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The ongoing slump in shipments of standard personal computers along with the drop-off in tablets are setting the stage for cellphone IC sales to finally surpass integrated circuit revenues in total personal computing systems this year, based on new forecasts in the recently released update of IC Insights’ 2017 IC Market Drivers Report.

IC sales for cellular phone handsets are projected to grow 16% in 2017 to $84.4 billion, as shown in Figure 1, while the integrated circuit market for personal computing systems (desktop and notebook PCs, tablets, and thin-client Internet-centric units) is now forecast to increase 9% to $80.1 billion this year, according to the 150-page update to the 590-page report, originally released in 4Q16.

Fig 1

Fig 1

IC sales for both cellphones and total personal computing systems are strengthening significantly in 2017 primarily because of strong increases in the amount of money being spent on memory, with the average selling price (ASP) of DRAM expected to climb 53% and NAND flash ASP forecast to rise 28% this year. In 2016, IC sales for cellphone handsets grew 2% after rising 1% in 2015, while dollar volume for integrated circuits used in personal computing systems increased just 1% last year after falling 6% in 2015. Cellphone IC sales are also getting a lift from a projected 5% increase in shipments of smartphones, which are being packed with more low-power DRAM and nonvolatile flash storage, while growth in personal computing is expected to be held back by 3% declines in both standard personal computer and tablet unit volumes in 2017.

Shrinking shipments of desktop and notebook computers enabled cellphone IC sales to surpass integrated circuit revenues for standard PCs in 2013.  During 2015 and 2016, cellphone IC sales came close to catching up with integrated circuit sales for total personal computing systems.  In 2017, cellular phone handsets are now forecast to take over as the largest end-use systems category for IC sales.  The gap between IC sales for cellphones and total personal computing systems is projected to widen by the end of this decade.  Cellphone integrated circuit sales are expected to increase by a compound annual growth average (CAGR) of 5.3% in the 2015-2020 forecast period to $92.1 billion versus personal computing IC revenues rising by CAGR of just 2.9% to $83.8 billion in 2020, says the Update of IC Insights’ 2017 IC Market Drivers Report.

The refreshed forecast shows IC sales for standard PCs climbing 11.2% in 2017 to $67.5 billion after increasing about 4% in 2016 to $60.7 billion.  Tablet IC sales are now expected to drop 2% to $11.8 billion in 2017 after falling 11% in 2016 to $12.1 billion, based on the updated outlook.  IC sales for thin-client and Internet/cloud computing centric systems—such as laptops based on Google’s Chromebook platform design—are projected to rise 15% in 2017 to a $838 million after surging 21% in 2016 to $728 million.  Between 2015 and 2020, IC sales for standard PCs are expected to grow by a CAGR of 4.1% to $71.6 billion in the final year of the updated outlook, while table integrated circuit revenues are projected to fall by -3.9% annual rate in the period to about $11.0 billion and ICs in Internet/cloud computing are forecast to rise by CAGR of 13.8% to more than $1.1 billion.

TechInsights analysts share their view on where technology is going, how it’s changing, and what new developments are emerging.

BY STACEY WEGNER, JEONGDONG CHOE and RAY FONTAINE, TechInsights, Ottawa, ON

In 2016, wearables were extremely interesting mainly because there was so much uncertainty around whether or not the market will be viable. The year saw some truly low-cost smart and fitness devices, and some market surprises like Fitbit buying Pebble. The Apple Watch 2 was an improvement over the Watch 1. However, the Huawei watch is remarkably designed with a nice round face, and functional, making the decision on which smart- watch to buy difficult.

While wearables will remain intriguing, even more interesting to watch is the wearables market. Hearables can be as simple as ear buds and basic hearing aids or as complex as devices that correct and amplify sound, sync with wireless devices for virtually any application, and even measure biometric outputs. That’s just the beginning. New sensors being packed into small devices are bringing us devices with nearly 30 sensors per device.

