Memory sector ready to rebound? Not quite
06/01/2009
Signs that the DRAM market hit a bottom in 1Q and is poised to rebound don’t quite paint the whole picture, which from a broader perspective still shows things plodding along, far from a meaningful recovery.
Global sales declined 14.3% in 1Q for both DRAM and NAND flash, but are expected to swing to a 3.6% Q/Q increase in 2Q, and then surge to a strong finish with nearly 22% growth in 3Q and 17.5% in 4Q. But sales only tell half of the story. “The oversupply situation will continue to be acute,” noted iSuppli’s Nam Hyung Kim, director and chief analyst for memory ICs and storage, in a research note. Shipments of 1Gb-density equivalent will still outstrip demand through 3Q, he predicted??even if every Taiwan DRAM supplier went dark (taking 25% of global DRAM Mbit production offline). And there’s little else firms can do, besides cutting more capacity and wait for demand to return.
 Global quarterly DRAM and NAND revenues. (Source: iSuppli) |
That imbalance will keep ASPs from bouncing back significantly, and thus keep most suppliers from even sniffing profitability, the real measure of recovery for most memory suppliers. By early 2Q DRAM prices stood at about a third of Taiwan firms’ cash costs, Kim noted, and would need to spike by “a few hundred percentage points to make any kind of impact.”
The picture in the NAND market is more complicated, but similarly the positivity of improved pricing is overshadowed by the reality of too much production vs. still-soft demand. ASPs have sunk to where even market-leading Samsung is nearly at breakeven costs, and even the consumer pulling power of Apple products can’t buoy the entire sector. “Even if Apple’s order surge and it books most of Samsung’s capacity, it would require a commensurate increase in demand to other suppliers to generate a fundamental recovery in demand,” something that had yet to happen, Kim wrote.
Inventory reductions in the channel are mainly attributed to restocking; Toshiba and Hynix won’t keep decreasing production without a demand spike (unlikely near-term with the global recession), so the imbalance continues, and all players (except Samsung for the moment) suffer with losses.
“Production cuts undoubtedly will have a positive impact on the market in the future,” Kim said, but warns that “the surge in optimism is premature.”
WORLDWIDE HIGHLIGHTS
The combined impact of memory oversupplies and a demand crash worsened by a global economic tailspin led to a -32% plunge in semiconductor capex in 2008, “one of the worst years in the history of the semiconductor capital equipment industry,” according to Gartner. But cheer up: the firm sees only a -13% slump in 2009.
IBM and its alliance partners Chartered, GLOBALFOUNDRIES, Infineon, Samsung Electronics, and STMicroelectronics released an evaluation kit for their 28nm, high-k/metal gate (HK+MG), low-power bulk CMOS process technology, with early “risk production” expected to start in 2H10.
SEMATECH and Tokyo Ohka Kogyo have finalized a partnership to develop EUV resists and materials for the 22nm node and beyond, at the consortium’s new Resist Materials and Development Center at the U. of Albany’s CollEge of Nanoscale Science and Engineering (CNSE).
European R&D consortium IMEC and chemicals/materials supplier Cytec Industries are collaborating to develop “a commercially viable” technology for organic photovoltaic devices, addressing stability issues and a new barrier/encapsulation technology.
Toshiba, Nakaya, and Amkor are forming a JV to provide system LSI assembly/test services, targeting October 2009 as a startup date.
Varian Semi. Equip. Assoc. and Soitec are collaborating to develop a high-current implanter for Soitec’s Smart Cut technology, eyeing the 22nm node.
USA
This year’s class of inductees into the National Inventors Hall of Fame — headlined by Gordon Moore, Jean Hoerni, Aflred Cho, and George Heilmeier — honor the 50th anniversary of the integrated circuit (IC).
SVTC Technologies has raised an additional $34 million from existing investors Oak Hill Capital Partners and Tallwood Venture Capital, to be used in part for expanding capabilities to support analog, bio-device, and optical components technologies.
Mentor Graphics has acquired LogicVision, a developer of proprietary built-in self-test (BIST) technology, in a stock deal worth approximately $13M.
Ovonyx has licensed patents and IP relating to phase-change memory technology to Numonyx, the JV combining Intel’s and STMicroelectronics’ former flash memory businesses.
Asyst Technologies has filed voluntary Chapter 11 in the US, and its two subsidiaries have filed for similar protection in Japan.
TriQuint Semiconductor has been accredited by the Department of Defense as a CatEgory 1A ‘Trusted Foundry’ for its 100mm gallium arsenide (GaAs) facilities in Richardson, TX, the highest award from the DoD, which opens up new business for classified programs.
ASIAFOCUS
Renesas and NEC are reportedly mulling a merger of operations by the end of the current fiscal year, which would create the third-largest global chipmaker behind Intel and Samsung.
UMC has proposed a $285M acquisition of Chinese partner HeJian Technology, which owns a 200mm/0.18µm, 41,000 wpm facility. The two firms’ relationship was the target of intense scrutiny by the Taiwanese government from 2005-2007.
Fujitsu is partnering with TSMC to send 40nm logic manufacturing work to the foundry; the two companies also intend to “initiate discussions” on extending to 28nm and below.
Japanese test equipment supplier Advantest is consolidating several manufacturing subsidiaries and closing a factory. Toshiba, meanwhile, said it will continue extended temporary leave at chip plants in several locations until June.
SAFC Hitech and Air Water are extending their materials research services pact to Japan’s silicon and compound semiconductor markets.
Hynix has developed a 1Gb DDR2 DRAM for mobile devices using 54nm process technologies.
Researchers from Korea’s Gwangju Institute of Science and Technology (GIST) have developed a plastic-based solar cell with efficiency rate of 6.2%, the highest achieved by a single-layer plastic organic PV cell.
Jordan Valley’s JVX 6200 X-ray metrology tool has won a seat at TSMC for copper layer thickness metrology.
EUROFOCUS
Freescale plans to close 150mm fabs in France and Japan in order to save $100M/year. NXP, meanwhile, reportedly has found unnamed buyers for its site in Caen (France).
ASMI is lining up new investors in the semiconductor sector: Intel Capital has bought a 4% stake, days after Tokyo Electron Ltd. (TEL) took a 4.9% stake as a long-term investment.
Q-Cells has sold its 17% stake (85M shares) in silicon supplier REC in order to pay down some credit.
Germany’s Roth & Rau is acquiring cleanroom specialist Ortner Cleanroom Logistic Systems for an undisclosed amount, strengthening its service and parts capabilities.
Sunfilm and Applied Materials have ramped to volume production of the world’s first tandem-junction SunFab line at Sunfilm’s site in Grossroehrsdorf, Germany, citing efficiencies of up to 8%.