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The IC industry’s original system-on-chip (SoC) product category—microcontrollers—is expected to steadily reach record-high annual revenues through the second half of this decade despite an overall slowdown in unit growth during the next five years. Microcontroller sales barely increased in 2015, rising less than a half percent, to set a new record high of slightly more than $15.9 billion, thanks to a 15% increase in MCU shipments that lifted worldwide unit volumes to an all-time peak of 22.1 billion last year (Figure 1). Strong unit growth—driven by smartcard MCUs and 32-bit designs—enabled the MCU market to overcome a 13% drop in the average selling price (ASP) of microcontrollers to a record-low $0.72 in 2015. Price erosion—especially in 32-bit MCUs—has weighed down MCU sales growth in three of the last four years, but ASPs are now expected to stabilize and increase slightly in the 2015-2020 forecast period, rising by a CAGR of 1.6% compared to a -7.7% annual rate of decline between 2010 and 2015.

Fig 1

Fig 1

While ASP erosion is expected to end, MCU unit shipments are forecast to rise at a much lower rate than in the first half of this decade, primarily because of a slowdown in the growth of smartcard microcontrollers and tighter reins on IC inventories for the “next big thing”—the Internet of Things (IoT). IC Insights’ forecasts MCU sales will rise in 2016 to nearly $16.6 billion, which is a 4% increase from $15.9 billion in 2015. MCU unit volumes are expected to grow by 2% in 2016 to 22.4 billion, and the ASP for total microcontrollers is forecast to rise 2% this year to $0.74. Between 2015 and 2020, microcontroller sales are projected to grow by a CAGR of 5.5% to nearly $20.9 billion in the final year of the forecast. Since the middle 1990s, worldwide MCU sales have grown by a CAGR of 2.9%.

As shown in Figure 1, no downturns are anticipated in MCU sales through 2020. Total MCU revenue growth is expected to gradually strengthen between 2016 and 2019 (when sales are forecast to grow 9%) before easing back to a 4% increase in 2020. MCU unit shipments are now projected to grow by a CAGR of 3.9%.

A major factor in slower MCU unit growth through 2020 is the maturing of the smartcard market, which in recent years has accounted for nearly half of microcontroller shipments and about 15-16% of total revenue. By 2020, smartcard MCUs are expected to represent 38% of total microcontroller unit shipments and about 12% of sales.

IC Insights released its August Update to the 2016 McClean Report earlier this month.  This Update included an update of the semiconductor industry capital spending forecast, a look at the top-25 semiconductor suppliers for 1H16, including a forecast for the full year ranking, and Part 1 of an extensive analysis of the IC foundry industry (the ranking of the top-10 pure-play foundries is covered in this research bulletin).

In 2014, the pure-play IC foundry market registered a strong 17% increase, the largest increase since 2010 and eight points greater than the 9% increase in the worldwide IC market.  In 2015, the pure-play foundry market showed a 6% increase, about one-third the rate of growth in the previous year, but seven points higher than the total IC market growth rate of -1%.  For 2016, the pure-play foundry market is expected to increase by 9% and greatly outperform the growth rate of total IC market, which is forecast to drop by 2% this year.

Figure 1 shows that the top 10 pure-play foundries are expected to hold 95% of the total pure-play foundry market this year.  This year, the “Big 4” pure-play foundries (i.e., TSMC, GlobalFoundries, UMC, and SMIC) are forecast to hold an imposing 84% share of the total worldwide pure-play IC foundry market.  As shown, TSMC is expected to hold a 58% marketshare in 2016, down one point from 2015, as its sales are forecast to increase by $2.1 billion this year, up from a $1.5 billion increase in 2015.  GlobalFoundries, UMC, and SMIC’s combined share is expected to be 26% this year, the same as in 2015.

The two top-10 pure-play foundry companies that are forecast to display the highest growth rates this year are Israel-based TowerJazz, which is expected to edge-out Powerchip for the 5th spot in the pure-play foundry ranking in 2016, and China-based SMIC, with 30% and 27% sales increases, respectively. TowerJazz and SMIC have been on a very strong growth curve over the past few years.  TowerJazz is expected to grow from $505 million in sales in 2013 to $1,245 million in 2016 (a 35% CAGR) while SMIC is forecast to more than double its revenue from 2011 ($1,220 million) to 2016 ($2,850 million) and register a 19% CAGR over this five-year timeperiod.

