Tag Archives: letter-wafer-top

The Micron Foundation announced that it will commit $1 million to higher education institutions in Virginia as it invests in the next generation of technicians, scientists and engineers with a focus on women and underrepresented minorities in these fields. The investment will provide grants and funding at select community colleges and universities for several types of programs, organizations and individuals that inspire and enable future innovators.

“Today we are proud to expand our commitment with education partners across Virginia, which share our focus on developing a strong, vibrant and talented workforce,” said Micron Foundation Executive Director Dee Mooney. “These efforts reflect our company’s focus on investing in students and embracing diversity, as well as our long-term commitment to our Manassas facility and its team members. We look forward to working with community and education leaders to identify and support programs that will make a difference for decades to come.”

The $1 million fund will support programs in the area of cleanroom and nanotechnology labs, unmanned and autonomous automotive systems, robotics, big data, embedded systems and networking applications. Faculty members, program directors and student groups from universities and community colleges in the Commonwealth of Virginia will be eligible. With a focus on women and underrepresented minorities, programs that support low income and first-time college student programs will also receive special consideration.

IC Insights forecasts total semiconductor capital expenditures will rise to $102.0 billion this year, marking the first time that the industry has spent more than $100 billion on capital expenditures in one year.  The $102.0 billion spending level represents a 9% increase over $93.3 billion spent in 2017, which was a 38% surge over 2016.

Figure 1 shows that more than half of industry capital spending is forecast for memory production—primarily DRAM and flash memory—including upgrades to existing wafer fab lines and brand new manufacturing facilities. Collectively, memory is forecast to account for 53% of semiconductor capital expenditures this year. The share of capital spending for memory devices has increase substantially in six years, nearly doubling from 27% ($14.7 billion) in 2013 to a forecast of 53% ($54.0 billion) of total industry capex in 2018, which amounts to a 2013-2018 CAGR of 30%.

Figure 1

Of the major product categories shown, DRAM/SRAM is forecast to show the largest increase in spending, but flash memory is expected to account for the largest share of capex spending this year (Figure 2).  Capital spending for the DRAM/SRAM segment is forecast to show a 41% surge in 2018 after a strong 82% increase in 2017.  Capital spending for flash memory is forecast to rise 13% in 2018 after a 91% increase in 2017.

Figure 2

After two years of big increases in capital expenditures, a major question looming is whether high levels of spending will lead to overcapacity and a softening of prices.  Historical precedent in the memory market shows that too much spending usually leads to overcapacity and subsequent pricing weakness.  With Samsung, SK Hynix, Micron, Intel, Toshiba/Western Digital/SanDisk, and XMC/Yangtze River Storage Technology all planning to significantly ramp up 3D NAND flash capacity over the next couple of years (and new Chinese memory startup companies entering the market), IC Insights believes that the future risk for overshooting 3D NAND flash market demand is high and growing.

Micron Technology, Inc., (NASDAQ:MU) today announced plans to invest $3 billion by 2030 to increase memory production at its plant in Manassas, Virginia, creating 1,100 new jobs roughly over the next decade. These investments are contemplated in Micron’s long-term model to invest capital expenditure in the low thirties as a percent of revenue. The expansion will position the Manassas site — located about 40 miles west of Washington, D.C. — to support Micron’s leadership in the rapidly growing market for high quality, high reliability memory products.

Source: Micron

“Micron’s Manassas site manufactures our long-lifecycle products that are built using our mature process technologies, and primarily sold into the automotive, networking and industrial markets,” said Micron President and CEO Sanjay Mehrotra. “These products support a diverse set of applications such as industrial automation, drones, the IoT (Internet of Things) and in-vehicle experience applications for automotive. This business delivers strong profitability and stable, growing free cash flow. Micron is grateful for the extensive engagement of state and local officials since early this year to help bring our Manassas expansion to fruition. We are excited to increase our commitment to the community through the creation of new highly skilled jobs, expanded facilities and education initiatives.”

