Tag: semiconductor

Chip maker predicts poor sales

Picture courtesy of Wikimedia CommonsThe Taiwan Semiconductor Manufacturing Co (TSMC) makes semiconductors for a number of companies including Qualcomm, Apple, Mediatek and others but it today said revenues for its fourth quarter wouldn’t be as buoyant as it first thought.

TSMC said its revenues would show the first fall in the quarter for four years.

In a statement it said that while its third financial quarter would do better than it expected because of a better exchange rate between the US dollar and the Taiwanese dollar, it expected a decline in its fourth quarter.

Although TSMC did not give a reason for the decline, there’s evidence that slack demand for smartphones and other electronics devices will be responsible for the decline.

The company said in the summer that inventories of chips in PCs, tablets and smartphones remained high.

Despite the fluctuations in the chip maker’s fortunes, TSMC still expects that it will show sales growth of close to 10 percent.

Chip sales up slightly in Q1

The Semiconductor Industry Association (SIA) reports that first-quarter chip sales were up 0.9 percent compared to the same time last year.

March was a particularly good month for chipmakers, with sales going up 1.1 percent sequentially and 0.9 percent year-on-year. However, it was not all good news. Sales in Japan plummeted 18 percent in March (YoY), while the Americas saw a 1.5 percent drop. Europe was up 0.7 percent, while the Asia Pacific region again bucked the trend and grew 6.9 percent. Total sales for March amounted to $24.28 billion. 

“Through the first quarter of 2013, the global semiconductor industry has seen modest but consistent growth compared to last year,” said Brian Toohey, president and CEO, Semiconductor Industry Association. “Sales have increased across most end product categories, with memory showing the strongest growth. With recent indications that companies could be set to replenish inventories, we are hopeful that growth will continue in the months ahead.”

Demand remains weak and the market is volatile to say the least. The PC market is under performing, while the tablet and smartphone markets are slowly turning to cheaper gear for emerging markets, with lower margins. 

Semiconductor materials market declined in 2012

The global semiconductor materials market fell by two percent in 2012 compared to the same time in 2011, SEMI has found.

In its latest report, the global industry association for the manufacturing supply chain for the micro- and nano-electronics industries also found that the worldwide semiconductor revenues declined three percent.

Revenues of $47.11 also marked the first decline in the semiconductor materials market in three years, the association pointed out.

Total wafer fabrication materials and packaging materials were $23.38 billion, compared to  $24.22 billion in 2011.

However, 2012 marked a turn for packaging materials revenues, which for the first time  exceeded wafer fabrication materials revenues standing $23.74 billion in 2012 compared to $23.62 billion in 2011.

A substantial decline in silicon revenue contributed to the year-over-year decrease to the total semiconductor materials markets. For the third year in a row, SEMI highlighted Taiwan as the largest consumer of semiconductor materials with record spending of $10.32 billion due to its large foundry and advanced packaging base.

Materials markets in China and South Korea also experienced increases in 2012, benefiting from strength in packaging materials. The materials market in Japan contracted seven percent, with markets also contracting in Europe, North America, and elsewhere.

China overtakes US in semicon manufacturing

China has managed to overtake the US in semiconductor manufacturing and according to SEMI’s latest report, the trend is more than likely to accelerate, reports Quartz

Last year China gobbled up $5.07 billion worth of silicon ingots and other materials used for semicon manufacturing, up 42 per cent over 2008. In contrast, North America consumed $4.74 billion, down from $4.99 billion in 2008.

The American slump is nothing compared to Japan, which is going through a production crash. Semicon material spending dropped from $10 billion in 2008 to $8.35 billion last year. 

Taiwan and South Korea are still doing well and if Japan doesn’t get its act together, South Korea will squeeze into second place in a matter of years, provided it is not attacked by the atomic threat across the border. 

Taiwan still reigns supreme, its spending is well north of $10 billion and growing.

European semiconductor distie market sales fall

The first half of 2012 saw a decrease in the European semiconductor distribution market, with sales failing to match the same period of 2011.

According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), 2012 ended with a decline of 10.8 percent and total sales revenues of 5.7 billion, compared to the same time in 2011.  

Malcolm Penn, CEO at analyst house Future Horizons, told TechEye the results were either a “sad reflection of the trend to outsource manufacturing from Europe”, mostly to Asia, or the tendency to “give up completely and exit the markets which in turn reduces the demand to for semiconductor devices and sales”.

