Tag: glofo

Chip industry still suffering from economic crunch

snail-8296a552f7bd1064368205306ff8a3c7c7bdc7c4-s900-c85The chip industry is still in the doldrums and that isn’t going to change anytime soon.

That’s the verdict of Malcolm Penn, CEO and chairman of UK semiconductor analysts Future Horizons.

At a semiconductor conference in London, Penn said that the chip industry is driven by four factors: the economy, fab capacity, unit demand and average selling prices (ASPs).

Penn said: “The economy is in a mess and it’s not getting any better. It’s the ‘wait one more quarter’ syndrome. Nobody reacts when the data is good because they don’t believe it.”

He said that 2016 seemed to be an almost exact replay of 2015. Nobody believes in the numbers any more, he said.

“No-one is spending money. There are no new killer products on the horizon. There is nothing, nothing at all.”

Killer apps can’t be predicted and have always been a surprise, Penn said. The outlook is somewhat grim.

“No one knows how to restart the engines.

Regionally, he said, the picture is also pessimistic. “Japan is a complete disaster. China is on a downward trend. Russia has shot itself in the foot,” he said. “Newly industrialised Asian countries have run out of steam. The overall trend is decidedly bad.”

So what of the future?

Historically, integrated circuits (ICs) have shown a 10 percent growth but, he said, the current trend is low with only a six percent figure in 2016. He said: “PC and smartphone IC shipments are still relatively very small. Unit demand is driven by the economy, and the PC market is as dead as a dodo.”

The figures over the last four years show a steady decline, 9.5 percent growth in 2013, 8.3 percent in 2014, 5.1 percent in 2015 and six percent this year.

He said: “Fab capacity is in the hands of the few. No there is no excess capacity. It takes a year to add new capacity and the lead time has never changed.”

As far as capital expenditure (CapEx) goes, Intel, Samsung and TSMC rule, he said at 60 percent CapEx. That’s not true for Global Foundries (GloFo) which is only nine percent.

He said: “A capacity shortage is waiting to happen. At some point of time there will be a shortage and it will catch everyone by surprise.” And most of the bigger fabs are in earthquake zones.

He’s gloomy about next year too. In 2017 he expects a weak PC and smartphone market.

“The economy is still horrid. There’s no life in the semiconductor business.”

Samsung to make chips for AMD

AMD logoA South Korean newspaper reported that Samsung’s semiconductor division will manufacture processors for AMD in 2016 using 14 nanometre technology.

AMD’s own semiconductor manufacturing was sold several years ago and is now called GlobalFoundries (GloFo).

GloFo as well as Taiwanese company TSMC currently make CPUs and GPUs for AMD.

But, according to the Korean newspaper, Electronic Times, GloFo won’t be ruled out of the equation and will work together with Samsung to produce the semiconductors.

Samsung already manufactures chips for other firms including Nvidia and Apple.

Globalfoundries goes it alone

Silicon wafer - Wikimedia Commons -Globalfoundries (GloFo) which manufactures semiconductors to customers’ designs, is likely to develop 10 nanometre technology in house.

Previously it had struck a deal with Korean giant Samsung to license its 14 nanometre FinFET technology and the partnership has proved lucrative with GloFo winning orders from AMD, Qualcomm, and Apple.

But, according to people who talked to Taiwanese wire Digitimes, GloFo now believes it will be more economical to work on its next generation 10 nanometre technology in house, rather than licensing.

GloFo recently completed the acquisition of IBM’s microelectronics division and that is going to help it to develop leading edge technology.

TSMC is GloFo’s biggest competitor and the race will be on to woo companies including Nvidia to deliver semiconductors with high performance and at good prices, according to the wire.

Recent rumours suggested that Chinese investors are interested in buying GloFo and the Abu Dhabi owners are not averse to such an approach.

Could the Chinese snap up GloFo?

Picture courtesy of Wikimedia CommonsThe Chinese government has a policy of building up its own semiconductor manufacturing and now a leading electronics pundit has suggested that by putting in a bid for Abu Dhabi firm Globalfoundries (GloFo) it could be “pushing at an open door”.