Figure 1

Figure 1

Eight of the top-10 pure-play foundries listed in Figure 1 are based in the Asia-Pacific region.  Israel-based TowerJazz, and U.S.-headquartered GlobalFoundries are the only non-Asia-Pacific companies in the top-10 group.  While LFoundry is currently headquartered in Avezzano, Italy, China-based SMIC agreed in 2Q16 to purchase 70% of the company for approximately $55 million.  Since LFoundry has an installed capacity of 40K 200mm wafers/month, the acquisition of a controlling interest in the company essentially serves to immediately expand SMIC’s capacity by 13% this year.

Although SMIC is forecast to register strong sales growth of 27% this year, Chinese foundries, in total, are expected to hold only 8.2% of the pure-play foundry market in 2016, down 5.1 points from the peak share of 13.3% reached in 2006 and 2007.  IC Insights believes that the total Chinese company share of the pure-play foundry market will increase through 2020, as the China-based foundries take advantage of the huge amount of government and private investment that will be flowing into the Chinese semiconductor market infrastructure over the next five years.

GlobalWafers Co., Ltd. and SunEdison Semiconductor Limited (NASDAQ:SEMI) announced today that they have entered into a definitive agreement for the acquisition by GlobalWafers of all of the outstanding ordinary shares of SunEdison Semiconductor in a transaction valued at US$683 million, including SunEdison Semiconductor outstanding net indebtedness.

Under the terms of the agreement, SunEdison Semiconductor shareholders will receive US$12.00 per share in cash for each ordinary share held, representing a 78.6% premium to the average closing price of SunEdison Semiconductor’s common stock for the 30 trading days prior to this announcement and a 44.9% premium to the closing price of SunEdison Semiconductor’s ordinary shares as of August 17, 2016, the last trading day prior to this announcement.  The transaction has been unanimously approved by both GlobalWafers’ and SunEdison Semiconductor’s boards of directors.

The transaction will be structured as a scheme of arrangement under Singapore law, and is subject to the approval of the shareholders of SunEdison Semiconductor, as well as other customary conditions including approvals from relevant regulatory authorities and the High Court of the Republic of Singapore.  SunEdison Semiconductor has requested and obtained a waiver from the Securities Industry Council of Singapore of the application of the Singapore Code on Take-overs and Mergers to the scheme of arrangement.

“We are very excited by this transaction,” said Doris Hsu, Chairperson and CEO of GlobalWafers.  “We believe this combination is unique in that it merges two of the market’s key suppliers with minimal overlap in customers, products and production capacities.  The combined company will bring together GlobalWafers’ unparalleled operating model and market strengths with SunEdison Semiconductor’s expansive global footprint and product development capabilities.  We will remain focused on our customers and will strengthen and build on our product offerings to deliver even greater value to our customers and shareholders,” Hsu concluded.

“We are pleased to have reached an agreement that delivers a significant premium to our shareholders,” said Shaker Sadasivam, President and Chief Executive Officer of SunEdison Semiconductor.  “We believe this transaction is in the best interest of our company.  We look forward to a smooth process to facilitate an efficient closing, which we hope can occur before the end of the year.”

GlobalWafers will finance the transaction, including payment of the purchase price and payment of SunEdison Semiconductor’s debt facilities at closing, through existing cash on hand and committed acquisition financing from the Bank of Taiwan, Hua Nan Commercial Bank, Mega International Bank, Taipei Fubon Bank, and Taishin International Bank.

GlobalWafers expects a number of strategic and operational benefits from this transaction, including:

  • Meaningful expansion of GlobalWafers’ production capabilities
  • Greater breadth in GlobalWafers’ product and global customer base, including greater access to the E.U. and Korea, as well as SOI product technologies
  • Significant increase in GlobalWafers’ financial scale

Related news: 

SunEdison Semiconductor announces manufacturing consolidation

SunEdison Semiconductor solidifies polysilicon supply

Is silicon’s heyday over? New materials challenge the industry workhorse

IC Insights will release its August Update to the 2016 McClean Report later this month. This Update includes an update of the semiconductor industry capital spending forecast, an analysis of the IC foundry industry, and a look at the top-25 semiconductor suppliers for 1H16, including a forecast for the full year ranking (the top 20 1H16 semiconductor suppliers are covered in this research bulletin).

