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September 12, 2012 – A delegation of stakeholders in LED manufacturing have met with US Department of Energy officials to plead their case for increased support in solid-state lighting (SSL) R&D and manufacturing, with their key message that SSL offers greater energy conservation and return-on-investments (ROI) than renewable energy technologies that get much more backing.

Pushing for the added US backing is a delegation of SEMI members and other industry stakeholders with origins in the FALCON Lighting Consortium, led by Philips Lumileds and SEMI members Applied Materials, Veeco, KLA-Tencor, Ultratech, and others (SEMI’s broad roster includes major suppliers of LED equipment and materials). FALCON and SEMI have emphasized increased DOE support for domestic SSL development and especially manufacturing. US LED manufacturing received over $23M in grants in several areas (metrology, lithography, and deposition R&D) under the 2009 American Recovery and Reinvestment Act. Funding has been reduced since then, but the groups claim lobbying efforts have restored and increased funding levels above what the DoE submitted to appropriations subcommittees.

In August of this year the groups met with US DoE Assistant Secretary of Energy David Danielson and his senior staff, their first such meeting in recent years. The key message was that energy conservation achieved through SSL can have a greater impact on US energy than renewable energy technologies which currently get government investments (and a lot more of it). The group calculates SSL can deliver 4.0-6.0 quads of annual energy savings for a 10-20× higher ROI than other energy investment alternatives.

"According to the Energy Information Administration [EIA], on a dollar-per-unit of-production basis, the level of subsidies received by the wind and solar industries were almost 100 times greater than those for conventional energy," stated Richard Solarz, senior director of technology at KLA-Tencor and Randy Moorhead, VP for government relations at Philips Electronics, co-leaders of the group advocating for greater DOE support for SSL.

"We believe that it is generally understood that conventional energy conservation — specifically lighting — efforts are under-supported."

SEMI added that it hopes the meeting will help secure support for SSL beyond its funding levels of the past four years, despite the obvious and formidable pressures on national budgets. "Despite the austerity mood in Washington, SEMI is confident that increased budget requests for LED-based lighting technologies will receive considerable bicameral and bipartisan support in the legislative branch during upcoming legislative sessions," the group stated.

*US EIA 2009 Annual Energy Review, ref. in each cell
** January 27, 2012 DOE est. 4.0 quads, FALCON estimate against current usage 6.0 quads

September 11, 2012 – Demand for power management semiconductors recovered in 2Q12 after declining for half a year, thanks to strong demand from electronic products such as smartphones and media tablets, according to IHS iSuppli.

Global revenue for power management chips (preliminary estimates) reached $7.9B in 2Q12, up 9.7% from the first quarter, and a complete turnaround from sequential declines of -4.0% in 1Q12 and -10.7% in 4Q11. That will help reverse some of the inventory buildup that accumulated over the past three quarters as consumer spending slowed.

"The products responsible for fueling growth include mobile handsets, media tablets, personal computers and other consumer electronic items, such as digital still cameras. In these devices, efficient power management is becoming more important to consumers — a significant feature given that electronic devices are almost never shut off or powered down anymore," stated Marijana Vukicevic, senior principal analyst for power management at IHS.

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IHS iSuppli forecasts continued growth in demand for power semiconductors over the next two quarters as we enter the prime holiday season build-up. Overall sales for 2012 are expected to reach $32.4B, only slightly better than last year’s $31.9B and flat growth in 2010. Over the next five years to 2016, look for biggest growth (30% CAGR) in power chips to come from media tablets, notably the iPad. Double-digit growth in demand is also expected from mobile handsets (11.7%), mobile infrastructure (13.1%), and digital set-top boxes (12.3%).

The main growth device in power management semiconductors, insulated gate bipolar transistors (IGBT) modules, which see wide application in alternative energy generation (13.3% CAGR), automotive safety/control (13.1%), and industrial building/home control (12.2%). Application in DC-DC non-isolated usage for inverters and alternative power sources gets special mention by iSuppli, as does low-voltage MOSFETs used in appliances, media tablets, and mobile infrastructure.

