World News
12/01/2004
Business Trends
Chip demand slows in 3Q, but overall growth steady
VLSI’s latest monthly data shows a mixed bag for chip and equipment demand: several multiyear highs and lows, but in the end, growth that’s right where it’s supposed to be.
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September’s IC orders (a three-month average) were a year-low $13.49 billion, down 6.1% from August and 0.9% from September 2003. Billings, however, jumped 26% sequentially and 24% year-on-year to $18.40 billion, a level not seen since September 2000. The IC B:B ratio slid further below parity to its lowest level since July 2001 at 0.87, down from 0.94 in August and 1.11 a year ago. (A book-to-bill ratio of 0.87 means that $87 worth of new orders were received for every $100 of product billed for the month.)
Worldwide equipment sales also showed strength in September, up 21.1% sequentially and 37.3% year-on-year to $4.85 billion, while equipment bookings fell 5.8% in September to $3.71 billion, a slight 1.8% gain from a year ago. The B:B was 0.81, its lowest level since July 2002, compared with 0.93 in August and 1.03 in September 2003.
Worldwide Highlights
Fabless heavyweight Xilinx Inc., San Jose, CA, has signed Toshiba as a foundry partner to produce its field-programmable gate array (FPGA) products. Volume production utilizing 90nm process technologies will begin in 1Q05 at Toshiba’s 300mm plant in Oita, Japan. The deal provides Xilinx with a second-source foundry for its 90nm FPGAs, the bulk of which are produced at Taiwan’s UMC. Toshiba hopes to expand its foundry business beyond system LSI and current ASIC business.
Toppan Printing Co. Ltd. has agreed to acquire DuPont Photomasks Inc., Round Rock, TX, for approximately $650 million (¥71 billion) in a bid to create the world’s largest merchant photomask supplier. DPI will become a wholly owned subsidiary of Toppan, renamed Toppan Photomasks. DPI’s advanced photomask center in Germany, a JV with AMD and Infineon, will coordinate development work with Toppan’s R&D facilities in Osaka, Japan. The deal is expected to close in early 2005, subject to regulatory review and approval by DPI shareholders.
USA
Spansion LC, the flash memory JV of AMD and Fujitsu, said that its Fab 25 flagship plant has moved to fully producing 110nm floating-gate flash memory, only two years after its conversion from a memory shop. Spansion EVP Jim Doran noted the transition took “just a few months, with minimal impact on our production output and yields far better than we had anticipated.”
KLA-Tencor Corp., San Jose, CA, and IMEC(the Interuniversity MicroElectronics Center) have begun a joint development project to accelerate adoption of optical critical-dimension (OCD) metrology technology for sub-65nm semiconductor applications. The project will focus on two areas: extending the use of OCD metrology in current applications such as shallow-trench isolation and gate to the sub-65nm node, and expanding its proliferation into new applications such as 3D contact and via layers.
ASIAFOCUS
China
Semiconductor Manufacturing International Corp. (SMIC) formally opened its $1 billion fab in Beijing on Sept. 25, signaling mainland China’s entry into volume production of 300mm wafers. The Fab 4 factory initially will ramp volume runs of 0.11-0.10µm processes for DRAMs, with total projected capacity by the end of this year of 125,000 200mm-equivalent wafers/month; Infineon and Elpida are the site’s first customers. SMIC is planning two other 300mm facilities adjacent to the Fab 4 plant for 2005 and 2006.
Infineon Technologies has officially opened its $1 billion backend operation in Suzhou. Production of memory products is scheduled to begin by the end of this month; maximum capacity of one billion chips/year is planned for early 2005. The chipmaker also has inaugurated an IT development center in Suzhou to support the fab, focusing on manufacturing processes.
India
Cypress Semiconductor Corp., San Jose, CA, said it will spend $2 million to expand its design center in Hyderabad. The facility, opened in 2004 to design network search engines, will broaden its focus to include 90nm logic devices and systems engineering capabilities.
Cookson Electronics, Providence, RI, has opened an India Research Center (IRC) at the Indian Institute of Science, the first stage of an expansion of its surface-mount technology operations in Bangalore, according to a news report. The $3-$5 million facility will be used for prototyping and testing high-end electronics assembly and packaging products, as well as joint research with the institute.
Japan
Texas Instruments plans to invest roughly $45 million into its Japan unit from now through the end of 2005 in order to boost production by 15%, according to the Nikkei Business Daily. TI’s facility in Miho, Ibari Prefecture, aims to increase production output of 200mm wafers from 25% of overall output to 40%, for use as digital signal processors and mixed analog/digital circuits. The operation, which also has lines for 125mm and 150mm wafers, will keep costs low by purchasing used equipment and relocating tools from US plants.
Hitachi Ltd. plans to build another power semiconductor plant in order to boost production by 180%, according to the Nihon Keizai Shimbun. The ¥2 billion addition to Hitachi’s existing site in Ibaraki Prefecture, scheduled to begin construction this month, will raise production from 5000 to 7000 150mm equivalent wafers/month, toward an eventual target of 14,000 wafers/month.
Korea
Hitachi Metals has established operations in South Korea to produce sputtering target materials, according to the Japan Corporate News Network. The facility, run by new company HMF Technology Korea Co., would be in addition to one already operating in Taiwan. Hitachi previously marketed target materials in Korea via Five Ace Technology Co., a wholly owned subsidiary in Taiwan.
Singapore
Taiwan’s PowerChip Semiconductor Corp. reportedly is in talks to buy 90% of a 200mm wafer fab in Singapore owned by Hitachi for about $118 million, in an effort to boost its foundry business to 30% of revenues by next year, according to several Asian newswire reports. The facility has production output of 30,000 200mm wafers/month using 0.13µm process technologies. Renesas would hold the remaining 10% ownership in the site, which was converted earlier this year from DRAM to logic chip production.
Taiwan
Taiwan Semiconductor Manufacturing Co. (TSMC) and Freescale Semiconductor Inc., Austin, TX, have agreed to jointly develop silicon-on-insulator (SOI) technology for the 65nm advanced CMOS process node. The two are expected to independently develop metallization backend technology - Freescale at the Crolles2 joint R&D and manufacturing facility in France, and TSMC in its Taiwan operations. TSMC also gains manufacturing rights to Freescale’s 90nm SOI technology.
EUROFOCUS
STMicroelectronics, Geneva, Switzerland, plans to reorganize its telecom/consumer, automotive, peripherals, memory products, and microcontrollers/linear/discrete groups, and will create a new unit to centralize frontend manufacturing and R&D functions. ST also announced that three VPs will be leaving due to retirement or personal reasons, ahead of next year’s impending retirement of president and CEO Pasquale Pistorio.
Wacker Polysilicon is spending €75 million to expand production at its Burghausen, Germany, site over the next two years. The investment, which will add 500 metric tons of polysilicon in 2006 and another 1000 metric tons in 2007 for total capacity of 6500 metric tons, is mainly a response to demand for polycrystalline silicon for solar cells.