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Global sales of semiconductors in January rose year-over-year, yet fell on a sequential basis as ongoing economic uncertainty is holding back more robust growth, iStockAnalyst today reported.

Worldwide sales of semiconductors were $24.05 billion the month of January, up 3.8% from January 2012 and down 2.8% from December 2012, according to the Semiconductor Industry Association (SIA).

"The across-the-board spending cuts that hit last week and the threat of a government shutdown later this month are just the latest examples of fiscal disruptions that sidetrack economic growth," said SIA CEO Brian Toohey.

On a regional basis, semiconductor sales rose 10.5% and 7.8% in the Americas and Asia Pacific respectively, but dropped 4.9 percent and 12.3 percent in Europe and Japan from the same period last year.

North and South America post best January of the last decade, the SIA noted.

Compared with December 2012, sales inched up 0.4 percent in Europe, while declining 5.5% in Japan, 3.5% in the Americas and 2.5 percent in Asia Pacific.

Semiconductor sales in the United States totaled more than $146 billion in 2012.

Corning, Apple’s glass supplier, announced yesterday that it will probably take at least three years before companies start making flexible displays using its new Willow flexible glass material.

Speaking with Bloomberg, Corning president James Clappin says that products with flexible displays are likely still three years out, adding that it’s now busy making "a lot of effort" to teach what it describes as "very big name" companies how to fully use the product. The glass has been rolled out as companies, such as Google, are considering launching wearable computers.

Clappin told reporters that companies have yet to come up with products that take advantage of Willow glass. The glass can be rolled up like a newspaper, allowing companies to make curved or flexible displays. Clappin believes people are not accustomed to glass you roll up.

Willow glass may be used in some simple products this year, said Clappin. Examples of these products could be thin films behind some touch panels or a flexible barrier for solar panels.

Corning said they have sent out samples of the flexible glass to makers of phones, tablets and TVs in June. Corning CFO, James Flaws, at the time said that the company hoped it would be available in consumer products this year.

Yole Développement’s research has credited STMicroelectronics for capitalizing on the booming demand for MEMS in mobile devices by shipping 58% more MEMS units in 2012, to become the first company to reach $1 billion in MEMS sales. And that was in a year when the average prices of accelerometers and gyroscopes that are its core MEMS products dropped by 20%-30%.

“The company was there and ready with its 8-inch fab when the volume demand started, as well as a large portfolio of products and low prices,” said Laurent Robin, Activity Leader, Inertial MEMS Devices & Technologies at Yole Développement. “They could use a feed-the-fab-strategy to build volumes, and discounts for buyers of multiple devices to meet the price demands of the cell phone makers.”

“Even more than Yole Développement’s recognition of ST’s achieving the revenue milestone, we appreciate the endorsement from our customers, across a broad range of applications and segments, of our strategy of being a reliable one-stop MEMS partner,” said Benedetto Vigna, Executive Vice President and General Manager of STMicroelectronics Analog, MEMS and Sensors Group. “We remain fully committed to continuing to meet our customers’ expectations and to expanding the role of sensors in ways that augment all of our lives.”

The morphing of the MEMS industry into a high volume consumer smart phone business has played to the advantage of big IDMs with their ability to ramp volumes to price aggressively, and to offer customers a wide variety of products from a single source to simplify the supply chain. The inertial sensor business also drove healthy 14% MEMS growth at Robert Bosch, boosting that big IDM’s sales close to those of long time industry leader Texas Instruments in a further reshuffling of the top companies lineup. Yole Développement will release its complete listing of the Top 30 MEMS companies early in April.

ST is now churning out some 4 million MEMS devices a day, offering not only inertial sensors but also now consumer pressure sensors, microphones, and e-compasses. The fully-integrated supplier has been able to optimize all steps in the process to wring out costs, from its mature standard manufacturing process for all inertial sensors, to its inhouse ASIC design, to its long expertise in common LGA packaging across all products, to its high volume parallel testing developed on commercial equipment with SPEA, to its sales force that can sell and deal on the whole smart phone sensor line. The company has also pushed the manufacturing technology to bring down die size, replacing glass frit with narrower gold bonding frames and replacing big bond pads with smaller TSVs made by etching air gaps around polysilicon vias. And it turned to outside partnerships (microphone technology from Omron) and purchases (magnetometers from Honeywell) to get new products to market faster.

