Joanne Itow is Semico's Managing Director.  See her bio here.

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Joanne Itow's blog

Industry Consolidation Continues

On the heels of the Qualcomm/Atheros acquisition, on January 10th, 2011, SMSC and Conexant Systems, Inc. announced the signing of an agreement under which SMSC will purchase Conexant in a stock and cash transaction valued at approximately $284 million.

Conexant’s imaging, audio, embedded modem and video products will be combined with SMSC's connectivity solutions targeting the computing, consumer, industrial and automotive markets. Christine King, President & Chief Executive Officer of SMSC expects the combined companies will lead to significant operating efficiencies and help position SMSC to increase earnings growth, increase R&D productivity and drive profitability and shareholder value.

Thanks, and a Wave of My New Hand!

This article is posted on behalf of Morry Marshall, who has retired. 

This is a personal thank you to the semiconductor industry, an industry that I have worked in for almost forty years.  My thank you is for a new hand. 

In 1962 I was in a line-of-duty military accident that resulted in the amputation of my left hand.  Soon after, in Walter Reed Army Medical Center, I was fitted with a cable-operated prosthesis, the best then available.  It used a Dorrance hook opened by a cable connected to a strap looped under my opposite shoulder and closed by two powerful rubber bands. 

That type of prosthesis served my needs for many years.  I have nothing but praise for the U.S. Army and the U.S. Veterans Administration for the medical and prosthetic care I received during that time.  After more than forty years using a hook I began experiencing pain in my shoulder.  The strap under my arm had been pulling on my shoulder all the time, creating a strain, even when it was not being used to open my hook.  To lessen the pain, it was necessary to loosen the strap and use only one rubber band to close my hook.  The hook still worked, but not very well. 

Something needed to be done, Enter electronics, especially semiconductors!  I was fitted for a myoelectric prosthesis, the ETD (Electronic Terminal Device), manufactured by Motion Control, Inc., Salt Lake City, Utah. 

We Are A Larger Semiconductor Industry, But Are We Any Smarter?

Over the last 18 months the semiconductor industry experienced another roller coaster ride as demand outpaced capacity, causing double bookings and raising average selling prices. So are we destined to overbuild capacity, over stock inventory and suffer a corresponding downward cycle that has been so characteristic of the semiconductor industry? A slowdown is inevitable as the growth experienced in 2010 is clearly unsustainable in the long term. The cycles of the semiconductor industry over the past decade combined with the escalating costs and risks associated with manufacturing facilities, design complexities and even assembly and test investments have created a conservative environment that is quite different than the unabashed exuberance that characterized the semiconductor industry of prior decades.

The Growing Influence of China

October has been a big month for China announcements. Texas Instruments announced the purchase of Cension Semiconductor, a 200mm fab previously operated by SMIC in Chengdu, China. This week Intel announced the grand opening of their first 300mm fab in Dalian.

China is becoming a more powerful force in the world economic and technology arena. In August 2010 it was reported that China’s GDP reached $1.337 trillion surpassing Japan and making China the second largest economy. With China’s economic growth rates in the 10% range and the U.S. growing at only 2-3%, it’s been predicted that China will overtake the U.S. in 5-10 years. China already surpassed the U.S. in the automotive market.

China also made the news last week regarding their control over rare earths, the 17 elements in the periodic table that are vital ingredients to a number of electronic gadgets and components. China is the largest producer of rare earths. The Economist noted that China is trying to control the rare earths market in a similar manner as OPEC controls oil. China is cutting exports of rare earths 5-10% a year. In July, the export quota was cut by 40% and prices soared. The Economist further speculates that China is curbing exports to persuade foreign firms to move manufacturing to China. That’s probably not the only reason but it may be one of the reasons behind Intel and TI’s recent moves into China.

MEMS: Small Moves Result in Big Potential

MEMS (Micro Electro Mechanical Systems) are perceived as being simple mechanical devices manufactured on 6-inch wafers or smaller, utilizing mature semiconductor fab technology.  Recently MEMS devices have experienced high growth rates as they revolutionized the smart phone screen orientation and game controllers for motion detection. Now the foundries and EDA/IP vendors are salivating over the revenue growth potential for MEMS development.

