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August 23, 2012 — Global semiconductor market revenue in Q2 2012 fell by 3% year-on-year (Y/Y) to $75.2 billion, resulting in widespread revenue declines for chip suppliers, particularly those headquartered in Japan and Europe, according to the IHS iSuppli Competitive Landscaping Tool.

In a troubling sign for the health of the semiconductor market in 2012, Q2 revenue increased by less than 3% compared to the typically weak first quarter. If the semiconductor industry were on a trajectory for stronger annual growth in 2012, sequential growth would be expected to amount to at least 4% or more in Q2.

The disappointing sequential growth came amid economic concerns such as “the Eurozone crisis, slowing manufacturing growth in China and stubbornly highly unemployment in the US,” said Dale Ford, senior director of electronics and semiconductor research at IHS. “Approximately two-thirds of the world’s semiconductor suppliers saw their revenues decline in the second quarter compared to the same period in 2011. This weak performance bodes ill for the semiconductor industry’s growth prospects for the entire year.”

Also read: 2012 semiconductor revenue forecast bumped up 1 point at IHS and Semiconductor industry revenue targets $323.2B in 2012

Global semiconductor revenue expanded by a marginal 1.4% in 2011. The new IHS forecast calls for an even weaker market in 2012. However, given weakness in the first half of the year, that forecast is likely to be downgraded even further.

Table 1. IHS ranking of the world’s Top 10 semiconductor suppliers in the second quarter based on revenue ($M).

Q2-11
Rank

Q2-12
Rank

Company Name

Q2-11
Revenue

Q2-12
Revenue

Revenue
Percent
Change

Revenue
Percent
of Total

Revenue
Cumulative
Percent

1

1

Intel

11,645

12,010

3.1%

16.0%

16.0%

2

2

Samsung Electronics

7,159

7,571

5.8%

10.1%

26.0%

3

3

Texas Instruments

3,597

3,128

-13.0%

4.2%

30.2%

7

4

Qualcomm

2,319

2,869

23.7%

3.8%

34.0%

4

5

Toshiba

2,786

2,381

-14.5%

3.2%

37.2%

6

6

SK Hynix

2,523

2,233

-11.5%

3.0%

40.1%

5

7

STMicroelectronics

2,567

2,147

-16.4%

2.9%

43.0%

8

8

Renesas Electronics Corp.

2,253

2,098

-6.9%

2.8%

45.8%

10

9

Broadcom

1,742

1,917

10.0%

2.5%

48.3%

9

10

Micron Technology

1,815

1,780

-1.9%

2.4%

50.7%

 

 

Other Companies

39,141

37,113

-5.2%

49.3%

100.0%

 

 

Total Semiconductor

77,547

75,247

-3.0%

100.0%

 

 

Top 10 semiconductor makers face challenges

The revenue decline was felt by companies in all regions. Companies based in all four major global regions saw their collective semiconductor revenues fall Y/Y in Q2.

The drop in revenues among leading suppliers exacerbated the situation. Among the world’s Top 10 semiconductor suppliers, six companies saw their revenues decline compared to the second quarter of 2011.  Four of those companies suffered double-digit revenue declines.

 

Eurozone crisis

European-based firms took the brunt of the downturn, as the economic crisis in the region took its toll on chip sales.

Among all semiconductor suppliers in Europe, combined revenue in the second quarter fell by 8.3% compared to a year earlier, the worst performance among all global regions, as shown in the figure attached. Two-thirds of all European suppliers saw their revenues fall during the period.

 

Top European semiconductor suppliers STMicroelectronics and Infineon Technologies saw double-digit year-over-year revenue declines of 16.4% and 12.9%, respectively.

 

Japanese face seasonal slump

Collective revenue for Japanese semiconductor suppliers retreated by 7.5% in the second quarter compared to the first quarter.

Half of the Japanese chip suppliers experienced decreases in revenue. However, deep drops in revenue by leaders such as Toshiba Corp., Renesas Electronics Corp., Fujitsu Semiconductor Ltd. and Mitsubishi magnified the overall decline.

 

“This has become a standard pattern for revenue growth for Japanese chip suppliers, as they typically see strong growth during their fiscal year ending March each year — followed by a decline during their first fiscal quarter ending in June,” Ford said. “The expectation is that Japanese suppliers will see a rebound in their revenues in the quarter ending in September.

 

Table 2. Total Semiconductor Revenue Change by Company Headquarters Location.