LEDs are projected to grow more than six-fold to nearly $100 billion and power conversion electronics to $15 billion over the next decade as the desire for energy efficiency drives adoption, says Lux Research. While the market opportunity is clear, the winning positions are still very much up for grabs, so making wise partnership and investment choices is critical.  

“A slew of developers are working on innovative materials and system architectures, targeting the primary challenges of cost reduction and manufacturability,” said Pallavi Madakasira, Lux Research Analyst and the lead author of the report titled, Winning the Jump Ball: Sorting Winners from Losers in LEDs and Power Electronics. “Many leading lights of the electronics industry are strong in these markets, but start-ups with novel technologies are looking to grab a share for themselves.  

Lux Research positioned the key developers of LEDs and power electronics materials, devices, and systems on the Lux Innovation Grid based on their technical Vvalue and business execution – companies that are strong on both axes reach the “dominant” quadrant. They also assessed each company’s maturity, and provided an overall Lux Take. Among their findings:

  • SiC players are dominant in power electronics. The “dominant” power electronics players wager mostly on SiC. Cree is a fully vertically integrated SiC device manufacturer, while other top leaders are experienced players from silicon power electronics like Infineon, Rohm Semiconductor and ST Microelectronics.
  • Cree, II-VI Wide Bandgap lead materials space. Cree is also “dominant” in materials, based on its development of SiC substrates. The only other company with a “dominant” rank is II-VI Wide Bandgap Group, an SiC wafer supplier with established relationships with power electronics and RF device manufacturers.
  • Six vie for dominance in LED. Cree is the leader in LEDs as well, the only firm that has successfully commercialized SiC-substrate-based LEDs at scale. Among other “dominant” firms, Nichia holds the most IP, while Samsung, Philips, and Osram Opto Semiconductors have all demonstrated GaN-on-silicon LEDs. GE Lighting does not have its own chip technology but its integration further down the value chain and its recent acquisition of fixture manufacturer Albeo make it a force to reckon with.

The report, titled Winning the Jump Ball: Sorting Winners from Losers in LEDs and Power Electronics, is part of the Lux Research Energy Electronics Intelligence service.

The competitive landscape of the cellphone core integrated circuit (IC) business has completely transformed over the past five years, with Qualcomm Inc. and Samsung capitalizing on the rise of smartphones and 4G.

In the market for application-specific mobile handset core ICs like baseband and radio-frequency semiconductors, Qualcomm in 2012 reigned supreme with 31 percent market revenue share, according to the IHS iSuppli Wireless Competitive Landscape Tool from information and analytics provider IHS (NYSE: IHS).

The San Diego-based chip maker has held the top position since 2007 and even enlarged its lead by 8 percentage points during the period. South Korea’s Samsung Electronics was the No. 2 vendor after Qualcomm, with a 21 percent share, after not even ranking in in the Top 10 in 2007, as presented in the attached figure.

Together the two companies accounted for more than half of the total market, with the next eight vendors in the Top 10 accounting for another 34 percentage points of share. The other vendors among the leaders were, in descending order, MediaTek, Intel, Skyworks, Texas Instruments, ST-Ericsson, Renesas, Spreadtrum and Broadcom. The Top 10 enjoyed a collective 86 percent share of the market.

“As smartphones and the next-generation wireless standard known as 4G Long Term Evolution (LTE) have gained popularity, the corresponding influences from both forces have created paradigm shifts that transformed competition in the mobile handset core IC market,” said Brad Shaffer, analyst for consumer & communications at IHS. “The arrival of Apple Inc.’s iPhone five years ago changed the game and paved the way for the current market rankings. This change is dramatically illustrated by looking at the major differences in the cellphone core IC rankings from 2007 to 2012. The companies that benefited from the shift in market orientation rose to domination while others that were caught between changing market environments were left in limbo.”

