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Tessera Technologies, Inc. today announced the acquisition of Ziptronix, Inc. for $39 million in cash. The acquisition expands on Tessera’s existing advanced packaging capabilities by adding a low-temperature wafer bonding technology platform that will accelerate delivery of 2.5D and 3D-IC solutions to semiconductor industry customers.

Ziptronix’s patented ZiBond direct bonding and DBI hybrid bonding technologies deliver scalable, low total cost-of-ownership manufacturing solutions for 3D stacking. Ziptronix’s intellectual property has been licensed to Sony Corporation for volume production of CMOS image sensors – an estimated $8.3 billion market according to Gartner. Ziptronix’s technology is also relevant to next-generation stacked memory, 2.5D FPGAs, RF Front-End and MEMS devices, among other semiconductor applications. Inclusive of CMOS image sensors, Tessera expects the annual market size to which this technology applies to exceed $15 billion by 2019.

“With this acquisition we’re gaining best-in-class technology, along with exceptional people, know-how in the 3D-IC market and a significant patent portfolio,” stated Tom Lacey, CEO of Tessera. “With the escalating cost for each node of semiconductor lithography, it remains very clear to us that our R&D spend on semiconductor packaging will only become more important and valuable to our customers. Ziptronix has commercially licensed the ZiBond and DBI technologies and they stack up very well alongside our extensive portfolio of 2.5D and 3D intellectual property. I’m confident that aligning our respective capabilities with our development expertise will help create a multi-hundred million dollar revenue opportunity for Tessera over the next decade as the industry continues to shift toward 3D-IC architectures.”

“ZiBond and DBI bonding are enabling technologies that provide significant cost and performance benefits,” said Craig Mitchell, President of Invensas, a Tessera subsidiary. “There is a great opportunity to further develop these platforms with our technology partners, and we’re very excited about their market potential.”

Founded in 2000 as a venture-backed spinoff of RTI International, privately held Ziptronix is a pioneer in the development of low-temperature direct bonding technology for 3D integration. Ziptronix is headquartered in Raleigh, North Carolina.

Dan Donabedian, President and CEO of Ziptronix added, “We’ve taken our technology from concept to commercialization in the backside illuminated image sensor and RF markets. Joining the Tessera family of companies combines our efforts with a proven leader in technology development and licensing in the semiconductor industry. This is a great alignment of companies that can address rapidly expanding 2.5D and 3D-IC markets.”

The addition of the Ziptronix team will not change Tessera’s target operating expense structure. Tessera is making no adjustments to third quarter 2015 revenue or earnings per share guidance.

The digital world once existed largely in non-material form. But with the rise of connected homes, smart grids and autonomous vehicles, the cyber and the physical are merging in new and exciting ways. These hybrid forms are often called cyber-physical systems (CPS), and are giving rise to a new Internet of Things.

Such systems have unique characteristics and vulnerabilities that must be studied and addressed to make sure they are reliable and secure, and that they maintain individuals’ privacy.

The National Science Foundation (NSF), in partnership with Intel Corporation, one of the world’s leading technology companies, today announced two new grants totaling $6 million to research teams that will study solutions to address the security and privacy of cyber-physical systems. A key emphasis of these grants is to refine an understanding of the broader socioeconomic factors that influence CPS security and privacy.

“Advances in the integration of information and communications technologies are transforming the way people interact with engineered systems,” said Jim Kurose, head of Computer and Information Science and Engineering at NSF. “Rigorous interdisciplinary research, such as the projects announced today in partnership with Intel, can help to better understand and mitigate threats to our critical cyber-physical systems and secure the nation’s economy, public safety, and overall well-being.”

The partnership between NSF and Intel establishes a new model of cooperation between government, industry and academia to increase the relevance and impact of long-range research. Key features of this model for projects funded by NSF and Intel include joint design of a solicitation, joint selection of projects, an open collaborative intellectual property agreement, and a management plan to facilitate effective information exchange between faculty, students and industrial researchers.

This model will help top researchers in the nation’s academic and industrial laboratories transition important discoveries into innovative products and services more easily.

“The new CPS projects, announced today, enable researchers to collaborate actively with Intel, resulting in strong partnerships for implementing and adopting technology solutions to ensure the security and privacy of cyber-physical systems,” said J. Christopher Ramming, director of the Intel Labs University Collaborations Office. “We are enthusiastic about this new model of partnership.”

The NSF-Intel partnership further combines NSF’s experience in developing and managing successful large, diverse research portfolios with Intel’s long history of building research communities in emerging technology areas through programs such as its Science and Technology Centers Program.

