World News
05/01/2001
WORLDWIDE HIGHLIGHTS
Inventory overhang, macroeconomy keep sales in slump
Worldwide semiconductor sales continue to decline, falling to $15.5 billion for February, according to the latest report from the Semiconductor Industry Association (SIA), San Jose, CA. That figure is a 6.9% decline over January's $16.6 billion, but an increase of 5.8% over the $14.6 billion logged for the same period a year ago.
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The latest Industry Pulse Pro from VLSI Research, San Jose, CA, offered more evidence of slowing in the semiconductor market as the worldwide IC book-to-bill ratio dropped to 0.54 for the month of February, a decrease of 0.07 from January, and the lowest book-to-bill ratio reported in more than a year.
VLSI reported a 3.5% decrease in semiconductor sales to $11.2 billion for February compared to January's $11.6 billion. The research firm expects sales to increase to $13 billion for March, but to decrease to $10.3 billion for April and rise slightly in May to $10.4 billion.
The North American book-to-bill ratio declined in February to 0.77 from January's revised figure of 0.80, according to Semi (Semiconductor Equipment and Materials International), San Jose, CA. Equipment manufacturers also saw bookings and shipments decline for the month. Semi said worldwide February shipments totaled $2.35 billion, 1% above January's revised $2.33 billion, but 48% above last year's shipments level of $1.59 billion.
Meanwhile, February bookings totaled $1.8 billion, 4% below January's $1.87 billion and 22% below the $2.3 billion logged for the same period last year. All figures are 3-month moving averages.
Three companies partner to design new chip
A three-way semiconductor group agreement between IBM, Sony, and Toshiba brings together three giants in the industry to develop an advanced, tailorable microprocessor chip. The venture will combine IBM's process technology with Sony's game unit consumer product and Toshiba's system-on-a-chip.
The three companies will together invest more than $400 million over five years to design a new microprocessor with built-in broadband connectivity, to access the Internet at high speeds and network with other units. The group will employ 300 technical people at a joint development center in IBM's Austin, TX, plant. Each company will then make the product for its own consumer applications. Designers will be able to select portions of the device for a specific application, and some parts, like a DSP, will be scalable.
Though the agreement is with Sony's video game division, Sony Computer Entertainment, Japanese industry sources expect parent Sony itself will likely start joint R&D with these partners as well, so all three can better compete with Intel.
What goes up, must come down
The length of an industry upturn does not necessarily predict the length of the following downturn, noted Bill McClean, president of IC Insights, at a recent conference.
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This becomes evident when looking at the third cycle of the IC industry, 1983-85. (The figure below gives a physical representation of the cycles.) During the third cycle, the upturn lasted almost two years and the downturn only lasted one. Even though the lengths of the cycles may vary, McClean said that the triggers of a downturn on a cycle-by-cycle comparison are usually the same.
McClean identified three triggers for industry downturns: global recession, overcapacity, and inventory burn, and noted that four of the last five downturns (1975, 1982, 1991, and 1998) have been accompanied by recessions.
USA
Brooks Automation Inc., Chelmsford, MA, has acquired SEMY Engineering Inc., Phoenix, AZ, a division of Semitool Inc., for $36 million in cash and $2.75 million in stock. Brooks is a supplier of tool and factory hardware and software automation solutions and SEMY provides advanced process and equipment control systems. In SEMY's FY00, the company had revenues of $19.8 million and was profitable.
Mallinckrodt Baker, Phillipsburg, NJ, has aquired 100% of the shares of Machwolk Sdn Bhd, Petaling Jaya, Malaysia, in a transaction that closed late last year.
Malinckrodt is a worldwide producer of high-purity analytical reagents, microelectronic, and biotechnology chemicals. Malinckrodt plans to manufacture several proprietary products for the microelectronics industry in Malaysia over the next two years, including its ALEG line of photoresist strippers/ash residue removers.
SIPEX Corp., Billerica, MA, plans to lay off approximately 4% of its work force to cut costs. The cuts are part of the implementation of a 24/7 schedule in the firm's Wafer Fab and Probe areas located in the Milpitas, CA, facility.
