World News
01/01/2004
SIA: Strong growth for global chip sales
Worldwide semiconductor sales rose 6.5% in September to $14.4 billion, up 5.9% from $13.56 billion in August — the seventh consecutive monthly increase and the biggest monthly percentage change in over a decade, according to data from the Semiconductor Industry Association (SIA).
Semiconductor growth is broad; August's month-to-month sales were upwardly revised by about 1.5% in every region except Europe, which was basically flat. For the third quarter, global chip sales were at $43.3 billion, a 13.7% increase over 2Q03 and a year-on-year increase of 17.5%.
PC components, which comprise 30% of the end market for semiconductors, continued to see excellent growth — DRAMs were up 33.2%, with MPUs up 23.9%. A major cause was a 7.2% rise in US GDP in the third quarter, thanks to record consumer outlays (up 6.6%) and strong business spending in computers and software (up 15.4%, double the increase in 2Q03). Flash memory grew 27.2%, and DSPs were up 20.3%, thanks to strong growth in cell phones, which account for 12% of end-market demand. For consumer technologies (17% of the end market), optoelectronics were up 14.6% and ASSPs up 17.2%.
 |
The figures "confirm that demand in the global semiconductor market is rising briskly," said SIA president George Scalise. Performance was strong in all major market sectors, including computation, communications, and consumer, "indicating a solid, continuing, and broad-based growth cycle," he said.
Compared with August, sales were up between 4.6%–8.0% in every geographic region, but the three-month moving average showed some startling increases. Here, sales in the Asia-Pacific region were up 19.1%, after a 6.4% increase in August. Europe was up 12% (it was 3.6% in August), followed by 11% in Japan (1.6%) and 8.6% in the Americas (2.4%). "Solid growth across all four geographic markets positions the industry for revenue growth exceeding 10% in 2003, followed by stronger double-digit growth in 2004," said Scalise.
Year-on-year, regional sales were especially encouraging for the Asia-Pacific region (24.4%), Japan (18.8%), and Europe (17.3%). Even the Americas region, which showed flat year-on-year growth in August, was up 4.5% for the comparative September–September period.
Asia-Pacific set to lead global industry comeback
Semiconductor revenue in the Asia-Pacific region is projected to grow to $116.6 billion in 2007, compared with $68.2 billion in 2003 and double the revenues accumulated in 2002, according to research from Gartner Inc.
Semiconductor revenue from that region will rise to $116.6 billion. China's semiconductor market is predicted to be worth $28.4 billion in 2003, rising to $36.8 billion in 2004 and $54 billion in 2007. That's an annual growth rate (AGR) of 18% — even better in the near term, at 23% in 2003 and 30% in 2004. "Semiconductor vendors doing business in China-Hong Kong in the second quarter have seen a full recovery," said Dorothy Lai, Gartner's principal analyst in Hong Kong.
Korea, with $12.4 billion in semiconductor revenues in 2003, is predicted to grow 19% annually, spurred by demand for cell phones, consumer devices, and flat-panel displays, added Gartner analyst C.S. Kim. Also experiencing double-digit growth (11.4% AGR) will be Malaysia, with $10.1 billion in semiconductor revenues by 2007.
Affected by a shift in production to mainland China will be Taiwan and Singapore, which are projected to have an AGR through 2007 of 11.4% and 4%, respectively.
USA
Filling out its compound semiconductor epitaxial deposition offerings, Veeco Instruments, Woodbury, NY, has purchased Emcore Corp.'s, Somerset, NJ, TurboDisc MOCVD business for $60 million in cash, and an additional $20 million if future revenue targets are met. The deal includes a facility in Somerset, NJ, along with 120 employees.
Aeroflex Inc., Plainview, NJ, has acquired Celerity Systems Inc., Cupertino, CA, for $10.25 million. The deal will expand Aeroflex's business to new markets including cellular base stations, while adding between $6–$7 million in revenues. The two companies were already working under a manufacturing and licensing agreement.
KLA-Tencor, San Jose, CA, and Accretech USA Inc., a subsidiary of Japan's Tokyo Seimitsu Co. Ltd., have settled their dispute over photomask inspection technology going back to 2001. The companies have dismissed their respective patent infringement claims and terminated litigation; terms of the settlement were not disclosed.
Maxim Integrated Products Inc., Sunnyvale, CA, has purchased Philips' 8-in. wafer fab and equipment in San Antonio, TX, for $40 million. The site generated approximately $500 million in annual revenues. Vijay Ullal, Maxim's VP of worldwide process technology, said the company will build revenues to $1 billion by 2004.
Novx Corp., San Jose, CA, a supplier of ESC/ESD process monitoring equipment, is discontinuing its Series 300 and Series 53xx lines, in favor of its new Series 400 and Series 6000 lines. Novx will redirect resources to expand capacity for the new lines, and will stop taking Series 53xx product orders immediately. and stopped taking orders for Series 300 at the end of 2003.