“Micron’s expansion in the City of Manassas represents one of the largest manufacturing investments in the history of Virginia and will position the Commonwealth as a leader in unmanned systems and Internet of Things,” said Governor Northam. “This $3 billion investment will have a tremendous impact on our economy by creating 1,100 high-demand jobs, and solidifies Micron as one of the Commonwealth’s largest exporters. We thank Micron for choosing to deepen their roots in Virginia and look forward to partnering in their next chapter of major growth.”

The initial clean room expansion is expected to be completed in the fall of 2019 with production ramp in the first half of 2020. This expansion will add less than 5% to Micron’s global clean room space footprint and will primarily support enablement of DRAM and NAND technology transitions as well as modest capacity increase at the site, in-line with growing customer demand for Micron’s long-lifecycle products.

“As a leading global supplier of automotive electronics systems and components, ZF appreciates the long-standing support of Micron to our business,” said Karsten Mueller, vice president, Corporate Materials Management, Global Commodity Electronics at ZF Friedrichshafen AG. “Meeting the ever-increasing demands for automotive applications will require significantly greater memory as the dual trends of advanced safety and autonomy drive the industry forward. Micron’s decision to expand the manufacturing and R&D capabilities at this IATF-certified facility is another indication that this growth should only accelerate in the future.”

As part of this expansion, Micron will also establish a global research development center in Manassas for the development of memory and storage solutions focused mainly on the automotive, industrial and networking markets. The research and development center will include laboratories, test equipment and a staff of approximately 100 engineers.

The Virginia Economic Development Partnership (VEDP) worked with the City of Manassas and the General Assembly’s Major Employment and Investment (MEI) Project Approval Commission to secure the project for Virginia. Micron will be eligible to receive an MEI custom performance grant of $70 million for site preparation and facility costs, subject to approval by the Virginia General Assembly. Additionally, the City of Manassas and utility partners are providing a broader, comprehensive support package to enable the expansion, including substantial infrastructure upgrades and additional incentives.

By Jay Chittooran

In testimony last week before a U.S. government interagency panel considering tariffs on $200 billion worth of Chinese goods, SEMI called for the removal of nearly 100 tariff lines, all of which cover items critical to the semiconductor manufacturing process, including materials and machines.

Jonathan Davis, global vice president of advocacy at SEMI, explained in his testimony that while SEMI strongly supports efforts to better protect valuable intellectual property (IP), tariffs will not help address Chinese trade practices, and will ultimately have significant and unintended consequences. SEMI asserts that these tariffs will harm companies in the semiconductor supply chain by increasing business costs, introducing uncertainty, and stifling innovation. Collectively, SEMI estimates that this round of tariffs will cost its 400 U.S. members more than tens of millions annually in additional duties. All told, SEMI estimates that all U.S. and Chinese retaliatory tariffs will cost members nearly $700 million in annual duties.

SEMI’s full written comments note that these tariffs, on top of those already in force and the retaliatory tariffs, will hamstring the industry. The tariffs seem to target U.S. firms for simply operating in China. Given that tools and materials are extremely complex, precise, and difficult to manufacture, it is unreasonable to believe that a constituent component can simply be replaced with a part from another source. Further, this U.S. government approach does not take into account that many items  subject to these tariffs are not available, at sufficient quality and cost, from domestic sources, or even non-Chinese sources. We stand steadfast in our belief that this trade action will raise prices, put thousands of high-paying and high skill jobs at risk, and curb growth.

Over the past four months, SEMI submitted written comments and offered testimony on the two previous rounds of tariffs, citing the damaging impact tariffs would have on the U.S. semiconductor industry. The first round of tariffs – on $34 billion worth of Chinese goods – took effect July 6, and the second round – targeting $16 billion in Chinese imports – will be imposed on August 23. The tariffs hit machines and tools central to the semiconductor industry, including equipment used to manufacture wafers, boules, and chips as well as test, inspection and sensing equipment.

We urge SEMI members to review the $200 billion U.S. tariff list to determine the level, if any, of impact. We also strongly encourage members to review Chinese retaliatory lists as well. Any SEMI members who have questions, should contact Jay Chittooran, Public Policy Manager at SEMI, at [email protected].

Originally published on the SEMI blog.