PRI Automation Inc., Billerica, MA, has laid-off 370 people from its worldwide work force, a reduction of about 20%. The cuts, according to PRI, were in response to lower expectation for second quarter earnings resulting from reduced capital equipment spending in the industry. PRI was also to break ground in April on an expansion of its new 57,000ft2 building, which will add 62,000ft2 to the present facility. The expansion will allow PRI to consolidate production of factory systems equipment. A company spokesman said that while the reduction in spending will likely slow down the expansion, it wouldn't stop it.
Ibis Technology Corp., Danvers, MA, announced a 15,000ft2 expansion at its wafer manufacturing facility. The company expects the expansion will allow it to more than double the number of oxygen implanters in the new facility for production of its line of wafers. The expanded SIMOX wafer fab was scheduled to be operational on April 1, and includes a new and improved quality control lab.
Mattson Technology, Fremont, CA, has said that it plans to divest STEAG CVD Systems, its single-wafer RT-CVD business unit. The decision is a result of the company's strategy to focus only on core technologies.
Praxair, Danbury, CT, has purchased Logistic Supply Company LLC and its wholly owned subsidiary CSF Technology LLC. CSF Technology, a distributor of consumable maintenance and repair parts to fabs in the US and Europe, will now do business as CSF Technology, a Praxair Company. Praxair has also purchased the Dorsey Gage Co.
NeoMagic Corp., Santa Clara, CA, and Infineon Technologies AG will produce embedded DRAM products with advanced process technologies. According to the contract terms, Infineon will provide wafer production capacity through NeoMagic's FY04. NeoMagic will use Infineon's 0.20µm and 0.17µm embedded DRAM process technologies, and both will have access to additional capacity and more advanced process technologies as they become available.
Amkor Technology, Chandler, AZ, has acquired two semiconductor assembly and test companies in Taiwan. In separate transactions, Amkor will acquire Taiwan Semiconductor Technology Corp., Linkou, Taiwan, and Sampo Semiconductor Corp., Lung-Tang, Taiwan. Both companies have signed letters of intent, and the agreements were expected to be finalized in April.
Intel Corp., Santa Clara, CA, has delayed production at the $2.2 billion expansion to its Irish operations, "Fab 24". The new projected start time has been pushed to 2H03. Due to start production of 300mm wafers by late 2002, the fab has already cost Intel $150 million. Intel says it is able to slow down construction temporarily because it is ahead of the 2H03 schedule.
Ashland Specialty Chemical Co., Dublin, OH, has formed Ashland Taiwan Co. Ltd., and has opened its first applications laboratory for technical support of its strippers and etch residue removers in Asia.
Toshiba America Electronic Components Inc. is spinning off its San Jose-based microprocessor engineering division as a wholly owned subsidiary.
The new company, ArTile Microsystems Inc., will provide customers with rapid development of system-on-a-chip designs based on its TX79 reduced instruction set computer microprocessor core for applications including networking, digital set-top boxes, digital TV and multimedia appliances.
Silicon Storage Technology (SST), Sunnyvale, CA, will invest $10 million in Grace Semiconductor Manufacturing Corp., Shanghai, China. Grace is expected to begin production of 50,000 200mm wafers/month in 2H02. SST will form a localized subsidiary company, SST China, to be located in Shanghai.
Corning Inc., Corning, NY, has completed the acquisition of 100% of the stock of Tropel Corp., Fairport, NY. The wholly owned subsidiary will now be known as Corning Tropel, operating as a unit of Corning's Specialty Materials Division.
MKS Instruments, Andover, MA, has entered a definitive agreement to purchase On-Line Technologies Inc., East Hartford, CT. MKS will acquire On-Line for 660,000 shares, contingent payments of about $1.5 million, and assumption of On-Line debt of approximately $9.2 million.
JAPAN
Sharp Corp., Osaka, Japan, will establish a semiconductor laser manufacturing plant in Mihara, Hiroshima Prefecture, to produce parts for DVDs and CD ROMs. Construction of the 14,000m2 plant is slated to start in June, with initial manufacturing production at 5 million lasers per month to start in September 2002.
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Equipment orders from Japanese suppliers were down for the month of January, as were sales, according to the Semiconductor Equipment Association of Japan. Worldwide orders from Japanese equipment makers totaled ¥117.7 billion (&0.96 billion) for January, down 31.4% from December's ¥171.6 billion.
Nitto Denko Corp., Osaka, will invest $17 million (¥2 billion) to make plastic substrates for color LCDs for cellular phones at its Hiroshima plant. The company says the plastic substrate is half the thickness and a third the weight of current glass substrates, allowing phones to be made smaller.