Company Headquarters

Q2-11 to Q2-12

Q1-12 to Q2-12

Worldwide

-3.0%

2.7%

  Americas

-2.5%

3.6%

  EMEA

-8.3%

5.0%

  Japan

-4.6%

-7.5%

  Asia-Pacific

-0.6%

8.4%

 

Figure. Total semiconductor revenue change by company HQ.

Semiconductor winners

Among the world’s Top 10 semiconductor suppliers, Qualcomm stood out with its 23.7% growth, which boosted it to No. 4 in overall rankings, up from seventh place one year earlier. Broadcom also achieved double-digit growth at 10.0%. This pushed the company up one position in the rankings to ninth place.

No. 2-ranked Samsung’s revenues grew by 5.8%, boosted primarily by its acquisition of Samsung Electro-Mechanics.

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. For more information, visit www.ihs.com.

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August 23, 2012 – JP Sercel Associates (JPSA), Manchester, NH, has released a new system for scribing and dicing metal layers and alloys used in LED manufacturing.

The IX-6100-MD can scribe and dice a variety of metal layers (Mo, Cu, Ni, Au, Ag, Zn) and their alloys used in LED manufacturing. A proprietary beam delivery system enables independent 2D adjustment of the laser beam shape, to optimize the laser energy used for cutting and achieve a minimal kerf width (20μm) while minimizing the heat-affected zone. JPSA’s proprietary vision and scribe placement technology reduces die street size and enables more LED die per wafer. The system can be equipped with the company’s Integrated Automation Platform (IAP) for automated wafer handling in production environments.

JPSA says it will ship several of the new IX-6100-MD systems in 3Q12 to an unidentified leading LED manufacturer in Asia, to be utilized for singulating high-power LED devices in which the metal substrate assists in LED heat dissipation.



Cross-section of 60μm copper. (Source: JPSA)

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August 21, 2012 – BUSINESS WIRE — Various techniques create the illusion of depth in 3D movies, often relying on glasses for the viewer and a cumbersome 2-projector method. Researchers at South Korea’s Seoul National University have developed a quarter-wave retarding film that changes light polarization, applied to the display screen as a specialized coating.

With further research, the film could enable “a simple, compact, and cost-effective approach to producing widely available 3D cinema, while also eliminating the need for wearing polarizing glasses,” said lead researcher Byoungho Lee, professor at the School of Electrical Engineering, Seoul National University in South Korea.

To create modern 3D effects, movie theaters use linearly or circularly polarized light. In this technique, two projectors display two similar images, which are slightly offset, simultaneously on a single screen. Each projector allows only one state of polarized light to pass through its lens. Polarized glasses cause each eye to perceive only one of the offset images, creating the depth cues that the brain interprets as three dimensions.

Various single projector methods achieve similar effects. The parallax barrier method creates the illusion of 3D with a combination of rear projection video and physical barriers or optics between the screen and the viewer. These obstructions are likened to the slats in a venetian blind, creating a 3D effect by limiting the image each eye sees.

Also read: 2012 brings major changes to the display polarizer films

The South Korean team’s glasses-free 3D method uses a single front projector against a screen. The venetian blinds’ “slat” effect is achieved by using polarizers that stop the passage of light after it reflects off the screen. A specialized coating, quarter-wave retarding film, was added to the screen to change the polarization state of light so it can no longer pass through the polarizers. As the light passes back either through or between the polarizing slates, the offset effect is created, producing the depth cues that give a convincing 3D effect to the viewer.

Figure. The experimental set up of a proposed glasses-free 3D theater experience is shown, with the projector in the familiar front position, creating 3D images. Credit: Optics Express.

The team’s experimental results show the method can be used successfully in two types of 3D displays: the parallax barrier method, described above, which uses a device placed in front of a screen enabling each eye to see slightly different, offset images and integral imaging, which uses a two-dimensional array of many small lenses or holes to create 3D effects.

The team plans to refine the method, and apply it to developing other single-projector, frontal methods of 3D display, incorporating passive polarization-activated lens arrays and the lenticular lens approach.

While their experimental results are promising, it may be several years until this technology can be effectively deployed in movie theaters.

The technique is described in the Optical Society’s (OSA) open-access journal Optics Express. Paper: “A frontal projection-type three-dimensional display,” Optics Express, Vol. 20, Issue 18, pp. 20130-20138 (2012).Optics Express reports on new developments in all fields of optical science and technology every two weeks, published by the Optical Society and edited by C. Martijn de Sterke of the University of Sydney. Optics Express is an open-access journal and is available at no cost to readers online at http://www.OpticsInfoBase.org/OE.

The Optical Society (OSA) brings together the global optics community through its programs and initiatives. For more information, visit www.osa.org.

