World News
07/01/2004
Business Trends
SIA: First-quarter blues turn to green lights for chip industry
According to the latest data from the Semiconductor Industry Association (SIA), chip sales in 1Q04 — typically a slow post-holiday period — blew the doors off of historical norms.
Worldwide chip sales (a three-month moving average) rose 4.4% to $16.28 billion in March, up from $15.58 billion in February and a 32.3% increase from March 2003. Year-on-year, sales growth achieved a 3.5-year high, besting February's 30.7% mark. For the first quarter, global sales were $48.8 billion, up 34% from 1Q03 — and also up 1.4% from the seasonally strong 4Q03, indicating the current strength of the chip industry.
Actual worldwide chip sales in March were $19.23 billion, much higher than the three-month moving average, and matching levels from the mid-2000 boom, according to World Semiconductor Trade Statistics (WSTS) data. Year-on-year actual growth of 31.5% was only slightly off the three-month average, which industry groups typically use to downplay month-to-month volatility in the industry.
 Worldwide semiconductor sales by region. (Sources: SIA, WSTS) |
Continued growth in corporate IT spending helped boost the numbers, with an 11.5% rise in IT software and hardware investments, the third consecutive quarter of double-digit growth. Sales of microprocessors and DRAMs were up 5.3% and 5.9% respectively in March; programmable logic devices rose 12.9% and application-specific standard products (ASSPs) rose 8.4%.
Geographically, all regions showed strong month-on-month gains, after small increases and declines in February. They're also enjoying growth rates above 24%, led by Asia-Pacific at 45.8%, for an overall 32.3% year-to-year growth clip.
WORLDWIDE HIGHLIGHTS
Israeli foundry Tower Semiconductor and Siliconix Inc., a subsidiary of Vishay Intertechnology Inc., have finalized a $200 million chipmaking contract. The 7–10-year deal, originally forged at the beginning of this year, calls for a year-long technology transfer phase to Tower's Fab 1 facility, after which Siliconix will offer $20 million for the purchase of additional equipment, credited toward the price of the wafers. Tower chairman and CEO Carmel Vernia said 50% of Fab 1's capacity would be allocated to the contract by 2007.
Texas Instruments Inc., Dallas, TX, has joined IMEC's sub-45nm CMOS research program as a core member, to focus on development of advanced lithography technologies, high-k gate dielectrics, strained silicon, and copper/low-k interconnects. TI, an affiliate member of IMEC since 1992, also gains access to IMEC's €84 million 300mm research facility, inaugurated in May. The company joins Intel, Samsung Electronics, Infineon, Philips Semiconductors, STMicroelectronics, and Matsushita in the program, which was formed in October 2003 to develop sub-45nm manufacturing process technologies.
Macronix International Co. Ltd., a provider of nonvolatile memory (NVM) products, and Saifun Semiconductors Ltd., Netanya, Israel, a developer of NVM technologies, have extended their collaboration to develop 0.13µm, multibit, multilevel-cell flash products at Macronix's 200mm Fab 2 in Hsinchu. The two companies previously joined forces to incorporate Saifun's NROM technology into Macronix's Nbit'Flash line of high-density flash products.
USA
Amkor Technology Inc., Chandler, AZ, has signed a contract to provide semiconductor assembly and final test services to IBM. Under the deal, Amkor will receive the substantial majority of IBM's subcontract wire bond and flip-chip assembly and final test business, including the purchase of IBM's 950,000 square foot manufacturing complex in Shanghai, China, as well as test operations in Singapore. The two companies also have entered into two agreements: a cross-licensing agreement covering select IBM and Amkor assembly and test IP, as well as a long-term supply agreement.
Sumco, the Japanese-owned joint venture between Sumitomo Metal Industries Ltd. and Mitsubishi Materials Corp., has put two US wafer-manufacturing facilities up for sale. The company's North and South campuses in Salem, OR, totaling slightly more than 600,000 sq. ft. in ten buildings, are being offered for $16 million and $27 million, respectively. Tools from the facilities are slated for transfer to the company's 100–200mm wafer plant in Hamilton Township, OH, where the company plans to double output capacity.
Intel Corp. has dropped plans for its fourth-generation Pentium 4 chip and a new similarly built Xeon processor so that the company can focus on chips using the cores of each. The abandonment of the 90nm-based "Tejas" and "Jayhawk" chips paves the way for the creation of "dual-core" chips, which promise faster speeds without generating excessive heat — functionality originally slated to be included in Intel's Itanium chips. The company said it expects to ship versions of dual-core chips for desktop and notebook computers in 2005.
ASIAFocus
China
AMD said it has established AMD China Co. Ltd. in Beijing's Zhongguancun Science Park, following its announcement in late 2003 that it would spend $30 million over the next two years to open the wholly owned subsidiary. As part of its charter, AMD China will open branch offices intended for Shanghai and Shenzen, and oversee new test and packaging operations opened in March in Suzhou as well as AMD's operations in Hong Kong. "If AMD is to be successful in general, we must be successful in China specifically," said chairman, president, and CEO Hector Ruiz, at the new company's inaugural ceremony.