Our recent AirPod teardown (FIGURES 1 and 2) sheds even more light on what’s happening in this area. The W1 chip found in the Beats Studio wireless headphone has the package mark 343S00131. Meanwhile, the W1 chip torn down from the Apple AirPods has the package mark 343S00130. They have a slight difference in the last digit in the package marks. TechInsights has confirmed that both 343S00131 and 343S00130 have the same die. This die measures 4.42 mm x 3.23 mm = 14.3 mm2 . TechInsights has been tracking Internet of Things (IoT) SoCs for over a year and our observations indicate that this new W1 SoC is very competitively placed when comparing its die size and connectivity specification of Bluetooth 4.2 or greater.

Screen Shot 2017-06-19 at 12.59.17 PM

Another extremely interesting technology to watch is the rise of intelligent personal or family assistants. This market started with the introduction of the popular Alexa and Echo. Sony may release their assistant this year with more sure to follow. As far as timing, we will have to wait and see. One issue that needs to be addressed is data collection and usage vs. persona privacy in a manner similar to Vizio’s issues with the FTC. In addition, more changes are coming for artificial intelligence or assistants on mobile devices with Samsung announcing Bixby ahead of its G8 launch.
Of course there are a slew of IoT technologies to watch like the acceptance of Zigbee, Z-Wave, LoRa, and Bluetooth 5.0, all of which seem to be vying aggressively for consumer IoT/connected home market. Rumors are gaining strength around how the Samsung S8 will have Bluetooth 5, which could mean a new WiFi modem, from whom we are not certain. Samsung and Wisol have been aligned for a while, but it would be a big statement to see a Samsung/Wisol WiFi/ Bluetooth modem design supporting a new technology like Bluetooth 5.0 in a flagship phone. Based on our knowledge of the Bluetooth Special Interest Group, we don’t believe that Bluetooth 5.0 has to be declared for a product. If fact, it would almost seem as if the SiG is asking OEMs to not make a declaration of the Bluetooth 5 in the device.

Image sensors

2016 was an exciting year for smartphone cameras, which should be considered as one of the biggest hardware differentiators between mobile handset platforms. Dual camera systems have reached the mainstream and are forecasted to drive growth for CMOS image sensor IDMs and foundries. Samsung introduced full chip Dual Pixels implemented in chips from its team and from Sony. Each Dual Pixel photosite is available as an autofocus (AF) point, and this complements traditional contrast AF methods and the emerging laser + time-of-flight (ToF) systems.

In 2017, ToF is expected to be a key differentiator in mobile platforms, both for AF and for new 3D/ranging functionality. Sony has introduced first generation direct bond interconnect (DBI) as a through silicon via (TSV) replacement and we expect tighter pitch DBI and eventually full chip active DBI going forward. On the image signal processor (ISP) side we are seeing a big push to lower nodes (28 nm ISPs are the state-of-the-art for high end stacked CIS chips). The flexibility offered by chip stacking should lead to new and disruptive partnerships between CMOS image sensor specialists and mixed signal advanced CMOS specialists. Finally, we expect new entrants to the digital imaging and sensing landscape. Machine vision, robotics, ranging, surveillance/security, and automotive vision and sensing applications are all positioned for growth due to enabling functionality and continued performance gains. It’s certainly an exciting time for all involved in designing and fabricating imaging and sensing pixel arrays and camera systems!

Memory devices

Last year virtually every vendor, device manufacturers, R&D engineer and market analyst we talked to was focused on DRAM and NAND technology roadmaps. We still talk to clients today who are focused on the future of these technologies. Today, 32L and 48L 3D NAND products are common and all the NAND players are eager to develop the next generation 3D NAND products such as 64L and 128L or even more (FIGURE 3). TechInsights has been analyzing and comparing these devices regularly. We found that 3D NAND is a kind of revolution for memory devices, and because of it, big data or data center, SSD/SD and related technologies like controller, interface and board/package, are moving forward. In addition, they may be able to keep pace for more than the next five years until any new emerging memory devices are commercialized.