“Distribution is at the sharp end of this demand, and we’ve seen the European chip market decline to just 11.4 percent of the total worldwide sales, half what it was 20 years ago in the mid 1980s,” Penn said. “Europe’s GDP is around 23 percent of the world total, so our manufacturing effort is half what it should be on a per-GDP basis, tragic”.

Georg Steinberger, chairman of DMASS said the results reflected a market of high price pressure and huge swings in demand and supply. He said while the situation is “unfortunate” it wasn’t unforeseeable. He pointed out that despite the disappointing results, 2012 was still the second best year in distribution history.

Regionally, the situation was different to previous years. While in 2010 and 2011 Germany and Eastern Europe were constantly gaining share against other Western Regions, in 2012 Germany faced a steep decline of 16.2 percent.

DMASS said Germany’s  share of the total market went from 34 percent to 31 percent, which could have been attributed to the sectors it operated in. This was compared to Eastern Europe which grew by over eight percent and included Russia, which alone grew by 16 percent.

Watchdog blocks $330 million component company acquisition deal

US authorities have blocked a proposed $330 million acquisition deal, with the buy out of PLX Technology creating a “near-monopoly” for Integrated Device Technology (IDT).
The Federal Trade Commission has put an end to the deal which it ruled would create an unfair advantage in the production and sale of PCIe switches, components which perform connectivity functions in electronic devices.
According to US authorities, IDT and PLX are the two biggest players in the PCIe market, worth $100 million a year globally.
The FTC said that the two companies are currently each other’s closest and most direct competitors. By joining together in a $330 million merger deal agreed in April 2012, the resultant company would own 85 percent of the PCIe market.
In the past customers have capitalised on the rivalry between the two component firms to drive down prices, but the proposed deal would eliminate this competition, potentially affecting value and quality. The rivalry has also resulted in more innovative features and better customer service.
“PCIe switches are important components in many computing, communications and consumer products,” said Richard Feinstein, Director of the FTC’s Bureau of Competition.
“The combination of IDT and PLX would hurt competition and lead to higher switch prices, lower innovation in the marketplace, and reduced customer service.”

Semiconductor revenues decline in 2012

Worldwide semiconductor revenue has declined from this time last year, according to preliminary results from Gartner.

According to Gartner, revenue was$298 billion in 2012, compared to $307 billion in 2011. The top 25 semiconductor vendors’ revenue also saw a downturn with a decline of 4.2 percent.  Those companies had 68.2 percent of total revenue in 2012, compared with 69.2 percent in 2011.

Gartner conceded that its previous expectations had not been correct.  Earlier this year it had predicted the industry would show little growth in the early part of 2012, but order rates would creep up in the second half, paving the way for a recovery phase in 2013, but this proved to be wrong.

Instead, expected renewal did not occur in 2012, while third quarter order rates were below seasonal expectations, and guidance for the fourth quarter of 2012 forecast further declined.

The company blamed this on the uncertainty about the state of the economy, coupled with ongoing inventory overhang, which it claimed “sent ripples through the semiconductor industry”.

Steve Ohr, research director at Gartner, pointed out that the hardest hit areas included the PC supply chain, memory, analog and discrete components.

Ohr pointed out that the PC business, ordinarily a growth driver, was on a negative slope for the first time in many years, while PC production declined 2.5 percent in 2012.

Intel recorded a 2.7 percent revenue decline mostly due to poor PC sales. Despite this, the company did manage to cling onto first position in market share for the 21st consecutive year, capturing 16.6 percent of the 2012 semiconductor market, its best performance ever.

Samsung, at second place, saw its semiconductor revenue fall. Gartner said this was due to declines in its three major product areas, DRAM, NAND flash and system integrated circuit (IC).

It was better news for Qualcomm however, which rose three places to third position as a result of  its 29.6 percent growth, thanks to continued adoption of smartphones and the growth of 3G and LTE technology in emerging regions, such as China and India.

The only other top 10 semiconductor vendor to record positive growth in 2012 was Broadcom, which rose from the 10th to the ninth position with growth of 8.8 percent.

GlobalFoundries urges EU to support chip industry

The European Union should do more to support the semiconductor manufacturing or risk losing out on innovation, GlobalFoundries has said, although its status as an impartial observer is, perhaps, questionable.

GloFo CEO Ajit Manocha highlighted the disparity between the incentives other regions give to chip manufacturers, he told Reuters, with the US and Asia able to offer more attractive conditions to companies.

Manocha said that while Asian companies will often give GloFo the red carpet treatment, as well as New York State authorities, Europe is “not playing that role properly”.

