Spansion tops Intel in tough NOR flash market
04/01/2007
Market conditions for NOR flash memory weren’t as harsh in 2006 as they were in 2005, but it was still no picnic with ASP getting pummeled, especially in the mobile phone sector, according to data from iSuppli Corp.
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Worldwide NOR flash revenue rose about 8.1% to $8.49 billion in 2006, led by new king Spansion, which enjoyed 25% growth to take the top spot for the year, and tack on four percentage points to its annual market share (30.4%). Nos. 3-4, STMicroelectronics and Samsung, also surpassed the market’s total growth, with 21.2% and 36.1%, respectively, while Intel lagged behind in a tough year, falling nearly 10%.
Despite rebounding from a “brutal” 15.5% decline in 2005, the NOR flash market was still a tough place to be in 2006, according to Mark DeVoss, senior analyst with iSuppli. Despite increasing unit shipments, suppliers continued to post losses due to severely eroding ASPs in all market segments, but particularly in the largest market segment of mobile phones, he said, in a statement.
Spansion posted the top revenues in the segment in 4Q for the fifth consecutive quarter, but its $687 million in revenues were about 5% below expectations, and the company missed breakeven operating margins, “attributable mainly to a large miss at a single customer in the mobile-phone segment,” according to the analyst firm. Intel, meanwhile, boosted NOR flash sales by nearly 14% in 4Q to $531 million, which suggests it is “girding itself for a head-to-head battle with Spansion,” the firm said.
Intel and ST had a particularly challenging time this past year in the NOR flash segment, both trying to integrate their NAND flash operations and prop up bottom lines, and rumors have swirled about a possible consolidation or even an exit from the market. In December ST essentially created a separate flash memory group amid a product business reorg, to address “industry consolidation and financial deconsolidation.”
WORLDWIDE HIGHLIGHTS
Global sales of semiconductors rose 8.9% to a record $247.7 billion in 2006, driven mainly by a host of consumer-oriented end products including cell phones and HDTV sets, according to final tallies by the Semiconductor Industry Association (SIA). Chip sales in December fell 3.6% from the prior month, per the usual rampup to meet holiday demand, but were up 9% from December 2005. Sales for the entire fourth quarter were also up 9% year-on-year, and 1.9% vs. 3Q06, to $65.2 billion. Growth was driven by cell phones, MP3 players, and HDTV sets, all of which are seeing lower costs and improved functionality due to increased use of semiconductor technology, noted SIA President George Scalise.
North American suppliers of semiconductor manufacturing equipment enjoyed a double-digit boost in demand for their tools to kickstart 2007, and sales picked up as well, mainly due to capacity investments from memory firms, according to the latest data from SEMI. Worldwide billings (a three-month average) totaled $1.617 billion in January, a 9.1% increase from December, and 28.4% higher than January 2006. Bookings, meanwhile, rose 14.1% sequentially and almost 40% year-on-year to $1.708 billion. The January B:B rose to 1.06, meaning that $106 worth of orders were received for every $100 of product billed for the month.
Wafer demand surged in 2006 after moderate single-digit growth in 2005, with both revenues and shipments up >20% due in large part to memory investments and growing adoption of 300mm processing, according to new data from SEMI. Silicon wafer area shipments totaled 7996 million square inches (MSI), a 20.3% increase from last year, when shipments rose just 6.1%, thanks to an increasing mix of 300mm wafer products. Revenues also achieved double-digit growth (26.7% to $10.0 billion), following just 8.2% growth in 2005. The final 2006 results suggest that 4Q06 wafer shipments were essentially flat from 3Q, recording 2072 MSI.
USA
Applied Materials Inc. says it will cease development of beamline implant products, close its Applied Implant Technologies group in Horsham, UK, and phase support including new and refurbished tools into its global services arm. About 270 employees will be affected by the closure, which is expected to be completed by year’s end at a rough cost of $90-$130 million.
Intel Corp. has tipped a “research chip” programmable processor with a single 80-core chip that achieves “teraflops performance” (trillions of calculations/sec), and consumes just 62W of power, less than that of some of today’s single-core processors. Future “tera-scale” research will involve developing more prototypes with general-purpose Intel Architecture-based cores, and adding 3D-stacked memory.
Honeywell Electronic Materials, Tempe, AZ, says it will invest >$1 million to expand its advanced packaging materials R&D center in Spokane, WA, by year’s end, adding ~85 new pieces of equipment for more work on thermal interface materials, and adding a new metrology lab to replicate customer manufacturing obstacles and test for solutions.
