By Jeff Dorsch

While the iPad Mini got most of the attention at last week’s Apple launch event in San Jose, Calif., the company also introduced its full-size fourth-generation iPad, which uses the new dual-core A6X processor. (The iPad Mini has an A5 processor, previously found in the iPad 2, the iPhone 4S, the third-generation iPad, and the fifth-generation iPod Touch.) The A6X is fabricated by Samsung Electronics under contract to Apple.

Image courtesy WikipediaAnand Shimpi of the AnandTech website called the A6X the “first fully custom” processor from Apple, which has been busy assembling a chip design team in recent years, dramatically increased with the 2008 acquisition of P.A. Semi (originally known as Palo Alto Semiconductor). Apple designs its own processors for its highly popular mobile devices, while continuing to use Intel processors for its iMac, Mac, and MacBook computers. There are, however, nearly constant rumors and whispers that Apple will drop the Intel processors from its Mac lines in favor of using its own custom-designed processors. Meanwhile, Intel has been getting its low-power Atom processors into Android-based smartphones and tablet computers, and it would love to pick up the processor business for Apple’s iPads, iPhones, and iPods as well.

“Our job is to ensure our silicon is so compelling, in terms of running the Mac better or being a better iPad device, that as they make those decisions they can’t ignore us,” Intel CEO Paul Otellini said of Apple earlier this month. Intel has also been beefing up its software and services business, providing more of a complete ecosystem in developing electronics.

While the custom-vs.-Intel, make-or-buy decision simmers at Apple headquarters in Cupertino, Calif., the legal issues with Samsung over patents are also leaking into the processor discussions at Apple. Samsung makes the A6X processor and its predecessors, and it is expanding its wafer fabrication facilities in Austin, Texas, to make more logic devices, not the memory chips that are its bread and butter. Apple reportedly wants to gradually shift the silicon foundry production of its custom processors to Taiwan Semiconductor Manufacturing Company, lessening its dependence on Samsung semiconductors.

Whatever transpires in the near future, you can count on Apple maintaining its independent stance, treating its suppliers and manufacturing contractors as a necessary evil.

By Jeff Dorsch

The personal computer has been a major sales driver for the semiconductor industry over the past three decades. Now, the industry’s perennial lodestar is becoming something of a millstone as consumers flock to the burgeoning market of smartphones, tablet computers and other mobile devices. The PC market has seen stagnant growth for the past year and shows no signs of resuming growth in the near future, with IHS iSuppli forecasting that PC shipments will fall this year for the first time since 2001. During the third quarter, Lenovo Group overtook Hewlett-Packard as the top PC supplier in the world, based largely on sales in China – the one region where PC growth is still positive.

Advanced Micro Devices relies on PC products for about 85 percent of its revenue. The chip company took a big hit in its third quarter, with revenue falling nearly 25 percent from a year ago to $1.27 billion. It posted a net loss of $157 million, compared with net income of $97 million in the third quarter of 2011. As a result, AMD will lay off about 15% of its worldwide workforce during the fourth quarter.

More importantly, AMD will restructure its operations to refocus its product lines toward other, higher-growth applications, such as embedded electronics, microservers and ultra-low-power mobile devices. “We intend to drive 40 percent to 50 percent of our portfolio to faster-growth markets where our IP is the key differentiator,” said AMD CEO Rory Read, who also indicated that the company would make use of third-party intellectual property in the future.

Intel is counting on the Ultrabook form factor to replace some of its chip sales for the PC market. The slimmer, smaller computers have yet to find much acceptance among consumers, however, as they are generally more expensive than more powerful laptops or desktops. IHS iSuppli recently reduced its 2012 forecast for Ultrabook shipments, saying it now expects 10.3 million units to ship this year, less than half of the 22 million units it forecast earlier.

For its third quarter, Intel reported net income of $3 billion on revenue of $13.5 billion, after earlier warning that Q3 revenue would come in lower than previous predictions. That compared with net of $3.5 billion on revenue of $14.2 billion a year earlier.

Intel is pushing its low-power Atom processors to be used in smartphones and tablet computers, and it has met some success there, especially in products that will run the forthcoming Windows 8 and Windows Phone 8 operating systems. In another sign that the once-formidable “Wintel” duopoly is fading away, Microsoft this month will introduce Windows RT in addition to Windows 8, with Windows RT intended for computers that are built around processors based on ARM Holdings chip designs. In other words, not Intel processors.