The top-20 worldwide semiconductor (IC and O-S-D—optoelectronic, sensor, and discrete) sales ranking for 1H16 is shown in Figure 1. It includes eight suppliers headquartered in the U.S., three in Japan, three in Taiwan, three in Europe, two in South Korea, and one in Singapore, a relatively broad representation of geographic regions.

The top-20 ranking includes three pure-play foundries (TSMC, GlobalFoundries, and UMC) and six fabless companies. If the three pure-play foundries were excluded from the top-20 ranking, China-based fabless supplier HiSilicon ($1,710 million), U.S.-based IDM ON Semiconductor ($1,695 million), and U.S.-based IDM Analog Devices ($1,583 million) would have been ranked in the 18th, 19th, and 20th positions, respectively.

IC Insights includes foundries in the top-20 semiconductor supplier ranking since it has always viewed the ranking as a top supplier list, not a marketshare ranking, and realizes that in some cases the semiconductor sales are double counted. With many of our clients being vendors to the semiconductor industry (supplying equipment, chemicals, gases, etc.), excluding large IC manufacturers like the foundries would leave significant “holes” in the list of top semiconductor suppliers. As shown in the listing, the foundries and fabless companies are identified. In the April Update to The McClean Report, marketshare rankings of IC suppliers by product type were presented and foundries were excluded from these listings.

Overall, the top-20 list shown in Figure 1 is provided as a guideline to identify which companies are the leading semiconductor suppliers, whether they are IDMs, fabless companies, or foundries.

Figure 1

Figure 1

Thirteen of the top-20 companies had sales of at least $3.0 billion in 1H16.  As shown, it took $1.86 billion in sales just to make it into the 1H16 top-20 semiconductor supplier list.  There was one new entrant into the top-20 ranking in 1H16 as compared to the 2015 ranking—AMD, which replaced Japan-based Sharp.  In 2Q16, AMD registered a strong 23% increase in sales while Sharp was moving in the opposite direction logging a 13% decline in its 2Q16/1Q16 revenue.

Intel remained firmly in control of the number one spot in the top-20 ranking in 1H16.  In fact, it increased its lead over Samsung’s semiconductor sales from only 20% in 2015 to 33% in 1H16.  The biggest upward move in the ranking was made by Apple, which jumped up three positions in the 1H16 ranking as compared to 2015. Other companies that made noticeable moves up the ranking include MediaTek and the new Broadcom Ltd. (the merger of Avago and Broadcom), with each company moving up two positions.

Apple is an anomaly in the top-20 ranking with regards to major semiconductor suppliers. The company designs and uses its processors only in its own products—there are no sales of the company’s MPUs to other system makers.  IC Insights estimates that Apple’s custom ARM-based SoC processors had a “sales value” of $2.9 billion in 1H16, which placed them in the 14th position in the top-20 ranking.

In total, the top-20 semiconductor companies’ sales increased by 7% in 2Q16/1Q16.  Although, in total, the top-20 2Q16 semiconductor companies registered a 7% increase, there were seven companies that displayed a double-digit 2Q16/1Q16 jump in sales and only two that registered a decline (Intel and Renesas).

The fastest growing top-20 company in 2Q16 was Taiwan-based MediaTek, which posted a huge 32% increase in sales over 1Q16.  Although worldwide smartphone unit volume sales are forecast to increase by only 5% this year, MediaTek’s application processor shipments to the fast-growing China-based smartphone suppliers (e.g., Oppo and Vivo), helped drive its stellar 2Q16/1Q16 increase.  Overall, IC Insights expects MediaTek to register about $8.8 billion in sales in 2016, which would represent a 31% surge over the $6.7 billion in sales the company had last year.

As expected, given the possible acquisitions and mergers that could/will occur over the next few years, the top-20 ranking is likely to undergo a significant amount of upheaval as the semiconductor industry continues along its path to maturity.

Overall revenue for the power semiconductors market globally dropped slightly in 2015, due primarily to macroeconomic factors and application-specific issues, according to a new report from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

The global market for power semiconductors fell 2.6 percent to $34 billion in 2015, the report says. Discrete power semiconductor product revenue declined 10.1 percent, while power module revenues decreased by 11.4 percent and power integrated-circuit (IC) revenues increased by 4.5 percent overall.

The report identifies Infineon Technologies as last year’s leading power semiconductor manufacturer, with 12 percent of the market, Texas Instruments with 11 percent and STMicroelectronics with 6 percent.