By Christopher Morales, Head of Security Analytics, Vectra

On August 3, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the largest chip fabricator globally introduced a WannaCry Ransomware cryptowormvariant onto its information technology/operational technology (IT/OT) networks. A TSMC supplier installed infected software on a new fabrication tool and connected it to the network, facilitating the malware infestation.

The infection spread quickly, taking out 10,000+ unpatched Windows 7 machines that run the chip fab company’s tool automation interface. The crypto worm crashed and rebooted systems endlessly, forcing several plants in Taichung, Hsinchu andTainan to shut down through much of the weekend.

The infection crippled materials handling systems and production equipment as well as Windows 7 computers. Some of the plants were producing SoC chips for the AppleiPhone 8 and X models. The incident’s connection to Apple and the iPhone heightened its visibility in the news media.

According to TSMC CEO C.C. Wei, patching for the Windows 7 machines requires computer downtime and collaboration with equipment suppliers. The absence of currentpatches created an environment where WannaCry could easily propagate.

The 2018 Spotlight Report on Manufacturing published by Vectra a few weeks before the incident foretold TSMC’s infection, which could cost the company as much as $255 million.

Smart manufacturer cybersecurity risks are increasing

According to the TSMC website, the company had “introduced new applications such as IoT, intelligent mobile devices and mobile robots to consolidate data collection, yield traceability, workflow efficiency, and material transportation to continuously enhance fab operation efficiency.” Further, TSMC had “integrated automatic manufacturing systems,” according to its website.

These innovations are typical in the evolution of Industry 4.0, which has increased the risk of cyber attacks against manufacturers.

But as manufacturers moved from air-gapped industrial systems to cloud-connectedsystems as part of the IT/OT convergence – using unpartitioned networks and insufficient access controls for proliferating IIoT devices – they created a massive, vulnerable attack surface, according to the Vectra report.

While air-gapped systems such as industrial controls have no connections by design to guard against malicious tampering, IT/OT convergence has connected these systems to information technologynetworks with little accounting for security vulnerabilities.

Many factories connect IIoT devices to flat, unpartitioned networks that rely on communication with general computing devices and enterprise applications. Since IIoT devices support few if any native cybersecurity measures, connecting them to easily infected applications, computers and unsegregated IP networks only invites trouble.

In the past, manufacturers relied on more customized, proprietary protocols, which made mounting an attack more difficult for cybercriminals. The conversion from proprietary protocols to standard protocols makes it easier to infiltrate networks to spy, spread and steal.

Few if any cyberattackers know and understand the proprietary protocols those closed legacy systems used. But it’s easy for most criminal hackers and their exploits to access standard IP network protocols just as WannaCry abuses the SMB protocol where there is no patch.

Real-time network visibility is crucial 

Industry 4.0 brings with it a new operational risk for connected, smart manufacturers and digital supply networks. The interconnected nature of Industry 4.0-driven operations and the pace of digital transformation mean that cyber attacks can have far more damaging effects than ever before, and manufacturers and their supply networks may not be preparedfor the risks.

Wherever cyber attacks interfere business continuity for business and information processes, they can also disrupt operational technologies that render products and get them out the door.

For cyber-risk to be adequately addressedin the age of Industry 4.0, manufacturing organizations need to ensure that proper visibility and response capabilities are in place to detect and respond to events as they occur. As in the case of the TSMC ransomware debacle, anything less than real-time detection and response is too little, too late to avoid production downtime.

There is no visibility into these systems to enable real-time detection before cyber attacks spread. Visibility into these internal connected systems is necessary to curtail the extent of damage from a cyberattack.

Manufacturing security operations now require automated, real-time analysis of entire networks to proactively detect and respond to in-progress threats before they do damage.

The Vectra 2018 Spotlight Report on Manufacturing

The 2018 Spotlight Report on Manufacturing delineates the many attack types and behaviors that the Cognito platform captured. The Cognito threat-detection and hunting platform monitored traffic and collected rich metadata from more than 4million devices and workloads from customer cloud, data center, and enterprise environmentsto reveal the cyberattacker behaviors.