Screen Shot 2017-06-19 at 12.59.25 PM

The memory products/technologies we are anticipating this year are 3D NAND technology with 64L, 72L and 128L and 1x and 1y nm DRAM technology. As always, 3D NAND technology is competitive with emerging memory including X-point memory regarding on the performance, reliability, retention, process integration and cost since X-point memory and crossbar devices such as ReRAM, CBRAM, MRAM and PCRAM are likely not cost effective (bit cost).

While Samsung has already revealed 1x nm DRAM, in 2017, we believe there will be another big area of competition in DRAM technology (FIGURE 4). DRAM cell has 1T1C architecture with a cylindrical capacitor, however, nowadays, the cell capacitance cannot meet the capacitance spec (20fF/ cell). Commercial DRAM products such as Samsung’s 18nm DRAM have just about 12fF/cell. With smaller cell nodes, it is absolutely harder to get the sufficient cell capacitance. Nevertheless, Samsung and SK-hynix are confident in developing n+1 (1y nm) and n+2 (1z nm). We anticipate that in 2017, every DRAM maker will be developing 1x and 1y nm commercial DRAM products. How these rollout and perform remains to be seen.

Screen Shot 2017-06-19 at 12.59.35 PM Screen Shot 2017-06-19 at 12.59.42 PM

Finally, we are anticipating a commercial product using X-point memory from Micron and Intel.

Conclusion

These represent some of the major technologies we have our eye on this year, although we fully anticipate seeing new technologies we can only imagine today emerge. After all, change is truly the only constant in our world. As our analysts continue to examine and reveal the innovations other can’t inside advanced technology, we will continue to share our findings on the technologies noted above, how they are used, and how they will be changed by the next discovery or invention.

Yole Développement (Yole) confirms the consolidation of the advanced packaging industry, that is showing a steady growth between 2016 and 2022: +7% in revenue.

“Advanced packaging is showing a total revenue CAGR higher than the total packaging industry (3-4%), semiconductor industry (4-5%) and generally the global electronics industry (3-4%)”, comments Andrej Ivankovic, Technology & Market Analyst at Yole. “Companies are today managing production costs and enlarging their portfolio. In parallel, advanced packaging players are expanding their activities toward the emerging markets thanks to mergers & acquisitions,” he adds. Therefore, the advanced packaging industry is showing drivers including IoT, automotive industry, 5G connectivity, AR/VR, AI.

advanced packaging revenue

What are the advanced packaging market drivers and latest market dynamics? What are the emerging market segments targeted by the leaders to diversify their activities? What are the technology moves? How will the advanced packaging market affect the semiconductor industry evolution? Advanced packaging solutions could enable the development of future semiconductor products and so boost the global semiconductor industry.

Yole’s advanced packaging team releases this month its Status of the Advanced Packaging Industry report. Under this 2017 edition, analysts propose an overview the industry, its disruptions and opportunities. They analyze the latest technology trends and forecasts. Yole’s team also reviews the supply chain and offers a detailed description and analysis of leading company strategies, especially the shifting business models. Yole’s report includes a technical roadmap, showing an analysis per advanced packaging platform along with an analysis of future production and developments in the timeframe 2017-2022.

Andrej Ivankovic from Yole, author of this technology & market report, will present a closer look at the ASE Tech Forum @ Nijmegen. ASE’s conference takes place on June 28, in Van der Valk Hotel, Nijmegen, The Netherlands. During one day, ASE invites you to explore key areas of its IC , SiP and MEMS packaging portfolio, developed in alignment with emerging applications. Innovative technologies, such as FO , FC and 3D, will be detailed as well as opportunities of collaboration: Full program & registration.

“We are very pleased to welcome our network at the ASE Tech Forum @ Nijmegen on June 28”, asserts Jean-Marc Yannou, Technical Director at ASE Europe. ASE is developing a unique one-day program to present our innovative portfolio and including networking times and technology demonstrations. We are looking forward to welcome the advanced packaging companies and get relevant discussions and debates”.