ASIAFOCUS
In a paper at the International Solid State Circuits Conference (ISSCC), Renesas Technology Corp. and Matsushita Electric Industrial Co. Ltd. say they have developed a technique that achieves stable operation with 45nm bulk CMOS, instead of silicon-on-insulator (SOI), for SRAM that can be embedded in system-on-a-chip (SoC) devices and microprocessors. The six-transistor type SRAM memory has two elements: a read-assist circuit that employs resistance of passive elements in a compensation function (laid out like a memory cell) and adjusts voltage automatically with respect to temperature and process variations; the other element is a write-assist circuit using eight hierarchically structured power supply lines to reduce power supply line capacitance in critical areas.
NXP Semiconductors (née Philips Semiconductors) and Taiwan’s Advanced Semiconductor Engineering Inc. (ASE) have agreed to form a joint venture in China to offer semiconductor testing and packaging for domestic and international markets across a range of semiconductors such as mobile communications, consumer electronics, and automotive products. The ASE-majority-owned venture (60/40), scheduled to begin operations in 2Q07, will be housed at NXP’s existing manufacturing site in Suzhou, and will utilize NXP’s Suzhou-based testing and packaging operation.
STMicroelectronics has expanded its partnership with India’s BITS Pilani and IIT Delhi to combine its capabilities with the two institutes’ research capabilities, to proliferate VLSI design and embedded systems knowledge.
Sony Corp. plans to slash its chip spending in the next few years, and may look to outsource production of the next version of chips used in its PlayStation 3 gaming console, in a move to improve profitability. Sony, which already makes 90nm−65nm Cell chips for the PS3 and plans to move to a 45nm version in late 2008 or early 2009, spent about $3.8 billion on semiconductor investments in the three years since April 2004, but those investments are likely to come down “significantly,” said executive deputy president Yutaka Nakagawa, quoted by Reuters.
Air Products has broken ground on a new plant to produce nitrogen trifluoride (NF3), used in chamber cleaning processes for semiconductor and flat-panel manufacturing, adjacent to the company’s existing facilities in Ulsan, South Korea. Phase One of the new site will ramp to around 500 metric tons/year by late 2007, about 20% of the company’s projected NF3 global output.
GSI Group, a maker of motion control and laser-based components, says it will move additional laser and high-speed air-bearing spindle manufacturing operations from two of its UK facilities to Suzhou, China, by the end of this year.
Gigaphoton has completed construction of a new building at is headquarters in Oyama, Japan, including a Class-1000 cleanroom with expanded R&D capabilities, laser light source maintenance training, customer support administration functions, and a spare parts warehouse. The extra facility will double manufacturing capacity for the company’s laser systems by as early as April.
EUROFOCUS
Silicon Laboratories Inc. has agreed to sell its cellular communications business to NXP Semiconductors (née Philips’ chip business) for $285 million in cash, in what NXP’s top exec deemed “a first step in the upcoming wireless industry consolidation.” The deal incorporates Silicon Labs’ Aero RF CMOS technology-based transceivers for cell phones, as well as monolithic cellular systems chips (the AeroFONE single-chip phone and power amplifier product lines).
Infineon Technologies AG says that it has been selected by Nokia to supply baseband and RF chips for GSM mobile handsets. Infineon’s E-Gold voice single-chip system-on-chip, combining a baseband processor, radio frequency transceiver, power management unit and RAM, will go in “selected future entry-level phones.”
Advanced Energy Industries Inc. said it will close its RF components operation in Stolberg, Germany, and transfer manufacturing operations mostly to facilities in China and the US by October of this year. The Stolberg location, acquired with the March 2002 purchase of Dressler HF Technik GmbH, focuses on RF power products, including power generators that are sold primarily to semiconductor capital equipment and solar cell manufacturing customers, as well as other RF products, including matching networks, high-power generators, and linear amplifiers. The business currently contributes to approximately 5% of the AE’s total annual revenue.
A UK-based consortium of companies has won business from the DTI to research medical applications of a new MEMS microgenerator. The two-year “Self-Energizing Implantable Medical Micro Systems” (SIMM) project, funded with GBP 500K (US $976K) matched by the participants, will prototype a device capable of harvesting energy from movement in or on the body, to provide power and prolong the life of electronic medical implant devices such as cardiac pacemakers, prosthetic joint wear monitors, and nerve stimulation.
The Linde Group has sold BOC Edwards’ Polish gases activities to Air Products and Chemicals Inc. for €370 million (~US $481.3 million), a divestiture required by antitrust conditions arising from Linde’s Sept. 2006 acquisition of the BOC Group.