Chip sales rise, equipment orders still down in October
01/01/2003
Business Trends
Chip sales rise, equipment orders still down in October
Chip sales were up month-to-month and year-to-year in October, sign of a healthy industry recovery, according to the Semiconductor Industry Association (SIA), San Jose, CA.
Global semiconductor sales reached $12.5 billion in October 2002, a 1.8% sequential increase from the $12.3 billion in revenue reported in September 2002 and a 20% increase from the $10.4 billion total recorded in October 2001.
"If there are any doubts remaining about the strength of the global chip industry, a healthy recovery continues as we move into the fourth quarter," stated SIA president George Scalise. "Having achieved three quarters of continually rising growth, including 5.6% in the first quarter, 5.8% in the second, and 8.2% growth in 2002's third quarter, our forecast calls for moderation in the year's final quarter, consistent with normal year-end patterns — steady but sustainable growth across broad product sectors."
Equipment orders continued down, however. North American-based manufacturers of semiconductor equipment posted $766 million in orders in October and a book-to-bill ratio of 0.73, according to Semiconductor Equipment and Materials International (Semi).
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The bookings figure is 8% below the revised September level of $832 million, yet 19% above the $644 million in orders posted in October 2001.
In other semiconductor industry news, VLSI Research Inc.'s October Industry Pulse Pro showed that front-end capacity utilization totaled 84.4%, down from September's revised 85.6%. That number is projected to fall to 79% in November, and drop further to 76.6% in December, according to VLSI Research.
WORLDWIDE HIGHLIGHTS
The MEMS Industry Group (MIG), a trade association representing North American MEMS and microstructure industries, and NEXUS, a European microsystems network, Grenoble, France, have entered into a partnership to foster development and commercialization of MEMS and MEMS-.enabled devices in Europe and North America. The two groups will establish the first North American user supplier club (USC), a concept that has successfully linked MEMS developers with users in Europe.
In addition to USCs, MIG and NEXUS will begin working toward a global study of commercialization issues in the MEMS and microsystems industry, including the tracking of industry statistics and the development of a technology roadmap.
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Modest growth in semiconductor sales and limited fab expansion will likely bring demand back in balance with the supply of fab capacity in 2003, projects Nikkei Market Access. The research group figures the industry had about 10% oversupply in 2002, but will get back to typical 10–20% annual growth in demand in 2003, as consumers upgrade their cell phones to models with color displays and cameras, and buy more enhanced DVD players and cars loaded with electronics. Meanwhile, it calculates the industry plans to bring on capacity to run a total of only about 200,000 300mm wafer starts/month by 4Q03, and will add capacity for another 2.4 million or so 200mm wafer starts for the year.
USA
Olympus Integrated Technologies America, San Jose, CA, has entered into an agreement with International Sematech (ISMT) to characterize and refine the use of DUV imaging for defect review and process control in the fab. The Olympus FR 3200 ADC DUV inspection and review station has been installed at ISMT's site in Austin, TX.
MKS Instruments, Andover, MA, has laid off an additional 120 people, about 6% of its work force, in an effort to lower operating costs. The company had reduced its staff by 173, or about 7%, in mid-September.
Entegris Inc., Chaska, MN, will close its manufacturing facility in Upland, CA, and shift production to Chaska, MN. Additionally, the company has also eliminated 121 positions, or 7% of its worldwide work force.
Royal Philips Electronics, Eindhoven, The Netherlands, plans to phase out the closure of its semiconductor fab in Albuquerque, NM, at the end of 2003. The core production team will remain in place into 3Q03, at which time manufacturing will be relocated to other Philips sites in North America, Asia, and Europe.
Akrion has expanded its primary plant at its headquarters in Allentown, PA, to 9600 ft2, dedicating 2500 ft2 of this space to the manufacture of its automated and semiautomated immersion cleaning systems, Akros and V3. The plant began operations in September, and is slated to reach volume production in 2003.
Isonics Corp., Golden, CO, plans to create a subsidiary to commercialize identified trace detection technologies for the homeland security field. Details of the subsidiary will be announced in the near future.
DuPont has acquired ChemFirst Inc. The deal includes two semiconductor fabrication materials businesses to be known as EKC Technology and Electronic Polymers, and a chemical intermediates business that will operate as First Chemical Corp.
Applied Materials Inc., Santa Clara, CA, will reduce its global work force by about 1750, or approximately 11%, as a result of the continuing downturn in the semiconductor industry. Some 800 positions at the company's Silicon Valley operations and 200 at its Austin operations will be affected. The remaining positions are expected to be eliminated at other locations in the US and worldwide by the end of 1Q03.
Amkor Technology Inc., Chandler, AZ, and Fujitsu Ltd., Tokyo, Japan, have ended talks relating to Amkor's proposed purchase of Fujitsu's semiconductor assembly and test operation in Kagoshima, Japan. Amkor president and COO John Boruch cited the current economic and industrial environment as chief among various reasons for the transaction's demise.
Asyst Technologies Inc., Fremont, CA, has completed its acquisition of 51% of Asyst-Shinko Inc., a Japanese JV company formed by the carve-out of the automated materials handling systems division of Shinko Electric Co. Ltd.
Through a recently signed cross-licensing agreement, International Sematech (ISMT) and DuPont Photomasks have combined their IP for producing test photomasks to strengthen photomask inspection and repair systems standards. Under terms of the agreement, DuPont Photomasks will be the exclusive merchant photomask manufacturer of test photomasks based on ISMT's defect inspection reticle and repair ReTicle mask design and DuPont Photomasks' patent-pending Universal Inspection Standard.
