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

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

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

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

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

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

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

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

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

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

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

In addition to the monthly Updates, IC Insights’ subscription to The McClean Report includes three “subscriber only” webcasts.  The first of these webcasts was presented on August 3, 2016 and discussed semiconductor industry capital spending trends, the worldwide economic outlook, the semiconductor industry forecast through 2020, as well as China’s failures and successes on its path to increasing its presence in the IC industry.

In total, IC Insights forecasts that semiconductor industry capital spending will increase by only 3% this year after declining by 2% in 2015.  However, driven by the top three spenders—Samsung, TSMC, and Intel—capital spending in 2016 is expected to be heavily skewed toward the second half of this year. Figure 1 shows that the combined 2016 outlays for the top three semiconductor industry spenders are forecast to be 90% higher in the second half of this year as compared to the first half.

Figure 1

Figure 1

Combined, the “Big 3” spenders are forecast to represent 45% of the total semiconductor industry outlays this year.  An overview of each company’s actual 1H16 spending and their 2H16 spending outlook is shown below.

Samsung — The company spent only about $3.4 billion in capital expenditures in 1H16, just 31% of its forecasted $11.0 billion full-year 2016 budget.

TSMC — Its outlays in the first half of 2016 were only $3.4 billion, leaving $6.6 billion to be spent in the second half of this year in order to reach its full-year $10.0 billion budget.  This would represent a 2H16/1H16 spending increase of 92%.

Intel — Spent just $3.6 billion in 1H16.  The company needs to spend $5.9 billion in the second half of this year to reach its current $9.5 billion spending budget, which would be a 2H16/1H16 increase of 61%.

In contrast to the “Big 3” spenders, capital outlays by the rest of the semiconductor suppliers are forecast to shrink by 16% in the second half of this year as compared to the first half.  In total, 2H16 semiconductor industry capital spending is expected to be up 20% over 1H16 outlays, setting up a busy period for the semiconductor equipment suppliers through the end of this year.

Further trends and analysis relating to semiconductor capital spending through 2020 are covered in the 250-plus-page Mid-Year Update to the 2016 edition of The McClean Report.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced worldwide sales of semiconductors reached $79.1 billion during the second quarter of 2016, an increase of 1.0 percent over the previous quarter and a decrease of 5.8 percent compared to the second quarter of 2015. Global sales for the month of June 2016 reached $26.4 billion, an uptick of 1.1 percent over last month’s total of $26.1 billion, but down 5.8 percent from the June 2015 total of $28.0 billion. Cumulatively, year-to-date sales during the first half of 2016 were 5.8 percent lower than they were at the same point in 2015. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Global semiconductor sales increased slightly from Q1 to Q2 but remain behind the pace from last year, due largely to global economic uncertainty and sluggish demand,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Sales into Japan and China have been a bright spot midway through 2016, and a modest rebound in sales is projected during the second half of the year.”

Regionally, sales increased compared to June 2015 in China (1.7 percent), but fell in Asia Pacific/All Other (-11.0 percent), the Americas (-10.8 percent), Europe (-5.5 percent), and Japan (-1.3 percent). Sales were up slightly compared to last month in the Americas (3.0 percent), China (2.2 percent) and Europe (1.7 percent), but down somewhat in Japan (-1.0 percent) and Asia Pacific/All Other (-0.6 percent).

sales graph sales table

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

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

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

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

Leading MEMS sensor manufacturer trends

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

1. STMicroelectronics 

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

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

2. Knowles

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

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

3. InvenSense

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

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

top mems suppliers

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

Researchers at the University of Illinois at Urbana Champaign have developed a new method for making brighter and more efficient green light-emitting diodes (LEDs). Using an industry-standard semiconductor growth technique, they have created gallium nitride (GaN) cubic crystals grown on a silicon substrate that are capable of producing powerful green light for advanced solid-state lighting.