The projects announced today as part of the NSF/Intel Partnership on Cyber-Physical Systems Security and Privacy are:

Rapidly increasing incorporation of networked computation into everything from our homes to hospitals to transportation systems can dramatically increase the adverse consequences of poor cybersecurity, according to Philip Levis, who leads a team at Stanford University that received one of the new awards. Levis’ team investigates encryption frameworks for testing and protecting networked infrastructure.

“Our research aims to lay the groundwork and basic principles to secure computing applications that interact with the physical world as they are being built and before they are used,” Levis said. “The Internet of Things is still very new. By researching these principles now, we hope to help avoid many security disasters in the future.”

The team, consisting of researchers from Stanford University, the University of California, Berkeley, and the University of Michigan, considers how new communication architectures and programming frameworks can help developers avoid decisions that lead to vulnerabilities.

Another project explores the unique characteristics of cyber-physical systems, such as the physical dynamics, to provide approaches that mix prevention, detection and recovery, while assuring certain levels of guarantees for safety-critical automotive and medical systems.

“With this award, we will develop robust, new technologies and approaches that work together to lead to safer, more secure and privacy-preserving cyber-physical systems by developing methods to tolerate attacks on physical environment and cyberspace in addition to preventing them,” said Insup Lee, who leads a team at the University of Pennsylvania, along with colleagues at Duke University and the University of Michigan.

“New smart cyber-physical systems technologies are driving innovation in sectors such as food and agriculture, energy, transportation, building design and automation, healthcare, and advanced manufacturing,” Kurose said. “With proper protections in place, CPS can bring tremendous benefits to our society.”

The new program extends NSF’s investments in fundamental research on cyber-physical systems, which has totaled more than $200 million in the past five years.

NSF is also separately investing in three additional CPS security and privacy projects that address the safety of autonomous vehicles, the privacy of data delivered by home sensors and the trustworthiness of smart systems:

The pure-play foundry market is forecast to grow to an all-time high of $12.2 billion in 4Q15, following several quarters in which sales remained between $11.3 and $11.8 billion, based on IC Insights’ updated foundry forecast presented in the August Update to The McClean Report 2015 (Figure 1). IC Insights defines a pure-play foundry as a company that does not offer a significant amount of IC products of its own design, but instead focuses on producing ICs for other companies (e.g., TSMC, GlobalFoundries, UMC, SMIC, etc.).

Fig 1

Fig 1

The quarterly pure-play IC foundry market has recently displayed a seasonal pattern in which the best growth rate takes place in the second quarter of the year and a sales downturn occurs in the fourth quarter.  Given that about 98 percent of pure-play foundries’ sales are to IDMs and fabless companies that will re-sell the devices they purchase from the foundry, it makes sense that the pure-play foundries’ strongest seasonal quarter (second quarter) is one quarter earlier than the total IC industry’s strongest seasonal quarter (third quarter).

However, as shown in the figure, 2015 is not expected to display the typical pure-play foundry quarterly revenue pattern.  Although 1Q15 registered its usual weakness, 2Q15 showed a sequential decline, rather than an increase. In 2012, 2013, and 2014, second quarter pure-play foundry revenue showed strong double-digit growth.  In 2Q15, results were decidedly atypical with a 2 percent decline in pure-play foundry sales. The primary reason behind the 2Q15 sales decline was the 5 percent 2Q15/1Q15 revenue decline by foundry giant TSMC.  TSMC’s 5 percent sequential decline was equivalent to a $366 million drop in its revenue.

For 4Q15, IC Insights forecasts that the quarterly pure-play foundry market will show a higher than normal growth rate of 4 percent.  With most of the inventory adjustments that held back growth in the first half of the year expected to be completed by the end of 3Q15, 4Q15 is forecast to register enough growth to boost the quarterly pure-play foundry market to over $12.0 billion for the first time.

SEMI today announced the second annual SEMI South America Semiconductor Strategy Summit (SA SSS) at the Sheraton Rio on November 10-12 in Rio De Janeiro, Brazil.   Unitec Semiconductor, ABI SEMI, and the Brazil Development Bank BNDES are making the event possible.  With the continued globalization of the microelectronics industry, and localization of manufacturing capabilities within growing electronic markets, the South American market presents new opportunities for both electronics manufacturing and supply chain companies.  Investors and analysts, equipment and materials suppliers, researchers, IC developers, and others ready to explore emerging opportunities in South America should attend. The unique delegation-style summit will provide an exceptional opportunity to meet face-to-face with representatives and executives from local companies, government officials, industry experts, economic development specialists, and analysts.