Praxair Inc., Danbury, CT, has completed a $19 million upgrade of its manufacturing and support infrastructure to meet customer demand for 300mm deposition materials. The expansion, which includes a new 300mm PVD development system in its Orangeburg, NY facility, will boost overall production capacity by 25%.
Fairchild Semiconductor, South Portland, ME, has agreed to purchase the RF Components Division of Raytheon Co., Lexington, MA, for an undisclosed amount. Fairchild has also bought Raytheon's foundry partnership to produce GaAs wafers and an equity stake in WIN Semiconductor. Fairchild says the deal will add $5 million in revenues per quarter by 2H04.
In other news, Fairchild has also opened a "Center of Excellence" in Fuerstenfeldbruck, Germany, one of six such centers worldwide. Among the projects at the German center are a color TV power supply with 70% fewer components, an automotive ignition-control system with 60% less board space, and an ultraslim power supply design for an LCD TV.
China
Motorola, Austin, TX, and Semiconductor Manufacturing International Corp. (SMIC), Shanghai, China, have agreed to transfer Motorola's MOS-17 8-in. wafer fab in Tianjin to SMIC in exchange for SMIC shares. SMIC will expand and operate the $1.5 billion fab, built in 2000 with a production capacity of 6000 wafers/.month, and act as a foundry partner for Motorola. SMIC also announced $630 million in new financing, which will help build a new 12-in. facility in Beijing and increase production capacity at its three facilities in Shanghai.
Taiwan's Powerchip Semiconductor Corp. plans to invest up to $1 billion for a new 8-in. wafer fab in mainland China, according to the Taiwan Economic News. Company chairman Frank Huang said the deal will ease tight output capacity in the face of a capacity shortfall seen since 2Q03. Huang said Powerchip may yet partner with mainland manufacturers to gain capacity either as an alternative or in addition to building a new fab.
Taiwan
National Semiconductor plans to open a research and development center in Taiwan, according to a report in the Asia Pulse Businesswire. National Semi's Taiwan GM Hsaio Wen-Hsiung said the HQ has been in the works for six months. Among National Semi's Taiwanese customers are TSMC, BenQ, and Compal.
Responding to concerns that chipmakers' current production lines won't be able to meet a growing number of orders, UMC plans to build new chip plants ahead of an anticipated pickup in demand. "We will be very aggressive in capacity expansion, especially in the 300mm area," said chairman Robert Tsao, at the opening of FSA's Asia-Pacific office. UMC has a pair of 300mm facilities in Taiwan and Singapore, and is "considering building more, faster, and in other countries," he said.
Korea
Samsung has begun construction of what will be the world's largest TFT-LCD manufacturing complex, just south of Seoul. The company plans to invest $17 billion by 2010 in the 2 million sq. ft facility, which will house four seventh-generation LCD production lines generating 40-, 42-, and 46-in. LCD panels from a single glass substrate.
IBM is finalizing plans to set up an R&D center in South Korea, according to the Korea Times. The center will most likely focus on semiconductors and telematics, given IBM's partnership with domestic carmaker Hyundai Motor Co. initiated in 2002.
Japan
Japan's electronics industries are expected to ramp up capex by double digits in 2003, according to a survey conducted by the Nihon Keizai Shimbun. Manufacturers of flat-screen TVs and chips are expected to boost capex by 14.1% in 2003, a reversal of last year's 17.8% decline. Other industries expecting boosts in capex include precision equipment (10.4%) and automotive (5%).
Japan's book-to-bill ratios seem to have stalled. September's worldwide book-to-bill was 1.10, down from 1.24 in August and 1.40 in July, but still the fifth consecutive month above parity. A book-to-bill of 1.10 means that $110 in new orders was received for every $100 of product billed for the month. The domestic book-to-bill in September was 0.92, its first time below parity since March 2003, down from 1.03 in August, 1.33 in July, and 1.15 in September 2002. Both book-to-bills have now declined for four consecutive quarters.
Singapore
ST Assembly Test Services Ltd. (STATS) is moving its Singapore corporate office and 200 employees to a new location on Ang Mo Lio Street, to make room for expansion. The company plans to convert 45,000 sq. ft of space in its existing site on Yishun Street, which already contains 300,000 sq. ft of operational space and a class 10K cleanroom.
EuroFocus
EV Group, Scharding, Austria, and Silicon Genesis Corp. (SiGen), San Jose, CA, have signed an agreement to develop low-temperature wafer bonding technologies. Under a licensing deal, SiGen will transfer equipment and processes to EV for inclusion in EV's line of wafer bonding tools. The combined technologies will provide high-throughput, low-temperature activated plasma bonding for EV's wafer bonding system and cluster platforms.
Micronic Laser Systems AB, Taby, Sweden, has introduced a new registration measurement system for TFT-LCD photomasks. Designed to complement the company's pattern generators, the MMS15000 verifies photomask pattern placements with an accuracy better than 100nm, and can measure masks as large as 1300 × 1500mm.