“While Texas Instruments previously led the market in 2014, the company was overtaken by Infineon Technologies in 2015, following its acquisition of International Rectifier and LS Power Semitech,” said Richard Eden, senior analyst, IHS Markit. “Infineon was the leading global supplier of both discrete power semiconductors and power modules, and the fourth-largest supplier of power management ICs. Infineon has been the leading supplier of discretes for several years, but overtook Mitsubishi Electric to lead the power module market for the first time in 2015, again, due to the International Rectifier and LS Power Semitech acquisitions.”

Figure 1

Figure 1

According to the latest Power Semiconductor Market Share Report from IHS Markit, while Infineon Technologies’ acquisition of International Rectifier was the largest acquisition last year, several other deals also changed the terrain of the power semiconductor market landscape. Key deals in 2015 included the following: MediaTek acquired RichTek; Microchip acquired Micrel; NXP Semiconductors acquired Freescale Semiconductor; NXP Semiconductors also created WeEn Semiconductors, a joint venture with Beijing JianGuang Asset Management Co. Ltd (JAC Capital); CSR Times Electric merged with China CNR Corporation to form CRRC Times Electric; and ROHM Semiconductor acquired Powervation.

“Companies were active in acquisitions for several reasons — especially the low financing cost in multiple regions of the world, which meant that borrowing rates in the United States and European Central bank were nearly zero,” said Jonathan Liao, senior analyst, IHS Markit. “In addition, the acquiring company typically increases its revenues and margins by taking the acquired company’s existing customers and sales without incurring marketing, advertising and other additional costs.”

The Power Semiconductor Market Share Report, part of the Power Semiconductor Intelligence Service from IHS Markit, offers insight into the global market for power semiconductor discretes, modules and integrated circuits. This year’s report includes Power ICs for the first time, as well as discrete power semiconductors and power semiconductor modules. For more information about purchasing IHS Markit information, contact the sales department at [email protected].

IBM (NYSE:  IBM) scientists have created randomly spiking neurons using phase-change materials to store and process data. This demonstration marks a significant step forward in the development of energy-efficient, ultra-dense integrated neuromorphic technologies for applications in cognitive computing.

An artistic rendering of a population of stochastic phase-change neurons which appears on the cover of Nature Nanotechnology, 3 August 2016. Credit: IBM Research

An artistic rendering of a population of stochastic phase-change neurons which appears on the cover of Nature Nanotechnology, 3 August 2016. Credit: IBM Research

Inspired by the way the biological brain functions, scientists have theorized for decades that it should be possible to imitate the versatile computational capabilities of large populations of neurons. However, doing so at densities and with a power budget that would be comparable to those seen in biology has been a significant challenge, until now.

“We have been researching phase-change materials for memory applications for over a decade, and our progress in the past 24 months has been remarkable,” said IBM Fellow Evangelos Eleftheriou. “In this period, we have discovered and published new memory techniques, including projected memory, stored 3 bits per cell in phase-change memory for the first time, and now are demonstrating the powerful capabilities of phase-change-based artificial neurons, which can perform various computational primitives such as data-correlation detection and unsupervised learning at high speeds using very little energy.”

The results of this research are appearing today on the cover of the peer-reviewed journal Nature Nanotechnology.

The artificial neurons designed by IBM scientists in Zurich consist of phase-change materials, including germanium antimony telluride, which exhibit two stable states, an amorphous one (without a clearly defined structure) and a crystalline one (with structure). These materials are the basis of re-writable Blu-ray discs. However, the artificial neurons do not store digital information; they are analog, just like the synapses and neurons in our biological brain.

In the published demonstration, the team applied a series of electrical pulses to the artificial neurons, which resulted in the progressive crystallization of the phase-change material, ultimately causing the neuron to fire. In neuroscience, this function is known as the integrate-and-fire property of biological neurons. This is the foundation for event-based computation and, in principle, is similar to how our brain triggers a response when we touch something hot.

Exploiting this integrate-and-fire property, even a single neuron can be used to detect patterns and discover correlations in real-time streams of event-based data. For example, in the Internet of Things, sensors can collect and analyze volumes of weather data collected at the edge for faster forecasts. The artificial neurons could be used to detect patterns in financial transactions to find discrepancies or use data from social media to discover new cultural trends in real time. Large populations of these high-speed, low-energy nano-scale neurons could also be used in neuromorphic coprocessors with co-located memory and processing units.