3Q11 4Q11 1Q12 2Q12
8.4 7.5 7.2 7.9

Worldwide revenue forecast for power management
semiconductors, in US $B. (Source: IHS iSuppli)

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September 10, 2012 – EV Group (EVG), St. Florian, Austria, has updated its modular EVG 150 automated resist processing system to address specific needs for backend lithography, conformal coating, and planarization. The new system was announced at last week’s SEMICON Taiwan.

The newest version of the EVG150 high-volume coater/developer performs spin coating, developing, spray coating and lift off on 50-200mm wafers, enabling up to four wet process modules combined with two stacks of hot plates, chill plates, and vapor prime modules. Two key additions include EVG’s OmniSpray technology (with proprietary ultrasonic nozzle), which allows the conformal coating of high topography surfaces (e.g. ultra-thin, fragile, or perforated wafers) and can result in up to 80% reduced material consumption vs. traditional spin coating, according to the company. The other key addition is the NanoSpray coating technique to coat surfaces with vertical sidewall angles — for example, processing through-silicon vias (TSV) with polymer liners and photoresist.

EVG reps summarized the additions for SST:

  • A modular design allowing roll-in/-out of process modules, for enhanced uptime and serviceability

  • A new spray coating module (the company’s OmniSpray technology) with x,y (raster) spray coating

  • A new module for the company’s proprietary "NanoSpray" process for coating blind vias

  • A new structural frame with most chemicals stored within the main frame, to shorten point-of-use and optimize process control

  • CIM Framework software, to help meet rigorous requirements for uptime, process control, and fab automation

"Close collaboration with our customers made it clear that the next logical step for our coater/developer technology was to create a universal approach for high-volume processing of devices with more complicated structures and topographies," stated Markus Wimplinger, EV Group’s corporate technology development and IP director.

 

Left: Vias with 1:5 aspect ratio, conformally coated with NanoSpray. Right: Top edge of
spraycoated cavity (cavity 150

2012 stall could pave the way for a record-breaking 2013

by Christian Gregor Dieseldorff, SEMI Industry Research & Statistics

September 7, 2012 — Consumer and business sentiment has become more important than ever before in the semiconductor industry. As we near the end of the third quarter in 2012, pessimism about the economy prevails given the challenging financial situation in the US, a slowing Chinese economy, and the on-going European debt crisis.

At the beginning of 2012, the outlook for semiconductor revenue was more optimistic, with predicted average growth of about 4 to 6 percent. The macroeconomic situation inspired caution and semiconductor revenue outlook changed to an outlook of flat to 2 percent for this year, with various key companies announcing changes in their revenue outlook. For example, in July, Intel cut its 2012 sales growth target to US$ 55.6-58.7 billion, up 3 to 5 percent from 2011, though Intel expects a stronger second half of 2012. TSMC cut its revenue growth rate by about 1 to 2 percent, expecting a slowdown in 4Q12 and into 1Q13. In July, STMicroelectronics announced it will cut capex for 2012 by 25 percent because of a lower outlook.

Meanwhile, struggling Japanese MCU and Analog/Power-maker Renesas considers options to stay in business, such as consolidating business units or pursuing a fab-lite strategy. Fujitsu announced it will pursue a fab-lite strategy, and recently announced the closure of one assembly and test facility and the transfer of ownership of two other facilities to J-Devices Corp. Also since mid-2012, a number of companies have announced more layoffs — including Siltronic AG, Nokia, Cisco, ON Semi, Google’s Motorola Mobility and Rambus.

2013: Another golden year?

While various industry segments appear to be tapping the brakes, others are revving their engines, hoping for an improved 2013. Increased demand for mobile devices, such as new smartphones, ultraportable PCs, and tablets may push semiconductor revenue higher by 10 percent, making 2013 another golden year.

Semiconductor revenue and capex rise and fall together, such that fab equipment spending generally trends along a similar path.