Getting to the core

The cellphone core IC space encompasses semiconductors that provide mobile handsets with wireless wide-area-networking (WWAN) communication and application-processing capabilities.

The market segments here include handset core ICs for analog baseband, digital baseband, power amplifiers, radio and intermediate frequencies, high-level operating systems and software processors, and other multimedia or graphics coprocessors.

Changes sweep the industry

Of the companies that did not even rank back in 2007, Samsung has climbed the quickest, landing in the runner-up spot, driven by its presence in the applications processor space. Also among those making the jump from outside the Top 10 is Intel, in fourth position at the end of last year after acquiring Infineon’s wireless division. It remains to be seen how successful Intel will be in utilizing the acquisition, finalized in 2011, in order to increase the breadth of its mobile product offering and increase the likelihood of winning design slots for those mobile products. Intel is also starting to see some signs of life with the Atom processor and its inclusion in handsets from Motorola along with other original equipment manufacturers.

Two other vendors also broke into the ranks of the Top 10 in 2012.

In ninth place, Spreadtrum expanded its digital baseband IC revenue by more than 370 percent within the five-year period. Broadcom likewise expanded revenue by a similar dizzying magnitude to land at No. 10—thanks to baseband IC revenue finally gaining traction by ramping design wins since 2011 at Samsung.

Everything’s smaller for Texas Instruments

While Qualcomm increased its lead at the top from 2007 to 2012, Texas Instruments fell from second to sixth place—down from a 20 percent share to 4 percent. TI’s proprietary OMAP product line of chips for portable and mobile multimedia applications has not taken off as quickly as expected, and the company as a result could not offset its planned exit from baseband products.

Another vendor near the top in 2007 that experienced a decrease in market share was ST-Ericsson, shrinking 2 percent to a 4 percent market share.

More changes ahead

The structure of the mobile handset core IC market will continue to shift, particularly as LTE becomes more widespread.

Baseband chips, already accounting for more than half the revenue of the total handset core IC space, will maintain their pre-eminence in determining the market-share gains and losses of industry vendors moving forward, IHS believes. Nonetheless, the future will also be driven by the ability of any given IC supplier to provide platform solutions that optimize the system-level design of all of the ICs, making up the handset’s core chip architecture.

Attribution: By gillyberlin (Flickr: Motorola Milestone Test) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

It is a fact that semiconductor industry capital spending is becoming more concentrated with a greater percentage of spending coming from a shrinking number of companies.  As a result, IC industry capacity is also becoming more concentrated and this trend is especially prevalent in 300mm wafer technology.  The figure below lists the 300mm installed capacity leaders for 2012 and IC Insights’ forecast for 2013.  The list was compiled and included in IC Insights’ updated report titled, Global Wafer Capacity 2013—Detailed Analysis and Forecast of the IC Industry’s Wafer Fab Capacity.    As shown, Samsung was by far the leader in 2012 having about 61% more 300mm capacity than second-place SK Hynix. Intel was the only other company that held a double-digit share of 300mm capacity at the end of 2012.  Assuming Micron is successful in acquiring Elpida in 1H13, the combined 300mm wafer capacity of the two companies will make the merged company the second-largest holder of 300mm capacity in the world behind Samsung.

 Of the top 10 companies on the list, half are primarily memory suppliers, two are pure-play foundries, and one company, Intel, is focused on MPUs.  Samsung is expected to maintain its lead in installed capacity through 2017, with aggressive capital spending plans seen over the past few years continuing over the next five years.  However, in terms of growth rate, IC Insights expects the largest increase in 300mm capacity to come from the pure-play foundries—TSMC, GlobalFoundries, UMC, and SMIC.  In total, IC Insights expects these four companies to more than double their collective 300mm wafer starts per month by 2017.