IBM scientists have organized hundreds of artificial neurons into populations and used them to represent fast and complex signals. Moreover, the artificial neurons have been shown to sustain billions of switching cycles, which would correspond to multiple years of operation at an update frequency of 100 Hz. The energy required for each neuron update was less than five picojoule and the average power less than 120 microwatts — for comparison, 60 million microwatts power a 60 watt lightbulb.

“Populations of stochastic phase-change neurons, combined with other nanoscale computational elements such as artificial synapses, could be a key enabler for the creation of a new generation of extremely dense neuromorphic computing systems,” said Tomas Tuma, a co-author of the paper.

By Marwan Boustany, senior analyst, MEMS and sensors, IHS Markit

With less potential for organic volume growth due to slowing end-product markets, market-share competition will dominate in 2016. MEMS suppliers will therefore focus more on sensor improvement (power and performance), portfolio expansion and innovation (new sensor categories), acquisitions (rapid capability integration), new business models (software services based on sensors) and expansion into new product categories (drones, smart homes, etc.).

Even as motion sensors and other traditional MEMS markets slow down, there are new and growing opportunities, including the following:

  • Virtual-reality headsets using motion sensors and microphones are a growing category in gaming, with HTC, Facebook and Sony all offering products.
  • Drones that use motion sensors began to take off in 2015. While this is a segment with a lot of potential, regulatory issues may have an as yet unclear impact on future sales volume, especially when the potential for delivery drones from Amazon are considered.
  • Home environmental monitoring, using gas, humidity and temperature sensors, show good opportunity for growth. This segment is led by smart home products from Nest and Honeywell, as well as carbon-monoxide detection regulations and growing consumer adoption of air-purifiers.
  • E-cigarettes, using flow sensors, are also on the rise.

Leading MEMS sensor manufacturer trends

Following is a top-line review of the three leading MEMS sensor manufacturers, based on 2015 revenue:

1. STMicroelectronics 

STMicroelectronics is still the revenue leader for consumer MEMS, thanks to its business across a wide range of sensor types. The company’s consumer MEMS revenue lead continued to erode at a fast rate last year, with competitors growing share, the company’s first-place revenue lead has narrowed from $100 million in 2014 to around $10 million in 2015. STMicroelectronic’s motion sensor revenue continued to decline in 2015, however it was helped by its growing success with 6-axis inertial measurement units (IMUs) used mainly by manufacturers in China.

STMicroelectronics was hit hard in the last two years, because Apple shifted its gyroscope business to InvenSense in 2014; however, STMicroelectronics won the Apple Watch business in 2015 with its 6-axis IMU and also increased its share of motion sensors used by Samsung in 2016.

2. Knowles

Knowles is still the dominant leader in MEMS microphones, leading the second-ranked suppler (Goertek) by a power of three in units and revenue. In addition to offering a wide range of analog and digital-output microphones, Knowles has also started shipping its VoiceIQ microphones with local processing in 2016, as it seeks to address both mobile and internet of things (IoT) applications.

While MEMS microphone price erosion has led to revenue decline for Knowles, it still ranks second after STMicroelectronics thanks to a favorable shift in Microphone adoption. The company has dramatically narrowed the lead enjoyed by STMicroelectronics — from more than $100 million in 2014 to just $10 million last year. Knowles provides a large share of MEMS sensors used in Apple’s products, as well as a share in most handsets, tablets and wearable products from other manufacturers.

3. InvenSense

InvenSense overtook Bosch and moved into third-ranked revenue position in the MEMS market last year. The company leads in consumer motion sensor revenue, thanks to dramatic volume growth for 6-axis IMUs as well as its dedicated optical-image stabilization (OIS) gyroscope. InvenSense is the standout MEMS supplier in terms of motion sensor revenue growth, with 26 percent year-over-year revenue growth, while the other sensor leaders suffer declining revenue.

Apple is the key and dominant source of this revenue for InvenSense, especially as it loses share in Samsung to STMicroelectronics in 2016. The company is increasingly pushing its MEMS microphone products against strong competition and hopes to release an ultrasonic fingerprint sensor in 2017 to capitalise on a rapidly growing segment.

top mems suppliers

Source: The IHS Markit MEMS & Sensors for Consumer & Mobile Intelligence Service provides comprehensive insight and analysis on MEMS sensors used in smartphones, wearables and consumer electronics. For information about purchasing this report, contact [email protected].