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August 21, 2012 — Samsung Austin Semiconductor LLC says it will spend "about $4 billion" to renovate and retrofit its existing facility for "full system LSI production," mainly to produce mobile systems-on-chip (SoC) on 300mm wafers using 28nm process technologies.

The project is beginning this month, and scheduled to begin mass production in 2H13. About 2500 construction workers and equipment vendors will be on-site. The $4B commitment — representing the largest single foreign investment ever made in the state of Texas — brings Samsung’s total investment in its Austin Semiconductor unit to more than $13B since 1996.

Earlier this year at an event, new Apple CEO Tim Cook described the "engine" of the iPhone and iPad as being made in Austin — almost certainly referring to (though not specifically naming) Samsung’s local plant which makes the A5 chips.

The investment isn’t exactly a surprise; a 3Q12 retrofit of Samsung’s Austin fab is one of the key capex drivers analysts have been tracking for the latter half of this year. Samsung is expected to push its capex by 11% in 2012 to $13.1B, just ahead of Intel’s $12.5B (16% Y/Y growth) — together representing fully 40% of worldwide capital spending this year.

Samsung has the ability (i.e., leading-edge capacity and a huge capital spending budget) and desire to become a major force in the IC foundry business, said IC Insights, in its top-12 foundry ranking for 2012. It is estimated that the company’s capacity dedicated to its IC foundry business reached 130K 300mm wafers per month in mid-2012. Using an average revenue per wafer figure of $2,500, Samsung currently has the potential to produce annual IC foundry sales of about $3.9 billion.

IC Insights also points out that Samsung is enjoying a tremendous amount of synergy by supplying application processors to the largest (itself) and second-largest (Apple) suppliers in the world of one of the hottest electronic system products in the world — smartphones.

August 17, 2012 – BUSINESS WIRE — Augmented reality (AR) is a disruptive yet nascent technology, which will evolve from limited, promotional applications today to applications in gaming, medical electronics, mobile devices, automotive and manufacturing sectors. According to Semico, this technology will increase demand for NAND and mobile DRAM memory, as well as video and audio processors, and new software platforms.

Semico forecasts that revenues related to this technology will approach $600 billion by 2016. Over 864 million high-end cell phones will be AR-enabled in 2014. By 2020, 103 million automobiles will contain AR technology.

“QR codes, NFC codes, AR tags — every day there is something new. But augmented reality isn’t just a new fad that will only impact marketing firms. It’s a new way to see and interact with technology that everyone should be aware of,” said Michell Prunty, consumer analyst, Semico, adding that companies serving the consumer or automotive industries should pay attention to AR early on.

Semico’s latest report, Augmented Reality: Envision a More Intelligent World, provides an in-depth look into this technology and its impact on the market. It examines the vendors, markets and issues surrounding augmented reality technology and explains how augmented reality can take advantage of current technology, and how augmented reality will force those markets to innovate to fit within the demands of natural user interfaces, privacy and user-generated content. Forecasts through 2016 are provided for hardware, end-use market growth by segments, unit growth and revenue, and automotive applications.

Companies mentioned: Apple, AliveCor, AR Wave, Aurasma, Avalance Technology, Blippar, Brother, Canon, CrowdOptic, DARPA, Digimarc, Epson, Extended3D, GM, Google, Green Goose, IBM, Innovega, Intel, Kodak, Leap Motion, Lumus, Mercedes-Benz, Metaio, Microsoft, Movea, Nintendo, Nokia, Noom Inc, Parrot Qualcomm, Recon Instruments, Senseg, Snapette, Sony, SteelHouse, ST-Ericsson, STMicroelectronics, Total Immersion, Valve, Viddy, Videoplaza, Visage Mobile, Vuzix, Zeal Optics, ZeroG Wireless, Zugara.

This research is part of Semico’s MAP Model Portfolio, which uses Semico’s online MAP Model database that tracks 33 end-use markets down the supply chain. Learn more at www.semico.com.

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August 17, 2012 — North America-based manufacturers of semiconductor equipment posted $1.28 billion in orders and $1.48 billion in billings worldwide in July 2012, ending with a book-to-bill ratio of 0.87, says SEMI.

The three-month average of worldwide bookings in July 2012 of $1.28 billion is 10.2% lower than the final June 2012 level of $1.42 billion, and 1.5% lower than the July 2011 order level of $1.30 billion.

The three-month average of worldwide billings in July 2012, $1.48 billion, is 3.9% lower than the final June 2012 level of $1.54 billion, and 2.9% less than the July 2011 billings level of $1.52 billion.