“The fastest growing advanced packaging platform is FO with 36% followed by 2.5D/3D TSV with 28%”,announces Andrej Ivankovic from Yole. “Therefore FO platforms and 2.5D/3D TSV solutions are expected to exceed respectively US$3 billion and US$ 1.3 billion by 2022.”

The FC platform is by far the largest, accounting for 81% of advanced packaging revenue with US$19.6 billion in 2017, however a lower 5% revenue growth indicates that penetration of primarily FO packages will decrease FC market share to 74% by 2022. The revenue forecast translates to an advanced packaging wafer forecast of 8% and a 9% unit count, CAGR during the period 2016-2022. Advanced packages will continue to dominantly address high-end logic and memory in computing and telecom, with further penetration in analog and RF in high-end consumer/mobile segments, while eyeing opportunities in growing automotive and industrial segments.

The shifts in the semiconductor supply chain are results of preparations for future uncertainty, and search for other value flows. Several mergers and acquisitions have been made in attempt to offer a more complete and diversified portfolio, while keeping control of costs and potential losses. Furthermore, in search of additional revenue, new business models are appearing or expanding.

AI is driving the development of 3D TSV and heterogeneous integration technologies. With its new 3D TSV & 2.5D business update report, Yole Développement (Yole), part of Yole Group of Companies investigates the advanced packaging industry and takes a closer look on the AI impact on this market.

“3D integration is clearly offering today unequalled performances suiting exactly the pressing needs of AI applications,” commented Emilie Jolivet, Technology & Market Analyst at Yole.

Initially developed for niche markets including MEMS devices and memories for datacenters, 3D integration is entering in a new era. The world population increase, the exploding smartphones market, the development of new functionalities such as voice/image recognition… all these parameters directly contribute to the development of AI and deep learning solutions, all based on 3D integration technologies. AI is not a concept anymore but a reality that is skyrocketing the development of disruptive advanced packaging technologies.

This year, the “More than Moore” market research and strategy consulting company is moving a step forwards the applications side. Its advanced packaging & semiconductor manufacturing team investigates the industry evolution, taking into account promising sectors such as deep learning, the end-users’ needs and required specifications for final systems. Yole’s analysts combine their advanced packaging expertise and their knowledge of the different industries to perform up-to-date and innovative reports. The 3D TSV & 2.5D business update report is a good example, with a strong focus on the high-performance sector.

Why do we need 3D TSV solutions, especially in high performance applications?

According to Yole, benefits are numerous and are part of the major issues initially identified by the industrial companies. Bandwidth, latency and power consumption are the key words of these innovations… Emilie Jolivet from Yole details some below:

  •  When two chips or more are integrated on an interposer, distance between logic and memory is shortened which enables lower latency and lower power consumption.
•  DRAM, based on a 3D TSV solution, is offering an unequalled bandwidth performance because of the ability of TSV solution to connect several layers of the device.
•  Artificial intelligence and specifically deep learning mostly intensively using memory and computing also need 3D TSV approaches. Both applications are driving the demand of interposer and 3D memory cubes.

AI and deep learning, both part of the high performance applications segment are might be the most impressive applications. However, datacenter networking, AR/VR and autonomous driving are not so far behind. Industrial companies progressively penetrate these market segments by developing dedicated approaches:

  •  Both 3D IC leaders, TSMC and Globalfoundries are involved in the development of new solutions focused on 3D SoC.
•  Samsung introduced its interposer solutions in 2017, SPIL is developing its own 2.5D solutions
•  STMicroelectronics is working on 3D interconnections and interposers for various applications including silicon photonics, data centers.

