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08/01/2004







Taiwan's top 10 semiconductor ranking shows diversity

A newly released Taiwan top 10 semiconductor ranking shows a healthy mix of companies sitting atop the island's $30 billion chip industry. The group accounted for more than half of Taiwan's semiconductor industry revenues at $16.23 billion in 2003, a 20.7% increase from a year ago, according to a report released by the US-Taiwan Business Council in early June.

Making up the council's top 10 were two pure-play silicon foundries, two IC packaging/assembly subcontractors, two fabless IC suppliers, and four memory makers. Silicon foundry giants Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and United Microelectronics Corp. (UMC) were no. 1 and no. 2, respectively, accounting for about half of the revenues at the top 10 chip companies in 2003, the ranking showed.

In the final chip assembly and testing segment, Advanced Semiconductor Engineering Inc. (ASE) was third in the top 10 ranking, while Siliconware Precision Industries Co. Ltd was no. 7. Both contract assembly houses registered strong growth in 2003 — ASE's revenues grew 26.1% while Siliconware was up 22.8% — reflecting an overall rebound in backend manufacturing.

Fabless IC supplier MediaTek Inc., which supplies chips for DVD players, disk recorders, and audio applications, saw its sales surge 28.6% in 2003. Meanwhile, Taiwan's no. 2 fabless chip supplier, Via Technologies Inc., which continued to struggle due to increased competition from Intel Corp. and Advanced Micro Devices Inc. in x86 processors and PC chip sets, saw its sales tumble 19.1%.

Taiwan's DRAM and memory suppliers filled out the remaining four slots in the top 10 list. Powerchip Semiconductor Corp.'s revenue jumped 79.9%, making the DRAM maker the fastest growing company of the group. Taiwan's other fast-growing DRAM supplier, ProMOS Technologies Inc., posted a 37.2% increase in revenues last year. But the island's two other top memory makers — Winbond Electronics Corp. and Nanya Technology Corp. — saw revenues drop in 2003. Nanya's growth was constrained by the lack of new capacity in 2003, but the company is working with joint-venture partner Infineon Technologies AG to start production on a new $2.2 billion 300mm wafer fab later this year. Winbond also is planning a new 300mm fab in Taiwan as it shifts its emphasis from commodity DRAMs to specialty memories and other ICs.

While chip foundries and contract assembly houses have fueled much of Taiwan's growth in the past decade, the island is becoming a hot spot for fabless semiconductor startups. Taiwan's Industrial Technology Research Institute (ITRI) in Hsinchu said the island's IC design sector grew to 250 companies with total revenues reaching $5.8 billion in 2003.

Taiwan's memory fabrication is also on the rise. "Taiwan's DRAM makers have also become a force in the global $16 billion DRAM industry, providing nearly 20% of the global output last year and being slated to achieve around 30% this year as companies like Powerchip increase production in new plants," concluded the council's recent 1Q04 report. — J. Robert Lineback, Senior Technical Editor

SEAJ: May delivered a mixed bag to chip equipment firms

Japanese manufacturers of semiconductor equipment saw mixed results in May 2004, as slowing domestic demand was countered by a pickup overseas, according to the Semiconductor Equipment Association of Japan (SEAJ).

For the third straight month, worldwide orders for Japanese-made semiconductor equipment were basically flat at ¥154.31 billion ($1.42 billion), but increased 56.1% compared with May 2003 — the tenth straight month of year-on-year gains. Domestic equipment order growth in May increased just 1% from April to ¥72.36 billion ($664.9 million), with slightly better growth of 8.1% from a year ago, after enjoying 40%–50% year-on-year gains through the first five months of the year.

Strong year-on-year growth was seen for wafer processing (152%), assembly (182%), and test/inspection (190%) equipment; even wafer manufacturing rocketed to a one-year high. Increased demand was attributed to Taiwanese chipmakers bringing new capacity online, and a recovering US market. Domestic orders were slower, with a nearly twofold increase in inspection equipment mostly offset by flat or negative growth in other equipment categories.

Worldwide billings of Japanese chipmaking equipment were up 7.4% in May to ¥124.65 billion ($1.14 billion), a 160% increase from a year ago, due to increases in sales of wafer manufacturing and processing equipment. Domestic sales of ¥59.18 billion ($543.9 million) were down 5% sequentially, due to a 12%–14% dropoff in sales for the two biggest categories, wafer processing and inspection. For the second consecutive month, worldwide and domestic sales were more than double the levels from a year ago.