PCs aren’t going away any time soon, yet their long dominance in computing is clearly assuming a lower profile.

By Jeff Dorsch

The annual SEMICON Europa exhibition – along with the Plastic Electronics 2012 show – came and went in Dresden, Germany last week. Speakers expounded on the state of the European semiconductor industry in particular, and attendees flocked through the exhibit floors of the Messe Dresden to see the latest in microelectronics manufacturing technology – and more on the flexible electronics in a moment.

Exhibitors at SEMICON Europa had plenty of announcements for the show, including Advantest Corp. revealing the formation of Cloud Testing Service, Inc., which will bring cloud-computing technology to the field of semiconductor testing.

At the opening of this year’s SEMICON Europa, Heinz Kundert, president of SEMI Europe, emphasized that European semiconductor manufacturers and their suppliers must work closely together to keep the European chip industry vital. “It is important for the industry to see itself as a European industry that is advocating its coordinated and consolidated interests both with the European Commission and with national governments. We all need to speak with one voice,” he said.

Economic development officials from New York State were at the conference, promoting their “NY Loves Nanotech” initiative. Dresden and the Empire State have something in common – they are the sites of sprawling wafer fabrication facilities operated by GlobalFoundries, Inc.

Plastics Electronics Conference, Exhibition Held at the Same Time

The eighth annual Plastic Electronics conference and exhibition was held last week in Dresden as well, covering a wide variety of topics in flexible and organic electronics. The big trend in plastic electronics is organic light-emitting diodes (OLEDs), used in computer monitors, mobile devices, and television sets. OLEDs are also being employed in lighting applications, another big market. Flexible solar panels were another topic of discussion at PE2012.

The Plastic Electronics conference and exhibition became part of Semiconductor Equipment and Materials International (SEMI) earlier this year.

By Jeff Dorsch

Intel Corp., Samsung Electronics Co. Ltd., and Taiwan Semiconductor Manufacturing Company are all committed to using 450-millimeter silicon wafers. With those giant chipmakers on board, everything should be going smoothly for the industry transition to chip manufacturing on larger substrates, right?

Wrong.

The road to 450mm wafer fabrication is proving to have plenty of potholes and detours. The development of extreme-ultraviolet lithography is closely tied to progress on 450mm manufacturing, and EUV is presenting a multitude of challenges to its implementation in volume production – a prominent one being the power of light sources for EUV tools. In a presentation last month at SEMICON Taiwan, Dr. C.S. Yoo, senior director of the 450mm program at TSMC, reported that lithography capable of producing semiconductors with 10-nanometer features must be ready by 2015 in order to meet the goal of 450mm production in 2018. The giant silicon foundry is working with the Global 450 Consortium (G450C) on addressing 450mm wafer issues.

ASML Succeeds in Getting Up-Front R&D Funding

ASML Holding NV this year lined up equity investments and contributions for funding R&D of EUV lithography and 450mm capability from Intel, Samsung, and TSMC.

The costs of EUV lithography will likely trim the cost advantages of manufacturing on 450mm wafers, wrote Chris Mack in this blog post. He expects that Intel, Samsung, and TSMC may have the 450mm field to themselves, while the rest of the industry continues with 300mm wafer fabs.

Five years ago, there was disagreement in the industry about whether the 450mm transition would be worth attempting. The consensus now is that few companies other than Intel, Samsung, and TSMC will plunge ahead, while GlobalFoundries Inc. and Toshiba Corp. are suggested as possible contenders. Suppliers of semiconductor production equipment, who felt they were burned in the industry transition to 300mm wafers and left with the R&D bill for making their products 300mm-capable, are proceeding cautiously, likely envying ASML’s success in getting R&D money upfront from its three big customers.

Semiconductor Equipment and Materials International (SEMI) recently set up its 450 Central website, offering information on the 450mm industry transition. The home page has links to news stories and press releases in the field, along with links to G450C and SEMI standards efforts for 450mm wafers.

The transition to 450mm wafers could be the most expensive the semiconductor industry has ever undertaken. For some chipmakers, the move is imperative.