In addition, companies like Intel, Nvidia are completely re-thinking their growth strategy: “Major IC companies which missed the smartphone business clearly don’t want to miss the AI revolution,” commented Emilie Jolivet from Yole. From their side, investors are part of the playground. Therefore, they all re-align their strategy to have product portfolio for serving AI/deep learning needs. Datacenters, cloud computing, AI, autonomous driving are becoming key words for venture capitalists.

Yole’s analysts are convinced of the added value of 3D integration technologies. AI and deep learning are new applications to consider but not only. AR/VR will be also part of the 3D integration future. And the latest announcement from AMD regarding its new Radeon Pro Vega graphic card dedicated to Apple’s new iMac Pro is another step towards the computing applications™.

A detailed description of the 3D TSV and 2.5D Business Update – Market and Technology Trends 2017 is available on i-micronews.com, advanced packaging reports section.

The latest update to the World Fab Forecast report, published on May 31, 2017 by SEMI, reveals record spending for fab construction and fab equipment. Korea, Taiwan, and China all see large investments, and spending in Europe will also increase significantly. In 2017, over US$49 billion will be spent on equipment alone, a record for the semiconductor industry.  Spending on new fab construction is projected to reach over $8 billion, the second largest year on record.  Records will shatter again in 2018, when equipment spending will pass $54 billion, and new fab construction spending is forecast at an all-time high of $10 billion. See Figure.

Figure 1

Figure 1

SEMI reports that these unprecedented high numbers are not only driven by a handful of well-known, established companies, but also by several new Chinese companies entering the scene with large budgets. An increase in overall fab spending (construction and equipment together) of 54 percent year-over-year (YoY) in China is expected.  Total spending rises from $3.5 billion in 2016 to $5.4 billion in 2017, and then to $8.6 billion in 2018, another 60 percent year-over-year (YoY).

Some of these China-based companies are well known, such as Hua Li Microelectronics or SMIC (top investors in 2017 and 2018), though newcomers in the arena, including Yangtze Memory Technology, Fujian Jin Hua Semiconductor, Tsinghua Unigroup, Tacoma Semiconductor, and Hefei Chang Xin Memory, add to the spending surge.

The SEMI World Fab Forecast breaks down fab equipment spending by region. Korea leads both years of our forecast period, with spending of $14.6 billion in 2017 and $15.1 billion in 2018.  In 2017, Taiwan is projected to be the second largest spending region on equipment, but China will take over second place in 2018 as it equips the many new fabs being built in 2016 and 2017.  Americas is in fourth place, projected to spend $5.2 billion in 2017 and $5.5 billion in 2018.  Japan will come in fifth, spending $5.1 billion in 2017 and $5.3 billion in 2018.  Although the Europe/Mideast region is in sixth place with relatively modest investments of $3.8 billion in 2017, this represents remarkable growth for the region, 71 percent more than in 2016; and the region will bump spending another 20 percent in 2018 (to $4.6 billion).

This exciting growth cycle could continue well beyond 2018.  Record fab construction spending of $10 billion for 2018 means new fabs will need to be equipped at least a year down the road, leading to high expectations for good business beyond the current two-year forecast period.

Since the last publication on February 28, the SEMI Industry Research & Statistics team has made 279 changes on 244 facilities/lines. In that time frame, 24 new facilities were added and 4 fab projects were closed.

For insight into semiconductor manufacturing in 2017 and 2018 with details about capex for construction projects, fab equipping, technology levels, and products, visit the SEMI Fab Database webpage and order the SEMI World Fab Forecast Report. The report, in Excel format, tracks spending and capacities for over 1,100 facilities including over 60 future facilities, across industry segments from Analog, Power, Logic, MPU, Memory, and Foundry to MEMS and LEDs facilities.

IC Insights recently released its May Update to the 2017 McClean Report. This Update included IC Insights’ latest 2017 IC market forecast, a discussion of the 1Q17 semiconductor industry market results, a review of the IC market by electronic system type, a look at the top-25 1Q17 semiconductor suppliers, and an update of the capital spending forecast by company.