"Bookings and billings for North American semiconductor equipment in July are close to values reported exactly one year ago," said Denny McGuirk, president and CEO of SEMI. "Seasonal slowing of investment activity in the current cycle is reflected in reduced orders as the industry enters the second half of the year."

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. A book-to-bill of 0.87 means that $87 worth of orders were received for every $100 of product billed for the month.

 

Billings
(3-mo. avg, $M)

Bookings
(3-mo. Avg, $M)

Book-to-
Bill

Feb 2012

1,322.8

1,336.9

1.01

March 2012

1,287.6

1,445.7

1.12

April 2012  

1,458.7

1,602.8

1.10

May 2012

1,539.3

1,613.7

1.05

June 2012 (final)

1,535.7

1,424.3

0.93

July 2012 (prelim)

1,476.5

1,278.7

0.87

The data contained in this release were compiled by David Powell, Inc., an independent financial services firm, without audit, from data submitted directly by the participants. SEMI and David Powell, Inc. assume no responsibility for the accuracy of the underlying data.

The data are contained in a monthly Book-to-Bill Report published by SEMI. The report tracks billings and bookings worldwide of North American-headquartered manufacturers of equipment used to manufacture semiconductor devices, not billings and bookings of the chips themselves. The Book-to-Bill report is one of three reports included with the Equipment Market Data Subscription (EMDS). SEMI is a global industry association serving the nano- and micro-electronic manufacturing supply chains. For more information, visit www.semi.org.

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August 16, 2012 — On a worldwide basis, Apple Inc. and other multinational original equipment manufacturers (OEMs) may be the top semiconductor purchasers in 2012, but within the all-important Asia-Pacific region, locally based companies lead the pack when it comes to chip spending growth.

Semiconductor spending in Asia-Pacific among OEMs headquartered in the region is expected to rise by an average of 6% in 2012, according to an IHS iSuppli OEM Semiconductor Spend Analysis Report. Chip purchasing in Asia-Pacific for all global OEMs is set to average only about 2.5% growth for the year.

Local firms are also leading the Asia-Pacific region in terms of semiconductor purchasing growth. Apple will post the second-highest growth among the top-10 biggest chip-buying OEMs in the Asia-Pacific region in 2012, at 15%. However, the fastest growth among the region’s top 10 will be generated by Taiwan’s HTC Corp., at 23%. For all OEMs buying chips in Asia-Pacific, the fastest growth will be posted by three indigenous companies: ZTE Corp. (China); HTC; and TCL Corp (China), as presented in Figure 1.

Figure. Top 3 Asia-Pacific-based OEMs, by order of semiconductor purchasing growth in their home region in 2012 (by share of revenue compared to regional average, 2009-2013). SOURCE: IHS iSuppli.

“Local companies have led, are leading and will lead the Asia-Pacific region in semiconductor spending growth — not the larger OEMs headquartered elsewhere, such as Apple, Hewlett-Packard Co. and Dell Inc.,” said Myson Robles-Bruce, senior analyst for semiconductor spending and design activity at IHS. “This is critical given the Asia-Pacific is the largest global region for chip purchasing — and is set to outperform the rest of the world in coming years. Apple is leading the Top 10 in growth and size worldwide during 2012 and 2013, giving it enormous advantages in terms of component supply and pricing. However, the Asia-Pacific players are playing to their home-field advantage, wielding in Asia the same kind of influence that Apple now enjoys globally.”

OEMs headquartered in Asia-Pacific have attained higher growth in semiconductor purchasing than those based in other regions for several years. Local companies expanded their chip spending in Asia-Pacific at a compound annual growth rate (CAGR) of 9% for the years 2008 to 2011. In contrast, Asia-Pacific spending for all OEMs worldwide increased by only 7% during the same period.

The forecast for 2013 shows semiconductor spending for this region will rise by 9.4%. However, looking only at local companies headquartered in the region, this growth rate becomes significantly higher, increasing to 15.5% for the year. 

“The phenomenon of domestic OEMs increasing their Asia-Pacific chip spending at a faster rate than their global rivals represents a consistent long-term trend,” Robles-Bruce said. “This trend has persisted regardless of whether overall growth rates for Asia Pacific semiconductor spending have increased or decreased.”

Figure 2 presents relative growth in Asia-Pacific chip spending growth for companies based in the region compared to those headquartered elsewhere.

Figure 2. Asia-Pacific semiconductor spending growth rates by OEM HQ (Annual percentage change in spending.) SOURCE: IHS iSuppli.

In 2012, ZTE is expected to show the highest growth in Asia-Pacific chip spending at 26%, followed by HTC at 23% and TCL at 22%. 