Device manufacturers, including Unitec Blue in Argentina, and Unitec Semiconductor and CEITEC in Brazil, are making new investments in front- and back-end manufacturing.  In 2012, Unitec Semiconductor S.A. announced an investment of US$400 million to build the most modern semiconductor factory in the Southern Hemisphere.  Located in Ribeirao Neves, the facility produces customized chips used in industrial and medical applications. Other leaders in the Latin American semiconductor industry include CEITEC S.A., which has operated a design center and a foundry since 2012, and HT Micron, a joint-venture between South Korean Hana Micron and Brazilian Parit Participações.  In addition, the Brazilian Government recently created a tax incentive program, called PADIS, to provide fiscal incentives for companies that pledge to invest in R&D and in the national development of the sector in the country.

“SEMI is pleased to organize this pioneering event to help build the successful growth of the South America semiconductor industry,” said Karen Savala, president of SEMI Americas. “SEMI is helping our members explore new opportunities with the latest information from corporate stakeholders and government officials. This event brings together global and regional industry leaders ─ fostering the connections and relationships that lead to business and market growth.”

The conference will provide overviews of the current industry environment in South America, address the challenges and opportunities for supply chain companies in the region, and explore the next steps in building the region’s microelectronics industry infrastructure. Panel discussions include: Smart Cards and Banking Technologies, Life Science Technologies, Smart Cities, and Challenges and Next Steps.

Registration, agenda, and sponsorship information is available online at www.semi.org/southamerica.

North America-based manufacturers of semiconductor equipment posted $1.59 billion in orders worldwide in July 2015 (three-month average basis) and a book-to-bill ratio of 1.02, according to the July EMDS Book-to-Bill Report published today by SEMI.  A book-to-bill of 1.02 means that $102 worth of orders were received for every $100 of product billed for the month.

SEMI reports that the three-month average of worldwide bookings in July 2015 was $1.59 billion. The bookings figure is 5.1 percent higher than the final June 2015 level of $1.52 billion, and is 12.5 percent higher than the July 2014 order level of $1.42 billion.

The three-month average of worldwide billings in July 2015 was $1.56 billion. The billings figure is 0.3 percent higher than the final June 2015 level of $1.55 billion, and is 18.2 percent higher than the July 2014 billings level of $1.32 billion.

“Year-to-date, the bookings and billings reported in the SEMI North American equipment book-to-bill report indicate a solid year for the industry,” said SEMI president and CEO Denny McGuirk. “The outlook for the remainder of the year is somewhat clouded, but we see investments in 3D NAND and advanced packaging as drivers.”

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. Billings and bookings figures are in millions of U.S. dollars.

Billings
(3-mo. avg)

Bookings
(3-mo. avg)

Book-to-Bill
February 2015 

$1,280.1

$1,313.7

1.03
March 2015 

$1,265.6

$1,392.7

1.10
April 2015 

$1,515.3

$1,573.7

1.04
May 2015 

$1,557.3

$1,546.2

0.99
June 2015 (final)

$1,554.9

$1,517.4

0.98
July 2015 (prelim)

$1,559.3

$1,594.3

1.02

Source: SEMI (www.semi.org), August 2015

MagnaChip Semiconductor Corporation, a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products, announced the appointment of Gary Tanner to its Board of Directors. Mr. Tanner’s appointment became effective on August 17, 2015. Mr. Tanner’s appointment fills a vacancy on MagnaChip’s Board of Directors created as a result of the Board increasing the number of directors on the Board to eight directors from seven directors.

Mr. Tanner served as Executive Vice President and Chief Operations Officer of International Rectifier Corporation from January 2013 to July 2015. Mr. Tanner also served as a Director of STATS ChipPac from September 2012 to July 2015. Mr. Tanner previously served as Director, Chief Executive Officer and President of Zarlink Semiconductor, Inc. until it was acquired by Microsemi Corporation in October 2011. Before joining Zarlink in 2007, Mr. Tanner was Vice President of Operations of Legerity, Inc. from 2002 to 2007. During his tenure with Intel Corporation from 1993 to 2002, Mr. Tanner held various management positions managing multiple domestic and international locations. Prior to joining Intel in 1993, Mr. Tanner held various management roles in fab operations at National Semiconductor, Texas Instruments and NCR Corporation.

“We are delighted to appoint Gary Tanner to MagnaChip’s Board of Directors,” said Doug Norby, MagnaChip’s non-executive chairman of the board. “Gary’s global experience and expertise in the semiconductor industry will be a great asset and will enable him to become a valuable contributor to MagnaChip.”

