BUSINESS TRENDS
06/01/2007
Gartner dims 2007 tool outlook amid memory, demand concerns
Acknowledging “considerable downside risk” due to memory oversupplies and pricing declines, Gartner Dataquest now projects a -1.5% decline in overall semiconductor capital spending this year to $55.23 billion, instead of a 1% increase. 2008 also will see lower growth (10.7% vs. 16.1% as previously forecasted), according to the firm, which also has muted its outlook for 2009 (-6.1% instead of -8.3%) and 2010 (-2.2% instead of -2.6%).
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Memory overspending will remain a concern into 2008, and weakness in the sector already impacting second-tier firms could spread to top-tier suppliers, likely resulting in “swift spending cuts” and broader-based equipment order pushouts, Gartner predicts. 1Q seems to have been the trough for SATS companies and the PAE sector, “but visibility remains poor.”
Memory ASPs are still being watched closely as they sink to or even below cost (~$2-$3). And questions still surround a number of end-demand variables, including enterprise sales of the Vista OS, the upcoming US presidential election and Beijing Olympic Games, rising gas prices and soft housing market, and weakening US GDP projections .
WORLDWIDE HIGHLIGHTS
Citing a number of factors ranging from mobile-phone shipments to lingering excess inventories and a slumping DRAM market, iSuppli Corp. has lowered its outlook for 2007 semiconductor sales to about 8% from 10.6%, and IC Insights has cut its outlook for 2007 semiconductor IC sales growth from 7% to just 2%.
1Q07 was ugly for most DRAM firms, and the biggest benefit by attrition was Hynix Semiconductor Inc., which significantly narrow the lead of No. 1 supplier Samsung Electronics Co. Ltd., according to data from iSuppli Corp. Overall DRAM sales slumped 9.9% in 1Q07 to $9.67 billion, though still 49% growth from a year ago. Total DRAM unit growth of 21% Q-Q beat expectations-the highest growth rate since 3Q02, noted the firm-and offset a punishing 26% Q-Q decline in ASPs. The quartet of Hynix, Promos, Elpida, and Powerchip all exceeded the DRAM market’s Y-Y unit shipments, each more than doubling bit production growth compared with a year ago-suggesting that their respective partnerships are growing and taking share from competitors.
A Carlyle Group-led consortium seeking to snap up packaging services firm Advanced Semiconductor Engineering (ASE) has called off its pursuit, though other private equity firms reportedly are eyeing possible bids. Meanwhile, Carlyle has moved on to invest in Japanese assembly/test house Nakaya Microdevices Corp.
USA
Reevaluating its business model to push back into profitability, AMD is slowing the 200mm-300mm transition at its Fab 30 in Germany and moving toward an asset-lite model. The company also has launched a $2.2 billion sale of notes to raise needed capital.
Researchers at SEMATECH’s Mask Blank Development Center at the U. of Albany have located, marked, and measured 10nm silicon particles intentionally deposited on a quartz mask blank, precision seen as necessary for EUV lithography at the 22nm node.
Schott Lithotec, the last US supplier of photomask plates, is ceasing production and will sell its Poughkeepsie, NY facility, finally deciding that lower ASPs and a shift of customers to Asia means it’s no longer a viable business to be in.
The US Citizenship and Immigration Services department received more than twice as many applications for the 65,000 available spots for 2008 H-1B visas-the very same day that the group started accepting applications (April 2).
ASIAFOCUS
Qimonda AG plans to spend about €2 billion (~US $2.73 billion) over five years for a new 300mm DRAM fab in Singapore. Construction is slated to begin this year, with production starting in 2009 and ramping to 60,000 wafers/month by 2012.
Infineon Technologies and Hindustan Semiconductor Manufacturing Corp. (HSMC) have agreed to build at least two fabs in Hyderabad, India-a $1 billion 200mm/0.13µm CMOS facility, followed by a $3.2-$3.5 billion 300mm fab. Infineon also will license its design libraries for ICs targeting mobile phones, ID cards, and automotive applications.
TSMC aims to begin 45nm production by September, ahead of initial 4Q07 plans, starting with a low-power 45nm process, then a general purpose and high-performance process, and a 45nm logic family with low-power triple gate oxide option.
Hynix Semiconductor Inc. has begun construction of its new $4.1 billion Fab M-11 300mm facility in Cheongju, South Korea, with sub-48nm NAND flash memory production planned by 3Q08.
Fujitsu Ltd. is delaying a planned capacity expansion of 300mm/65nm production at its Mie Prefecture facility-down to 18,000 wafers/month by March 2008 instead of projections of 25,000 wafers/month-and will slow future expansion as well, according to Japanese wire reports.
Elpida Memory Inc. plans to produce up to 80% of DRAMs at its site in Hiroshima, Japan, with 70nm process technology by year’s end, note Japanese news reports. The site originally had been projected to reach bout 20% of the mix of the process technology by the end of September, and raise that output to ~50% of chips produced by year’s end.
Japan’s DENSO Corp. says it will spend about $200 million (¥24 billion) to establish a third company to produce automotive semiconductor products, targeting sales of ~$850 million (¥100 billion) by fiscal 2015. Denso Electronics Corp., to be established in Chitose, Hokkaido, will be the company’s third such production facility for the automotive chips, complementing other locations in Kota and Takatana.
Anadigics Inc. wants to build a 150mm GaAs wafer fab in China’s Jiangsu Province, to cost $10-$15 million over the next two years. Initial production is planned for late 2009.
EUROFOCUS
Soitec says sales grew 41.5% in fiscal 2007 vs. a year ago to about 372.0 million euros. Growth slowed in each fiscal quarter on a year-on-year basis, and the company remains cautious in the short-term mainly due to inventory, but still expects solid growth in 2H07.
ON Semiconductor and Masaryk U. in the Czech Republic have opened a lab facility for basic silicon and microelectronics R&D.
Royal Philips Electronics has spun off programmable IP startup Silicon Hive BV, formed in 2003 to commercialize Philips Research’s technology for consumer and mobile devices.
Scottish firm MicroEmissive Displays has officially opened a new €10 million volume manufacturing facility in Dresden, Germany, to produce components used in microdisplays for glasses, head-mounted displays, and electronic viewfinders. Proximity to Fraunhofer and the local semiconductor technology cluster were cited as reasons to locate the facility there.