses will help TI keep H2 2012 operating expenses under control, noted Barclays.

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