 IC Insights believes that the companies listed will represent essentially all the advanced 300mm IC production and capacity in the future.  IC Insights believes that the top seven or eight companies—Samsung, “Micron-Elpida,” TSMC, SK Hynix, Intel, Toshiba/SanDisk, and GlobalFoundries—can be considered an “elite” group that is just about guaranteed to be a driving force in 300mm capacity additions.  The remaining companies are likely to participate in future 300mm capacity expansion, but all have varying degrees of risk associated with fully realizing their long-term 300mm IC production capacity goals.

Meanwhile, there is still much uncertainty as to when the industry will make the next wafer-size transition—from 300mm to 450mm—and how much it will cost to do so, but momentum continues to build and the transition can now be considered certain to happen.  IC manufacturers have yet to fully optimize the high-volume manufacturing cost structure for the 300mm wafer size.  However, the potential per-die cost savings that the larger wafer can provide is enough of a motivating factor to make the transition happen.

Intersil restructuring to cut 18% of workforceIntersil Corporation (NASDAQ: ISIL) today announced restructuring initiatives designed to prioritize the company’s sales and development efforts, strengthen financial performance and improve cash flow.

The restructuring plan includes a reduction of approximately 18% of Intersil’s worldwide workforce and a reduction of approximately $30 million in annual operating expenses, according to the SEC filing. Currently, Intersil employs approximately 1,700 employees, according to their company website. The estimated 18% reduction would involve around 300 jobs. Intersil has not released a statement about where the workforce reduction would come from within the company.

The restructuring plans will be substantially completed during the first quarter of 2013 and are expected to reduce annual operating expenses by approximately $30 million. A restructuring charge of approximately $15 million for severance-related benefits is expected during the first quarter of 2013.

"Today’s market requires us to sharpen our focus on core strengths and markets where we can offer superior value to our customers," said Jim Diller, Interim President and Chief Executive Officer, of the restructuring initiatives. "Today, we are announcing plans designed to ensure that Intersil remains well-positioned and appropriately structured for sustainable, long-term growth and profitability."

This is not the first time that Intersil, which specializes in the design and manufacture of high-performance analog, mixed-signal and power management semiconductors, has had to cut workforce in an effort to improve cash flow, though it is a more substantial reduction than their most recent restructuring efforts. Intersil reduced their workforce by 9% in 2008, in response to the economic conditions of the day, and then again in May 2012, with a workforce reduction of 11%.

Intersil has locations in California, Florida, China, Malaysia, Japan, Germany and the United Kingdom.

Smartphones and media tablets continue to the prime movers of technology industries, with the two mobile platforms spurring a double-digit increase in the market for microelectromechanical system (MEMS) motion sensors this year.

Revenue this year for MEMS motion sensors used in cellphones and tablets will amount to $1.5 billion, up 13 percent from $1.3 billion in 2012, according to the an IHS iSuppli MEMS Special Report from information and analytics provider HIS. While this will be down from the robust 21 percent increase in 2012 and the phenomenal 85 percent boom in 2011, it still represents a strong rise compared to the tepid growth expected for most electronic components during 2013.

After 2013, there will be two more years of double-digit increases before the market starts moderating in 2016 with $2.21 billion. By then, more than 6 billion motion sensors will ship in mobile handsets and tablets, up from just 1.6 billion units in 2011.

“The growth of MEMS motions sensors in wireless devices is being driven by four key factors: the robust sales of smartphones and tablets; the boom of Chinese smartphone makers; the fast adoption rate of pressure sensors; and the addition in some cases of a second gyroscope in the camera modules for optical image stabilization,” said Jérémie Bouchaud, director and senior principal analyst for MEMS & sensors at IHS.

Earlier forecasts showing the market would slow by 2014 will no longer be true given new vigor in the industry because of these four variables, IHS believes.

Apple sets market in motion

First initiated by Apple in its iPhone for auto screen rotation, motion sensors have grown to become one of the most dynamic segments in the overall MEMS market, paving the way for next-generation, gesture-based menu navigation in the user interface of cellphones.