Frontend fab equipment spending, by product types.
(Source: SEMI World Fab Forecast Reports, August 2012)

In terms of fab equipment spending, 2007 and 2011 were golden years. Although spending in 2012 will decline, it may still turn out to be the third largest spending year on record for overall fab equipment spending.

SEMI’s fab database shows about 200 facilities equipping (including Discrete and LED fabs), suggesting that 2013 has the potential to be another golden year — perhaps an all-time record — with 17 percent growth, almost $43 billion.

Frontend fab equipment spending. (Source: SEMI World Fab Forecast Reports, August 2012)

Key drivers for fab equipment spending in 2012 are the foundries, led by TSMC, Globalfoundries, and UMC with over $10 billion combined spending. Their dominance continues in 2013 with about another $10 billion in spending.

Frontend fab equipment spending by product types, showing largest spending types.
(Source: SEMI World Fab Forecast Reports, August 2012)

Examining fab equipment spending by product type, the DRAM sector is still struggling with declining average selling prices. The industry lost German maker Qimonda in 2009, Powerchip exited DRAM in 2011, and ProMOS is struggling. In order to avoid further ASP declines, DRAM makers ceased investments in new capacity and those who could afford it focused investment in new technologies and upgrading existing fabs. After the bankruptcy of Elpida, at the beginning of 2012, global capital expenditure for DRAM declined to very low levels. This is not expected to change in 2013.

Flash investments also slowed in 2012. For example, at the beginning of 2012, Sandisk announced a pause in Fab 5 capacity expansion. At the end of July, Toshiba announced it will cut its NAND production by 30 percent. However, SEMI data indicates that Flash investments will pick up again in 2013, with big spenders Samsung (mainly Line 16), SK Hynix, Flash Alliance, and Micron.

Samsung turns attention towards System LSI by converting existing Memory fabs into System LSI and building new ones. Spending on a grand scale, Samsung is predicted to pour over $5 billion in 2012 and over $6 billion in 2013, all into this product type.

Although more fab projects have begun than estimated last year, the overall number of fab construction projects has declined year-over-year. Looking at how this affects investments, in 2012 investments for construction projects are expected to decline by 4.4 percent (from about $6.4 billion to $6.1 billion). In 2013, another 10 percent drop will bring fab construction spending to about $5.5 billion.

Foundries perform much better than other industry segments in terms of installed capacity growth. Foundries are even more necessary given industry consolidation and as more IDMs change to a fab-lite or fabless business model. Examining installed capacity by product type, Flash will overtake DRAM in 2012.

Cutbacks in Flash production in 2012 have improved average selling prices so companies will likely increase Flash capacity in 2013 to meet anticipated demand growth. DRAM capacity investments are at "maintenance level," so no increase of installed capacity is expected in 2013. Samsung’s heavy investments in System LSI will singlehandedly grow SLSI capacity (its $4 billion conversion of Austin, TX fab from Flash to 28nm SoC logic devices).

Promising future

While 2012 may not bring positive growth, it may still end up reigning among the top performing years. As the industry continues to consolidate, with more companies moving towards a fab-lite or fab-less model, traditional foundries continue to expand and some big IDMs ramp their foundry services. Investment "engines" may be idling in the near-term, and those investments could gear up for a smooth acceleration into 2013, driven by high demand for mobile devices.

SEMI Industry Research and Statistics Group: A worldwide dedicated team

Since the last fab database publication at the end of May 2012 SEMI’s worldwide dedicated analysis team has made 296 updates to more than 230 facilities (including 52 Opto/LED fabs) in the database. The August edition of the World Fab Forecast, lists over 1,150 facilities (including 300 Opto/LED facilities), with 76 facilities starting production this year and in the near future.

The SEMI World Fab Forecast uses a bottom-up approach methodology, providing high-level summaries and graphs; and in-depth analyses of capital expenditures, capacities, technology and products by fab. Additionally, the database provides forecasts for the next 18 months by quarter. These tools are invaluable for understanding how the semiconductor manufacturing will look in 2012 and 2013, and learning more about capex for construction projects, fab equipping, technology levels, and products.

