Michell Prunty's blog

Silicon wafer demand for semiconductor production is expected to grow at a compounded annual growth rate of 13% over the next five years. For the past several years semiconductor silicon wafer manufacturers have been struggling due to the large investments that were required while installing new capacity for 300mm wafers and from the increased pressures of semiconductor manufacturers to decrease costs.

Another year has come and gone and the Semico Summit will be here soon!
At the Semico Summit we will once again discuss the hot topics facing the industry and put them into perspective.  While the notebook market contributes a strong base market for semiconductors the excitement and new growth is coming from media rich consumer applications.  These products fall into two categories, convergence portable devices and high definition media delivering systems. 

Driving the capability to provide cost effective semiconductors is the continued adoption of leading edge technology and the resulting integration that lowers the bill of materials enabling mass marketing to consumers.

The challenge is to have quality designs that can occur within the consumer design and life cycle of consumer products.  Semiconductor IP is one of the critical technologies that will enable consumer products and features that the masses want. At the Semico Summit these and more will be discussed.

Worldwide Notebook PC unit shipments will reach approximately 97.8 million in 2007, a 30% increase from 2006, according to Tony Massimini, Chief of Technology for Semico Research. According to our financial clients Semico’s forecast was the only forecast to call the growth in the notebook market correctly, with forecast accuracy over 99%.

Tony Massimini has been accurately forecasting the computing markets for over 15 years. He is considered an expert on both end-use markets as well as components such as MPUs, MCUs, DSPs, and embedded cores.

Semico Research provides analytic information on strategic end markets for the semiconductor industry. Because Semico comprehends the relationship between families of semiconductors and end products, we were able to forecast an accurate growth rate on notebook PCs for 2007.

Notebook PCs continue to be a double digit growth segment and important to the health of the semiconductor industry. New portable products are continually being introduced. These new products will stimulate new markets and will not cannibalize established growth markets.

Phoenix, AZ – January 7, 2008 – Semiconductor Partners in conjunction with Semico Research forecasts the used semiconductor equipment market will show tremendous growth in 2008 and 2009. Based on Semiconductor Partners’ analysis of probable fab closures and fabs for sale, the availability of used equipment will grow from $300 million in 2007 to more than $8 billion in 2009.

”As leading edge digital memory and logic manufacturers build 300mm fabs for process technologies of 65nm or less, this will obsolete their 200mm fabs at 130nm or 90nm and some of their 300mm fans at 90nm. Analog and mixed signal manufacturers will have a need for these fabs to meet for expansion to satisfy the growing analog, mixed signal and RF markets. This creates an opportunity for companies that finance, resell or refurbish used equipment,” states Morry Marshall, Partner – Strategic Technologies at Semiconductor Partners.

Executives at Spansion have been busy recently, opening a new fab and sealing deals that will help the company cement its lead in the NOR market. The new fab in Japan, SP1, is the world’s only 300mm dedicated NOR facility. The company has reduced its time to market from 42 months at 110nm to 31 months at 65nm, with a goal of shrinking to 21 months at 45nm. The company plans to ship volume production of 65nm MirrorBit devices by late this year, and 45nm by late 2008. While the company is still not turning a profit, it is in the best position of any leading NOR vendor to do so. The move to 300mm 65nm production will enable Spansion to enjoy a cost lead over its competitors.

An increasing percentage of Spansion’s sales come from its MirrorBit devices. This makes the acquisition of Saifun Semiconductor a natural move to better control the IP related to the company’s success. Saifun’s NROM IP is the basis for MirrorBit, and is also licensed to Macronix, NEC, SMIC, Sony, and Tower. The move will help Spansion with future design projects, but more importantly will eliminate the licensing and royalty payments it currently pays to Saifun. Spansion paid US$17.6 million in calendar year 2006 for licensing and design services to Saifun. This will help with Spansion’s cost reduction efforts, and provide a new source of revenue from the other licensees.

Last week Intel and AMD announced their 3Q 2007 financials. Both companies made strong gains driven by increase in PC sales, mainly notebooks.

Intel surpassed its projections for the quarter, hitting $10.1 B in total sales, up sequentially 16% and 15% yr-to-yr. Additionally its gross margin improved to 52.4% compared to 46.9% in 2Q 2007. The company reported record MPU unit shipments along with flat ASPs. The PC chipsets also hit record unit levels, while motherboard units were down.

