The Week In Review: Manufacturing

U.S. R&D woes; sustainability; new China fab venture; Aixtron.

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R&D
Amid budget cuts in the U.S. government, federal funding for R&D at higher education institutions in the United States declined for a fourth straight year, according to a new report from the National Center for Science and Engineering Statistics (NCSES).

Overall, universities reported $68.8 billion in R&D expenditures in 2015, a 2.2% increase from 2014, according to the NCSES, part of the U.S. National Science Foundation (NSF). This represents the reported total R&D expenditures of 906 degree-granting institutions that spent at least $150,000 in R&D in the previous fiscal year.

Of the $68.8 billion, federal funding accounted for $37.9 billion of that. Adjusted for inflation, federal funding for higher education R&D declined by 1.7% between 2014 and 2015, and 13% since its peak in 2011, according to the NCSES.

In 2011, federal funding accounted for 62.5% of the total higher education R&D expenditures. That figure dropped to 55.2% in 2015, according to the NCSES.

Here’s the good news: While federal funds decreased, other sources of university R&D funding saw increases. Universities’ own funding of R&D rose by 5.9% in 2015, business expenditures by 7.5%, nonprofit expenditures by 6.9%, and expenditures funded by other sources by 6.4%, according to the figures. Even with the federal decrease, though, overall university expenditures were up by 2.2% compared with the previous year, according to the figures.

Three fields–medical science ($21.3 billion), biological science ($11.7 billion) and engineering ($11.1 billion) — together accounted for 64.3% of total higher education R&D, according to the NCSES. Medical science showed modest growth between years, while biological science and engineering remained flat.

There are other signs of R&D woes in the U.S. Not long ago, Sematech was disbanded. SUNY Poly, the home of Albany Nanotech, was recently hit with a scandal. And several IC makers and fab tool vendors are expanding their R&D efforts in Europe and Asia.

Chipmakers
GlobalFoundries, Anbaric Microgrid, and Exelon have announced an agreement to identify opportunities for improving power quality and reliability at GlobalFoundries’ Fab 8 semiconductor manufacturing facility in Saratoga County, N.Y. The companies will perform a power quality analysis to identify the source and costs associated with electrical disturbances. They will further determine the efficiency of GlobalFoundries’ energy supply and consumption with proposed improvements including infrastructure investment and utility negotiations. Capacity expansion requirements will be determined by evaluating grid deliverability and load growth and a full evaluation of the energy costs at the Fab 8 site.

China’s Semiconductor Manufacturing International Corp. (SMIC) has announced the formation of a new foundry ventureNingbo Semiconductor International (NSI). NSI is jointly established by China IC Capital, an investment fund of SMIC, Ningbo Senson Electronics and Hua Capital. NSI will develop analog and specialty semiconductor technology platforms in the areas of high-voltage analog, radio frequency, and optoelectronics.

Macom Technology Solutions Holdings, a supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products, has entered into a definitive agreement to acquire Applied Micro Circuits (AMCC) .

Fab tools
In May, China’s Grand Chip Investment (GCI), a 100% indirect subsidiary of Fujian Grand Chip Investment Fund, entered into an agreement to take over German MOCVD maker Aixtron.

Recently, the German Federal Ministry of Economics and Energy withdrew or axed the deal for now. The agency announced a reopening of the review proceedings in connection with the takeover offer by Grand Chip.

Now, the Committee on Foreign Investment in the United States (CFIUS) plans to review GGI’s tender offer of Aixtron. CFIUS says there are unresolved U.S. national security concerns regarding the proposed transaction. CFIUS informed the parties that it plans to recommend to President Obama that the transaction be prohibited. The U.S. has 15 days to block or allow the deal.

Market research
North America-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 0.91 in October, according to SEMI. In September, the book-to-bill was 1.05.

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