World News
04/01/2003
Business Trends
January chip sales, tool orders down
Global chip sales totaled $12.2 billion in January 2003, a 2.4% decrease from the $12.5 billion in revenue reported in December 2002, but a 22% increase from the $10 billion recorded in January 2002, according to the Semiconductor Industry Association (SIA).
"For more than a decade, with the exception of the boom year 2000, sales have been slightly lower in January than December because of the seasonality of the semiconductor industry," said George Scalise, SIA president. "We continue to forecast double digit revenue growth for 2003 and broad-based strength in our industry, driven by a recovery in IT spending, a fast-paced global wireless market, and the emergence of new growth sectors, including Wi-Fi (802.11) and broadband networks using advanced semiconductor technologies."
Forecasts predict a 4–7% rise in IT spending in 2003 and a 10–14% rise in PC sales, as corporate buyers return to the market.
The wireless communication market, 25% of final chip demand, drove performance in 2002 and continues to show strength, as consumers buy new mobile technology, including smart phones with digital cameras and e-mail messaging.
North American-based manufacturers of semiconductor equipment posted $742 million in orders in January 2003 and a book-to-bill ratio of 0.92, according to Semiconductor Equipment and Materials International (Semi).
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The $742 million is 10% below the revised December 2002 level of $827 million and 15% above the $645 million in orders posted in January of last year.
In other news, frontend capacity utilization totaled 75.7% in January 2003, according to VLSI Research Inc.'s Industry Pulse Pro. That number is projected to fall to 73.6% in February, according to VLSI.
WORLDWIDE HIGHLIGHTS
The worldwide semiconductor market is forecast to grow 8.9% in 2003, with revenue totaling $167 billion, up from $153.4 billion in 2002, according to quarterly forecast estimates by Dataquest Inc., a unit of Gartner Inc.
A slowdown in the market at the end of 2002 continued into 1Q03, but Dataquest analysts said that business spending on IT will return in 2H03, which will fuel demand.
Looking ahead, Dataquest analysts said a combination of pent-up demand and under-investment in fab capacity is likely to spur semiconductor unit shipment growth and to stabilize device pricing, conditions that would create strong growth in 2004 and 2005.
The semiconductor industry still has excess capacity equivalent to some 11 fabs, each running 30,000 200mm wafers/month, but that should be used up by about 3Q, figures Malcolm Penn, CEO of the market research firm Future Horizons. Even if the industry's unit volume increases by only about 12% in 4Q, he calculates chipmakers will be the equivalent of 16 fabs short.
The European NanoBusiness Association has created 12 local hubs in Oslo, Helsinki, Copenhagen, Newcastle, Cambridge, London, Dublin, Munich, Eindhoven, Madrid, Budapest, and Sofia. The hubs will allow every region of Europe to participate in the opportunities afforded by nanotechnology.
In the US, the NanoBusiness Alliance is supporting legislation to provide $2.1 billion over three years for nanotechnology R&D programs. The bill was filed by US House Science Committee Chairman Sherwood Boehlert (R. NY) and would support programs at the National Science Foundation, the Department of Energy, the Department of Commerce, NASA, and the Environmental Protection Agency.
USA
In order to streamline its cost structure, National Semiconductor Corp., Santa Clara, CA, will reduce its work force by 500 and will seek to sell its information appliance unit and its cellular base band business. In addition, the company will realign some manufacturing, product development, and support personnel.
Micron Technology Inc., Boise, ID, is set to reduce its headcount by 10%. The company also plans to focus on products using its latest-generation process technology.
Matheson Tri-Gas Inc. and ATMI Inc. have entered into a manufacturing and distribution agreement for ATMI's SAGE product line for the compound semiconductor market.
Intel Corp., Santa Clara, CA, plans to convert Fab 12, a 200mm fab located in Chandler, AZ, to a 300mm wafer fab. The conversion project, estimated to cost $2 billion, will begin in 1H04, with production scheduled to begin in late 2005. The converted fab will start production on 65nm process technology.
JMAR Technologies Inc., San Diego, CA, will sell its JMAR Precision Systems Inc. motion and metrology equipment-manufacturing operation in Chatsworth, CA, and form MAR Research, JMAR/SAL
NanoLithography, and JMAR Semiconductor operations into a single corporate entity with three specialized divisions: research, systems, and microelectronics.
