World News
05/01/2005
BUSINESS TRENDS
Asian equipment markets flex muscles in 2004
Sales of chipmaking equipment for 2004 totaled $37.08 billion - a 67% increase from 2003, its second-highest performance ever behind the historic year 2000 - driven by robust spending in all geographic regions on 300mm equipment and other advanced technologies, according to Semiconductor Equipment and Materials International (Semi). Sales of wafer processing equipment grew 73%, while assembly/packaging increased 47%, and test equipment sales rose 55%.
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The data from Semi and SEAJ members, covering seven major semiconductor-producing regions and 22 product categories, clearly show the market’s heavy and increasing dependence on the Asia-Pacific region. Japan widened its lead as the biggest region in 2004, expanding 45% to $8.28 billion. Coasting into the No. 2 slot was Taiwan, which grew 166% to $7.76 billion, while slumping North America slipped to third ($5.81 billion). Also making big strides in 2004 were Korea ($4.61 billion, +45%), China ($2.68 billion, +132%), and the rest-of-world region ($4.49 billion, +114%), which incorporates Singapore, Malaysia, Philippines, and other smaller global markets.
WORLDWIDE HIGHLIGHTS
Worldwide silicon wafer area shipments increased by 22% in 2004 to 6262 million square inches (MSI), surpassing the 2000 peak, with 300mm wafers accounting for more than 15% of shipments by year’s end, according to the Semi Silicon Manufacturers Group (SMG). Revenues also grew by 26% from 2003 to $7.3 billion.
Wafer fab capacity inched up 0.8% sequentially and 9.4% year-on-year to 1.4664 million wafer starts/week in 4Q04, according to Semiconductor International Capacity Statistics (SICAS) in Vessem, The Netherlands. Total IC capacity utilization rates decreased from 92.5% in 3Q04 to 86.0% in 4Q04, the lowest level in six quarters. Utilization rates for leading-edge technology (processes <0.16µm) remained high at 93.2%, with capacity growing 45.7% year-on-year to 0.5056 million wafer starts/week. Capacity for 300mm wafer starts/week (calculated as 200mm equivalent) increased 20.6% from 3Q04 to 0.1636 million wafer starts/week, while 300mm utilization dropped from 86.4% to 73.5%.
USA
Texas Instruments Inc. is selling its large-size thin-film transistor liquid-crystal display driver operations to Oki Electric Industry Co., to shift its focus to proprietary analog products. The ¥5 billion (US$47.4 million) transaction will make Oki the No. 3 LCD chip driver producer behind Samsung and NEC, according to the Nihon Keizai Shimbun.
A federal judge in Virginia has dismissed all of Rambus’ patent infringement claims against Infineon Technologies AG, involving efforts to get its memory technologies included into standards. Rambus is pursuing similar litigation against Hynix, Inotera, Nanya, Micron, and Infineon’s former parent company, Siemens.
ASIAFOCUS
China
While awaiting a final decision from the US Export-Import Bank regarding its requested $769 million loan to purchase US chipmaking equipment, Semiconductor Manufacturing International Corp. (SMIC) reportedly is quietly preparing Plan B - turning to Japanese suppliers instead, according to reports from the Associated Press and Financial Times. A syndicate of Japanese banks reportedly would provide funds similar to the US proposal.
AMD has officially opened its new test, mark, and pack facility in the Suzhou Industrial Park, adjacent to Spansion’s flash memory assembly building. AMD began rolling out products in December at the 11,000m2 facility, and plans to add its eighth-generation microprocessors by 2H05.
Japan
Toshiba Corp. and SanDisk Corp. have accelerated the ramp-up of their newly completed joint 300mm NAND flash-memory fab to 2H05. The ¥270 billion (US$2.6 billion) Fab 3 facility in Yokkaichi began construction in spring 2004 with initial startup pegged for FY06, and later moved up to fiscal 4Q05. Production of 10,000 wafers/month is slated for later this year, and up to 62,000 wafers/month by fiscal 2007 based on demand. The site initially will utilize 90nm process technologies, moving to 70nm by 1H06 and 55nm by the end of 2006.
Elpida Memory Inc. has begun the first phase of equipment investments totaling ¥100 billion (US$950 million) for its second 300mm fab in Hiroshima, according to the Asahi Shimbun. Initial rollout at E300-Fab2, which began construction in June, will support monthly production of 15,000 wafers by December, about one-fourth of eventual total planned capacity of 60,000 wafers/month. Total investment in the new site is projected to be as much as ¥500 billion ($4.5 billion).
Korea
The World Trade Organization has ruled that penalizing tariffs by the US against Hynix Semiconductor are in violation of trade regulations. Alleging Hynix had been backed by government loans, the US International Trade Commission imposed a 44% duty on Hynix’s DRAM chips in June 2003, followed by a 35% duty imposed by the European Union. In other news, Hynix also has set aside provisions to cover potential financial obligations “similar to other companies” involved in a US antitrust case alleging price-fixing among a collection of top memory chipmakers, according to several news sources. Infineon Technologies AG already has agreed to pay $160 million in fines related to the charges, and Samsung indicated it has set aside about $100 million.
Singapore
National Semiconductor said it is seeking a buyer for its test and assembly plant in Toa Payoh, geared mostly toward complex high-pin-count (digital) products, which are no longer a focus for the company. National Semi has another test/assembly plant in Malaysia, and completed its third site in Suzhou, China, last fall.
Taiwan
United Microelectronics Corp. (UMC) is under investigation for allegedly making illegal investments in Chinese foundry He Jian Technology Corp., according to various media reports. TSMC is the only Taiwan foundry with government approval to invest in chipmaking operations on the mainland. UMC also has acquired up to a 50% stake in Becom Electronic Inc., a developer of audio/visual systems for automobiles, according to the Taiwan Economic News. UMC acquired the ownership through a recent issuance of $9.3 million shares.
EUROFOCUS
Ireland has abandoned its offer to provide a reported €100 million (~US$130 million) in funding for Intel’s expansion of its Fab 24-2 facility in Leixlip, outside Dublin, after learning that the European Union might take as long as 18 months to review the plan and likely would rule against it. Intel announced in May 2004 that it would invest €1.6 billion (nearly $2 billion) to build the extension to its Fab 24 300mm production site (currently the company’s fourth 300mm facility) to enable 65nm process technologies, with anticipated production beginning in 1H06.
Infineon Technologies AG said it will cease production by early 2007 at its 800-employee plant in Munich, founded as an R&D facility 20 years ago and more recently used to manufacture high-frequency products on 150mm wafers. Production will be shifted to facilities in Regensburg and Perlach.