Although many of the prominent semi manufacturing firms are based in the East or in the US, Europe has its share of innovative companies Dutch manufacturing equipment firm ASML, for example, has received investment from Intel and Samsung this year, with its technology considered crucial for future chips production. 

According to Manocha, there should be more investment by EU authorities to stimulate production of chips within Europe.  Although this would not generate masses of jobs, Manocha said it would mean reaping the benefits of chip technology created by European companies which are often attracted by foreign countries offering attractive tax breaks.  This would also encourage more an environment for wider innovation, he said.

Although there is manufacturing in the EU by the region’s largest chip firm STMicro, it would benefit from the same drive that has seen increased investment in New York State, for example.

Of course, Manocha would say this. He runs a chip company.

Engineers enter fourth dimension with Christmas tree transistors

Scientists at the University of Purdue reckon they can give conventional silicon-based electronics a run for its money with the development of festive ‘4D’ transistors.

The researchers had previously completed plain old three dimensional structures using indium gallium arsenide, a material that is being developed as a potential successor to silicon in computer chips. However, the team’s endeavours into abstract space have revealed the contents of the fourth dimension – Christmas tree shaped transistors.

The Purdue researchers say they have created a system using three nanowires, progressively smaller, creating a tapered cross section that apparently resembles a Christmas tree shape.

Apparently the fourth dimension comes into play with the stacked nanowires also speeding up the operation of the transistors, in addition to the added height.

“A one-story house can hold so many people, but more floors, more people, and it’s the same thing with transistors,” Peide “Peter” Ye, one of the researchers, explained. “Stacking them results in more current and much faster operation for high-speed computing.

“This adds a whole new dimension, so I call them 4-D.”

By creating stacked transistors in this way, the continuation of creating smaller microchips can be continued Ye says.

Engineers are facing increasing difficulties in shrinking silicon based electronics to ever smaller nano-scale processes. Once chip designs pass the 7 nanometre process, creating workable designs becomes much tougher, and engineers are on the lookout for new technologies that can continue Moore’s Law.

Ye believes that the ‘4D’ transistors give a glimpse of the post-silicon world of chips. “It’s a preview of things to come in the semiconductor industry,” he said.

Worldwide wafer fab equipment spend drops in 2012

Sales of wafer fab equipment (WFE) spending dropped.

According to Gartner, the industry is on pace to total $31.4 billion in revenues this year, a decline of 13.3 percent from 2011 spending of $36.2 billion.

The analyst house said that while the market would improve in 2013, it would not return to positive growth, with WFE spending projected to total $31.2 billion, a 0.8 percent decline from 2012.

However, there seems to be some light at the end of the tunnel, with the company claiming that in 2014 the market would return to growth. It predicts that it will, probably,  increase 15.3 percent to surpass $35.9 billion.

According to Bob Johnson, research vice president at Gartner, the outlook for the semiconductor equipment markets had deteriorated because the macro economy had weakened.

He said WFE started off the year strong, as foundries and other logic manufacturers ramped up sub-30-nm (nanometer) production. However, he warned demand for new equipment logic production “would soften as yields improve, leading to declining shipment volumes for the rest of the year.”

According to Gartner, wafer fab manufacturing capacity utilisation will decline into the low 80 percent range by the end of 2012 before slowly increasing to about 87 percent by the end of 2013.

It added leading-edge stuff will return to the high 80 percent range by the second half of 2012, and move into the low 90 percent range through 2013, providing for “a somewhat positive capital investment environment”.

Gartner believes that memory will continue to be weak through 2012, with strong declines in DRAM investments and a virtually flat NAND market. By rubbing its crystal ball its analysts forsee a modest growth pattern beyond 2012 with normal, but relatively benign, cyclical fluctuations as the industry returns to mid-single-digit growth in device revenue, and capital investment responds accordingly.

And it’s not much better for foundry capital spending, which has been revised by the company downward for 2012 and 2013 due to an earlier yield improvement on 28 nm technology achieved by some foundries and a higher downside risk of wafer demand in the fourth quarter of 2012 and first quarter of 2013.

It said foundries will likely tighten their short-term capex when they experience a more than 10 percent reduction of the fab utilisation rate later in 2012.

Wafer demand will drop for several quarters due to the revised downward semiconductor device outlook and the earlier success on yield improvement of 28 nm low-power polysilicon silicon oxynitride (SiON) technology achieved by some key foundries, although the yield of 28 nm high-k metal gate (HKMG) remains below normal.