DRAM, NAND woes seen spilling into 2009
10/01/2008
Despite a mild recovery in 2Q08, global DRAM makers are once again building inventories and pulling the rug out from prices, and the buildup will likely push out a full market recovery until the end of next year, according to a new warning by iSuppli.
This spring the DRAM market “bottomed out”and profits improved for a few top-tier suppliers amid hopes that smaller suppliers would soon follow. But rising channel inventories (notably PC OEMs) means contract prices were expected to turn down again in 3Q, notes Nam Hyung Kim, director and chief analyst, memory ICs, at iSuppli.
Also contributing to a 3Q DRAM price plunge was better-than-expected DRAM shipments in 2Q, climbing 15% from 1Q instead of the expected 10%, suggesting that excess inventory is being pushed from the suppliers out to the buyers.
 Preliminary DRAM revenue in US $M, 2Q08. (Source: iSuppli) |
iSuppli thinks DRAM firms’ reduced capex levels will eventually rebalance supply levels, but wafer output will slow to just ~10% growth in 2009 vs. the 40% seen in 2007. And further aggressive migration to sub-60nm process technologies by market leaders Samsung and Hynix will only boost their output and risk further oversupply, perhaps lasting into 1H09 and delaying any market recovery until later in the year.
Meanwhile, in the NAND flash sector, global revenues declined 2.5% in 2Q to $3.36B due to continued high inventory and weak consumer spending. Nevertheless, US-based Micron still managed to post ~12% growth in 2Q to $300M in sales, narrowing the gap with Hynix, thanks in part to an aggressive technology ramp (300mm and sub-40nm). Intel (4.8%) was the only other NAND producer to increase sales in 2Q. Despite the buzz about solid-state drives and other emerging applications, none is expected to offer short-term help to the NAND sector (weighed down by a gloomy economic outlook, excess inventory, slow orders, and weak consumer spending), and iSuppli now projects a -60% decline in per-Mb ASPs for 2008.
WORLDWIDE HIGHLIGHTS
Chip equipment demand was sluggish in 2Q08 in every global region, sputtering along at three- and five-year lows, according to SEMI and SEAJ. Global sales totaled $7.83B in 2Q08, declines of -26% from 1Q08 and -29% vs. 2Q07; orders were down -13% Q-Q and -30% Y-Y to $6.99B.
IBM and joint development partners (AMD, Freescale, STMicroelectronics, Toshiba, and CSNE in Albany, NY) say they have built a working SRAM using 22nm process technologies???but details are being withheld until the IEEE International Electron Devices (IEDM) meeting in December.
Worldwide silicon wafer demand area shipments had been sluggish in previous quarters, but picked back up in 2Q08 to typical seasonal levels, according to data from SEMI’s Silicon Manufacturers Group (SMG).
3D IC start-up, BeSang Inc., teamed up with Stanford University’s Nanofabrication Facility and Korea’s National NanoFab Center, to develop a novel vertical interconnection scheme, claimed to be the world’s first 3D chip manufacturing process.
PDF Solutions is acquiring Triant Holding’s fault detection and classification business, including certain customer contracts, technologies and employees, for $1.75M in cash.
USA
Applied Materials CEO Mike Splinter called 3Q08 the “trough”of the industry’s current downcycle, but pinned any sustainable upswing into 1Q09 on consumer’s year-end holiday spending. The company’s display business is about to plunge from recent historic highs, though its silicon unit and ramping solar biz should pick up most of the slack.
Scientists at the US Department of Energy’s National Renewable Energy Laboratory (NREL) claim to have developed a photovoltaic device that converts 40.8% of incoming light into electricity, the highest confirmed efficiency of any photovoltaic device to date.
Northwestern U. researchers mass-produced the 2008 Summer Olympics logo (15,000 times in 1cm2 of space) using a polymer pen lithography technique.
IBM and Mentor Graphics have partnered to develop 22nm computational lithography software for the IC industry.
DuPont aims to double its production capacity of PV backsheet film by late 2009.
Teradyne is acquiring Eagle Test’s analog/mixed/RF products for $250M to complement its system-on-chip (SOC) know-how.
ASIAFOCUS
Elpida CEO Yukio Sakamoto says his company’s plan to create a $5B DRAM JV in China’s Jiangsu Province is the final stage in an industry “turf war”???with the ultimate prize being simply survival.
TSMC has greenlighted new capex expenditures for 200mm and 300mm capacity, and a new stock buyback program. Meanwhile, Philips Electronics has sold the last of its stake in TSMC, pocketing $390M.
Hynix is criticizing Japan decision to lower, and not eliminate, its chip tariffs, following the US’ removal of its similar duties.
Spansion and SMIC have extended their foundry pact to 43nm.
Korea’s DC Chemical will sell $184M in poly-Si to Japan’s Space Energy, which separately plans to make double-sided solar panels with Hitachi.
LDK Solar has awarded a $220M contract to Applied Materials to supply wafering systems including wire saws and squarers.
July orders for Japan-made chipmaking gear were down 28% Y-Y, falling for the 17th straight month.
MagnaChip tipped power-efficient MOSFETs for LCD TVs and monitors.
Motech has landed a US ~$320M order for 120MW of solar cells from India’s Solar Semiconductor.
Suntech has completed a $100M minority investment in China’s Nitol Solar, and successfully tested initial batches of polysilicon.
Sony says it has developed a 7.2W 635nm wavelength red semiconductor laser array.
Yingli Green Energy plans a new solar plant in Beijing.
EUROFOCUS
Advantest Corporation has completed its buyout of Credence Systems GmbH. The newly formed company, Advantest Europe Systems GmbH, will be located in Amerang, Germany.
Air Products will supply bulk gases to Schott Solar, which separately is reportedly planning an IPO.
Rofin-Sinar and Manz Automation plan to make thin-film PV laser tools. Elsewhere, German startup Solarcoating Machinery and US-based Northfield Automation aim to target PV systems automation.
SEMICON Europa is heading to Dresden’s “Silicon Saxony”region starting in 2009.
Germany’s Bruker AXS is acquiring domestic AFM supplier Surface Imaging Systems.
SolarWorld Group and Evonik Industries AG have inaugurated a joint production plant in Rheinfelden, Germany, to produce solar-grade silicon from monosilane.
Zuken joined the Synopsys HSPICE Integrator Program.
Schott AG plans to more than double solar cell production capacity at its facility in Alzenau, Germany, and relocate its solar biz HQ to Mainz.
Norway’s REC has chosen a site in Quebec for a new silicon plant.