Taiwan Semiconductor Manufacturing Co. (TSMC) has received approval for its plans to open 200mm wafer facilities in mainland China in a second-stage review from an industry-consultant committee under the Ministry of Economic Affairs. The Executive Yuan will make the final decision on the committee's suggestion in an inter-government meeting. The plan was evaluated on the basis that all Taiwan's chipmakers intending to open 200mm facilities on the mainland must exhibit an output rate of 10,000 wafers/month at their 300mm wafer factories for six consecutive months; TSMC's fab has been operating at 15,000 wafers/.month for six months, reporting about 90% defect-free.
Samsung Electronics Co. plans to invest about $55 million in its TFT-LCD assembly plant operations in Suzhou, in addition to a $126.4 million investment already made in the eight-year-old facility, according to Dow Jones. Korea-based Samsung has said it aims to transfer about a third of its TFT-LCD assembly operations to China by 2006, encompassing $4.2 billion in domestic sales.
Green Mountain Integrated has begun construction of a 200mm wafer fab in Nantong, Jiangsu Province, China, expected to be online by the second quarter of 2005 with a capacity of 30,000 wafers/month, according to the South China Morning Post.
Japan
Sony Corp. plans to absorb some chipmaking capabilities of its game business subsidiary, Sony Computer Entertainment (SCE), in order to consolidate its group semiconductor manufacturing operations. SCE will spin off its chip plant in Nagasaki, which will be transferred to Sony Semiconductor Kyushu. SCE primarily makes chips for Sony's PlayStation2 game console.
Elpida Memory Inc. plans to spend ¥500 billion ($4.56 billion) to build the world's largest DRAM facility at the site of its Hiroshima subsidiary, according to the Nihon Keizai Shimbun. The plant would produce 10,000 300mm wafers/month by 3Q05, with eventual output of 60,000 wafers/month. Elpida, which would scrape up ¥100 billion in funds by spring 2005, also plans to boost production at its existing Hiroshima facility by 25% to 28,000 wafers/month by year's end.
Taiwan
TSMC directors have approved a $1.4 billion capacity-expansion plan, with most of the money ($1.334 billion) going toward increasing capacity of 90nm copper processes at its 300mm Fab 12 by 14,000 wafers/month. The remainder ($67.3 million) will be used to increase production at its 150mm and 200mm fabs by approximately 15,600 200mm equivalent wafers/month. No schedule for the spending or production ramp was provided.
TSMC has also joined the X Initiative, a consortium promoting the X-architecture chip design process. TSMC has verified the 0.13µm X-architecture design rules with test chips; rival foundry UMC released its 0.13µm version in December 2003. The X-architecture, also supported by Infineon and Toshiba, orients a chip's interconnect wires using diagonal pathways in addition to traditional right-angle (Manhattan style) configurations, improving chip performance.
Taiwanese memory chipmaker ProMOS Technologies Inc. plans to spend up to $900 million for a new 200mm plant in China with 60,000 wafers/month capacity, according to Dow Jones. Initial stages of the investment, which had not yet been approved by the Taiwanese government at press time, are expected to begin by 4Q04; all but $350 million of the required funds will be raised in China.
Clariant Co.'s AZ Electronic Materials unit has opened the doors at its plant in Huko, which will manufacture photoresists for LCD lithography processes. Production at the 18,000 m2 facility will start this month, with a yield of ~240 tons/month. Ground was broken for the facility in June 2003.
Eurofocus
Intel Corp. said it will invest €1.6 billion (nearly $2 billion) to expand its 300mm Fab 24 facilities in Leixslip, outside Dublin, to enable 65nm process technologies. The investment, along with grants and incentives from the Irish Development Authority, will add 60,000 sq. ft of manufacturing cleanroom space plus equipment for Fab 24 and Fab 24-2. Production on the addition is expected to begin in 1H06. Intel's operation in Leixslip, established in 1989, is the company's largest operation outside the US and its sole manufacturing base in Europe.
AMD celebrated the "topping off" of its Fab 36 300mm facility in Dresden on May 17, less than six months after breaking ground. Hans Deppe, VP and GM for AMD Saxony, said that infrastructure additions are now underway to "be ready for equipment" by year's end. First test wafers are scheduled for mid-2005, with commercial shipments projected for 1H06.
DuPont Photomasks Inc., Round Rock, TX, has begun commercial production at its facility in Dresden, Germany, co-located with the Advanced Mask Technology Center, the company's photomask R&D joint venture with AMD and Infineon. The facility includes 1400m2 of cleanroom space, advanced e-beam and laser photomask-pattern generators, and other tools.
Si Automation (SiA), Montpellier, France, has signed a three-year contract to provide fabwide tool monitoring and data management services at STMicroelectronics' 200mm site in Crolles. SiA already works with STMicro at its Meylan 300mm R&D center and Crolles1 200mm operations center.