ON Semiconductor Corporation this week announced that Gilles Delfassy has joined its Board of Directors. The Board also appointed Mr. Delfassy to its Science and Technology Committee.

“We are pleased to have Gilles Delfassy join our Board of Directors,” said Dan McCranie, chairman of ON Semiconductor’s Board of Directors. “Gilles is highly respected as an expert in the global semiconductor and wireless electronics industries, having spent the majority of his 35-year career at Texas Instruments. He brings strategic insight and an impressive track record of successful new business development, including systems solutions and the integration of companies through acquisition both in the U.S. and abroad. In addition, Gilles has extensive marketing and global manufacturing experience, making him a very valuable addition to the Board.”

At Texas Instruments (TI), Mr. Delfassy served as Senior Vice President & Executive Officer, General Manager leading the company’s worldwide wireless communications business, growing it to the number one position in the global market. Prior to founding and leading TI’s Wireless Terminals Business, Mr. Delfassy served as TI’s European Digital Signal Processing (DSP) Department Manager. In this position, he played a primary role in the definition and significant growth of TI’s worldwide DSP strategy. Previously, Mr. Delfassy was TI’s European Automotive and Microcontrollers Business Unit Manager, during which time he built a profitable business that was ultimately worth several hundred million dollars. He presently serves as a director of Imagination Technologies.

Microcontrollers are in the middle of an incredible wave of unit growth, but unprecedented price erosion is keeping a lid on the increase of revenues, according to IC Insights’ Mid-Year Update to its 2015 McClean Report on the integrated circuit industry.  The mid-year forecast shows microcontroller shipments rising 33 percent in 2015 to 25.4 billion MCUs worldwide as a result of a tremendous upsurge in units for smartcards and 32-bit applications—many of which are aimed at the Internet of Things (IoT) market.

Despite the blistering pace of unit growth, dollar-volume sales of MCUs are now expected to rise by just 4 percent in 2015, reaching a new record high of $16.6 billion from about $15.9 billion in 2014, when total MCU revenues also increased 4 percent.  As seen in Figure 1, average selling prices for microcontrollers are expected to continue plunging with ASPs nose-diving 21 percent in 2015 to $0.65 compared to $0.83 in 2014, when the ASP for MCUs fell 12 percent.  IC Insights’ Mid-Year Update forecasts a 14 percent drop in MCU ASPs in 2016 with microcontroller revenue growing 7 percent to $17.7 billion and unit shipments climbing 25 percent to 31.6 billion worldwide.

Starting in 2014, microcontroller unit growth accelerated, driven by rocketing shipments of low-cost MCUs used in smartcards for protection in electronic banking and credit-card transactions, mass-transit fares, government IDs (such as electronic passports), medical records, and security applications.  After a 26 percent increase in 2014, smartcard MCU shipments are now expected to surge by 41 percent in 2015 to 12.9 billion units worldwide, followed by 25 percent growth in 2016 to 16.1 billion.

The mid-year forecast significantly raises the projection for smartcard MCU shipments through 2019 as U.S. credit card companies, banks, retailers, government agencies, and other industry sectors begin to broadly adopt secure “chip-card” technology, much like Europe and other country markets have done since the 1990s. In the U.S., massive data breaches in credit card transactions at retail stores and growing concerns about identity theft have finally resulted a major move to smartcards for higher levels of security, anti-fraud encryption, and greater protection of lost or stolen debit and credit cards.

mcu unit shipments

While price erosion weighs on total MCU sales growth, total microcontroller shipments are also accelerating because of strong demand for 32-bit designs and other single-chip solutions that can serve the explosion of sensors in wireless systems and connection to the Internet of Things. IoT-related MCU sales are forecast to grow 16 percent in 2015 to $405 million with unit shipments climbing 40 percent to 431 million.

By Taylor Sholler, SEMI

With trade policy dominating headlines in recent weeks, all eyes were on Maui in the waning days of August as trade ministers from twelve nations convened for perhaps the final time to finalize the Trans-Pacific Partnership (TPP).  Such a pact between Pacific Rim economies would account for 40 percent of the world’s GDP.  However, last-minute hurdles on dairy, autos, and drug provisions proved to be the negotiators’ undoing and ministers left Hawaii with the promise of at least one more round of exhaustive deliberations in the fall.

Such is the pathway for a multilateral agreement like the TPP.  By all accounts, significant progress has been made but getting 12 countries to concur on a high-standard agreement to reduce both tariffs and non-tariff barriers has been arduous to say the least.  The business community remains optimistic nonetheless and will continue to support TPP conclusion— key for the U.S. SEM industries which export 80% of their products— later this year.