While accelerometers and electronic compasses are already standard in smartphones, other MEMS devices are also gaining heavy traction. Pressure sensors that can help with indoor navigation came to greater prominence in 2012 as Samsung adopted the MEMS device in high-end smartphones more aggressively than expected. After Samsung, Sony and other smaller handset manufacturers, such as Xiaomi from China, also started equipping smartphones with pressure sensors.

Axis power

A new motion sensor likewise is making headway this year in the form of dual-axis gyroscopes, intended for optical image stabilization (OIS) in the camera module of handsets. The new sensor is in addition to the 3-axis gyroscope already found on the main printed circuit boards of handsets. As the camera function increasingly becomes a key differentiator in mid- and high-end smartphones, OIS will become a key feature in camera phones of more than 8 megapixels.

Gray market fades

Also helping spur the motion sensor market in 2012 was a dramatic surge in the number of legitimate, officially sanctioned smartphones in China—as opposed to the hordes of illegal, gray-market handsets still widely proliferating in that country.

The number of authorized smartphones produced by Chinese handset original equipment manufacturers (OEM) exceeded 150 million units last year, up from 67 million in 2011. The Chinese-made handsets now all feature at least one accelerometer, with compasses and gyroscopes expected to be integrated later. Smartphone shipments from Chinese OEMs will continue to climb in the next few years, further stoking the MEMS motion sensor market for handsets.

Combo sensors enjoy fast growth

While discrete MEMS motion sensor devices like accelerometers, gyroscopes and electronic compasses continue to be the major revenue earners, the combo sensor market—in which several sensors are integrated into a module—is also expanding rapidly.

In terms of revenue, approximately 16 percent of motion sensors were shipped as part of a combo sensor in 2012, up from just 3 percent in 2011, on the way to 53 percent by 2016. Six-axis inertial measurements units (IMU) comprising a 3-axis accelerometer and a 3-axis gyroscope in the same package will be the most popular combo sensor, ahead of 6-axis compasses and 9-axis IMUs.

Controlling the market: the biggest buyers—and their suppliers

Apple and Samsung were the biggest buyers in 2012 of motion sensors in handsets, accounting for 57 percent of consumption, up from just 25 percent in 2009. The American and South Korean giants have now surpassed Nokia as the top purchasers. Also rising to become a major force is the group of Chinese OEMs including Huawei, ZTE, Lenovo and Coolpad, along with a number of other smaller China-based players.

On the supply side, four suppliers claimed 84 percent of total motion sensor revenue last year.

French-Italian STMicroelectronics led the field with a 48 percent share, followed by Japan’s AKM with 18 percent, German-based Bosch with 10 percent and InvenSense from California with 9 percent.

MEMS motion sensor
By Haraldino80 (Own work) via Wikimedia Commons

solid state thin film batteryVarious power factors have impacted the advancement and development of micro devices. Power density, cell weight, battery life and form factor all have proven significant and cumbersome when considered for micro applications. Markets for solid state thin-film batteries at $65.9 million in 2012 are anticipated to reach $5.95 billion by 2019, according to a new report released by ReportsnReports.com. Market growth is a result of the implementation of a connected world of sensors.

The report points out that development trends are pointing toward integration and miniaturization. Many technologies have progressed down the curve, but traditional batteries have not kept pace. The technology adoption of solid state batteries has implications to the chip grid. One key implication is a drive to integrate intelligent rechargeable energy storage into the chip grid. In order to achieve this requirement, a new product technology has been embraced: solid state rechargeable energy storage devices are far more useful than non-rechargeable devices.

Thin film battery market driving forces include creating business inflection by delivering technology that supports entirely new capabilities. Sensor networks are creating demand for thin film solid state devices. Vendors doubled revenue and almost tripled production volume from first quarter. Multiple customers are moving into production with innovative products after successful trials.

A solid state battery electrolyte is a solid, not porous liquid. The solid is denser than liquid, contributing to the higher energy density. Charging is complex. In an energy-harvesting application, where the discharge is only a little and then there is a trickle back up, the number of recharge cycles goes way up. The cycles increase by the inverse of the depth of discharge. Long shelf life is a benefit of being a solid state battery. The fact that the battery housing does not need to deal with gases and vapors as a part of the charging/discharging process is another advantage of the solid state thin film battery.