SEMI’s Worldwide Semiconductor Equipment Market Subscription (WWSEMS) data tracks only new equipment for fabs and test and assembly and packaging houses. The SEMI World Fab Forecast and its related Fab Database reports track any equipment needed to ramp fabs, upgrade technology nodes, and expand or change wafer size, including new equipment, used equipment, or in-house equipment.

Also check out the Opto/LED Fab Forecast.

Learn more about the SEMI fab databases at: www.semi.org/MarketInfo/FabDatabase and
www.youtube.com/user/SEMImktstats

SEMI
www.semi.org
San Jose, California
September 4, 2012

September 6, 2012 – Spending on R&D by semiconductor companies worldwide is expected to grow 10% in 2012 to a record $53.4 billion, as companies all across the ecosystem try to keep up with more complex IC designs and new process technologies, according to data from IC Insights.

Total chip sales are only expected to increase 3% in 2012 to $321.4B, says the analyst firm (others aren’t so optimistic anymore), meaning R&D as a percentage of sales will rise to 16.2% — right around the 15%-17% where it’s hovered for the better part of the past decade. R&D/sales had been 10%-12% of revenues in the early 1990s, and just 7%-8% of sales in the late 1970s-early 1980s, the firm notes. Chip companies across the ecosphere (integrated device manufacturers [IDMs], fabless suppliers, and foundries) are seeing their development costs rise due to more complex IC designs and new process technologies, currently on 300mm wafers but with 450mm now in progress & due later this decade.

Worldwide semiconductor R&D spending leaders, sales in US $M.  *Renesas and NEC merged in
April 2010; that year includes combined 1Q results. ** Fabless  *** Foundry  (Courtesy of IC Insights) 

A dozen companies spent more than $1B for the first time ever in 2011. Intel’s R&D expenditures accounted for nearly a third of the top-10 spending, and about 17% of total R&D expenses worldwide. The top 10 overall R&D spenders increased their R&D spending dollars by 12%; top annual increases went to Intel (27% more spending vs. 2011), Qualcomm (25%), and TSMC (23%). IDMs accounted for 66% of R&D spending by semiconductor companies in 2011, dwarfing that of fabless suppliers (29%) and pure-play foundries (5%).

Also noteworthy is the regional distribution of these dollars. By company headquarters, the US represented 57% of worldwide semiconductor R&D spending in 2011, far ahead of suppliers based in Japan (17%), Europe (10%), Taiwan (8%), South Korea (7%), and mainland China (1%).

IC Insights particularly calls out TSMC’s emphasis on R&D spending the past few years. The foundry cracked the top-10 R&D spenders in 2010, nearly lapped the field in R&D/sales growth in 2011, and its 2012 R&D budget is twice what it was just three years ago, according to recent comments by CEO Morris Chang. That’s in addition to the foundry’s capex budget of $8.25B this year, up 13% from 2011. "With the influx of IDMs turning to foundry capacity and major fabless customers needing lead-edge CMOS processes, TSMC is spending more money on both new 300mm fabs and R&D," explains the analyst firm.

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September 5, 2012 – Global semiconductor sales totaled $24.34B in July, a scant 0.2% increase from the prior month and down -1.9% from a year ago, as macroeconomic challenges weigh down demand particularly in Europe and the Americas, according to the latest monthly data from the Semiconductor Industry Association (SIA).

"July’s sales figures offer some encouraging signs for the global semiconductor industry, but it’s clear that macroeconomic challenges are restricting stronger growth," stated Brian Toohey, SIA president & CEO.

On a positive note, the year/year decrease was actually smaller than it has been since Oct. 2011, the SIA noted. June semiconductor sales were flat from May thanks to declines in the Americas and Europe, and down -2% from the same month a year ago.