A new method of cubic phase synthesis: Hexagonal-to-cubic phase transformation. The scale bars represent 100 nm in all images. (a) Cross sectional and (b) Top-view SEM images of cubic GaN grown on U-grooved Si(100). (c) Cross sectional and (d) Top-view EBSD images of cubic GaN grown on U-grooved Si(100), showing cubic GaN in blue, and hexagonal GaN in red. Credit: University of Illinois

A new method of cubic phase synthesis: Hexagonal-to-cubic phase transformation. The scale bars represent 100 nm in all images. (a) Cross sectional and (b) Top-view SEM images of cubic GaN grown on U-grooved Si(100). (c) Cross sectional and (d) Top-view EBSD images of cubic GaN grown on U-grooved Si(100), showing cubic GaN in blue, and hexagonal GaN in red. Credit: University of Illinois

“This work is very revolutionary as it paves the way for novel green wavelength emitters that can target advanced solid-state lighting on a scalable CMOS-silicon platform by exploiting the new material, cubic gallium nitride,” said Can Bayram, an assistant professor of electrical and computer engineering at Illinois who first began investigating this material while at IBM T.J. Watson Research Center several years ago.

“The union of solid-state lighting with sensing (e.g. detection) and networking (e.g. communication) to enable smart (i.e. responsive and adaptive) visible lighting, is further poised to revolutionize how we utilize light. And CMOS-compatible LEDs can facilitate fast, efficient, low-power, and multi-functional technology solutions with less of a footprint and at an ever more affordable device price point for these applications.”

Typically, GaN forms in one of two crystal structures: hexagonal or cubic. Hexagonal GaN is thermodynamically stable and is by far the more conventional form of the semiconductor. However, hexagonal GaN is prone to a phenomenon known as polarization, where an internal electric field separates the negatively charged electrons and positively charged holes, preventing them from combining, which, in turn, diminishes the light output efficiency.

Until now, the only way researchers were able to make cubic GaN was to use molecular beam epitaxy, a very expensive and slow crystal growth method when compared to the widely used metal-organic chemical vapor deposition (MOCVD) method that Bayram used.

Bayram and his graduate student Richard Liu made the cubic GaN by using lithography and isotropic etching to create a U-shaped groove on Si (100). This non-conducting layer essentially served as a boundary that shapes the hexagonal material into cubic form.

“Our cubic GaN does not have an internal electric field that separates the charge carriers–the holes and electrons,” explained Liu. “So, they can overlap and when that happens, the electrons and holes combine faster to produce light.”

Ultimately, Bayram and Liu believe their cubic GaN method may lead to LEDs free from the “droop” phenomenon that has plagued the LED industry for years. For green, blue, or ultra-violet LEDs, their light-emission efficiency declines as more current is injected, which is characterized as “droop.”

“Our work suggests polarization plays an important role in the droop, pushing the electrons and holes away from each other, particularly under low-injection current densities,” said Liu, who was the first author of the paper, “”Maximizing Cubic Phase Gallium Nitride Surface Coverage on Nano-patterned Silicon (100)”, appearing Applied Physics Letters.

Having better performing green LEDs will open up new avenues for LEDs in general solid-state lighting. For example, these LEDs will provide energy savings by generating white light through a color mixing approach. Other advanced applications include ultra-parallel LED connectivity through phosphor-free green LEDs, underwater communications, and biotechnology such as optogenetics and migraine treatment.

Enhanced green LEDs aren’t the only application for Bayram’s cubic GaN, which could someday replace silicon to make power electronic devices found in laptop power adapters and electronic substations, and it could replace mercury lamps to make ultra-violet LEDs that disinfect water.

By Yoichiro Ando, SEMI Japan

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

Overview

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

Toshiba plans a new mega fab

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

Toshiba New Fab 2

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

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

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

Sony expands 300mm capacity

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

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

Micron and TowerJazz

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

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

Investments in 200mm and smaller wafer lines

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

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

Electronic Parts and Optoelectronic Devices

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

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

SEMI World Fab Forecast

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

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

Beyond its gloom, the MEMS industry is showing numerous emerging devices that hold promise for future growth. These innovative MEMS solutions were listed by the MEMS & Sensors team of Yole Développement (Yole) in the Status of the MEMS Industry 2016 report (Yole Développement, May 2016). Today, more than 100 businesses, startups and large companies are involved in exciting developments using MEMS technology. The MEMS approach can be defined as a transfer function: It lowers cost and improves integration and performance.

transfer function

“MEMS can be seen as a ‘transfer function’ using semiconductor and micromachining technologies to create devices replacing devices that are more complex, bulky or less sensitive,” explains Dr. Eric Mounier, Sr. Technology & Market Analyst at Yole. Yole has identified at least 5 criteria that determine the success of a MEMS device. They are: size reduction, potential cost reduction, “good enough” specifications, batch manufacturing compared to existing solutions, and reliability.
At least 10 to 15 years of development are required to achieve all the successful criteria.

