World News
10/01/2003
BUSINESS TRENDS
Second quarter offers some positive signs
Worldwide sales of both semiconductor chips and silicon wafers rose in 2Q03, according to data from the Semiconductor Industry Association (SIA) and Semiconductor Equipment and Materials International's (Semi) Silicon Manufacturers Group.
Worldwide semiconductor chip sales hit $37.6 billion in 2Q, up 3.2% from 1Q03, and up 10.4% from 2Q02. Sales were up significantly in nearly every chip segment. Sales of programmable logic and standard cell chips increased 27.5% and 15.7% in June, respectively, due to consumer use of broadband services.
Growing demand for DVDs — particularly DVD recording capabilities — drove a 33.9% jump in optoelectronics sales, while digital camera and mobile phone demand fueled a 37.1% leap in flash memory sales.
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SIA President George Scalise highlighted strong growth in the computational, consumer, and communications sectors. Year-on-year sales of computers were up nearly 8% — the strongest growth in three years — which contributed to an 8.2% growth in microprocessor sales.
Doug Andrey, principal industry analyst at SIA, said that an approaching PC upgrade cycle is likely the cause of the boost in computer sales, still the largest market for semiconductors. Andrey said he expects this trend to pick up by the year's end.
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Geographically, the Asia-Pacific region grew the most on a quarter-by-quarter basis, up 5.9%, followed by Japan (5.3%) and the Americas (3.6%). A 4.1% decline in European sales was attributed to a sluggish economy and continued outsourcing of production to Asia.
Capacity utilization was at approximately 88% for 0.18µm technologies, and up to 95% for "leading-edge" 0.15µm technologies. "Now that inventory has been worked off, increasing demand as the year progresses will directly generate rising semiconductor sales," said Scalise.
Quarterly data from Semi's Silicon Manufacturers Group (SMG) also was upbeat. The special interest group, which consists of Semi members who produce mono- and polycrystalline silicon and silicon wafers representing 95% of the world's silicon output, says that analysis of 2Q03 silicon wafer area shipments may indicate a new period of growth for the industry. Worldwide shipments were up 8% compared to 1Q03, and identical to shipments in 2Q02.
Volker Braetsch, chairman of Semi SMG, and Wacker Siltronic's VP of strategic planning and communication, says supply is tight for 300mm wafers, and will likely tighten further as new fabs come online, while production of smaller diameters including 200mm wafers already is at capacity limits. Braetsch said that while wafer area shipments are near the highs reached in 4Q02, revenues have lagged behind, and silicon suppliers have had to cut production lines to stay competitive.
WORLDWIDE HIGHLIGHTS
Chartered Semiconductor, Singapore, IBM, and Infineon, Munich, Germany, are working together to develop an advanced foundry process at 65nm, with extensions down to 45nm. The work will utilize nearly 200 engineers from the three companies at IBM's Advanced Semiconductor Technology Center, a newly opened 300mm development lab in East Fishkill, NY.
STMicroelectronics and Texas Instruments, along with ARM and Nokia, are joining forces to promote open standards for mobile application processors. The Mobile Industry Processor Interface (MIPI) Alliance aims to develop specs for various hardware and software interfaces, continuing the work of TI and STM's OMAPI standards project. MIPI plans to announce an expanded participant roster later this year.
International Sematech (ISMT), Austin, TX, says its Advanced Technology Development Facility (ATDF) has successfully qualified a 4th-generation automated material handling system with overhead transport OHT and conveyor systems within a 300mm fab, the first such combination in a 300mm manufacturing environment. ATDF says the system, which processed wafers through seven tools, could be ready for industry use within two years.
USA
Advanced Micro Devices (AMD), Sunnyvale, CA, plans to acquire the information appliances unit of National Semiconductor. Terms of the deal were not disclosed. AMD will assume command of National Semi's Geode family of microprocessors, targeted at smart displays and set-top boxes.
Honeywell is seeking an injunction to put on hold Air Products' recent $300 million acquisition of Ashland's chemicals business. Honeywell claims the purchase violates a strategic alliance between Air Products and GEM Microelectronic Materials, a JV owned by Honeywell and Mitsubishi Chemical that makes wet process chemicals for the semiconductor industry.
Raytheon, Lexington, MA, and IBM, Armonk, NY, have announced a deal to design and market systems for the aerospace and defense industries. The deal, worth up to $100 million over five years, partners IBM's custom chip and chip system design group with Raytheon, which has expertise in defense electronics and aerospace and defense.
