BUSINESS TRENDS
08/01/2008
Caution, uncertainty extend 2008 capex slump, cloud 2009 recovery
Things are looking bleaker by the month for companies serving semiconductor makers. Gartner has lowered its capex forecast yet again, down to -22.5%, amid a bursting memory industry bubble, global economic uncertainties, and “little upside potential currently visible for the near term.”
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Overcapacity and oversupplies (both DRAM and NAND flash) have sunk prices and profits for most memory producers, who now can move unit volumes “only at fire sale prices,” wrote a trio of Gartner analysts (Bob Johnson, Mark Stromberg, and Klaus Rinnen) in a report. Memory capex is seen dropping -32.1% versus a 3% increase in sales. Meanwhile, a greater adoption of fab-lite strategies and reliance on foundries for more advanced production will drop IDM spending by -13% this year. IDMs are increasingly in a situation where slowing growth rates and costs required to keep pushing to new technology nodes will necessitate cautious spending. But foundry spending hasn’t increased reciprocally, instead using that demand to leverage higher utilization rates. Foundries will spend -27.6% less this year, Gartner says, as their attitude changes from “If we build it, they will come,” to “If they come, we will build it,” the analysts note.
Gartner still sees a market rebound in 2009 of about 7.6% growth for overall capex, about in line with what it forecasted in April, and peaking at a 18% climb in 2010, better than the 12.5% from its previous forecast. That’ll be followed by another downturn in 2011 (-9.4%) and another rebound in 2012 (7%). CAGR for the six-year period through 2012 is a scant -0.9% decline.
WORLDWIDE HIGHLIGHTS
SEMI said semiconductor equipment demand slumped to three-year lows in May, to levels not seen since mid-2005.
Unexpected strength in the PC market is good news for microprocessor (MPU) suppliers, with both AMD and Intel touting gains from different perspective, according to the latest data from iSuppli.
Israeli firm Orbotech, a supplier of automated optical inspection equipment for printed circuit boards and flat-panel displays, has agreed to purchase Photon Dynamics for $290M in cash.
Wincroft Inc. has signed a Letter of Intent to acquire Apollo Solar Energy Inc., a Delaware corporation that indirectly owns 100% of the equity of Sichuan Apollo Solar Science and Technology Co. Ltd., a wholly foreign-owned enterprise organized under the laws of the People’s Republic of China.
IBM and Tokyo Ohka Kogyo have agreed to jointly develop processes, materials, and equipment for producing CIGS solar cell modules.
MEMC Electronic Materials Inc. and Tainergy Tech Co. Ltd. of Taiwan have executed a definitive agreement for MEMC to supply solar wafers to Tainergy. MEMC will supply solar wafers to Tainergy over a 10-year period, with pre-determined pricing, on a take or pay basis beginning Q3 2008.
Nichia Corp. filed a patent infringement lawsuit in Germany against a Korean company, Seoul Semiconductor Co. Ltd., a German subsidiary of Seoul Semiconductor, Seoul Semiconductor Europe GmbH, and its German distributor, Conrad Electronic SE. The subject of this lawsuit, seeking an injunction and recovery of damages, is against the Acriche Series White LED product manufactured by Seoul Semiconductor, which Nichia believes infringes their patent [EP(DE)622858].
Solar Semiconductor has a strategic partnership with AS Solar GmbH, a reseller of Solar PV products in Europe. This multi-year partnership is valued at about US$695M.
Celerity Inc. has reached an agreement with Fujikin Inc., a Japan-based supplier of advanced fluid and gas components and control systems, for Fujikin to market, sell, and support privately labeled Celerity mass flow controllers (MFCs) in Japan.
USA
Automated test equipment providers Credence and LTX say they have agreed to merge their companies in a deal that they project will save them ˜$25M.
Spansion says it is extending its plan to hand off manufacturing and technology work to external partners to focus on its MirrorBit flash memory technology and its SP1 300mm flash memory fab in Japan.
Entegris (Chaska, MN) has signed a definitive agreement to acquire privately held Poco Graphite Inc. in an all-cash transaction valued at $158M.
Aviza Technology Inc. has licensed its VTR Vertical Furnace product line to Expertech Inc., a manufacturer of diffusion and LPCVD furnaces for large-scale production.