Intel’s 4Q 2007 Outlook indicates continued strong recovery for the PC market. The company is projecting total sales between $10.5 and $11.1 B with gross margins around 57%. Intel has been shipping quad core MPUs (actually a pair of dual core die in one package) and will be ramping up production of its next generation 45nm MPU for desktop and servers.

AMD also reported a sequential 18% increase in total sales for 3Q 2007, $1.6B, and 23% yr-to-yr. The company’s Computing Solutions segment grew 17% sequentially. This was due to a 19% increase in MPU revenue, driven by MPU unit shipment growth of 16%. Within this the Mobile MPU unit shipments grew 41% sequentially and 68% yr-to yr. AMD introduced its native quad core Opteron (65nm) and continues to ramp up its 65nm –production.

Semico Spin

Last week Intel had its official grand opening for Fab 32 in Chandler, AZ. This is Intel’s sixth 300mm facility and its second at 45nm. The company’s Oregon development facility, D1D, has been producing 45nm MPUs. Fab 32 will be crucial for Intel’s aggressive ramp up schedule by providing high volume production. In early October Intel started production wafers. Two additional 45nm, 300mm manufacturing fabs are scheduled to open next year in Kiryat Gat, Israel (Fab 28) and Rio Rancho, N.M. (Fab 11x).

Fab 32 costs $3 B; it has 184,000 square feet of clean room space. The entire structure measures 1 million square feet. It is located on the same campus as Fab 12 and Fab 22. Currently Fab 12 is producing 65 nm MPUs. Eventually Intel will transition Fab 12 to 65nm Chipsets. Fab 22 is currently producing 130nm Southbridge chipsets. No word on the future plans for Fab 22.

Semico Spin

Intel’s strength is in manufacturing. The MPU design and process technology are important, but to maintain its market share and achieve economy of scale, Intel’s manufacturing capacity is a driving force.

On Oct. 30, 2007 MIPS made a major announcement that it will license its core for the 32-bit MCU market.

Up till now MIPS is available from various silicon providers as a standard MPU, ASIC, custom, or an ASSP. An MCU is designed for more of the traditional control applications and has embedded memory for the main program. This distinguishes it from an MPU. It is a general purpose device, which sets it apart from the other types of deices.

MIPS is offering several cores:

4K series (entry level)

34K, 24K (mid performance), mainly automotive.

74K (high performance

MIPS is also making available its EJTAG debug. Various functions are integrated around these basic MIPS cores. The company is leveraging its recent acquisition of Chipidea to provide Analog IP. The market focus for the 32-bit MCU will be automotive, industrial and what MIPS refers to as multipurpose: consumer, communications, and smart cards.

The licensees who will develop and sell MIPS based MCUs have yet to be announced.

Semico Spin

The Intel Developers Forum is naturally focused on processor related topics, but the close tie between the processor performance and the memory configuration means that there are always some important memory topics that are presented. The memory topic of highest interest this year was the resolution of fully buffered DIMM for DDR3.

Power consumption related to both the processing function as well as for the cooling of the semiconductor components are both becoming more important. In the overall scheme of a processor’s architecture, the way in which the processor uses the various memory elements as well as the coordination between the memory and the processor is critical to the overall cost and performance of the system design. The system-level design objectives impact many of those architectural considerations.

One of Intel’s design objectives relative to DRAM memory features was the ability to extend the capacity of the memory for high-performance applications with as little disruption to the architecture as possible. In order to support that objective, Intel supported Fully Buffered DIMM (FBDIMM) and the Advanced Memory Buffer (AMB) that was required on each of the modules.

AMD sent out its own press releases in response to some of the news out of IDF. The company points out that its Barcelona MPU for servers is a true native quad core. AMD also points out that it was first with the memory controller integrated with the MPU and was first to announce a roadmap showing integrated graphics with the CPU. The MPU with integrated graphics, Fusion, is due out in 2009.

AMD saw a severe decline in both MPU revenue and unit shipments in 1Q 2007. The company sis show a strong unit recovery in 2Q 2007, but sales were hampered by falling ASPs. While shipments for desktops and low end servers suffered in 1H 2007, MPUs for notebooks actually increased in both 1Q and 2Q 2007. This week AMD announced major design wins for its Turion 64 X2 dual core mobile MPU with Toshiba, Acer, Dell and Fujitsu Siemens.

In addition to Barcelona, AMD has announced the desktop version, Phenom. This will be offered as native dual-core, triple-core, and quad-core versions. Dual and quad core versions will be released in 4Q 2007. The triple-core version will come out in 1Q 2008.

Semico Spin