The regional outlook remains uneven, he added, with Japan rebounding from last year’s disaster and the Asia-Pacific region holding steady, but Europe and the Americas have lagged behind. Japan (4.2%) and the Asia-Pacific (1.4%) showed year-on-year growth — but both Europe and the Americas saw around -10% declines. Likewise on a sequential monthly basis, Japan (5.4% — its strongest M/M increase in three years) and Asia-Pacific (0.3%) were positive, but Europe was flat and the Americas declined from June (-3.9%). (All numbers represent a three-month moving average.)

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September 4, 2012 — Wafer probe card maker FormFactor, Livermore, CA, has agreed to acquire fellow probe card supplier MicroProbe, San Jose, CA, for $100M in cash and $16.8M in stock. The deal, subject to customary conditions, is expected to close by the end of this year.

MicroProbe generated $87.3M in revenue for its fiscal 2011 (ended Dec. 31), with 46% Y/Y growth and a non-GAAP EBITDA profit margin of 20%.

The combined entity will, according to the companies, be the industry-leading supplier of advanced system-on-chip (SOC) probe cards, with technology leadership in both memory and SOC probe card markets. The entity also will see "improved and immediately accretive financial performance" by the beginning of 2013, they claim.

FormFactor was unseated as the longtime top nonmemory probe card supplier in VLSI Research rankings earlier this year; it now ranks second with $162M in 2011 sales, with Microprobe listed fourth. Combined they would rival Japan’s Micronics ($242M) which assumed the top spot. VLSI projects probe card sales will be flat in 2012 but overall growing steadily over the next five years, reaching $1.5B by 2016.

"This merger is a transformational event for FormFactor," stated FormFactor CEO Tom St. Dennis. "The combined company will have the technology and resources to address semiconductor test requirements across the entire advanced probe card space."

"This merger enables our world-class teams to accelerate innovation in wafer test across our customer base and provides compelling opportunities for our combined employees," explained Mike Slessor, CEO of MicroProbe, who will become SVP and executive officer of the combined companies.

"Together, we are in position to focus on delivering leading wafer probe solutions to meet the needs and roadmaps of logic and memory semiconductor device manufacturers," added FormFactor chairman Carl Everett.

August 30, 2012 – US-based investment firm Kohlberg Kravis Roberts and Co. (KKR) reportedly is seeking to snap up struggling chip firm Renesas for ¥100 billion (US $1.3B), weeks after domestic peer Elpida similarly welcomed outside help following filing for bankruptcy earlier this year.

Local media reports that Renesas, which is projecting a ¥150B ($1.9B) net loss for its current fiscal year, had been seeking roughly the same ¥100B from parent companies (NEC, Hitachi, and Mitsubishi Electric) who own 90% of the chipmaker, but was only granted half that (~¥50B). (Renesas’ market capitalization is only around ¥120B-¥130B, point out the Yomiuri Shimbun and The Wall Street Journal.) In July the company announced ¥43B in cost reduction efforts, including some downsizing and closure of production lines and in excess of 10% workforce reduction. In May it expanded an outsourcing deal with TSMC to hand over all 40nm embedded flash production for its MCUs.

Reports (many citing the Nikkei) suggest KKR wants a controlling stake (>50%), and KKR officials want approval from Renesas’ ownership within weeks or even days. (And KKR isn’t alone — other private equity funds have pitched for an investment stake in Renesas in recent months, according to Reuters.) The Asahi Shimbun reported that senior officials at Renesas parents indicated they would approve the KKR deal, though other investors expressed worry about protecting the company’s technology and leadership in its key market for automotive controllers.

Nevertheless, overall investors like the move — since the news broke on Wednesday (Aug. 29), Renesas’ shares have closed about 35% higher on the Tokyo Stock Exchange.

KKR is no stranger to investing in the semiconductor device sector. In 2005 it carved out Agilent’s semiconductor business to create Avago, and was among a consortium that carved out NXP Semiconductors from Philips in 2006. In the past KKR has also been reported to have pursued UMC and packaging outsourcer UTAC.