Qualcomm has filed a complaint against Texas Instruments, alleging that the chipmaker violated a December 2002 patent agreement over wireless semiconductor technology. Qualcomm won't say specifically what patents are at stake, but TI has stated plans to expand its market share of chipsets based on code division multiple access (CDMA) technology, an area dominated by Qualcomm.
Vitesse Semiconductor Corp., San Jose, CA, has agreed to sell its Optical Systems Division to Avanex Corp., Fremont, CA, a developer of photonic processing subsystems, in an all-stock deal worth approximately $5.9 million. As part of the deal, Avanex also will buy up to $2 million in products from Vitesse over the next three years.
Sipex Corp., Milpitas, CA, has signed a deal with PolarFab, a Bloomington, MN, foundry, to produce its high-end power management and interface products, as well as wafers for Silex's photo detector DVD products. PolarFab also will add extra capacity, as well as extend preferential wafer pricing and delivery, and engineering support.
EUROFOCUS
The European Union has imposed a five-year, 34.8% tariff on Hynix Semiconductor's DRAM chips, fulfilling promises to penalize the company for alleged subsidies received by the South Korean government. Of 15 EU member nations, only France and the Netherlands voted against the measure. The action mirrors a recent US decision to levy a 44.29% tariff on Hynix chips.
ARM, Cambridge, England, and Axis Systems, Sunnyvale, CA, have signed an agreement to develop a fully integrated, system-level verification flow for ARM cores and the ARM PrimeXsys platform. By the agreement, Axis will further integrate ARM technologies and cores into its XoC platform for the embedded chip market.
ASM International, Amsterdam, The Netherlands, plans to relocate its R&D facilities from Espoo, Finland, to the University of Helsinki, where the two organizations will jointly develop atomic layer deposition technologies. The move, scheduled to be completed in November 2003, will transfer equipment and about a dozen workers, while laying off about two dozen others.
Infineon, Munich Germany, plans to contract with Semiconductor Manufacturing International Corp. (SMIC) to manufacture memory chips with 0.11µm processes, according to wire reports and the Taiwan Economic News. SMIC will use 193nm production processes to build the chips, ranging from 0.11µm to 0.14µm.
Royal Philips Electronics, Amsterdam, The Netherlands, has added to its line of active matrix liquid crystal display technology geared towards the next generation of mobile phones. The new low-temperature polysilicon (LTPS) module integrates IC and external capacitors onto the glass, resulting in fewer components and tighter display margins.
Semiconductor manufacturer Eupec Hungaria will invest approximately $8.6 million to build new facilities and raise capacity. The company has also received more than $400,000 in government grants for the project, which will employ 120 people and incorporate production and assembly lines.
ASIAFOCUS
China
Suzhou He Jiang, a mainland Chinese chipmaker, was planning for volume production in September for its 8-in. wafers made with a 0.18µm process, according to local reports. The company, headed up by former UMC execs, projects an increased monthly capacity of 10,000 wafers/month. Comparatively, mainland China's other dedicated chip supplier, Semiconductor Manufacturing International Corp., produces 35,000 wafers/month.
Siemens AG will invest $30 million to expand manufacturing at its mobile communications factory in Shanghai. The facility, run with partners China Mobile and China Unicom, is the second production location for Siemens' third-generation wideband CDMA technology.
Royal Philips Electronics NV, Amsterdam, The Netherlands, and Advanced Semiconductor Manufacturing Corp. (ASMC) have expanded their joint venture to include a new $687 million semiconductor manufacturing facility, according to Dow Jones. The line is now entering trial production, and will produce 30,000, 8-in. wafers/month at full capacity.
Amkor Technology, Chandler, AZ, and United Test and Assembly Center Ltd. (UTAC), Singapore, will join forces to offer assembly and test products and services to wafer foundries and IDMs in China. UTAC will locate its China test center within Amkor's factory in Shanghai.
Credence Systems Corp., Hillsboro, OR, and the Hong Kong Science and Technology Parks Corp. are partnering to establish a probe and test development center. The facility, scheduled to open by the end of 2003, will offer test program development, silicon debug, engineering analysis, device characterization, and pilot production test services to fabless companies in Hong Kong.
Agilent Technologies, Palo Alto, CA, and the microelectronics department at Peking University have opened an engineering test and education center for system-on-chip designs. The centers will house research projects supporting three national/ministry laboratories. Agilent also reportedly plans to open a chip design service and development center in Taiwan.
