BUSINESS TRENDS
07/01/2008
WSTS halves 2008 growth outlook
Global semiconductor sales are seen growing just under 5% in 2008, better than the 3.2% seen in 2007 but only half of the 9.1% expected just six months ago, according to new calculations from World Semiconductor Trade Statistics Inc. (WSTS). The group remains optimistic that growth will continue through 2009 (5.8%) and peak in 2010 (8.8%).
By individual category, the new WSTS forecast lowers the growth outlook in 2008 to a -5.5% decline versus 4.6% growth in the November update. Other IC categories also aren’t doing as well as had been hoped: analog and micro had been seen at ~12%/10% growth in 2008, respectively, but are now seen managing just 1.9%/5.4%. Logic is the exception, seen rising 13.4% in 2008, better than had been predicted (10.2%). A bright spot in the 2008 market: sensors, now seen enjoying 7.4% growth instead of a previously predicted -1.2% decline.
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Meanwhile, Gartner has slightly raised its forecast for worldwide semiconductor market growth in 2008 from 3.4% to 4.6%, following “seasonally normal” sales in Q1 2008, thanks to strong PC and cell phone unit production, and end-market demand still seems healthy despite macroeconomic concerns.
WORLDWIDE HIGHLIGHTS
Intel, Samsung, and TSMC have set a deadline of 2012 for when they want a 450mm-wafer-capable pilot line tested and ready. No specifics were offered about each partner’s level of participation other than to suggest “a cooperative approach” to minimize risk and costs–nor any suggestion how those costs would be divvied up among the three partners and the supplier community.
Worldwide semiconductor utilization held steady at around 90% in Q1 2008, although a closer look at the numbers from Semi-conductor International Capacity Statistics (SICAS) shows that a surge of leading-edge capacity came online at the start of the year. Total IC capacity growth rose 1.7% Q-Q and 15.1% Y-Y to 2153.8K wafer starts/week (WSPW), while actual wafer starts were 1950.2K, about flat Q-Q but up nearly 20% Y-Y. Overall utilization rates stayed about flat, at 90.5% vs. 90.4% in Q4 2007. Leading-edge capacity (<0.12µm) picked up again in Q1 2008; at <80nm, capacity surged 14.5% Q-Q to 725.5K WSPW, and wafer starts rose 16.2% to 701.9K WSPW, for a utilization rate of nearly 97%.
Intel and Micron say that their joint venture IM Flash has created a 34nm multilevel cell NAND chip (skipping the 4?? node) that can fit in a standard TSOP package. Analysts suggest that, made on 300mm wafers, these would be the first chips to break the $1.00/GB barrier in terms of manufacturing costs.
After initial secrecy that spawned heated speculation, Applied Materials has revealed the source of its mystery ~$2B PV equipment contract: Abu Dhabi Future Energy Co. and the “Masdar City” initiative.
USA
Mentor Graphics has acquired the assets of model-based DFM technology developer Ponte Solutions, one of the last standing DFM vendors (along with Blaze). Personnel and technology will be merged into Mentor’s Calibre organization.
Cymer says it has reached 25W of average continuous EUV power for 1.5hrs, and is on track to achieve 100W average power for production-ready EUV tools in 2009.
Applied Materials has added a service program guaranteeing the performance cost/output of its SunFab thin-film line for producing solar modules. Its first customer: Spain’s T-Solar Global, which ordered a 40MW/yr max capacity SunFab line in 2007.
The US International Trade Commission is launching a wide-ranging probe on behalf of LSI and Agere Systems, to investigate certain semiconductor ICs and products containing tungsten metallization that might be infringing patents. Companies being targeted include Taiwan’s UMC, Nanya, Powerchip, and ProMOS; STMicroelectronics and NXP in Europe; China’s Grace Semiconductor; and a number of US firms, including IDT, Cypress, Freescale, Microchip Technology, National Semi, On Semi, and Spansion.