Figure 1 shows the “Billion-Dollar Club” list from 2007 through IC Insights’ forecast in 2017. In total, there are 15 companies that are forecast to have semiconductor capital expenditures of ≥$1.0 billion in 2017, up from 11 in 2016 and only 8 in 2013. Infineon and Renesas are expected to move into the major spending ranking this year as each company is aggressively targeting the fast rising automotive semiconductor market. Other companies expected to be added to the ranking this year include Nanya and ST. Moreover, IC Insights believes that a few Chinese companies are likely to break into the “major spenders” ranking over the next couple of years as they ramp up their new fabs. The 15 companies listed, which include four pure-play foundries, are forecast to represent 83% of total worldwide semiconductor industry capital spending in 2017, the highest percentage over the timeperiod shown.

This year, four companies—Intel, Samsung, GlobalFoundries, and SK Hynix— are expected to represent the bulk of the increase in spending. Samsung is forecast to spend $3,200 million more in capital outlays this year than in 2016, Intel $2,375 million more, GlobalFoundries $865 million more, and SK Hynix an additional $812 million. Combined, these four companies are expected to increase their spending by $7,252 million in 2017, or about 90% of the total $8,021 million net jump in total semiconductor industry capital expenditures forecast for this year.

With a 31% increase, the DRAM/SRAM segment is expected to display the largest percentage increase in capital expenditures of the major products types listed this year. With DRAM ASPs surging since the third quarter of 2016, DRAM manufacturers are once again stepping up spending for this segment.

Capital spending for flash memory in 2016 ($14.6 billion) was significantly higher than spending allocated for DRAM ($8.5 billion). Overall, IC Insights believes that essentially all of the spending for flash memory in 2016 and 2017 was and will be dedicated to 3D NAND flash memory process technology as opposed to planar flash memory. A big jump in NAND flash capital spending in 2017 is expected to come from Samsung as it ramps its 3D NAND production in its giant new fab in Pyeongtaek, South Korea.

Figure 1

Figure 1

By Walt Custer, Custer Consulting Group, and Dan Tracy, SEMI

SEMI’s year-to-date worldwide semiconductor equipment billings year-to-date through March show a 59.6 percent gain to the same period last year.

Understanding volatility in the electronic equipment supply chain can be valuable in forecasting future business activity.  A useful way to compare relevant electronic industry data series is by using 3/12 growth rates.  The 3/12 growth is the ratio of three months of data, compared to the same three months a year earlier.

Chart 1 compares the 3/12 growth rates of four data series:

  • World semiconductor equipment shipments (SEMI; www.semi.org)
  • Taiwan chip foundry sales (company composite maintained by Custer Consulting Group)
  • World semiconductor shipments (SIA, www.semiconductors.org & WSTS, www.wsts.org)
  • World electronic equipment sales (composite of 238 global OEMS maintained by Custer Consulting Group).

supply-chain-dynamics

Highlights

  • Semiconductor capital equipment sales are by far the most volatile of the four series in Chart 1, followed by foundry sales.
  • Foundry sales are a good leading indicator for semiconductor equipment shipments ─ leading SEMI equipment by 3-4 months on a 3/12 growth basis.
  • Foundry growth peaked in November 2016.
  • SEMI equipment growth appears to have peaked in February 2017.
  • Semiconductor shipments may have peaked in March 2017. March semiconductor revenues were up 18.5 percent in 1Q’17 vs 1Q’16 and, although still very strong, their rate of growth appears to have plateaued.

Note that 3/12 values greater than 1.0 indicate growth.  Declining 3/12 values (but greater than 1.0) indicate growth but at a slower rate.  Values below 1.0 indicate contraction.

Based upon Chart 1, semiconductor equipment 3/12 growth will likely reach zero in August or September of this year. Considering the unstable world geopolitical situation, uncertainty clearly exists.

SEMI members can access member-only market data and information at www.semi.org/en/free-market-data-semi-members.