By Yoichiro Ando, SEMI Japan

The 2016 global semiconductor market is forecast to decrease by 2.4 percent from the previous year according to the World Semiconductor Trade Statistics (WSTS). SEMI forecasts that the global semiconductor manufacturing equipment market will be effectively flat this year. However, SEMI also forecasts double-digit growth in 2017 with significant new fab construction starts in 2016 and 2017 that will drive later equipment. The forecast foresees the Japan market will shrink through 2017. This article provides insight behind those forecast numbers.

Overview

Large-scale investments in 300mm wafer lines in Japan are primarily made by three companies: Toshiba (NAND Flash), Sony (image sensors) and Micron Memory Japan (DRAM). The logic players’ investments are largely for upgrading and expanding existing capacity; the companies producing power, surface acoustic wave (SAW), and automotive semiconductor devices are actively adding capacity by constructing new fabs and expanding existing fabs. These activities are planned on 200mm or smaller wafers, so the investments are smaller in terms of dollar values. However, they are important to Japan’s semiconductor industry in the coming Internet of Things (IoT) age.

Toshiba plans a new mega fab

Toshiba continues to expanding its 300 mm NAND fabs in Yokkaichi in 2015 and 2016 ─ including the second phase construction of Fab 5, new Fab 2 for 3D NAND flash memory production, and plan for a new fab (Fab 6).

Toshiba New Fab 2

Toshiba’s new Fab 2 cleanroom (Source: Toshiba)

The new Fab 6 will be dedicated to 3D NAND flash memory production, and is planned to be built in an adjacent area of the current Yokkaichi factory site. Detailed plans of the construction (such as construction period, production capacity, and investment to manufacturing instrument used) will be decided in FY 2016 based on market trends. Fab 6 is expected to be built in FY 2017. Production capacity of the fab is projected to be more than 200,000 wafers per month (300mm wafers) at full capacity.

Toshiba and Western Digital announced a plan in July 2016 to invest a total of 1.5 trillion JPY for the next three years in Yokkaichi operations. This investment will be for the construction of the new fab as well as for updating equipment for existing fabs such as new Fab 2 and Fab 5.

Sony expands 300mm capacity

Sony is also actively expanding its 300mm wafer fabs for increased production of complementary metal-oxide-semiconductor (CMOS) image sensors. Sony plans to expand production capacity not only with its existing lines but also to acquire fabs from other companies. Specifically, Sony acquired Tsuruoka factory in Yamagata prefecture in 2014 from Renesas Electronics Corporation, and it is now operated as Yamagata Technology Center (TEC) of Sony Semiconductor Manufacturing Corporation, which is a semiconductor production subsidiary of Sony Corporation. In 2015, Sony acquired the 300mm line of the Toshiba Oita factory, for production of CMOS image sensors.

Sony plans to invest 70 billion JPY in FY 2016, and expand image sensor production capacity ─ now 70,000 wafers per month as of first quarter of 2016. The restoration of Kumamoto TEC damaged by the Kumamoto earthquake would make investment in other TECs decrease.

Micron and TowerJazz

Micron Technology operates a 300mm fab in Hiroshima (Micron Memory Japan Fab 15). The fab manufactures DRAM with 12nm process technology. Micron invested US$750 million in 2015 and $500 million in 2016 for the technology upgrades. The capacity has been flat in these two years.

Panasonic TowerJazz Semiconductor, a Panasonic and TowerJazz joint venture, operates a 300mm foundry fab in Uozu. The company invested $10 million in 2015 and plans to invest the same amount in 2016 to improve the productivity.

Investments in 200mm and smaller wafer lines

Other major semiconductor manufacturers primarily invest in existing fabs and lines for maintenances and productivity improvements. Therefore, investment amount is modest. However, these fabs will be the major source for semiconductor devices of the Internet of Things applications.

