World News
10/01/2004
Business trends
SIA charts 2H04 course, wary of inventories, utilization rates
Solid but slowing global demand is in store for the semiconductor industry in 2H04, with the outlook very much dependent upon a continued rise in capacity utilization and chip inventories, according to the Semiconductor Industry Association (SIA).
 Semiconductor sales by region. (Sources: SIA, WSTS) |
Worldwide chip sales (a three-month moving average) grew $53.45 billion in 2Q04, an increase of 9.5% from 1Q and 40.3% from the same period a year ago. DRAM sales were the leading driver of 2Q growth, as exhibited by a 13% year-on-year growth in PC sales, according to SIA president George Scalise. With new DRAM production coming online, and a transition to smaller die sizes bumping up production, "it is likely that the supply/demand situation will ease going forward," he added. Also boosting 2Q results were sales of wireless communications chips and optoelectronics devices.
Capacity utilization rates, roughly 93% in 1Q04, rose to the mid-90% range in 2Q, and Scalise noted that utilization and inventories should be closely watched. But despite scattered warnings of inventory buildup, Scalise said in general "customers are continuing to manage inventories very carefully...we do not believe excess inventories will be a problem in most market sectors in the near term."
While global chip sales are on pace to top a record $214 billion this year, Scalise said sales growth rate in 2H04 would be slower. He predicted 3Q sales would be 4%–6% higher than 2Q, based on analysis of inventories, production capacity, and end-market demand.
WORLDWIDE HIGHLIGHTS
Intel Corp. said it has finished installation of what it claims is the world's first pilot line for extreme-ultraviolet (EUV) lithography in an effort to move the technology out of R&D and on track for 32nm IC production by 2009. The integrated EUV process line at Intel's 300mm Hillsboro, OR, facility, will be used to develop new photoresists and process steps for fabrication of 32nm-node devices using 13.5nm wavelength EUV exposures.
Infineon Technologies AG and Taiwan's Winbond Electronics Corp. have expanded their partnership for DRAM manufacturing to include 90nm DRAM trench technology and 300mm production processes. The two also will jointly develop and sell specialty memories. Initial products from Winbond's new 300mm plant in Taichung are expected by the end of 2005.
USA
ATMI Inc., Danbury, CT, is continuing its divestiture of noncore operations with the sale of its fabrication plant parts-cleaning business to Delaware-based Materials Support Resources Inc. Terms of the deal, which includes operations at five locations in Arizona, New Mexico, Texas, Oregon, and Ireland, were not disclosed. ATMI also has sold its specialty epitaxial services business in Mesa, AZ, including assets, IP, and inventory, for up to $41 million in cash to International Rectifier.
The Semiconductor Industry Association (SIA) is soliciting proposals for an independent study of cancer risk among US semiconductor wafer-fab workers from the 1960s to the present. The study, reviewing data on more than 200,000 workers following the recommendations of an advisory committee formed in 1999, is open to RFPs from public and private institutions including universities, laboratories, and government agencies. It is expected to begin in 1Q05 and take three to five years to complete.
ASIAFocus
China
Japanese chipmaking JV Renesas Technology Corp. will spend ¥30 billion ($275.7 million) over the next three years to boost its presence in China, according to the Nihon Keizai Shimbun. About 60% of the investment will go to its chip assembly plant in Beijing, with the rest earmarked for its operations in Jiangsu Province.
Hong Kong
Officials from the $1.5 billion Hong Kong Science and Technology Park say space has been filled to 75% capacity and by next year will be 100% filled, thanks to an influx of new tenants including Philips and Omron, and agreements with mainland chip-design centers, according to a story in The Standard. Based on an influx of new tenants, as well as recent deals with design centers in Xian, Shenzen, Hangzhou, Beijing, and Chengdu, the park plans to pour another $40 million into an IC design center there.
India
AMD is set to begin operations in a new design facility in Bangalore, according to the Asia Pulse Businesswire. The 40,000 sq. ft. facility, part of a $5 million investment plan to triple AMD's domestic work force to 120 engineers by the end of 2005, initially will work with design teams in Texas, California, and Massachusetts, and eventually become an independent unit.
Japan
NEC Electronics Corp. has consolidated the operations of its ULSI manufacturing engineering and advanced SoC line operating divisions under one roof. The new subsidiary, NEC Fabserve Ltd., located in Sagamihara, Japan, will offer advanced process fabrication, volume production-related services, and development, sales, and maintenance of equipment and components.
Korea
Creditors of South Korean chipmaker Hynix Semiconductor Inc. reportedly have approved plans for a $2.0 billion chipmaking operation in China, as part of a joint venture with STMicroelectronics and the Chinese government. Under the plan, approved by the required 75% of Hynix's creditors, ST and Hynix each will invest $500 million, with the Chinese government kicking in $1 billion, for an initial 200mm fab, followed by a 300mm fab, according to various media reports.
Taiwan
Powerchip Semiconductor Corp. plans to spend about $2 billion to build a third 300mm facility in Taiwan, according to a Dow Jones report. The company already has one 300mm facility on-line and another under construction, with combined monthly capacity of 40,000 wafers/month. Production ramp at the new site will take at least six quarters.
Taiwan foundry United Microelectronics Corp. has unveiled an enhanced prototyping program for verification of SoC designs on its 130–90nm process technologies. The Shuttle Express, available by November, performs logic and/or design changes during post-initial silicon runs using just the top three metal layers to improve turnaround time.
EuroFocus
FEI Co., Hillsboro, OR, has opened a new facility in Eindhoven, The Netherlands, to focus on R&D for nanotechnology applications. The NanoPort center will be open to outside scientists and FEI developers to jointly research and develop nano projects, such as the European Union's recently announced Interaction Proteome project, the company said. The facility incorporates a variety of nanotech equipment, including transmission and scanning electron microscopes, and focused ion-beam systems. Among the targeted application markets are semiconductors, data storage, materials science, and biotechnology.
Tokyo Electron Ltd. (TEL) and European research organization CEA Leti have agreed to jointly research and develop front-end-of-line CMOS process technology, focusing on new materials for CMOS gate stacks. The research, to be conducted at Leti's Nanotec300 300mm facility in Grenoble, France, will investigate high-k and metal-gate films and related process steps for the 45nm and below nodes. Development will occur on TEL's Telformula flexible batch thermal-processing system and single-wafer Trias system.