Taiwan Semiconductor Manufacturing Corp. (TSMC) says it will begin volume production of 8-in. wafers at its Shanghai facility by 2004, according to a report in Interfax. Construction and equipment move-in will be completed by the end of next year, but the company did not disclose the facility's production capacity. The plant is TSMC's first 8-in. wafer fab in mainland China.
Taiwan
Officials in Hsinchu City, Taiwan, have officially opened a research & development center for Si-Soft, part of a nationwide project aimed at increasing the company's profile in semiconductor production and design. The center, which will house over 20 domestic and foreign companies, will receive $217 million in government funds over the next three years.
ChipMOS Technologies has signed an agreement to provide wafer testing and IC assembly and testing services to Renesas, Hsinchu, Taiwan. The deal covers Renesas' mobile memory chips for use in handheld devices, and low-power memory chips for graphics applications.
Barcelona Design, a Newark, CA, provider of analog synthesis technologies, has formed a partnership with UMC to develop synthesizable phase-locked-loop and analog-to-digital converter technologies for UMC's 0.18µm, 0.15µm, and 0.13µm processes.
Intel will build a $8.7 million R&D center in Taipei, adding to the company's existing application design center. CEO Craig Barrett announced the development plans for the new Innovation Center, which complements other R&D facilities in China and India.
Japan
Advantest, Tokyo, Japan, planned to finish consolidating its production lines to a single location in Saitama Prefecture by September. The company says the moves will shorten lead times for semiconductor-testing equipment from 3–4 months to <2 months.
Canon plans to invest 100 billion yen ($851.6 million) to develop next-generation steppers using 60nm processes, according to the Nihon Keizai Shimbun. The company will add 300 employees for the project, scheduled to be completed by 2005. Canon is already planning to build new R&D facilities alongside its existing plant in Tochigi Prefecture.
Elpida Memory, Tokyo, Japan, a DRAM JV between NEC and Hitachi, was planning to take over NEC's production facility in Hiroshima as a wholly-owned subsidiary by September 1. Hiroshima Elpida Memory Inc. will lease equipment and receive nearly 1400 employees from NEC, with FY04 revenues of around $1.10 billion. With the deal, Elpida will own production lines for both 200mm and 300mm wafers.
In other news, Elpida and Powerchip Semiconductor Corp., Hsinchu, Taiwan, have extended a previous agreement to exchange foundry services for chip manufacturing processes. Powerchip will implement Elpida's 0.10µm and 0.09µm processes in its 12-in. wafer fab, where it already produces 15,000 wafers/month using Elpida's 0.13µm processes.
Korea
Hynix Semiconductor, Seoul, Korea, says it will immediately ramp up production of its new 500MHz 256Mbit DDR SDRAM chips, built on the company's 0.13µm processes. The memory devices are targeted at gamers, who tend to require higher frequencies and faster performance than typical users, and will be priced 10–20% above DDR400 chips.
Malaysia
Silicon Storage Technology Inc. (SST), Sunnyvale, CA, has entered into an agreement with Malaysian foundry 1st Silicon to license SST's 0.25µm SuperFlash technology. The foundry will use the technology for manufacturing embedded flash products ranging from smart cards, mobile phones, and automotive applications. Pilot production is planned for spring 2004.
India
The Semiconductor Complex Ltd. (SCL) can now boast India's first facility built specifically to produce micro-electro mechanical systems (MEMS). The company's facility in Mohali was chosen as the national foundry for MEMS by the National Program on Smart Materials, a two-year-old government-sponsored initiative supporting MEMS research.
Singapore
United Microelectronics Corp. (UMC) says it will buy Infineon's 30% stake in their chip manufacturing joint venture for between $100 million and $130 million, giving it 80% ownership in the 12-in. fab in Singapore. UMC's cumulative investment in the plant will top $500 million this year, and will total $1.2 billion by the end of 2004.
Middle East
Kulicke & Soffa, Willow Grove, PA, has agreed to sell its sawing equipment and hard material blades operations in Israel to unnamed third parties. The company says its Semitec dicing blades business in Santa Clara, CA, is not for sale. The sawing and blades businesses represent approximately 2% of the company's revenue.
Tower Semiconductor, Migdal Haemek, Israel, says it has received $2.5 million from wafer and financial partners towards its Fab 2 project, and received a commitment for another $20.4 million. Under the financing deal, Tower will distribute over 800,000 shares of stock among SanDisk, Alliance Semiconductor, Macronix, and Israel Corp.