World News

08/01/2010

BUSINESS TRENDS

Is rising inventory a concern?

New buzz in the industry shows inventories are on the rise, but with mixed opinions whether it's time to sound the alarms.

Bill McClean of IC Insights still sees ~30% growth in 2010, but notes that IC unit shipments overshot in 2Q, particularly in application-specific analog and logic. (Analog ICs for cell phones swelled 66% in May vs. a year ago though sales only rose about 3%, for example.) "This type of IC unit volume increase should always raise some concern," he said, adding that the communications sector is a good early-warning signal for the industry as a whole.

Craig Berger from FBR Research points out that days-of-inventory (DOI) is creeping up all across the supply chain. "Downstream customers no longer replenish inventory and could begin to de-stock inventory," he warns in a research note.

Credit Suisse's John Pitzer sees "a bullish trendline" for general enterprise, industrial, wireless, smartphones, and anything tied to Apple—but "the PC food chain at the very least is off to a slow start," he writes. Several PC OEMs have cut back their build plans; weakness seems concentrated to the US consumer channel, he adds.

Deutsche Bank's Ross Seymore, though, says fears of inventory build are "overblown." Three consecutive quarters of building simply means they are "returning to ‘normal' levels" and are "lean by any historical basis," he points out in a research note—13% below its 2006 peak even though sales today are ~20% higher. Further down the channel, semiconductor "customer" inventory rose 11% in 2Q but is still -15% below its prior peak levels, on just -4% lower sales.

WORLDWIDE HIGHLIGHTS

Synopsys remained the top EDA product seller in 2009, but Mentor passing Cadence to become #2 highlights the market's shift toward ESL methodology, says Gary Smith EDA.

TSMC has hiked its 2010 capex budget to $5.9B (vs. $4.8B), of which it spent $3.1B in 1H10. Analysts, though, worry about a "period of digestion" in the next year as new fabs come online from TSMC, UMC, GlobalFoundries, and Samsung.

Scientists from Singapore, Korea, and the UK have built thin metallic lines with line width roughness below the ITRS' 2010 targets, using an organometallic material and a combination of -beam lithography and subsequent gas treatment.

NORTH AMERICA

GlobalFoundries has hired ex-Magnachip and ChipPAC exec Robert Krakauer as its new CFO.

Intel has demo'd a silicon-based optical data connection that can move data up to 50Gbit/s, many times faster than today's copper technology.

The US District Court in Minneapolis, MN, has backed a previous finding that Camtek infringed a Rudolph Technologies' patent related optical inspection of semiconductors using strobing illumination.

ASIAFOCUS

Samsung has begun mass production of its 30nm 2Gb "Green" DDR3.

Elpida and Taiwan partners Promos, Rexchip, and Powerchip will produce "ultrasmall" DRAM for 65nm production, according to the Nikkei daily.

SMIC says it has "successfully" ramped production of its 65nm low-leakage process; a 55nm process is expected by year's end.

UMC has procured ~$40M worth of 300mm fab tools from Texas Instruments, said to be earmarked for capacity expansions at the foundry's Singapore facility.

Elpida Memory has developed 40nm-based 2Gb DDR2 mobile RAM, expected to become the main product at its 300mm Hiroshima plant.

Renesas is retrenching with a ¥77B plan to outsource 25% of production to foundries, shutter some facilities, and narrow its focus to its core microcontroller business, report the Nikkei daily and Nikkei Business Daily.

Under a new licensing deal, 3S Korea will manufacture and sell Entegris' 300mm front opening shipping box (FOSB) products.

EUROFOCUS

A new European R&D project consortia, "European Silicon Photonics Cluster," aims to raise awareness of the potential of silicon photonics.

NXP has signed a five-year deal for Applied Materials to service equipment at its 200mm facility in Nijmegen, Holland.

CEA-Leti has debuted a low-power reconfigurable (in <50µs) multicore chip for radio applications.

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