Custer Consulting Group (www.custerconsulting.com) provides market research, business analyses and forecasts for the electronic equipment and solar/photovoltaic supply chains including semiconductors, printed circuit boards & other passive components, photovoltaic cells & modules, EMS, ODM & related assembly activities and materials & process equipment.

Electronic systems that improve vehicle performance; that add comfort and convenience; and that warn, detect, and take corrective measures to keep drivers safe and alert are being added to new cars each year. Consumer demand and government mandates for many of these new systems, along with rising prices for many IC components within them, are expected to raise the automotive IC market 22% this year to a new record high of $28.0 billion (Figure 1).

Over the past several years, the global automotive IC market has experienced some extraordinary swings in growth.  After increasing 11.5% in 2014, the automotive IC market declined 2.5% in 2015, but then rebounded with solid 10.8% growth in 2016.  It is worth noting that the sales decline experienced in 2015 was primarily the result of falling ASPs across all the key automotive IC product categories—microcontrollers, analog ICs, DRAM, flash, and general- and special-purpose logic ICs, which offset steady unit growth for automotive ICs that year.

Figure 1

Figure 1

However, in the second half of 2016, steadily rising ASPs (along with demand for the new automotive systems) helped return the automotive IC market to double-digit growth. In 2017, exceptionally strongincreases in DRAM and flash memory prices are expected to help drive the total automotive IC market to an extraordinary increase of 22.4%.

IC Insights recently revised its IC market outlook for 2017 and now shows DRAM average selling prices rising 50% in 2017, NAND flash ASPs increasing 28%, and the average selling price for automotive special-purpose logic devices increasing 34%. these strong ASPs gains, coupled with ongoing system demand, are driving the strong automotive IC market growth this year (Figure 2).

Figure 2

Figure 2

Collectively, microcontrollers, analog, standard logic, and memory ICs used in automotive applications accounted for only about 8% of total IC marketshare by system type in 2016, but that share is forecast to increase to more than 10% in 2020, when automotive is expected to become the third-largest end-use category for ICs, trailing only the communications and computer segments.   Through 2020, IC Insights anticipates that advanced driver-assistance systems (ADAS) will be the biggest user of automotive ICs.  Various ADAS systems are currently helping cars and drivers remain safe on the road and they are proving to be essential building blocks to semi autonomous and autonomous vehicles that are being proposed for the next decade.

GLOBALFOUNDRIES and the Chengdu municipality today announced an investment to spur innovation in China’s semiconductor industry. The partners plan to build a world-class FD-SOI ecosystem including multiple design centers in Chengdu and university programs across China. The investment of more than $100 million is expected to attract leading semiconductor companies to Chengdu, making it a center of excellence for designing next-generation chips in mobile, Internet-of-Things (IoT), automotive and other high-growth markets.

GF and Chengdu recently launched a joint venture to build a 300mm fab to meet accelerating global demand for GF’s 22FDX FD-SOI technology. Connected to this manufacturing partnership, Chengdu is now focusing on developing the city as a center of excellence for 22FDX design. The partners plan to establish multiple centers focused on IP development, IC design and incubating fabless companies in Chengdu, with the expectation of hiring more than 500 engineers to support semiconductor and systems companies in developing products using 22FDX for mobile, connectivity, 5G, IoT, and automotive. There will also be a focus on creating partnerships with universities across China to develop relevant FD-SOI coursework, research programs and design contests.

“China is the largest semiconductor market and is leading the way with a nationwide commitment to smart cities, IoT, smart vision and other advanced, mobile or battery-powered connected systems” said Alain Mutricy, senior vice president of product management at GF. “FDX is especially well suited for Chinese customers, and the FD-SOI ecosystem in Chengdu will provide the support system necessary to help chip designers take full advantage of the technology’s capabilities. We are committed to extend our partnership with Chengdu to accelerate adoption of FDX in China.”