  • Renesas Electronics Corporation plans upkeep of production capacity of Kumamoto fab (200mm wafer fab) and Naka fab (300mm wafer fab).
  • Fujitsu enhances Fab B2 of Mie Fujitsu Semiconductor Limited, which provides foundry services with 300mm wafer lines. Taiwan’s major foundry UMC participated in capital of Mie Fujitsu Semiconductor Limited, and assists with 40nm process technology.
  • Rohm Co., Ltd. plans to invest more than 10 billion JPY in enhancement of 200mm lines of fab and others in the headquarters.
  • Fuji Electric Co., Ltd. continues enhancement of its 200mm wafer lines for IGBT of Yamanashi plant in FY 2016. Fuji Electric further expands its SiC power device production capacity by enhancing 200mm wafer lines at Matsumoto fab.
  • Mitsubishi Electric Corporation manufactures power devices at 200mm wafer line of Kumamoto fab. Mitsubishi Electric continues enhancement of power device production capacity.
  • Shindengen Electric Manufacturing Co., Ltd. is enhancing its power semiconductor module production by adding a new line each for Akita Shindengen Co., Ltd. and Higashine Shindengen Co., Ltd. from FY 2015.

Electronic Parts and Optoelectronic Devices

The electronic parts companies are emerging as new fab owners in Japan. Their recent activities are summarized below:

  • New Japan Radio Co., Ltd. continues enhancement of production capacity of SAW devices and GaAs ICs at its Kawagoe fab in 2016.
  • Hamamatsu Photonics K.K. continues enhancement of MEMS fabrication facility (Fab 13) which started operation in March 2014.
  • Upkeep of new clean room of Toyota Motor Corporation, which started operation in 2014, is now underway. Currently, this line is used for research and development, and trial production of SiC devices.
  • Murata Manufacturing Company, Ltd. is building a new fab for SAW filter production at its headquarter factory in Toyama. The new fab construction will be completed in September 2016. Total investment to the facility is planned to be 12 billion JPY. Then it will be equipped with 200 mm (mostly secondary) equipment.
  • Taiyo Yuden Co., Ltd. continues its enhancement plan of Oume fab in FY 2016, which was acquired from Hitachi in 2013 for SAW device production.
  • TDK agreed to acquire 125mm wafer lines in Tsuruoka Factory from Renesas Electronics Corporation in November 2015. TDK plans to enhance its production capacity of super miniature electronic components at this plant. Production will start in FY 2016 after replacement of manufacturing equipment to conform to products to be manufactured. Investment will continue in FY 2016 as well for startup of the mass production and maintenance at this plant.

SEMI World Fab Forecast

To obtain line-by-line investment and capacity trends in Japan and other regions in the world, SEMI Fab Forecast is a powerful and affordable tool. The report is in easy to use, with Excel spreadsheet format that covers six quarters of actual data and six quarters of forecast on over 1,000 fab/lines. For further information, please see www.semi.org/en/MarketInfo/FabDatabase.

Connect with Japan Semiconductor Industry at SEMICON Japan
SEMICON Japan (December 14-16, Tokyo) offers excellent opportunities to interact and connect with the Japan semiconductor industry. To join the exhibition, please see www.semiconjapan.org/en/exhibit.

Over the past 20 years, China has become increasingly frustrated over the gap between its IC imports and indigenous IC production (Figure 1).  It has oftentimes been quoted over the last couple of years that China’s imports of semiconductors exceeds that of oil.

In its upcoming Mid-Year Update to The McClean Report 2016 (released at the end of this week), IC Insights examines the “Three-Phase” history of China’s attempt at strengthening its position in the IC industry that started in earnest in the late 1990s (Figure 2).

Figure 1

Figure 1

Figure 2

Figure 2

In the late 1990s, China began to contemplate ways to grow its indigenous IC industry and assisted in creating Hua Hong NEC, which was founded in 1997 as a joint venture between Shanghai Hua Hong and Japan-based NEC (it merged with Grace in 2011).  Then, as part of the country’s 10th Five Year Plan (2000-2005), establishing a strong China-based IC foundry industry became a priority.  As a result, pure play foundries SMIC and Grace (now Hua Hong Semiconductor) were both founded in 2000 and XMC was founded in 2006.  This effort is categorized by IC Insights as Phase 1 of China’s IC industry strategy.

In the early 2000s, to help boost the sales of its indigenous foundries, as well as ride the strong wave of fabless IC supplier growth, the Chinese government began attempts to foster a positive environment for the creation of Chinese fabless companies. It should be noted that eight of the current top 10 Chinese fabless IC suppliers were started between 2001 and 2004 and seven of them were in the top 50 worldwide ranking of fabless IC companies last year. This stage of China’s IC industry strategy is labeled by IC Insights as Phase 2.