“Based on this segmentation, and out of all the MEMS devices in development that could undergo significant growth in the future, we foresee ultrasonic and gas sensors as well as microspeaker as the next success for the MEMS industry,” details Dr. Mounier.

As Yole’s market forecast announces, the gas sensor market is showing a 7.3% CAGR for the 2014–2021 period. The market should reach US$920 million in 2021. Moreover Yole’s analysts highlight a potential upside market of almost US$65 million in 2021. This positive scenario might be possible if gas sensors are widely adopted in consumer products, analysts say (Source: Gas Sensor Technology & Market report, Yole Développement, February 2016).

Microspeakers could be part of the success story as well. Indeed a big transition is happening now: for the first time, silicon speakers are ready for volume production, enabling the creation of a brand-new multibillion-dollar market for MEMS manufacturers. Last month, Yole’s analysts had an interesting interview with USound, an Austrian company founded three years ago by several veterans of the MEMS industry.

“Prototypes of the first balanced-armature replacement and the first micro-tweeter are currently being sampled to selected customers,” USound asserted. “Pre-production will start at the end of the summer, along with internal qualification. The technology is ready for adoption and will revolutionize the personal-audio market, similar to what happened with the MEMS microphone.”

USound intends to evolve into an audio-system developer, offering complete solutions ranging from hardware to firmware, in order to simplify technology adoption and help our customers achieve optimum product performance. To read the full interview, click USound.

For the next few months, Yole will pursue its investigation into the MEMS world. Numerous technology and market reports will be released, and Yole’s MEMS & Sensors team will attend many key conferences to present its vision of the industry.

For example, in mid-September Yole will be part of two major events in Asia: MEMS & Sensors Conference Asia and Sensor Expo & Conference – China. At both conferences, Yole will present attendees with the status of the industry and its new virtuous cycle. Yole’s Speaker, Claire Troadec, MEMS & Semiconductor Manufacturing Analyst, will focus her presentation on the Chinese MEMS industry, which is steadily transforming from “Made in China” to “Created in China.” Claire will also review the Chinese MEMS players and the new virtuous cycle the MEMS industry.

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

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

Figure 1

Figure 1

Figure 2

Figure 2

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

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

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

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

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

Although liquid-crystal display (LCD) has dominated mobile phone displays for more than 15 years, organic light-emitting diode (OLED) display technology is set to become the leading smartphone display technology in 2020, according to IHS Markit (Nasdaq: INFO). AMOLED displays with a low-temperature polysilicon (LTPS) backplane will account for more than one-third (36 percent) of all smartphone displays shipped in 2020, becoming the most-used display technology in smartphone displays, surpassing a-Si (amorphous silicon) thin-film transistor (TFT) LCD and LTPS TFT LCD displays.

“While OLED is currently more difficult to manufacture, uses more complicated materials and chemical processes, and requires a keen focus on yield-rate management, it is an increasingly attractive technology for smartphone brands,” said David Hsieh, senior director, IHS Markit. “OLED displays are not only thinner and lighter than LCD displays, but they also boast better color performance and enable flexible display form factors that can lead to more innovative design.”

Samsung Electronics has already adopted OLED displays in its smartphone models, and there is also increasing demand from Chinese Huawei, OPPO, Vivo, Meizu and other smartphone brands. Apple is also now widely expected to use OLED displays in its upcoming iPhone models.

At one time, OLED displays were entirely glass-based and in terms of performance, there was little difference between LCD and OLED displays. Now, flexible OLED displays made from thinner and lighter plastic are enabled and have drawn Apple’s attention. “Apple’s upcoming adoption of OLED displays will be a milestone for OLED in the display industry,” Hsieh said.

Samsung Display, LG Display, Sharp, JDI, BOE, Tianma, GVO, Truly, and CSOT are also starting to ramp up their AMOLED manufacturing capacities and devote more resources to technology development. Samsung Display’s enormous sixth-generation A3 AMOLED fab, for example, will enable even more AMOLED displays to reach the market. Global AMOLED manufacturing capacity will increase from 5 million square meters in 2014 to 30 million square meters in 2020.

“Many display manufacturers were investing in LTPS LCD, thinking it would overtake a-Si technology,” Hsieh said. “However, many of the fabs under construction, especially in China, have had to change their plans to add OLED evaporation and encapsulation tools, because OLED penetration has been more rapid than previously expected.”

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

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

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

Figure 1

Figure 1

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

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