Peter Clarke, writing in Electronics Times, points to the fact that a Chinese consortium will raise £23 billion to buy US memory company Micron – a deal that the US government is likely to oppose. And another consortium wants to buy sensor manufacturer Omnivision.

Clarke bases his analysis on a story in Taiwanese daily Digitimes and he believes that Abu Dhabi isn’t as interested in developing its own semiconductor industry as it once was.

GloFo was spun off as a separate company by AMD some years ago, and the acquisition of its technology would take China a long way towards establishing itself as a major global player in the industry.

Further, GloFo, as Clarke points out, is a private company and wouldn’t face the kind of regulatory scrutiny that a Micron acquisition would face.

IBM can’t get no breaks

alice+The ever shrinking Biggish Blue is continuing to suffer.

The outfit’s revenue fell for the 13th quarter in a row and missed the average analyst estimate.

A strong US dollar is being blamed and the fact it is continuing to kill off low yielding parts of its Empire.

IBM wants to concentrate on high-growth areas like security software, cloud services and data analytics.

The company, which sold its x86 server business to Lenovo last year, has continued realigning its operations by paying contract chipmaker Globalfoundries (GloFo) Inc to take over its loss-making semiconductor unit this month.

Revenue from what the company calls “strategic imperatives”, which include cloud and mobile computing, data analytics, social and security software, rose about 20 percent, yet the new businesses have so far failed to make up for revenue lost to divestitures.

IBM said it expected third quarter revenue to be the same as revenue from the first quarter, or about $19.6 billion.

Revenue from its software business fell 10 percent to $5.8 billion from last year.

Revenue from global technology services such as outsourcing fell 10 percent, hurt by weak discretionary IT spending by clients.

Big Blue’s total revenue fell to $20.81 billion in the second quarter ended June 30, from $24.05 billion a year earlier, missing the average analyst estimate of $20.95 billion.

IBM leaps ahead of Intel

IBM engineers in a fabrication plant (fab)IBM said that a collaboration between it, Samsung, SUNY Poly and Global Foundries (GloFo) has created a seven nanometre chip with working transistors.

That’a a heap ahead of Intel, which hasn’t so far demonstrated that it has such technology.

The breakthrough, said IBM, could mean 20 billion transistors could be placed on chips the size of a human fingernail.

The researchers said they bypassed conventional semiconductor manufacturing wisdom and instead produced a number of breakthroughs including Silicon Germanium (SiGe) channel transistors and Extreme Ultraviolet (EUV) lithography at multiple levels.

Last week, IBM span off its semiconductor division to GloFo but it still has a research agenda for chips and is pushing its Power platform.

Currently servers use 22 nanometre and 14 nanometre technology and, said IBM, 10 nanmetre technology is close to becoming a mature technology.

IBM believes that once seven nanometre processors roll out of the fabs, they could contribute to a 50 percent power/performance improvement for mainframe and power systems.

IBM and SUNY Poly have a research centre at the Albany NanoTech Complex which has a half a billion dollar project.

GlobalFoundries becomes an IBM supplier

IBM logoAs we reported yesterday, the US government cleared the acquisition of IBM’s semiconductor business by GlobalFoundries (GloFo).

And today IBM announced that that would mean to its future business.

GloFo will become IBM’s exclusive semiconductor supplier for the next 10 years – so it will make its POWER chips that go into Big Blue servers.

It’s not the end of the story for IBM semiconductor engineers, however. IBM Research will carry on doing semiconductor and material science and that will help the company to continue selling mainframes, storage and POWER systems to aid it in its push into cloud, big data and analytics systems.

IBM said that its semiconductor and material research has delivered important technology including copper chips, silicon germanium and quantum computing.

It’s good news for GloFo. The Abu Dhabi based company, which acts as a foundry to produce semiconductors for its customers, also gains access to leading IBM technology, including its state-of-the-art fabrication plant (fab) in New York State.