ASIAFOCUS
Japan’s top seven chip companies–Toshiba, Elpida, Sony, Renesas, NEC Electronics, Matsushita, and Fujitsu Microelectronics–plan to cut their combined capex by 21.8% in fiscal 2008, mainly due to a shift away from the weak memory market. The cutbacks, following declines in the previous fiscal year, identify a move by several companies (notably Renesas and Fujitsu) to system chips, work that involves smaller production scales and custom orders, so production (and capacity investments) can be held back based on demand.
TSMC and UMC (and reportedly SMIC soon) say they plan to raise prices in an effort to offset “structural factors” such as R&D and fab costs. The moves also are seen as ways to not only reverse declining ASPs and boost profits, but also pressure customers to file orders ahead of the busy seasonal periods.
Hynix Semiconductor is reportedly ready to hike its memory chip prices by up to 15% after similar increases in May and April, convinced that the market has firmed up enough to support such a move, according to the Korea Times. Samsung and Elpida are also expected to raise prices.
Japan’s Electric Industry Co. is spinning off its chipmaking operation into a new company and giving a majority (~95%) ownership to Rohm Co., in a deal estimated at ¥100B (~$964M). The Nikkei Daily quoted Oki president/CEO Katsumasa Shinozuka, noting that the business, which made chips for telephone exchanges, had seen its sales ratio vs. the overall company drop “to just a few percent and its synergies with other divisions have all but disappeared.”
Taiwan chip assembler Advanced Semiconductor Engineering and memory firm ProMOS are being wooed by mainland Chinese officials to build a 300mm wafer fab onshore, according to the Taiwan Economic News, citing mainland press reports.
Hynix Semiconductor and ProMOS Technologies have agreed to a partnership that will allow access to the Korean chipmaker’s 50nm-node DRAM stack process technology, and give Hynix access to more 300mm capacity and an 8%-10% ownership stake in the Taiwan memory firm. Separately, Hynix says a blackout briefly halted operations at its DRAM facility in Wuxi, China, a situation that analysts speculate could help the industry’s overall supply/demand balance.
DuPont says it will “soon begin” construction of a R&D site in Hong Kong and a manufacturing facility in Shenzhen, China, to tap into the thin-film side of the high-growth photovoltaic (PV) industry.
Metrology equipment supplier Nanometrics has acquired Tevet Process Control Technologies Ltd., a supplier of integrated metrology technology, through an all-cash transaction.
The Yingli Group is exploring a possible greenfield polysilicon manufacturing project in Baoding, China, with proposed 3000MT annual capacity.
Gas/liquid delivery systems maker Celerity has opened a new 17,000 sq ft manufacturing facility in the Woodlands Industrial Park district in the northern part of Singapore.
EUROFOCUS
The resignation of Infineon president/CEO Wolfgang Ziebart “due to different opinions” on the company’s future strategic direction could be due to butting heads with management about whether to pursue a large industry tie-up, with NXP the likely partner, according to industry reports. No successor will be named; instead board member Peter Bauer will be a spokesperson for the board and focus on a new “IFX 10-Plus” plan to improve profitability through targeting manufacturing costs, “optimized portfolio management,” and organizational efficiencies. Media have speculated that Ziebart’s exit could pave the way for more significant M&A activity involving Infineon and perhaps NXP or Freescale.
STMicroelectronics has reiterated its 2008 financial targets and wants to increase outsourcing to cut costs, though it isn’t planning any more factory closures following last year’s shutdowns in the US and Morocco. “Worst-performing” business will be carved out and “selective acquisitions” will be undertaken, according to chairman Carlo Bozotti, who also predicted that the company will “do better than the market in 2008.”
Soitec and the CEA (French Atomic Energy Commission) have filed a patent infringement lawsuit against MEMC Electronics Materials, alleging infringement upon several patents related to silicon-on-insulator and other technologies.
Air Semiconductor has hired a new CEO and says it is ready to transition “from a development organization into a semiconductor product company” with worldwide operations and customers.