World News
01/01/2006
BUSINESS TRENDS
Cell phones, consumer resiliency underscore strong chip sales in 2005
Consumers’ uncurbed appetite for cell phones and digital entertainment gear as well as a jump in demand for electronics from the developing world, mean 2005 chip sales are coming in slightly stronger than expected, according to a forecast update from the Semiconductor Industry Association (SIA).
The SIA says that 2005 chip sales will be up 6.8% to $227.6 billion, nudged up from the 6.0% estimate at midyear. This year will see slightly lower growth than projected at mid-2005 - 7.9% instead of 8.8%, to $246 billion - with double-digit increases returning in 2007 (10.5%, to $271.3 million). The trade group is holding to its longer-term forecast of 9.8% annual growth through 2008, with a 13.9% jump to a $309 billion market that year.
 The Asia-Pacific region appears perennially strong; all regions are projected to see >10% growth in 2008. (Source: SIA) |
SIA president George Scalise said demand remains strong across the board for consumer products, including digital TV sales (+65%), MP3 players (+58%), and digital cameras (+15%), although demand for cell phones and PCs was much stronger than anticipated. Another surprise has been the soaring demand for electronics outside of the traditional developed economies. Doug Andrey, SIA principal industry analyst, noted that PC sales were up 15% instead of the 10% projected - and that 75% of unit growth came from areas such as India, Latin America, and Africa. Fastest growth continues to come from the Asia-Pacific region, where sales are expected to rise 11%-16%/year through 2008.
US consumer spending remains surprisingly unaffected by high gasoline and heating costs, despite all those projections that households would have to cut back purchases in other areas. Still, Andrey acknowledged that the SIA depended on retail sales data for its figures, and it was a bit too early to know the true impact energy prices may have had on end-of-year holiday spending. - James Montgomery
WORLDWIDE HIGHLIGHTS
USA
Metron Technology Inc. has agreed to purchase all of the outstanding shares of ChemTrace Corp. and ChemTrace Precision Cleaning Inc., both privately-held companies, for an undisclosed cash amount. ChemTrace will be operated as part of Metron, a wholly-owned subsidiary of Applied Materials Inc.
Hemlock Semiconductor Corp., a silicon producer, plans to invest $400-$500 million to expand capacity 50% at its Hemlock, MI, headquarters. The company, a joint venture of Dow Corning Corp., Shin-Etsu Handotai Co. Ltd., and Mitsubishi Materials Corp., projects the capacity will be needed as solar industry demand grows.
Agilent Technologies Inc., Palo Alto, CA has acquired privately held Molecular Imaging Corp., a developer and manufacturer of nanotechnology measurement tools including AFMs, for an undisclosed amount.
ASIAFOCUS
A group of US-based IC R&D and manufacturing companies is breaking ground on a $2.5 billion IC manufacturing and R&D center in Tianjin, China, with aims to eventually build up operations for 200mm and 300mm CMOS chip production. The cooperative effort involves CMD International (Tianjin) Electronic Co. Ltd. and state-backed Tianjin Economic Technological Development Area.
eASIC has selected Fujitsu as a foundry partner to make its 90nm-based ASIC devices, utilizing maskless direct-write e-beam technology. Following tapeout, the product is now undergoing testing and development, with scheduled release in 1H06.
EUROFOCUS
A regional planning board has reportedly approved an application from Intel to build a 16,000m2 addition (“Fab 24-3”) to its 150-acre operations in Leixlip, although the company hasn’t made any official plans to commence construction. The new facility, involving investments reportedly up to $2 billion, was approved with some conditions, including traffic management issues and preserving the flood plain of the nearby Rye Water tributary. In addition, Intel plans to build a new $3.5 billion, 300mm wafer fabrication facility at its site in Kiryat Gat, Israel. The new factory will produce 45nm chips and will be operational in 2008.
Six companies that supply parts to Dutch-South Korean company LGPhilips LCD, which makes LCD screens, signed an agreement with the Polish government to build a US$360 million factory in southwestern Poland. LG Philips LCD is a joint venture between South Korea’s LG Electronics and Philips of the Netherlands.
Infineon Technologies AG is expanding its 65nm development and manufacturing partnership with IBM, Chartered Semiconductor, and Samsung, by having Chartered manufacture 65nm logic products for low-power mobile phones, with initial prototypes due in 1Q06 and production by 4Q06. Infineon employees in the US and Europe will transfer the process technology into Chartered’s 300mm Fab 7.