World News
02/01/2005
BUSINESS TRENDS
Surplus chip inventories in the electronics supply chain soared to $1.6 billion in 3Q04, more than double the $800 million built up in the previous quarter, according to iSuppli Corp., El Segundo, CA. That’s significantly higher than preliminary calculations in October of $1.1 billion, and early projections of flat sequential levels, after inventories bottomed out well into negative numbers in 4Q03. Semiconductor suppliers held 89% of the $1.6 billion excess, with the remainder held by other segments of the electronics supply chain, including equipment OEMs, distributors, contract manufacturers, and retailers. Days of inventory increased 6% from a year ago.
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Chip suppliers have recognized and responded quickly to their swelling inventories, cutting back on wafer starts and reassessing capital equipment expenditures, said iSuppli, which predicts that both will decrease in 4Q04 and into 2005, and foundry capacity utilization rates also will sink over the next two quarters. Those early efforts will be enough to stop the rising tide, but not much more - iSuppli predicts surplus inventories to decline only slightly in 4Q04 to $1.5 billion.
WORLDWIDE HIGHLIGHTS
Infineon Technologies AG, Munich, Germany, plans to spend approximately $1 billion to build a frontend production plant in Malaysia’s Kulim High-Tech Park, to build power and logic chips used in automotive and industrial power applications. Groundbreaking is planned for early 2005, with projected ramp-up in 2006. CEO Wolfgang Ziebart described the plan as an effort to expand the company’s presence in Asia, as well as a strategic move to reduce exposure to fluctuating US-euro currency exchange rates.
Hynix Semiconductor, Ichon, South Korea, and STMicroelectronics, Geneva, Switzerland, have announced details of their jointly owned frontend manufacturing facility to be built in Wuxi City, China, to produce DRAM and NAND flash memory technology. Construction will begin early this year, with a 200mm line scheduled to begin volume production in 2006 and a 300mm line following in 2007, each with capacity of 20,000 wafers/month.
USA
The Semiconductor Industry Association (SIA) has announced a research program to ensure US leadership in information technology well into the future. The Nanoelectronics Research Initiative (NRI) aims to link up related research from academia, industry, and the federal government to conduct research on materials, device structures, and assembly methods for microelectronic devices with feature sizes smaller than 10nm.
ASIAFOCUS
China
Santa Clara, CA-based chipmaker Advanced Micro Devices (AMD) has begun trial operations at its chip assembly plant in Suzhou, according to local news reports. Full production of 250,000 chips/week is expected to be achieved by year’s end. The Chinese market currently contributes 15-18% of AMD’s global sales.
Japan
Japanese development consortium Semiconductor Leading Edge Technologies (Selete) plans to spend about ¥3 billion (US$29.2 million) on development of 45nm chips by March 2006. Funds will come from four of the 11 member organizations: Renesas Technology Corp., Toshiba Corp., NEC Electronics Corp., and Fujitsu Ltd., according to the Nihon Keizai Shimbun. Selete recently completed its five-year Asuka project to develop 65nm linewidths, supported by ¥70 billion (~US$700 million) in investments.
South Korea
LG Philips, a 50-50 JV between LG Electronics and Philips Electronics, plans to spend $5.06 billion to build a seventh-generation production line for thin-film transistor liquid-crystal displays (TFT-LCD), according to several media reports. Production ramp at the company’s site in Paju, north of Seoul, is projected for 1Q06.
Taiwan
BOC Edwards, West Sussex, UK, plans to invest in seven gas plant facilities in Taiwan to shore up bulk gas supply to nine new semiconductor and flat-panel display manufacturing fabs under construction. The investments, part of a $75 million deal with the company’s JV partner, BOC Lienhwa Industrial Gases Company Ltd., will serve sites in Hsinchu, Taichung, Tainan, and Taoyuan.
EUROFOCUS
The Soitec Group, Paris, France, and Netherlands-based ASM International NV have produced samples of 300mm strained silicon-on-insulator (sSOI) wafers, following customer evaluations of 200mm sSOI wafers a year ago. Initial wafers are thin-film sSOI for fully depleted architectures; thicker-film sSOI wafers for partially depleted architectures will begin sampling in 1Q05.