Conversely, a sector-specific trade agreement is a bit more straightforward and industry welcomed news just a week earlier that an agreement-in-principle was reached on the expansion of the Information Technology Agreement (ITA).  Originally agreed to in 1996, the ITA fosters free trade in tech and has sorely needed an update to account for the vast progress made through industrial innovation.  While this effort was not without its own obstacles, World Trade Organization (WTO) members came to an agreement in Geneva on July 24th to cut tariffs on more than 200 ICT products after more than three years of negotiations.

This deal between more than 50 nations is seen a major victory for the global economy and the semiconductor equipment and materials industries in particular. SEM-related items account of more than a dozen of the products on the expansion list, including machines and apparatus to manufacture boules, wafers, semiconductor devices and flat panel displays among other products of interest to SEMI members.

WTO trade ministers will now take the list back to their respective capitals for domestic consultations.  By November 1st, participating members must submit a draft schedule detailing their plans for national implementation.  The process should culminate during the WTO’s 10th Ministerial Conference in Nairobi in December 2015, with tariff elimination slated to begin July 2016.

The expanded agreement represents 97 percent of world trade in information technology products—an estimated $1.3 billion annual market.  However, the deal also contains a commitment to work to tackle non-tariff barriers in the IT sector, and to keep the list of products covered under review to determine whether further expansion may be needed to reflect future technological developments.

In what was already been a successful year for trade liberalization, negotiators should soon celebrate implementation of the largest WTO-driven tariff elimination deal in 19 years.  The process has breathed fresh life into the promise of sectoral trade pacts driven by market demand and targeted negotiations.  SEMI has worked closely with ITA negotiators throughout the process to ensure the inclusion of SEM items in the expanded list and this is something we hope to replicate in other market opening accords like the Environmental Goods Agreement as well.

The semiconductor supply chain is comprised of the most innovation and technologically advanced products in the world and trade agreements like the ITA play an exceedingly helpful role in the advancement of our industry.  WTO Director-General Roberto Azevedo and trade negotiators around the world should be commended for their persistence on this important expansion effort. SEMI will continue to support the great work happening in Geneva and elsewhere to remove barriers to trade and improve business operations for our members.

For a complete list of items included in the expanded ITA, please visit:  https://ustr.gov/sites/default/files/ITA-expansion-product-list-2015.pdf

For those with trade-specific questions or concerns, SEMI maintains a dedicated international policy staff, led by Jonathan Davis, Global Vice President of Advocacy ([email protected]).

The Semiconductor Industry Association (SIA) announced former Defense Secretary Leon Panetta will deliver the keynote address at the upcoming SIA Award Dinner, taking place on Thursday, Dec. 3 in San Jose, Calif. Mr. Panetta, who has also served as CIA director, White House chief of staff, director of the Office of Management and Budget (OMB), and as a member of Congress, will offer insight on how the strength of U.S. technology, and a vibrant U.S. semiconductor industry in particular, are critical to our country’s standing in the world and to our economy and national security.

“Leon Panetta is one of America’s most respected leaders and experts on foreign policy,” said John Neuffer, president and CEO, Semiconductor Industry Association. “The semiconductor industry is a global industry with global challenges. We must ensure smart government policies are in place here at home so our industry can remain strong, and we must work closely with counterparts overseas to ensure we can play on a level playing field in the global markets. Given Mr. Panetta’s extensive and diverse experiences on the domestic and international stages, we very much look forward to his keen perspectives on these matters as we welcome him as the keynote presenter at this year’s SIA Award Dinner.”

Mr. Panetta has dedicated much of his life to public service. He served as the 23rd defense secretary from July 2011 to February 2013. Before joining the Department of Defense, Mr. Panetta served as the director of the CIA from February 2009 to June 2011. Previously, he spent 10 years co-directing with his wife, Sylvia, the Leon & Sylvia Panetta Institute for Public Policy, based at California State University, Monterey Bay. The Institute is a nonpartisan, not-for-profit center that seeks to instill the virtues and values of public service in young men and women.

From July 1994 to January 1997, Mr. Panetta served as chief of staff to President Bill Clinton. Prior to that, he was director of OMB, a position that built on his years of work on the House Budget Committee. Mr. Panetta represented California’s 16th (now 17th) congressional district from 1977 to 1993, rising to House Budget Committee chairman during his final four years in Congress. He holds a Bachelor of Arts degree in political science and a law degree, both from Santa Clara University.

The SIA Award Dinner also will feature the presentation of the semiconductor industry’s highest honor, the Robert N. Noyce Award.