Cyber attacks on manufacturers increased in severity from January to June 2018 based on data that the Vectra Cognito platform collected. The Vectra report confirms that all manufacturing industries are at equal risk of cyberattacks.

To learn about other findings pertinent to your Industry 4.0 cybersecurity risk, download the 2018 Spotlight Report on Manufacturing.

Christopher Morales is the head of security analytics at Vectra, a San Jose, Calif. cybersecurity firm that detects hidden cyberattacks and helps threat hunters improve the efficiency of incident investigations.

Global semiconductor industry revenue grew 4.4 percent, quarter over quarter, in the second quarter of 2018, reaching a record $120.8 billion. Semiconductor growth occurred in all application markets and world regions, according to IHS Markit (Nasdaq: INFO).

“The explosive growth in enterprise and storage drove the market to new heights in the second quarter,” said Ron Ellwanger, senior analyst and component landscape tool manager, IHS Markit. “This growth contributed to record application revenue in data processing and wired communication markets as well as in the microcomponent and memory categories.”

Due to the ongoing growth in the enterprise and storage markets, sequential microcomponent sales grew 6.5 percent in the second quarter, while memory semiconductor revenue increased 6.4 percent. “Broadcom Limited experienced exceptional growth in its wired communication division, due to increased cloud and data-center demand,” Ellwanger said.

Memory component revenue continued to rise in the second quarter, compared to the previous quarter, reaching $42.0 billion dollars. “This is the ninth consecutive quarter of rising revenue from memory components, and growth in the second quarter of 2018 was driven by higher density in enterprise and storage,” Ellwanger said. “This latest uptick comes at a time of softening prices for NAND flash memory. However, more attractive pricing for NAND memory is pushing SSD demand and revenue higher.”

Semiconductor market share

Samsung Electronics continued to lead the overall semiconductor industry in the second quarter with 15.9 percent of the market, followed by Intel at 13.9 percent and SK Hynix at 7.9 percent. Quarter-over-quarter market shares were relatively flat, with no change in the top-three ranking. SK Hynix achieved the highest growth rate and record quarterly sales among the top three companies, recording 16.4 percent growth in the second quarter.

IC Insights released its August Update to the 2018 McClean Report earlier this month.  This Update included a discussion of the top-25 semiconductor suppliers in 1H18 (the top-15 1H18 semiconductor suppliers are covered in this research bulletin) and Part 1 of an extensive analysis of the IC foundry market and its suppliers.

The top-15 worldwide semiconductor (IC and O-S-D—optoelectronic, sensor, and discrete) sales ranking for 1H18 is shown in Figure 1.  It includes seven suppliers headquartered in the U.S., three in Europe, two each in South Korea and Taiwan, and one in Japan.  After announcing in early April 2018 that it had successfully moved its headquarters location from Singapore to the U.S. IC Insights now classifies Broadcom as a U.S. company.

Figure 1

As shown, all but four of the top 15 companies had double-digit year-over-year growth in 1H18. Moreover, seven companies had ≥20% growth, including the five big memory suppliers (Samsung, SK Hynix, Micron, Toshiba/Toshiba Memory, and Western Digital/SanDisk) as well as Nvidia and ST.

The top-15 ranking includes one pure-play foundry (TSMC) and four fabless companies. If TSMC were excluded from the top-15 ranking, U.S.-based Apple would have been ranked in the 15th position. Apple is an anomaly in the top company ranking with regards to major semiconductor suppliers. The company designs and uses its processors only in its own products—there are no sales of the company’s MPUs to other system makers. IC Insights estimates that Apple’s custom ARM-based SoC processors and other custom devices had a “sales value” of $3.5 billion in 1H18.

IC Insights includes foundries in the top-15 semiconductor supplier ranking since it has always viewed the ranking as a top supplier list, not a marketshare ranking, and realizes that in some cases the semiconductor sales are double counted. With many of our clients being vendors to the semiconductor industry (supplying equipment, chemicals, gases, etc.), excluding large IC manufacturers like the foundries would leave significant “holes” in the list of top semiconductor suppliers. Foundries and fabless companies are identified in the Figure. In the April Update to The McClean Report, marketshare rankings of IC suppliers by product type were presented and foundries were excluded from these listings.