EUROFOCUS
JSR Micro NV, a wholly owned subsidiary of Tokyo-based JSR Corp., has completed construction of its newest semiconductor materials manufacturing facility in Leuven, Belgium. The facility will produce KrF photosensitive resists.
Spectris plc, Almelo, The Netherlands, has completed its acquisition of Philips Analytical. The company has been renamed PANalytical, and will form part of the process technology sector of Spectris.
Infineon Technologies, Munich, Germany, and Nanya Technology Corp., Taoyuen, Taiwan, have signed final contracts concerning strategic cooperation on DRAM. The agreement provides for the joint development of advanced 0.09 and 0.07µm production technologies for 300mm wafers. The companies have also set up a 50/50 joint venture for the production of DRAM chips and will build a new joint 300mm facility in Taiwan.
IMEC will build a 300mm silicon research foundry to address process research two generations ahead of current industry manufacturing. The new fab will be built next to IMEC's existing facilities in Leuven, Belgium, and should be fully operational by 2004. The initiative will serve several as yet unnamed IC manufacturers and development organizations worldwide, and will focus on the fundamental physics behind emerging process modules, including low-k and high-k materials.
Communicant Semiconductor Technologies AG has received European Union approval for federal and state government subsidies to fund its foundry. The subsidies will pay for jobs created at its headquarters in Frankfurt.
Micronas, Freiburg, Germany, has purchased a license for California-based MIPS Technologies' core IP for new product development. Micronas will offer high-performance and low-power designs for home entertainment platforms.
STMicroelectronics, Geneva, Switzerland, and Fujitsu Ltd., Tokyo, Japan, have teamed to develop the ST19ZR01, a contactless smart card IC with FRAM and ROM, but no standard RAM. A demonstrator product, which includes an on-board library of certified cryptographic algorithms, will be marketed through ST starting 4Q02. The newly developed product will be used in applications like transport ticketing and personal ID cards.
ASIAFOCUS
China
Shenzhen STS Microelectronics, a joint venture between STMicroelectronics (ST), the Shenzhen Hi-Tech Industrial Co. Ltd., and Shenzhen Graduate School of Tsinghua University have signed a collaboration agreement to establish a joint ASIC research center. The center will focus on R&D of ASICs using advanced digital and mixed-signal technologies, and will be located for the time being in Tsinghua's research institute at Shenzhen High-tech Industrial Park. It will move to its permanent home at Tsinghua University campus in Shenzhen University Park, Xili Lake, Shenzhen, in 2003.
Israel
Tower Semiconductor has joined the ARM Foundry Program. Through the program, Tower will gain access to two of ARM's embedded microprocessor cores, enabling Tower to produce ARM core-based products in its Fab 2 facility.
Nova Measuring Instruments Ltd. will undertake a corporate reorganization and operational adjustment program, as a result of the difficult economic environment and near-term industry forecasts. The reorganization consolidates Nova products into two main product divisions, thin film and metrology. Adjustments have so far resulted in a work force reduction of approximately 14%.
Japan
Mitsubishi Corp. will establish a nanotechnology firm in the US to develop microscopic carbon nanotubes. The new company, Tailored Material Corp., will develop carbon nanotube technology for next-generation thin displays for mass production in FY04.
Matsushita Electric Industrial Co. Ltd. and independent electronics R&D center IMEC, Leuven, Belgium, will collaborate on the development and implementation of high-k gate stacks for sub-65nm devices. As part of the contract, a Matsushita researcher will join IMEC's research team.
Komatsu Electronic Metals will expand its capacity to make 300mm wafers to 45,000 wafers/month by 2005. The company will add tools in its Miyazaki plant by the middle of next year to increase capacity from 10,000 to 15,000 wafers/.month. Then it will start production at Nagasaki of an additional 30,000 units. Komatsu says demand for 300mm wafers is running about 180,000 wafers/ month, but it expects that to reach 750,000 by 2005.
Mitsui & Co has bought a majority stake in Teksel Co. Mitsui plans to launch a joint venture with Teksel and then merge its own semiconductor subsidiary with its new partner. In other news, the company has started trial operations of its new carbon nanotube plant, located in a suburb of Tokyo. The facility can produce 120 tons of 20nm carbon nanotubes annually.
Fujitsu Ltd. will cut the work force at its three US subsidiaries by 10% as part of restructuring efforts, which include halting the marketing of transmission devices for long distance communications, and substantially scaling down information systems building services for corporate clients in North America. The payroll cut means that a recent plan by Fujitsu to slash 1700 jobs overseas will be carried out entirely in the US.
Korea
Hynix Semiconductor Inc. has signed a final agreement to sell its FPD unit to China's BOE Technology Group Inc. BOE is set to take on all of the unit's 1700 employees for two years.
Silicon Tech Ltd. has signed an agreement with Hong Kong's Tec-Hill Group to build an IC production plant in Shenyang, China. Construction of the plant will begin in April.
Malaysia
1st Silicon has received US$614 million in equity and credit. The funds will be used to purchase the chipmaking equipment the company needs to bring its fab up to capacity levels.
Chartered Semiconductor Manufacturing is reducing its worldwide work force by about 300 people or approximately 7%. Some 60% of the employees affected are manufacturing operators in Chartered's Singapore fabs; the rest are operations, support, and administrative staff.
Taiwan
Sony Corp. has announced plans to set up an innovation and R&D center in Taiwan. It will also establish an IC design center at the Nankang IC Design Park in Taipei, with opening set for early next year.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has raised its forecast for 4Q utilization to "close to 60%," from an earlier prediction of between 50 and 60%. TSMC also said wafer shipments in the fourth quarter would approximately equal shipments for the third quarter.