ST Liquid Crystal Display Corp. plans to invest some $625 million (¥75 billion) to expand its low-temperature polysilicon TFT-LCD plant to run to 32,000 600x720mm glass substrates/month in 2002. The 50-50 joint venture of Sony Corp. of Tokyo and Toyada Automatic Loom Works Ltd. of Aichi will start
adding a second production line this fall, aiming at a production start in June of next year. Current capacity is 12,000 substrates/month. Each partner will also put up an additional $80 million (¥10 billion) capital for the joint venture.
EUROPE
Unaxis Management Ltd., Zurich, Switzerland, has acquired SPTec Signal Processing Technologies SA. The company has been named Unaxis SPTec SA. Unaxis Semiconductors will integrate the new company into its compound semiconductors Strategic Business Unit.
Infineon Technologies AG, Munich, Germany, and Japan-based Sanyo Electric Co. Ltd. will cooperate on the production of ultra high-frequency (RF) devices. Infineon will supply high-end SIEGET RF transistor chips to Sanyo, which will start production of leadless environmentally considered chip scale packages (ECSP) for Infineon. At the same time, both companies will market Infineon RF transistor chips in ECSP packages under their own brands.
ASIA PACIFIC
Taiwan Semiconductor Manufacturing Co., Hsinchu, Taiwan, will decommission its Fab 1 in March 2002. Processes in the fab will move to other TSMC facilities.
In other TSMC news, the Taipei, Taiwan-based unit plans to build four additional 300mm wafer plants in southern Taiwan. The plants, to be constructed within the next few years, will be built in Tainan Science-based Industrial Park.
TSMC, Taipei, Taiwan, has also downplayed remarks that it is reevaluating the transition to 300mm wafer fabs. J.B. Chen, VP of Tainan operations, said that TSMC is reevaluating the timeline for equipping Fab 14. Fab 14's original schedule consisted of tool move-in in September, and wafer output by 1Q01.
ON Semiconductor, Phoenix, AZ, is planning to invest an additional $100 million in its joint venture, the Leshan-Phoenix Semiconductor Co. Ltd. in Sichuan Province, southwest China. According to an MOU signed by ON Semiconductor and its Chinese partner, the Leshan Radio Co., the additional investment is earmarked for a 6-in. chip manufacturing facility in Leshan.
The DuPont Microcircuit Materials business unit of DuPont iTechnologies recently became the sole owner of Electronic Materials DuPont Dongguan (EMDD), a joint venture established in southern China in 1994. EMDD operates a facility that produces thick film compositions used in manufacturing hybrid circuits and components for the electronic communications and information technology industries in China.
Taiwanese companies Acer and United Microelectronics Corp. are merging their businesses, Acer Display Technology and Unipac Optoelectronics, to create new FPD producer AU Optronics. The new company will have a combined monthly production capacity equivalent to 170,000 generation 3.5 glass substrates.
Nintendo Co., Megachips Corp., and Taiwan's Macronix International Co. will build a new line at Macronix to run 3000 8-in. wafers/month making chips for Nintendo's new portable Game Boy unit.
Toshiba and Matsushita Electric Industrial will invest $1.1 billion in a new joint venture plant in Singapore to produce large-size low-temperature polysilicon TFT LCDs. The plant, to open in July 2002, will have capacity to turn out 55,000 730x920mm panels/month when it ramps up in 2003. The partners will build a three-story building with total floor space of 146,400m2 in Tampines, Singapore. Toshiba will own 67% of the venture, Matsushita 33%, and the companies will divide its output in the same proportion.
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What's ahead for 300mm?
An industry-wide survey of some of the latest 300mm equipment and materials shows that the challenges of processing 300mm wafers are being understood and addressed. Many suppliers have devised clever solutions to the unique challenges in such areas as wafer reclaim and handling, lithography, gas handling, metrology, and wafer bumping. For more information, see our special report starting on p. 91.
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Direct tool-to-tool transport
PRI Automation Inc. has introduced AeroLoader III, a fab-wide interbay and intrabay overhead wafer-transport system that provides direct tool-to-tool transport and is a critical component of PRI's TransFab unified material-handling system. Designed to carry 300mm FOUPs and reticle carriers, AeroLoader III provides shortest-path routing and prioritized hot-lot delivery. For more on this new system, see p. 133.