Overall, the top-15 list shown in Figure 1 is provided as a guideline to identify which companies are the leading semiconductor suppliers, whether they are IDMs, fabless companies, or foundries.

In May 2018, Toshiba completed the $18.0 billion sale of its memory IC business to the Bain Capital-led consortium. Toshiba then repurchased a 40.2% share of the business. The Bain consortium goes by the name of BCPE Pangea and the group owns 49.9% of Toshiba Memory Corporation (TMC). Hoya Corp. owns the remaining 9.9% of TMC’s shares. The new owners have plans for an IPO within three years. Bain has said it plans to support the business in pursing M&A targets, including potentially large deals.

As a result of the sale of Toshiba’s memory business, the 2Q18 sales results shown in Figure 1 include the combined sales of the remaining semiconductor products at Toshiba (e.g., Discrete devices and System LSIs) and the new Toshiba Memory’s NAND flash sales. The estimated breakdown of these sales in 2Q18 is shown below:

Toshiba System LSI: $468M
Toshiba Discrete: $315M
Toshiba Memory Corporation: $3,107M
Total Toshiba/Toshiba Memory Corporation 2Q18 Sales: $3,890M

In total, the top-15 semiconductor companies’ sales surged by 24% in 1H18 compared to 1H17, four points higher than the total worldwide semiconductor industry 1H18/1H17 increase of 20%. Amazingly, the Big 3 memory suppliers—Samsung, SK Hynix, and Micron, each registered greater than 35% year-over-year growth in 1H18. Fourteen of the top-15 companies had sales of at least $4.0 billion in 1H18, three companies more than in 1H17. As shown, it took just over $3.7 billion in sales just to make it into the 1H18 top-15 semiconductor supplier list.

Intel was the number one ranked semiconductor supplier in 1Q17 but lost its lead spot to Samsung in 2Q17 as well as in the full-year 2017 ranking, a position it had held since 1993. With the continuation of the strong surge in the DRAM and NAND flash markets over the past year, Samsung went from having only 1% more total semiconductor sales than Intel in 1H17 to having 22% more semiconductor sales than Intel in 1H18!

It is interesting to note that memory devices are forecast to represent 84% of Samsung’s semiconductor sales in 2018, up three points from 81% in 2017 and up 13 points from 71% just two years earlier in 2016. Moreover, the company’s non-memory sales in 2018 are expected to be only $13.5 billion, up 8% from 2017’s non-memory sales level of $12.5 billion. In contrast, Samsung’s memory sales are forecast to be up 31% this year and reach $70.0 billion.

The Trump administration’s consideration of tariffs on Chinese printed circuit assemblies and connected devices would cost the economy $520.8 million and $2.4 billion annually for the 10 percent and 25 percent tariffs, respectively, according to a new study commissioned by the Consumer Technology Association (CTA).

“With the economy thriving under President Trump – we’ve seen remarkably low unemployment and a booming stock market – the administration shouldn’t jeopardize America’s global standing with tariffs,” said Gary Shapiro, CEO and president, CTA. “Foreign governments don’t pay the cost of tariffs, Americans do – and for that reason, U.S. trade policy needs to steer clear of tariffs that act like taxes on American manufacturers and consumers. The danger we face – the unintended consequence – is that tariffs mean Americans will pay more for all the devices they use every day to access the internet.”

The economic impact study shows American shoppers will have to pay between $1.6 billion and $3.2 billion more for connected devices such as gateways, modems, routers, smart speakers, smartwatches and other Bluetooth enabled products. The price of connected devices from China will increase by between 8.5 and 22 percent. And prices for these products from all sources will rise between 3.2 and 6.2 percent.

Similarly, the price of printed circuit assemblies from China –– will increase by between nine and 23 percent, while an alternative supply from U.S. manufacturers will cost two to three percent higher. As a result of higher input costs, totaling an additional $900 million to $1.8 billion, American manufacturers of products that contain printed circuit assemblies will purchase between six and 12 percent less from suppliers overall.