The book-to-bill ratios for both worldwide and domestic demand rose back to parity levels at an even 1.0 in May; however, both are down compared with a year ago (worldwide was 1.04 in May 2003; domestic was 1.43). A book-to-bill of 1.00 means that $100 in new orders was received for every $100 of product billed for the month.

Inotera Memories Inc., the 50-50 DRAM JV between Infineon Technologies and Nanya Technology Corp., has inaugurated its $2.2 billion 300mm DRAM production facility in Taoyuan, Taiwan, 18 months after its formation. The first of two stages of equipment and production ramp-up is now complete, with initial production of 20,000 wafer starts/month by the end of this year. Completion of the second stage is slated for the end of 2005, with a ramp-up to 50,000 wafer starts/month.

Japan's 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. The unit aims for ¥22 billion in sales for the current fiscal year ending in March 2005.

A proposed plan by several Japanese chipmakers to consolidate manufacturing facilities has been abandoned, according to a Kyodo News report. The deal, first announced in September 2003, would have pooled investments topping $1.7 billion into Renesas subsidiary Trecenti Technologies Inc., but the market upswing has convinced potential investors, including the host Hitachi/Mitsubishi Electric JV, to focus on their own operations.

Silterra Malaysia Sdn Bhd and European research center IMEC have agreed to jointly develop 0.13µm CMOS process technology at IMEC's Leuven, Belgium facility. Silterra's foundry, which currently offers 0.18-0.22µm process technologies, plans to provide 0.13µm design libraries and IP in 1Q05, with pilot production starting in 2Q05.

Toshiba Corp. and Sony Corp. have developed technology that can double production yields for 65nm semiconductors, according to Japanese newswire reports. The companies claim their process, which produces more durable wires, can boost yields to up to 60%, roughly comparable to 90nm commercial production levels. They plan to incorporate the technology for mass production starting in 1H05.

Komatsu Electronic Metals Co. said it plans to increase output of 300mm wafers at its Nagasaki facility by 30,000 wafers/month by 2H05, according to the Nihon Keizai Shimbun. The ¥1.1 billion (roughly $10 million) expansion will boost overall production at its Nagasaki and Miyazaki facilities to 75,000 wafers/month.

Taiwanese TSMC has boosted production at its Fab 6 facility to a record 70,000 200mm wafers/month, exceeding its planned 2Q04 capacity by nearly 10%. TSMC also said its Fab 14 plant has successfully produced high-yield 300mm wafers at levels equaling those from its Fab 12 operations, just 90 days after initial installation of process equipment.

In other news, TSMC spent $357.4 million on chipmaking equipment in June, the company reported in a statement to the Taiwan Stock Exchange. Leading suppliers were ASML, with 10 tools totaling $89.1 million. TEL ($84.7 million), and KLA-Tencor ($65.5 million). Also seeing business were Applied Materials' Asia-Pacific unit ($37.6 million), Novellus ($37.6 million), Hitachi High-Technologies ($25.6 million), and Rudolph Technologies ($17.9 million).

South Korea's Hynix Semiconductor has agreed to sell its system IC division to a newly founded group, pending shareholders' approval. The South Korean business will be renamed System Semiconductor Ltd., a group formed by CVC Asia Pacific Ltd. and Citigroup Venture Capital Equity Partners, which facilitated the $822 million sale of Hynix's nonmemory business several weeks ago.

Elpida Memory Inc., the Hitachi/NEC memory JV, and Micron Technology Inc. have petitioned the Japanese government to impose countervailing duties on imports of DRAM chips from Hynix, according to news reports. The US and European Union imposed similar duties last year. Hynix and Elpida currently rank fourth and sixth in the DRAM market, respectively.

Toshiba Corp. plans to transfer part of its power transistor business, including product development, design, and manufacturing and marketing of high-capacity power module products, to Mitsubishi Electric, according to wire reports. The operation consists of only a few percent of Toshiba's total discrete business.

Korean tech giant Samsung said it will invest more than $17 billion to create the world's largest "crystal valley" in south Chungchong Province. The company, which already has six production lines in Chonan for LCDs and PDPs, aims to create "a new cash cow" by 2010, according to the Korea Times.