World News
04/01/2004
Business trends
SIA: 2H03 chip sales streak toward the record books
Worldwide semiconductor sales in 2003 topped $166 billion, besting earlier projections to achieve 18.3% growth, thanks to a big ramp-up in the second half of the year, according to data from the Semiconductor Industry Association (SIA). The industry's second-half performance was one of the strongest on record, according to SIA.
Sales in December were $16.03 billion, down a fraction from $16.12 billion in November, but up 28% from a year ago. The figures ended a nine-month streak of sequential growth, but continued to build on a string of double-digit percentage increases compared with a year ago.
 Worldwide semiconductor sales by region. |
Leading the charge for end-market contributors in December were PC sales (DRAM up 10.6%, microprocessors up 7.9%), as well as the global wireless market, which grew 16% for the year, doubling the initial forecast. For consumer electronics, optoelectronics rose 11.6% and ASPs were up 21%. Volumes in 4Q03 were up 20% year-on-year, with DSPs growing by 11.6% and flash up 29.3%. A 32.5% increase in PLD sales helped the wireline communications segment achieve its first quarter-on-quarter growth in three years. The automotive market also showed growth, accounting for 8.1% of end-market demand for semiconductors and a 10.3% increase in sales of dedicated chips.
Seasonal demand kept capacity utilization above 95% for all of 4Q03, and SIA expects it to trend modestly down in 1Q04, following historical patterns.
Geographically, all markets reported rising chip sales in 4Q04, posting a moving three-month average of 10%–14%, but were flat to slightly down from November to December. Year-on-year, the markets continued to soar well into double-digit growth, led by the Asia-Pacific region and Japan (34.0% and 33.9%), followed by Europe (22.1%) and the Americas (16.8%).
Currently, 2004 appears to be starting off with a better-than-expected first quarter, thanks in part to strong demand for cellular phones, said SIA analyst Doug Andrey.
WORLDWIDE HIGHLIGHTS
In what could be the start of a major round of consolidation in the crowded semiconductor assembly and test services (SATS) arena, Singapore-based ST Assembly Test Services Ltd. (STATS) and ChipPAC Inc., Fremont, CA, have agreed to a $1.6 billion stock-swap merger. The combined firm, STATS ChipPac Ltd., based in Singapore, will be the second-largest IC test house in the world with more than $1 billion in revenues this year, and the third-largest SATS supplier in the industry, behind Taiwan's ASE Inc. and US-based Amkor Technology Inc.
Semi, San Jose, CA, has published 25 new standards governing various steps for manufacturing semiconductors and flat-panel displays. The new Semi standards, part of the thrice-yearly publication cycle, include guidelines for defining the quality area of an LCD mask, formats for data management in the semiconductor exposure process, and specifications for polished monocrystalline silicon-carbide wafers.
USA
Patriot Scientific Corp., San Diego, CA, has answered a lawsuit from Intel by filing its own counterclaims for copyright infringement. Intel recently sued Patriot to prevent the company from taking legal action against its customers, for alleged infringement of Patriot's processing-speed technology. Other targets of Patriot litigation include Matsushita, Fujitsu, Sony, Toshiba, and NEC.
Aeroflex Inc., Plainview, NY, said it plans to seek a buyer for its thin-film interconnect manufacturing business in Pearl River, NY. The company took a $5.8 million asset impairment charge in the company's 2Q04 financials to write down the expected net asset value of the business.
Nikon Corp. is building a worldwide training center in the US, following entrenched efforts from rivals ASML and Canon. The $70 million facility in Belmont, CA, will house several steppers and scanners in a cleanroom set up for 90nm lithography applications, and will offer computer-based training and more than 500 classes. Equipment move-in to the facility is scheduled for December 2004, with classes starting by February 2005.
Corning Inc., Rochester, NY, plans to invest $600 million to expand manufacturing of LCD glass at its facilities in Taiwan and Japan over the next two years. Corning, which has about 50% market share for the glass, plans to spend $240 million in 2004, up from $180 million in 2003.
Infineon Technologies AG, Munich, Germany; Genus Inc., Sunnyvale, CA; and the U. of Albany Center of Excellence in Nanoelectronics have agreed to a three-year, $12 million partnership for developing next-generation memory chip devices. Teams from Infineon and Genus will join researchers at the 300mm wafer R&D complex at the Albany Nano-Tech center, to develop and optimize atomic-layer deposition (ALD) processes for metal electrode and high-k dielectric materials for sub-45nm DRAM capacitors.
ASIAFocus
China
New Venture Research, a US market-research and business-development firm, and E.J. McKay and Co., a Shanghai-based M&A advisory group, plan to form a joint venture to help companies do business in China. The "China Solutions" program will assist OEMs and contract manufacturers to identify Chinese partners, acquisition targets, and other joint ventures.
Add three more companies to the growing list of chip industry firms that are setting up shop in Shanghai.