Traditional lithium-ion (Li-Ion) technology uses active materials, such as lithium cobalt-oxide or lithium iron phosphate, with particles that range in size between 5 and 20 micrometers. Nano-engineering improves many of the failings of present battery technology. Re-charging time and battery memory are important aspects of nano-structures. Researching battery micro- and nanostructure is a whole new approach that is only just beginning to be explored.

Industrial production of nano batteries requires production of the electrode coatings in large batches so that large numbers of cells can be produced from the same material. Manufacturers using nano materials in their chemistry had to develop unique mixing and handling technologies.

Cymbet millimeter scale solid state battery applications are evolving. In the case of the intra-ocular pressure monitor, it is desirable to place microelectronic systems in very small spaces. Advances in ultra-low power integrated circuits, MEMS sensors and solid state batteries are making these systems a reality. Miniature wireless sensors, data loggers and computers can be embedded in hundreds of applications and millions of locations.

In the second of two installments, Linx Consulting reports a steady growth in semiconductor production, as released in The Econometric Semiconductor Forecast.  The first installment focused on regional developments that will affect semiconductor industry growth.

Semiconductor production to see steady growth after 2013

The weakness in economic growth spills into end products containing semiconductors in 2012 and early 2013.  Our model relating final demands to aggregate semiconductor production (measured by SEMI’s Million Square Inches of silicon processed, MSI) suggests weak demand was anticipated in 2012, and that by early 2013, enough improvement in end markets occurs to push growth up at a modest pace that averages slightly less than 6% for the full year.   By 2014, growth should recover to long-term potential growth for MSI of approximately 7%/year.

 

Figure 1: Aggregate semiconductor production from 1955 to present, with forecast to 2015.

Key assumptions driving this forecast include some solution to the fiscal cliff dilemma that permits US consumers and businesses to begin to return to more normal conditions.  Removing uncertainty drives a modest expansion US spending on technology goods of around 2.3%, up from the anemic 0.8% growth anticipated for 2012.  Most of that growth will occur in the second half of 2013, as it will take some time for businesses to analyze the new policy environment and then implement investment plans.  Inventory-shipment ratios for technology goods, which are spiking in the last half of 2012, are assumed to recede on a steady pace to more typical levels through 2013.  If shipments in IT goods do not develop as expected, the quarterly pattern above would most likely show a steeper decline in 2012Q4 and a further decline in 2013Q1, followed by strong gains in Q2 or Q3.

 

Figure 2: The difference between Segment Demand and Total Silicon Area (includes test and monitor wafers).

Strongest growth will remain in flash memories and logic devices

The overall picture of MSI growth breaks down into the expected performance of device segments and technology nodes.  Despite the shift to consumer electronics and mobile platforms, we expect growth to be concentrated in CMOS products with a continuing slowing of unit growth and analog and discrete devices.  Strongest growth will remain with flash memories, and advanced foundry logic devices targeted at tablets and phones.

In contrast with advanced memory and logic processing, approximately 56% of the market continues to be produced at design dimensions in excess of 100 nm on wafer sizes at 200 mm or smaller.  This market segment is extremely sensitive to economic volatility and has slowed significantly in the last four years.  Manufacturers of these devices are often capital constrained and extremely cost sensitive, leading to little process innovation and limited capacity expansion.

More silicon area at 32 nm produced in 2012 than any other node

On a technology basis, despite tight capital budgets, the introduction of devices at 28 and 22nm half pitches continues apace, and significant process challenges are driving increased complexity and resultant challenges in patterning, cleaning, CMP and deposition throughout the device manufacturing process.  2012 is forecast to have produced more silicon area at 32nm than any other node, and the introduction of low 20nm half pitches and flash has continued to grow startling rates. 

In total devices manufactured at 65nm and below continued to show strong area growth in 2012 of 14%, with devices at 90nm and above largely offsetting declines from 2011 with 8% growth in 2012, but flat performance on average.