The Week In Review: Manufacturing

Intel cuts forecast; Samsung vs. TSMC; fab tool spending; Nova’s acquisition.

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Look out below! Intel has lowered its first-quarter revenue outlook. The company now expects first-quarter revenue to be $12.8 billion, plus or minus $300 million, compared to the previous expectation of $13.7 billion, plus or minus $500 million. “Intel may be experiencing greater-than-expected seasonal declines in both notebooks and desktops,” said Doug Freedman, an analyst with RBC Capital Markets, in a report.

Is there a changing of the guard in the foundry business? Not yet, but stay tuned. Apple will be using Samsung’s 3D NAND chip in its notebooks for SSDs, according to a report from the Korea Times. “The article also states in detail that Samsung will be responsible for supplying 50% of the mobile DRAM for iPhones (likely iPhone 6s) and 80% of Apple A9 chip fabrication. Competing reports out of Taiwan claim that TSMC will also get a fair percentage of A9 business — but independent supply chain backup does not really exist for that as of yet; only that TSMC has continued ordering for 16nm FF+ in C1Q15 and that they will continue ordering in C2Q15. Samsung will likely share its manufacturing load with GlobalFoundries”,” said Srini Sundararajan, an analyst with Summit Research Partners, in a report.

Pacific Crest Securities downgraded TSMC to an “Underperform” rating. “TSMC’s sales growth likely peaked at 53% year-over-year in 4Q ‘14, driven by the addition of Apple as a new customer. But, we believe year-over-year growth should decelerate materially starting in 2Q ’15, due to tough growth comparisons, Qualcomm share loss, and Apple share loss (A9) to Samsung. We believe manufacturing share loss at Apple to Samsung could impact TSMC’s revenue by $2.81 billion and EPS by $0.19 during the next iPhone product cycle,” said Michael McConnell, an analyst with Pacific Crest Securities, in a report. “Near-term risks to TSMC’s model include: (1) high inventory at top five customers; (2) peaking monthly sales in January; and (3) a negative Q2 revenue impact from Samsung shifting to its Exynos AP in its GS6 smartphone.”

JEDEC Solid State Technology Association announced that Seijin Kim, senior vice president of the Mobile Division at Samsung Electronics, has been presented with the first JEDEC Industry Leadership Award.

SEMI said that fab equipment spending in 2014 increased almost 20% and will rise 15% in 2015, increasing only 2-to-4% in 2016.

Applied Materials has been recognized as a 2015 World’s Most Ethical Company by the Ethisphere Institute, the global leader in defining and advancing the standards of ethical business practices.

Applied Materials announced that its board has approved a quarterly cash dividend of $0.10 per share payable on the company’s common stock.

Lam Research announced the pricing of $500 million aggregate principal amount of its 2.750% senior notes due 2020 and $500 million aggregate principal amount of its 3.800% senior notes due 2025.

Nova Measuring Instruments announced the acquisition of ReVera, a provider of metrology tools.

Axcelis Technologies has avoided a proxy battle. The fab tool vendor has reached an agreement with Vertex Capital Advisors. Under the plan, the company will nominate Richard Faubert and John Kurtzweil to its board.

A Chinese consortium of investors led by Summitview Capital has entered into a definitive merger agreement to acquire U.S. memory maker Integrated Silicon Solution Inc. (ISSI). The proposed transaction values ISSI’s equity at approximately $639.5 million.

NXP Semiconductors will acquire Athena SCS, a provider of solutions securing the expanding connected world.



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