SynTest Technologies Inc., Sunnyvale, CA, a supplier of IC design-for-test tools, has opened a new R&D and customer support center and has signed Hyperform Technologies Co. Ltd. as its local distributor. Also, Sumitomo Metal Mining Co. Ltd. plans to create a new company to produce bonding wire for domestic chip assembly plants, with a target of 30% market share in 2006; and Toshiba is reportedly building a new facility to handle operations for the region, including Taiwan and Hong Kong. The facility, which will integrate semiconductor technology development, customer support, and market research, was scheduled to begin operation in March.
Japan
Toshiba and Sony are planning to jointly manufacture chips at Toshiba's 300mm facility in Oita, with volume production beginning this fall. The companies previously produced chips through a JV established in 1999. Toshiba recently announced plans to add the $1.8 billion SoC plant to its operations in Oita.
Taiwan's Advanced Semiconductor Engineering Inc. has agreed to acquire NEC Electronics' IC packaging and testing operations in Takahata, seen as a move against rival Amkor. The deal, expected to be completed by June, includes a four-year plan to provide backend manufacturing services to NEC, and potentially other collaborations in production technologies and IP. The new firm, ASE Japan Co. Ltd., will potentially have revenues of approximately $165 million in its first year.
Singapore
Advanced Interconnect Technologies Inc. (AIT) is relocating its corporate headquarters from Pleasanton, CA, to Singapore. Xilinx Inc. also plans to open up new headquarters in Singapore in early 2005 to offer R&D and chip-testing services in the Asia-Pacific market. The company expects its regional operations, spanning 10 locations including Japan, to account for more than half of overall revenues in the next few years, up from 35% in 2003.
Wacker Siltronic plans to invest nearly $30 million to expand production at its Singapore plant to 240,000 wafers/month, to help absorb capacity from its operations in Wasserburg, Germany, being shut down later this year. The deal raises Wacker's overall investment in Singapore to roughly $386 million.
Korea
Hynix Semiconductor Inc. said it is planning to roll out 512Mbit NAND flash-memory chips using 120nm technology early this year, its first foray into flash memory. Hynix will eventually produce 1Gbit and 2Gbit NAND flash chips by 4Q04 using 90nm technology.
The World Trade Organization is examining the legality of US and EU duties imposed on imports of South Korean chips. The duties were in response to alleged government subsidies received by Hynix, which were protested by Infineon Technologies AG and Micron Technology Inc.
Taiwan
Winbond Electronics Corp. is planning to start the $1.3 billion first stage of construction on its 300mm facility in the Central Taiwan Science Park by 3Q04. Volume production of chips using 0.11µm processes is scheduled for 2Q06, ramping up to capacity of 24,000 wafers/month by 2Q07. The facility will focus on niche DRAM, flash memory, and MRAM chips, according to company president C.J. Chang.
Infineon Technologies AG plans to buy ADMtec Inc., a Taiwanese fabless chip-design firm, for about $75 million in cash, and an additional $25 million if unspecified "performance and development milestones" are met within two years. The new company, Infineon-ADMtec Co. Ltd., is Infineon's first controlling stake in an Asian semiconductor company.
MEMC Electronic Materials Inc., St. Peters, MO, plans to acquire the remaining 55% of shares it does not own in Taisil Electronic Materials Corp., a Taiwanese manufacturer of polished and epitaxial silicon wafers. The deal adds manufacturing capacity that can be expanded for 200mm or 300mm wafer production, according to CEO Nabeel Gareeb.
EuroFocus
Micronic Laser Systems AB, Taby, Sweden, is discontinuing its Sigma7100 first-generation laser pattern-generation tool, saying it "did not meet the requirements for production stability." One system has been returned, and a postponed order has been removed from the backlog. The system will be replaced by the Sigma7300. The company expects the total cost for rebuilding and writedowns will be about $14.7 million.
ASML and IMEC plan to collaborate on an industrial affiliation program for 193nm liquid immersion lithography, in addition to IMEC's existing 157nm litho program. ASML will become a strategic partner in IMEC's 300mm research platform, with its TwinScan XT:1250i immersion tool to be installed in IMEC's 300mm cleanroom in 4Q04.
Air Liquide SA has agreed to acquire most of the assets of German industrial-materials company Messer Griesheim GmbH for roughly $1.8 billion. The deal involves Messer's operations in the US, UK, and Germany, which generated about $1.28 billion in revenue in 2003 — roughly 70% of the company's global revenue. Air Liquide plans to sell off parts of the Messer business representing about 20% of the overall sales.
Clarification
In the February article, "High-frequency capacitance measurements monitor EOT of thin gate dielectrics," Keithley Instruments Inc. neglected to note that the co-author was Yuegang Zhao, a senior applications engineer with its Semiconductor Business Group who has an MS in semiconductor physics from the U. of Wisconsin.