“Following the ribbon cutting marking the signing of our Investment Cooperation Agreement, and to deepen our cooperation and attract more best-in-class semiconductor companies to Chengdu, the Chengdu Municipal Government is delighted to cooperate with GlobalFoundries on this FD-SOI ecosystem action plan,” said Gou Zheng Li, Vice Mayor of City of Chengdu. “Over the next six years, we aim to build a world-class ecosystem for FD-SOI and make Chengdu a Center of Excellence for the design and manufacturing of integrated circuits.”

GF’s 22FDX technology employs a 22nm Fully-Depleted Silicon-On-Insulator (FD-SOI) transistor architecture to deliver the industry’s best combination of performance, power and area for wireless, battery-powered intelligent systems. Construction of the new Chengdu fab has commenced and is on schedule with an expected completion date in early 2018. The fab will begin production of mainstream process technologies in 2018 and then focus on manufacturing 22FDX, with volume production expected to start in 2019.

Worldwide semiconductor revenue totaled $343.5 billion in 2016, a 2.6 percent increase from 2015 revenue of $334.9 billion, according to final results by Gartner, Inc. The top 25 semiconductor vendors’ combined revenue increased 10.5 percent, a significantly better performance than the overall industry’s growth; however, most of this growth resulted from merger and acquisition (M&A) activity.

“The semiconductor industry rebounded in 2016, with a weak start to the year, characterized by inventory correction, giving way to strengthening demand and an improving pricing environment in the second half,” said James Hines research director at Gartner. “Worldwide semiconductor revenue growth was supported by increasing production in many electronic equipment segments, improving NAND flash memory pricing and relatively benign currency movements.”

Intel retained its No. 1 position as the largest semiconductor manufacturer and grew its semiconductor revenue 4.6 percent in 2016 (see Table 1). Samsung Electronics continued to maintain the No. 2 spot with 11.7 percent market share.

Table 1. Top 10 Semiconductor Vendors by Revenue, Worldwide, 2016 (Millions of Dollars)

2015 Rank

2016 Rank

Vendor

2016 Revenue

2016
Market Share (%)

2015 Revenue

2015-2016 Growth (%)

1

1

Intel

54,091

15.7

51,690

4.6

2

2

Samsung Electronics

40,104

11.7

37,852

5.9

4

3

Qualcomm

15,415

4.5

16,079

-4.1

3

4

SK hynix

14,700

4.3

16,374

-10.2

17

5

Broadcom Ltd. (formerly Avago)

13,223

3.8

4,543

191.1

5

6

Micron Technology

12,950

3.8

13,816

-6.3

6

7

Texas Instruments

11,901

3.5

11,635

2.3

7

8

Toshiba

9,918

2.9

9,162

8.3

12

9

NXP Semiconductors

9,306

2.7

6,517

42.8

10

10

Media Tek

8,725

2.5

6,704

30.1

Others

153,181

44.6

160,562

-4.6

Total Market

343,514

100.0

334,934

2.6

Source: Gartner (May 2017)

Consolidation continued to play a major role in the market share rankings, with several large companies growing through acquisitions. Merger and acquisition activity among the major vendors in 2016 included Avago Technologies’ acquisition of Broadcom Corp. to become Broadcom Ltd., On Semiconductor’s acquisition of Fairchild Semiconductor, and Western Digital’s acquisition of SanDisk. The largest mover in the top 25 was Broadcom Ltd., which moved up 12 places in the market share ranking.

“The combined revenue of the top 25 semiconductor vendors increased by 10.5 percent during 2016 and accounted for a 74.9 percent share, outperforming the rest of the market, which saw a 15.6 percent revenue decline,” said Mr. Hines. “However, these results are skewed by the large amount of M&A activity during 2015 and 2016. If we adjust for this M&A activity by adding the revenue of each acquired company to the revenue of the acquirer for both 2015 and 2016 where necessary, then the top 25 vendors would have experienced a 1.9 percent revenue increase, and the rest of the market would have increased by 4.6 percent.”