“When our government begins to charge its own companies and people with more taxes in the form of tariffs, we have put in jeopardy not just the American Dream of many small and mid-size businesses, but you put in jeopardy the people that work for them too,” said Win Cramer, CEO, JLab Audio, a California based company and CTA member. “These people support a growing economy, support a growing business and, most importantly, pay taxes. Pre-tariffs, JLab Audio was planning to scale up with new hires and programs to push our company’s growth to another level, but now we’ve put all of that on hold as we need to see how everything shakes out.”

Based on CTA’s most recent U.S. Consumer Technology Sales and Forecasts report, if the administration enacts tariffs of 10 and 25 percent, CTA projects 2019 U.S. unit shipments of connected devices such as fitness trackers, smartwatches, wireless headphones, modems/broadband gateways, wireless earbuds and smart speakers would decline by as much as 12 percent. Also, U.S. shipment revenues for these devices would decrease by as much as 6.5 percent in 2019.

On the heels of a 37.3% growth in wafer front end (WFE) semiconductor equipment growth in 2017, the market will grow only 10% in 2018 to $62.3 billion, according to the report “The Global Semiconductor Equipment: Markets, Market Shares, Market Forecasts,” recently published by The Information Network, (www.theinformationnet.com) a New Tripoli, PA-based market research company.

For the first six months of 2018, WFE billings were $35.3 billion, meaning billings of $27.0 billion will be registered in the second half of 2018 if the sector as a whole grows 10% in CY 2018.

This means a drop of 24% between 1H 2018 and 2H 2018.

The chart below shows that U.S. equipment companies held a 48.8% share of the total sector in 1H 2018 followed by Japan with a 30.3% share and ROW (primarily Europe) with a 26.9% share. For 2H 2018, the weak Japanese Yen means Japan will have a 29.1% share, but stronger EUV sales by ASML will mean Europe’s share will grow to 28.0%.

The memory market is moving into a period of oversupply: NAND oversupply started six months ago and has resulted in device price drops, while DRAMs will reach an oversupply situation in the next few months. As a result, market leader Samsung Electronics has pushed out purchases. Foundry leader TSMC has reduced its estimate for sales revenue growth in 2018 and its capital expenditure budget.

Automotive electronics are a bright light for the semiconductor industry, as smartphone growth slows, and personal computing growth continues to decline. The expectation is that automotive electronics will become the next big technology market driver. The automotive semiconductor market will exceed the overall industry growth as semiconductor content expands with added features and functionality. The desire to put self-driving vehicles on the road is creating increased interest in innovative automotive solutions as well as increased semiconductor demand. A new research report from Semico Research, Automotive Semiconductors: Accelerating in the Fast Lane, states that the automotive segment of the semiconductor industry will grow to $73 billion by 2023.

“There are a number of challenges in the automotive industry that are unique for the system developers to navigate. Autonomous driving is a critical one,” says Jim Feldhan, President of Semico Research. “Many people feel AI is the key to the success of autonomous driving. Autonomous driving includes the ability to have optical character recognition, i.e. reading signs, distinguishing a sign from a person, and determining if the brakes should be turned on. Security surveillance, computer vision, virtual reality and image processing, real-time diagnosis and corrective solutions and strategic map planning are critical to autonomous driving. Increasing levels of processing are required as these systems become more sophisticated.”

Key findings in the report include:

The TAM market for automotive IP processor royalties will grow to $2.34 billion by 2023.
A fully autonomous vehicle (L5) is expected to require 74GB DRAM and 1TB NAND memory.
Powertrain requires the highest compute function and carries the highest ASP.

Revenue generated from processors in Autonomous Driving Systems will reach $422 million in 2018.
In its recent report, Automotive Semiconductors: Accelerating in the Fast Lane (MP118-18), Semico Research provides a comprehensive review of the current market and future opportunities for the semiconductor industry in the automotive segment. Topics covered in the report include Automotive Trends, Opportunities and Challenges, Manufacturing Technology for Auto ICs, Automotive Forecast, and Semiconductor IP in Automotive. The report is 56 pages long and includes 28 tables and 34 figures.