The Week In Review: Manufacturing

Foundry drivers; GF IP; Qualcomm-NXP; K&S on the hot seat?

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Chipmakers
In 2016, growth in the pure-play foundry business will be driven by leading-edge processes, according to IC Insights.

In fact, the increase in pure-play foundry sales this year is forecast to be almost entirely due to processes at <40nm. “Although it is expected to represent 60% of total pure-play foundry sales in 2016, the ≥40nm pure-play IC foundry market is forecast to be flat this year,” according to IC Insights. “In contrast, the leading-edge <40nm pure-play foundry market in 2016 is expected to surge by 23%, increasing by $3.6 billion.”

Some 54% of TSMC’s 2016 revenue is expected to come from <40nm processes, compared to 47% in 2015, according to IC Insights. In 2016, 52% of GlobalFoundries’ sales are forecast to come from <40nm production. This compares to 51% in 2015, according to the firm. In 2016, 18% of UMC’s sales are forecast to come from <40nm production, compared to 10% last year.

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Invecas, a supplier of IP, ASIC and embedded software solutions, has announced the availability of foundation IP for GlobalFoundries’ 14nm finFET technology. The IP portfolio includes general-purpose I/O, memories, standard cell libraries, and a full set of interface and analog IP solutions.

Separately, Invecas will also provide IP and ASIC design services as a part of GlobalFoundries’ FDXcelerator Partner Program, an ecosystem designed to facilitate 22FDX SoC designs based on 22nm FD-SOI technology. The collaboration is designed to accelerate the adoption of FDX technology in various applications, such as the Internet-of-Things (IoT), mobile, RF connectivity, and networking markets.

X-Fab Silicon Foundries will acquire the assets of Altis Semiconductor, a specialty stand-alone foundry located in the Greater Paris area, out of insolvency proceedings. From the 250nm to 130nm nodes, Altis Semiconductor offers a full set of processes, including mixed-signal, low power, RF, embedded non-volatile memory and others.

Samsung Electronics and SAP have opened a joint research center under which the companies will conduct R&D for memory solutions to be used in next-generation in-memory computing. The center will focus on in-memory technology development that enables faster data processing and more analyses of rapidly increasing amounts of data.

The next-generation memory race is heating up. Spin Transfer Technologies (STT), a developer of Orthogonal Spin Transfer Magneto-Resistive Random Access Memory technology (OST-MRAM), has fabricated perpendicular MRAM magnetic tunnel junctions (MTJs) as small as 20nm at its development fab in Fremont, Calif. “Since the beginning of the year, we’ve been able to process more than 40 wafer lots, an achievement that likely would have taken more than three years without our on-site R&D fab,” said Barry Hoberman, CEO of STT, in a statement. “In just four years, STT has taken the journey from incubation to commercialization.”

Audi, BMW, Daimler, Ericsson, Huawei, Intel, Nokia and Qualcomm have announced the formation of the “5G Automotive Association.” The association will develop, test and promote communications solutions, support standardization and accelerate commercial availability and global market penetration.

The Wall Street Journal reported that Qualcomm is in talks to acquire NXP Semiconductors. “Eindhoven-based NXP would be an appropriate target because it has a very broad product portfolio which could broaden Qualcomm’s market coverage. For example, it would expand Qualcomm’s automotive market by moving from its current dashboard play to engine and body control as well. And NXP became the number one chip supplier to the automotive market after its Freescale acquisition. That Freescale acquisition also brought to NXP a significant microcontroller portfolio and wireless infrastructure DSPs, including small-cell base station chips necessary for the 5G cellular infrastructure market,” said Will Strauss, president of Forward Concepts. “Qualcomm has a market value of about $95 billion and NXP’s market value is about $32 billion. The deal could close within the next two or three months, but the outcome is by no means certain.”

Fab tools and T&M
National Instruments (NI) has released VeriStand 2016, the latest version of its software used by embedded software test engineers to build and run hardware-in-the-loop (HIL) verification systems. Today’s engineers face a number of changing requirements driven by the emergence of the connected car and autonomous vehicles. VeriStand and NI’s HIL systems are open and customizable platforms to help companies meet the changing test demands in the market.

Breithorn Capital Management is a private investment manager and a shareholder of Kulicke & Soffa (K&S). It holds approximately 1.1% of K&S’ outstanding common stock. In a letter to K&S’ board, Breithorn highlighted the K&S’ low valuation and substantial excess cash balance. It expressed concerns with the board’s lack of urgency in addressing poor historical stock performance. Breithorn believes the company should hire advisors to evaluate strategic alternatives for the business.

Market research
Connected car production is growing rapidly, according to Gartner. The production of new automobiles equipped with data connectivity, either through a built-in communications module or by a tether to a mobile device, is forecast to reach 12.4 million in 2016 and increase to 61 million in 2020.

“We expect a big increase in DRAM contract pricing, much better than the up 1% to 2% we saw in August. NAND contract pricing increases may decline somewhat from the up 2% to 5% we saw in August, while remaining positive. End demand remains good, while supply in DRAM remains stable and supply in NAND is muted as planar capacity comes offline for 3D NAND conversions,” said Weston Twigg, an analyst with Pacific Crest Securities, in a research note. “DRAM supply is still being managed, and pricing is improving. DRAM pricing appears strong as LPDDR4 demand has increased to support the Apple ramp and as PC shipments and content have improved. We believe that Samsung has been slowing its 18nm conversion to manage supply, which is likely helping pricing. However, we now expect Samsung to accelerate its conversion to take advantage of stronger pricing. We also expect Micron to accelerate its 1xnm transition, as was signaled when it said it planned to shift capex toward DRAM from NAND in F2017.”

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Prior Week In Review: Manufacturing (Sept 23)
Fan-out R&D; display inspection; SSDs; M&A mania.
Manufacturing Research Bits (Sept 27)
X-ray cat movies; dancing electrons; photonic crystals in 3D.