Both ZTE and HTC are considered among the top smartphone vendors on a worldwide basis, trailing market leaders Samsung, Apple, and Nokia, with a combined share of slightly more than 10%. 

ZTE has been able to effectively compete in the Chinese domestic smartphones market, matching Apple’s smartphone share for that area. The company has announced that it plans to double its smartphone shipments for this year by dramatically increasing sales to the U.S. and Chinese markets. 

HTC has been suffering of late, due to falling profits resulting from losing battles to Samsung and Apple in key markets. Although HTC has not yet achieved the branding it needs in order to reach greater success, the company continues to press forward with plans to challenge the market leaders with newer products like the HTC One X, as well as the upcoming Rio, Accord, and Zenith Windows phones. 

TCL recently reported that its handset sales for the Chinese domestic market were up by more than 200% year over year. Most of this new growth was driven by the release of five new smartphone models this year.  Also for 2012, the company has brought to the China market a new 7-inch tablet called the T50.  TCL has publicly stated its goal of raising revenue by 30% for this year, a feat which will be based in part upon greater spending on semiconductors.  

IHS (NYSE: IHS) is a leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Learn more at www.ihs.com

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August 14, 2012 – BUSINESS WIRE — Bruker released the PeakForce Kelvin Probe Force Microscopy (KPFM) mode for its atomic force microscopes (AFMs). PeakForce KPFM improves quantitative surface potential data for semiconductor metrology and materials research.

The PeakForce KPFM accessory, an optional addition available for the Dimension Icon and MultiMode 8 AFMs, includes the complete set of KPFM detection mechanisms (amplitude and frequency modulation), in conjunction with TappingMode and Peak Force Tapping, as well as the ability to perform KPFM measurements over an extended voltage range.

The mode uses frequency-modulation detection to provide the highest spatial resolution Kelvin probe data. It builds on Bruker’s PeakForce Tapping technology to provide directly correlated quantitative nanomechanical data, which improves the sensitivity of the frequency-modulation measurement and eliminates artifacts. PeakForce KPFM mode combines FM-KPFM detection with PeakForce Tapping technology. PeakForce KPFM provides a completely automated parameter setup with ScanAsyst.

“Our research and industrial customers have increasing needs for quantitative nanoscale property measurements,” said Mark R. Munch, Ph.D., president of Bruker Nano Surfaces Division. “We are committed to move AFM beyond just imaging contrast to quantitative electrical and mechanical property maps,” added David V. Rossi, EVP and GM, Bruker’s AFM Business Unit.

Bruker Corporation (NASDAQ: BRKR) provides high-performance scientific instruments and solutions for molecular and materials research, as well as for industrial and applied analysis. For more information about Bruker Corporation, please visit www.bruker.com.

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August 14, 2012 — Worldwide silicon wafer area shipments for semiconductors increased during Q2 2012, compared to Q1 and to Q2 2011, reports SEMI’s Silicon Manufacturers Group (SMG).

Total silicon wafer area shipments were 2,447 million square inches (MSI) in Q2, up 20% from the 2,033 million square inches shipped during Q1. The shipment figure edged out Q2 2011 numbers, up 2% year over year.

The sequential and annual growth was expected, said Dr. Bruce Kellerman, chairman of SEMI SMG and senior director of Semiconductor Product Marketing at MEMC. "Given the ongoing market uncertainties and challenges, the overall wafer demand for 2012 is expected to be relatively flat compared to 2011."

Read SEMI News and Views’ latest post: Supply chain readiness in an era of accelerated change

Table. Quarterly silicon area shipment trends. Shipments are for semiconductor applications only and do not include solar applications.

 

Million of Square Inches (MSI)

Q2 2011

Q1 2012

Q2 2012

TOTAL

2,393

2,033

2,447

Silicon wafers are the fundamental building material for semiconductors. All data cited in this release is inclusive of polished silicon wafers, including virgin test wafers, epitaxial silicon wafers, and non-polished silicon wafers shipped by the wafer manufacturers to the end-users.

The Silicon Manufacturers Group acts as an independent special interest group within the SEMI structure and is open to SEMI members involved in manufacturing polycrystalline silicon, monocrystalline silicon or silicon wafers (e.g., as cut, polished, epi, etc.). The purpose of the group is to facilitate collective efforts on issues related to the silicon industry including the development of market information and statistics about the silicon industry and the semiconductor market. SEMI is a global industry association serving the nano- and microelectronics manufacturing supply chains. For more information on SEMI, visit www.semi.org.

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