Mattson Technology Inc. and Synopsys Inc. have a collaboration to offer calibrated process models for flash annealing equipment used on the 45nm node and beyond.
SVTC Technologies has officially opened its Silicon Valley Photovoltaic Development Center in San Jose, CA.
Dow Chemical is acquiring Rohm & Haas in a cash deal worth about $15.3M. The deal will also require a $3B equity investment from Berkshire Hathaway (becoming Dow’s largest shareholder) and $1B from the Kuwait Investment Authority.
ATMI Inc., which provides specialty materials to semiconductor makers, has agreed to settle a legal dispute with industrial gas producer Praxair Inc., resolving patent infringement litigation going back to 2003.
Aviza Technology Inc. has licensed its VTR Vertical Furnace product line to Expertech Inc., a manufacturer of diffusion and LPCVD furnaces for large-scale production
Microsemi Corp., a manufacturer of high-performance analog mixed signal integrated circuits and high-reliability semiconductors, has acquired most of the assets of SEMICOA, a military/aerospace IC firm.
Electro Scientific Industries Inc. announced receipt of a purchase order from STMicroelectronics, a producer of system-on-chip (SoC) technology, for the Cignis laser singulation system. The formal introduction of the Cignis system was announced last month at SEMICON West.
Evergreen Solar Inc. has signed a new, long-term contract with IBC Solar AG valued at about $1.2B. The contract extends through 2013 and brings Evergreen’s total contractual backlog to nearly $3B with five customers.
The Fab Owners Association (FOA), the association of semiconductor/MEMS manufacturing executives and suppliers, has announced the addition of it newest device-maker members: Infineon Technologies, Maxim Integrated Products, SVTC Technologies, and ANADIGICS Inc.
ASIAFOCUS
Air Liquide is investing ˜???35M to expand gas capabilities at the Hynix-Numonyx 300mm NAND memory JV in Wuxi.
Toshiba and SanDisk are scaling back their joint 200mm NAND work.
Toppan Printing Co. Ltd. says it has developed the first 32nm-generation photomask manufacturing process, for 193nm immersion (water) lithography.
SMIC has received core 45nm equipment and plans to ramp up by year-end.
Sharp and Renesas are using nanobubbles to remove perfluorooctane sulfonate from wastewater generated in semiconductor manufacturing.
Taiwan’s Industrial Technology Research Institution (ITRI) hopes to be manufacturing improved dye-sensitized solar cells in three to five years.
Organo is hiking capacity for ion exchange resin beads used in its pure water production systems, used as a cleaning solvent in semiconductor manufacturing.
Japan’s Probe Inc. plans to start subcontracting semiconductor testing in Taiwan by establishing a joint venture there with local chipmaker Powertech Technology Inc.
Applied Materials has broken ground for a new facility in Singapore that will serve as a hub for the company’s business activities throughout Asia.
Toshiba will include Cymer’s krypton fluoride (KrF) and argon fluoride (ArF) light sources in its 300mm memory fab in Japan.
DC Chemical Co., a South Korea-based polysilicon manufacturer, has signed an 833.2B won (US$795M) deal with Taiwan’s Green Energy Technology Inc. to supply polysilicon between 2010 and 2016.
The Woongjin Holdings Co. is spending 100 B won (US$95.9M) to establish a subsidiary to produce and sell a key raw material used for making solar cells. Woongjin Holdings, the holding company of Woongjin Group, will own the entire stake in the polysilicon unit, tentatively named Woongjin Polysilicon Co.
Rohm and Haas Electronic Materials, CMP Technologies, has opened its Asia Technical Center (ATC) in Hsinchu, Taiwan.
EUROFOCUS
Advantest has agreed to buy Credence’s operation in Amerang, Germany, for $5M.
Intel Capital, Intel’s global investment firm, has led a group of investors that injected 85M euros of fresh capital into Germany’s Sulfurcell Solartechnik GmbH for the latter’s investments to expand production.
Pevafersa Group has chosen Praxair Inc. as the supplier of gases, gas equipment, and gas management services for Pevafersa’s solar cell manufacturing facility in Toro, Spain. Praxair will provide on-site supply of gases as well as gas delivery equipment and management services needed for the project.
The EU is opening an inquiry into public aid
given to Germany’s EverQ, a three-way JV among Evergreen Solar, Q-Cells, and Renewable Energy Corp.