Just like CMOS image sensors filled the mature, unused fab capacity in 2003, MEMS is now expected to be the fab filler for this decade.  CMOS image sensors experienced quick adoption as it penetrated the consumer digital camera market but it grew from millions of units to billions when almost every cell phone integrated a camera into its handset.  That is one example of a success story.  But what about RFID?  RFID was suppose to be on every retail product tracking sales and inventory at Walmart and on every passport and drivers license for personal identification and security.  Those units have not materialized.  

MEMS has the potential to be much more than just a fab-filler.  For years MEMS have been used in hard disc drives and airbags for automotive markets.  They are now making inroads into other safety and engine control sensors in automotive applications.  MEMS are now gaining more recognition as they make their way into consumer devices even beyond smart phones and game controllers. 

Another Vote for Gate-First HKMG

On September 15th, 2010 Panasonic Corp. quietly announced they would begin shipping 32nm gate-first HKMG LSI parts for use in their consumer line of Blu-ray DiscTM players.  This announcement is notable for several reasons.  First, this is another endorsement for the gate-first HKMG team.  IBM and the Common Platform foundries are going with gate-first.  Intel and TSMC are the other big players going with the gate-last HKMG technology. 

 Panasonic developed their process with Renesas Electronics Corp. based on a research program with IMEC.  Panasonic uses a hafnium based high-k dielectric with their metal gate electrodes.  Assuming this chip is being manufactured in Panasonic’s Uozu fab in Japan, that means Panasonic is the second company to mass produce and ship a 32nm HKMG product. Of course, Intel was the first.  AMD has manufactured chips at GLOBALFOUNDRIES using their 32nm gate-first HKMG technology but is not expected to begin shipping product until 1H 2011. 

Big Customers = Big Foundries, Opens Door for Others

On Wednesday, September 1, 2010, GLOBALFOUNDRIES will be hosting its inaugural Global Technology Conference in Santa Clara. Attendance should be high as we all try to find out what GLOBALFOUNDRIES has up their sleeve to woo new business.

These technology forums are a great way to get broad audience coverage but all the big foundries are targeting the largest and the most advanced semiconductor manufacturers. As I prepare my next foundry report, I can see why big customers are so important. In 2009, TSMC reported that their 10 largest customers accounted for 53% of their total net sales. Back in 2000, TSMC’s five largest customers comprised 30.6% of their total sales. UMC’s top 10 customers account for 65.3% of total revenues and SMICs five largest customers account for 60% of their total sales. In 2008, Chartered Semiconductors top five customers comprised more than 63% of their total sales and with the combined sales of GLOBALFOUNDRIES that percentage is even higher now.

If You Have Cell Phone Problems Tomorrow, August 4th, 2010…

On July 6th I talked about the sun entering into an active period. Its here! Early Sunday, August 1st there was an eruption on the sun’s surface, usually referred to as a coronal ejection. Tons of plasma were shot into space and are headed towards Earth. These ionized atoms are expected to arrive early tomorrow, August 4th. So if your cell phone is acting up tomorrow this may be why. This is part of the Sun’s next active cycle. It will be interesting to see if there is an effect on our electronics.

Jim Feldhan
Semico Research

Joanne Itow Discusses the Secondary Equipment Market

Joanne Itow discusses how the secondary equipment market will thrive via the markets that don't require 300mm fabs, including discretes, analog, sensors, etc. Included in the video are multiple charts, showing how these markets will grow. Semico has partnered with SEMI on a study that will be available in the 4th quarter.

Reporting from ComicCon 2010

Last week Semico's Tony Massimini escaped the scorching 110° F (43°C) Phoenix temperatures and combined a work/vacation by attending ComicCon 2010 in San Diego, CA. He brought back five great video clips covering Intel and nVidia as well as his views on things to come. See all five videos at the links below. Tony, where’s your Klingon costume? OK, that’s last century. How about an Avatar outfit?

Demo of Intel’s SmartTV       
nVidio demo of 3D graphics
ComiCon overview                  
Tony’s opinions and wrap-up