Cloud passes over central Europe

Clouds over the Old Power Station, OxfordAs IBM announced that the US government had approved the sale of its semiconductor business to GlobalFoundries (GloFo),the company said that its current focus on cloud computing is paying off in central and eastern Europe.

IBM decided some years back that it was foolish spending billions on state of the art fabrication plants (fabs) when its one time rival Intel was beating it on all fronts. And it has concentrated on getting rid of other non-core businesses too.

Now IBM seems to be all about the cloud and according to a claim it made today, startups and thriving businesses are adopting IBM cloud technology in their droves. This could be bad news for Microsoft, which seems to have decided it’s a cloud company too.

IBM quoted the International Monetary Fund as saying that the economy has begun to recover in central and eastern Europe.

IBM said that a number of organisations across the region have adopted IBM Cloud, including in Russia, in the Czech Republic, in Slovenia and in Poland.

The company did not say what type of revenue such business was generating, but if its cloud business generates as much money as IBM generates press releases about the cloud, then it’s doing quite well, thank you very much.

Neelie Kroes talks up European tech initiative

Neelie Kroes, European commissioner for digital agenda, made a cameo appearance here at IEF 2013, in the initiative dubbed the Airbus of Chips.

In a short video, she said Europe had to pool its resources in the initiative, launched in May, with an ambitious roadmap intended to double semiconductor production here in a bid to catch up with the USA.

The real name of the project is the Public Private partnership on electronic components and systems – or Ecsel for short.

Khalil Rouhana, VP of the Digital Agenda, European Commissioner, said that the sector is essential for all of the economies in the bloc.

The aim is to reverse the trend of production capabilities in Europe. Europe is good in the automotive market but still manufactures a lot of logic technology. The EC will put 1.2 billion into the partnership, more money into graphene, and more R&D amounting to 3 billion over the next seven years.

The private sector is also expected to contribute to the partnership.

The objectve is to grow semi and smart system manufacturing in Europe, including manufacturing equipment and materials processing. The partnership wants to concentrate on cutting edge tech including 450mm wafers and 10nm process technology.

100 billion is expected to be committed to be R&D by 2020, creating jobs for quarter of a million people directly and indirectly.

Rouhana said that the initiative will really swing into action at the beginning of 2014. His talk prompted a panel discussion involving Intel, GloFo, Samsung, and Xmos.

The GloFo representative said his company endorsed the initiative. Europe has a very strong industrial base and the EC has finally realised that a push is needed. He said the US is driving a move to bring manufacturing back to the country, and Kroes’ initiative is similar.

Xmos CEO, Nigel Toon, representing the SME sector, said it was quite hard to see how small companies could directly benefit.  Rouhana, representing the EC, said it’s putting in place a scheme to link SMEs up with the project. It will put a fast track system in for SMEs with five percent of the budget dedicated to small companies.

Leonard Hobbs, R&D director at Intel Ireland, said the EC ambition was great. The move to larger wafers and smaller process nodes were welcome to Intel, and acknowledge that the company will play a role.

Young Sohn, chief strategy officer of Samsung, said his company has many European collaborators whether in R&D, wireless or analogue.  

Well, this is all very fine and dandy, but are the billions the EC spends going to really reverse the trend?  Which player, for example, is going to want to compete against the likes of Samsung and Intel and TSMC? We’re unlikely to see the non European companies quaking in their boots.  

ARM will make chips

At ARM’s press conference on Monday we were struck by how the company was talking about itself. Almost like a manufacturer.

Well guess what?

A very reliable source tells me that pretty soon now the company will start making chips and is already in advanced talks with a number of Chinese partners.

The thing is, the expertise now exists on the mainland to make SoCs, and at very low cost too.

Who would ever have thought that the plucky little British company ARM would ever find itself in the position of challenging the might of Intel.

It is true, as senior VP Tom Kilroy told us yesterday, that Intel is a clear generation ahead of any of the foundries such as GloFo (Global Foundries) and TSMC, but at what cost?

Well, at a very high cost indeed, numbered in the billions of dollars.