Tegal Corp., Petaluma, CA, has been granted two US patents for producing sub-0.15µm devices via novel methods using solid source. The patented methods are enabled by actively controlling the plasma reactions on a variety of surfaces during the etching process.
Veeco Instruments Inc., Woodbury, NY, has entered into joint technology development efforts with two Japanese manufacturers of thin film magnetic heads focused on advanced giant magnetoresistive and tunneling magnetoresistive sensor development. The joint development efforts include the purchase of two NEXUS PVD systems.
Rockwell Automation, Milwaukee, WI, has signed a $4.5 million, five-year contract with Air Liquide America LP. Rockwell will supply its vibration analysis equipment to Air Liquide.
Agilent Technologies Inc., Palo Alto, CA, has signed an agreement to acquire IP and other assets of Pixel Devices Inc. (PDI), a developer of CMOS image sensor technology. At the close of the transaction, key employees of Sunnyvale, CA-based PDI will join Agilent's semiconductor products group.
Shipley Co. LLC, Marlborough, MA, has opened its Advanced Technology Center (ATC), a facility dedicated to the development of lithography, interconnect, low-k dielectric, and other critical materials needed for the newest generations of microelectronic devices. Shipley, a subsidiary of Rohm and Haas Co., has invested $30 million in the ATC.
ASIAFOCUS
China
TriQuint Semiconductor Inc., Hillsboro, OR, has completed the construction of its 1100m2 test facility located in the Tianjin Economic Technological Development Area. It will be operated by Sawtek Inc., a wholly owned subsidiary of TriQuint, and will provide assembly, test, mark, tape, and reel support for TriQuint's products.
Japan
 Japan tool orders rose 6.5% in December to ??59.3 billion. |
Mitsubishi Materials Corp., Tokyo, plans to open a wholly owned sales subsidiary in Shanghai, China, to begin operations in April. The new company will sell products such as electronic parts to control the temperature of electronic circuits.
Oki Electric plans to expand its wafer-level packaging capacity by 60% this spring. The company is adding facilities to process 3000 more wafers/month, for a total capacity of 8000/.month, and looking to supply other chipmakers with chip-sized packaging on a foundry basis.
JSR plans to double its capacity to make photoresist for color filters at its Kyushu plant this year, to meet growing demand from LCD makers. It will invest about $8 million (¥1 billion), including expansion of the cleanroom.
Nikon has a first order for its CMP tool, apparently from a chipmaker outside of Japan. The company targets a $50 million CMP business by 2005, or an approximately 15% share of the high-end CMP market.
Korea
Hynix Semiconductor Inc., Seoul, Korea, and the Korea Exchange Bank (KEB) have signed a memorandum of understanding to normalize the chipmaker's operations by 2006. Under the plan, Hynix will sell off nonessential businesses and streamline its structure and personnel. It also agreed that the CEO and other top managers would resign if yearly restructuring schedules are not met.
Malaysia
Chartered Semiconductor Manufacturing, Singapore, plans to consolidate its Fab 1 business into Fab 2 by March 2004. Approximately 500 employees will be affected by the consolidation.
Taiwan
Advanced Semiconductor Engineering Inc. (ASE), Kaohsiung, and AMD have signed an agreement to jointly develop solutions for flip-chip assembly on organic packages for microprocessor chip sets. Under the agreement, the companies will share technical expertise and exchange development information on flip-chip assembly materials, processes, and equipment to assemble AMD's next-generation chipset products.
ProMOS Technologies Inc. said a Hsinchu district court has granted a preliminary injunction allowing it to continue to develop, produce, and sell DRAM chips and other semiconductor products using technology from Infineon Technologies AG. The court has also ordered the German chipmaker not to block ProMOS' use of the technology.
AU Optronics will acquire a 20% stake in Fujitsu's LCD business, Fujitsu Display Technologies Corp. AU will pay $12.6 million for the stake.
EUROFOCUS
ASML Holding NV has qualified buyers for its thermal division. The company said in January it hoped to sell the unit in 1H03.
Wacker Siltronic AG will set up a $428.7 million 300mm silicon wafer plant at its Freiberg site in Saxony, Germany. The new plant will have an initial capacity of 60,000 wafers/month with an expansion capability of up to 150,000 wafers/month. It is scheduled to be operational in August 2004.
AIXTRON, Aachen, Germany, will cut jobs in an effort to maintain profitability. The company, which makes equipment for the manufacture of compound semiconductors, did not specify how many of its 500 employees will go.