(Image via Shutterstock)

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August 27, 2012 – Semiconductor lithography tool leader ASML has agreed to sell a 3% equity stake to Samsung Electronics, adding a third major chip investor to its plan to help fund its ongoing development efforts in semiconductor lithography technologies.

Earlier this summer ASML unveiled its blockbuster Co-Investment Program: hand over up to an aggregate 25% minority stake to its key customers, in exchange for cash and R&D funding for the next five years, split between two key areas of EUV lithography and 450mm wafers. First to jump on board was Intel paying €2.25 billion (US $2.8B) for a 15% stake; weeks later TSMC picked up a 5% stake in ASML for about €1.1B (US $1.38B).

Also read:

Now, under the newest deal, Samsung will invest a total of €779M (US $974M) in ASML: €503M for the equity and €276M for R&D. In total, from which are inarguably far and away the top three global chipmakers, ASML has pulled in roughly €3.04B ($) in equity investments, and €1.38B (US $) to support R&D funding. With its goal of €1.3B reached, ASML says the program is now officially concluded and it will not seek any more participants.

* Some totals rounded

ASML’s Co-Investment Program has been well received by industry and investors (ASML’s stock price has risen about 19% since the Intel announcement on July 10). EUV lithography is still being tinkered with to get it production-ready, with significant hurdles still to surmount from source power to masks. Meanwhile the industry is simultaneously trying to transition to the bigger 450mm wafer size, but lithography (essentially ASML) has been a glaring omission from those efforts. With major chipmakers ponying up funds specifically to ramp up lithography efforts in 450mm wafer processing, that gets everyone behind 450mm to make it happen within the next couple of years.

(Image via Shutterstock)

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August 24, 2012 — Semiconductor foundry Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) has joined IMS Nanofabrication AG’s multibeam mask writer development collaboration to develop an electron multi-beam mask writer for use in advanced mask lithography applications, joining founding members Dai Nippon Printing Co., Ltd. (DNP), Intel Corporation and Photronics Inc.

The program’s aim is a lithographic process that meets <10nm patterning requirements at high throughput for leading-edge semiconductor manufacturing. It began in January 2012.

The team is finishing up its proof-of-concept phase; the upcoming phase will focus on the design and construction of an alpha and beta version of the multi-beam mask writer.

The multi-beam mask writer project’s focus on accuracy and high productivity is “encouraging,” said C.S. Yoo, head of E-Beam Operation (EBO) at TSMC, noting a release goal of 2015.

TSMC is the top semiconductor foundry globally, according to IC Insights, and Gartner. IMS believes that by enlisting customers early in the development phase, the design and operation of this new architecture will readily adapt to the needs of a high volume manufacturing environment. The collaboration participants will provide input to IMS on mask manufacturing issues that are critical to leading-edge device manufacturers and to leading merchant mask makers. Collaboration members expect to benefit from early access to the electron mask exposure tool (eMET) technology and from the commercialization of the technology in partnership with additional industry players. This collaboration is representative of a new approach to managing development programs that are needed to address critical demands in mask making.

DNP is a comprehensive printing company involved in publication printing, commercial printing, smart cards, business forms, network business and electronic components, among others. For more information on DNP, please visit: http://www.dnp.co.jp/eng/

IMS Nanofabrication AG is a high-tech company with extensive know-how in charged particle systems. IMS offers solutions to directly transfer custom designed patterns to resist or to generate resist-less two and three dimensional surface modifications with features below 20 nanometers. IMS focuses its efforts on the development and production of key tool components for mask writing and direct write lithography applications. For more information on IMS Nanofabrication AG, visit: www.ims.co.at

Intel (NASDAQ: INTC) is a world leader in computing innovation. The company designs and builds the essential technologies that serve as the foundation for the world’s computing devices. Additional information about Intel is available at www.intel.com.

Photronics Inc. is a leading worldwide manufacturer of photomasks. Additional information on the Company can be accessed at: www.photronics.com

TSMC is a global dedicated semiconductor foundry. Additional information can be accessed at: www.tsmc.com.

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