IC Insights believes that Phase 3 of China’s attempt at creating a strong China-based IC industry began in 2014, just before the start of its 13th Five Year Plan which runs from 2015 through 2020.  As discussed in detail in the Mid-Year Update, this Phase is being supported by a huge “war chest” of cash that is intended to be used to purchase IC companies and their associated intellectual property, provide additional funding to China’s existing IC producers (e.g., SMIC, Grace, XMC, etc.), and to help establish new IC producers (e.g., Sino King Technology, Fujian Jin Hua, etc.).

In 1Q16, the U.S. Department of Commerce slapped an export ban on U.S. IC suppliers’ shipments of ICs to China-based telecom giant ZTE in response to the company allegedly shipping telecommunications equipment to Iran while it was under trade sanctions by the U.S. This ban, if fully enacted, would have a devastating effect on ZTE’s telecom equipment sales (including mobile phones). Thus far, the export ban has been postponed until August 30, 2016 pending further investigation by the U.S. Department of Commerce.

The situation regarding ZTE and the abrupt announcement earlier this year of export controls on the company by the U.S. government sent shock waves throughout the Chinese government as well as China’s electronic system manufacturers.  At this point in time, such potentially drastic measures taken by the U.S. government against such a large Chinese electronics company has bolstered the Chinese government’s resolve to make China more self-sufficient regarding IC component production, spurring increased emphasis on “Phase Three.”

Despite strong double-digit percentage increases in annual unit shipments, semiconductor sensor sales growth has become uncharacteristically lethargic because of steep price erosion in several major product categories. Strong unit demand is being fueled by new wearable systems, greater automation in vehicles, and the much-anticipated Internet of Things (IoT), but sharply falling average selling prices (ASPs) on accelerometers, gyroscope chips, and magnetic-field measuring devices are capping annual growth of total sensor revenues in the low- to mid-single digit range, based on data in IC Insights’ 2016 O-S-D Report—A Market Analysis and Forecast for Optoelectronics, Sensors/Actuators, and Discretes.

The 2016 O-S-D Report shows worldwide dollar-volume revenues for sensors rising by a compound annual growth rate (CAGR) of 5.3% between 2015 and 2020 compared to an 8.9% annual rate in the last five years. In contrast, total sensor unit shipments are expected to climb by a CAGR of 12.4% in the five-year forecast period compared to a blistering 20.5% rate of increase in the 2010-2015 period, when new sensing, navigation, and automated embedded control functions in smartphones drove up strong growth along with steady increases in automotive and industrial applications.

Despite recent years of weak sales growth—just 1% in 2015 to $6.4 billion—the sensor market is expected to end this decade with 10 consecutive years of record-high revenues and reach $8.3 billion in 2020 (Figure 1). Unit shipments of sensors have reached record high levels each year since the beginning of the last decade—even in the 2009 downturn year, when worldwide unit volume grew 9% while sensor revenues dropped 3%. Record sensor shipments are expected to continue for another five years, reaching 28.9 billion units in 2020, according to the 360-page 2016 O-S-D Report, which contains a detailed five-year forecast of sales, unit volume, and ASPs for more than 30 individual product types and device categories in optoelectronics, sensors/actuators, and discretes.

Figure 1

Figure 1

Competition between suppliers and requirements for low-cost sensors in new high-volume applications drove down ASPs from about $0.66 in 2010 to $0.40 in 2015.  The need to squeeze more sensing solutions into wearable systems, far-flung IoT-connected applications, and multi-sensor packages for increased accuracy and multi-dimensional measurements is exerting more pricing pressure in the market, concludes the 2016 O-S-D Report.   The report’s forecast shows sensor ASPs dropping by a CAGR of  6.3% in the next five years to only $0.29.

Total sensor sales are expected to grow by about 3% in 2016 to $6.6 billion with worldwide shipments rising 13% to nearly 18.2 billion units this year.  Sales of sensors made with microelectromechanical systems (MEMS) technology (i.e., accelerometers, gyroscope devices, and pressure sensors, including microphone chips)—are expected to grow by 4% in 2016 to $4.8 billion with unit shipments increasing 10% to 7.6 billion.  The 2016 O-S-D Report projects MEMS-based sensor sales rising by a CAGR of 5.5% in the next five years to $6.1 billion in 2020 with unit shipments growing by an annual rate of 11.9% to nearly 13.4 billion.  ASPs for MEMS-based sensors are expected to decline by a CAGR of -5.7% to $0.45 in 2020 from $0.61 in 2015, according to the annual O-S-D Report.