The Week In Review: Manufacturing

E-beam inspection; fab tool downturn; drone mania at Intel and Qualcomm; setback for rare earths.

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NuFlare Technology wants to enter a new market. The e-beam giant and NGR are jointly collaborating on a development program for next-generation electron-beam wafer inspection and metrology. It’s unclear if NuFlare is developing a single- or multi-beam tool, however.

Don’t look now, but a fab tool downturn could be on the horizon. This comes amid a slowdown in PCs, tablets and smartphones (See below). Product demand in China is also weak. Prior to Semicon West in July, VLSI Research’s IC equipment forecast called for 17% and 3.9% growth for 2015 and 2016, respectively. Now, in the latest forecast, VLSI’s equipment forecast calls for plus 3.6% growth in 2015 and minus 10.2% in 2016.

It’s drone mania in the market. “Drone demand remains strong with most specialty stores in the United States having less than two weeks of inventory and some stores still struggling to secure (a) steady supply,” said Brad Erickson, an analyst at Pacific Crest Securities, in a research note. “We continue to see particularly strong demand for DJI’s recently launched products, the Phantom 3 Advanced and Professional.” Meanwhile, the growth in drones has prompted two chipmakers to enter the drone chip market. First, Intel Capital has invested more than $60 million in Yuneec, a drone maker. Intel and Yuneec will collaborate on the development of drones. Then, Qualcomm is planning to enter the chip business for drones. The moves are a potential threat for Ambarella, the leading supplier of chips for drones. Ambarella’s foundry partner is Samsung. “Qualcomm’s imminent entry into drones could have a modest impact on Ambarella’s business, given its roughly 10% revenue exposure to drones,” Erickson said.

The rare earths market has gone from bad to terrible. U.S-based Molycorp, one of the few major non-Chinese rare earths suppliers, has suspended the production of its Mountain Pass facility in the U.S. It plans to continue serving its rare earth oxide customers via its production facilities in Estonia and China. Rare earth pricing, which has declined dramatically over the past four years, was a key factor in the decision to suspend rare earth production at Mountain Pass.

TSMC announced that TSMC Solar, its 100% owned subsidiary, will cease manufacturing operations at the end of August 2015. TSMC believes that its solar business is no longer economically sustainable.

Is the long-awaited consolidation finally taking place in the OSAT market? Here’s another sign: Advanced Semiconductor Engineering has launched an unsolicited bid to acquire a 25% stake in Siliconware.

eASIC, a fabless ASIC and FPGA company, and ASOCS, a pioneer in virtual radio access networks (vRAN), have signed a definitive agreement to develop a custom silicon device for the acceleration of next-generation network virtualization applications.

Worldwide PC shipments are expected to fall by 8.7% in 2015 and will not stabilize until 2017, according to International Data Corporation (IDC). The latest forecast has PC growth declining through 2016–which will make five years of declining shipments. Growth should resume in 2017, led by the commercial market, while consumer volume continues a small decline through the end of the forecast in 2019.

According to IDC, tablet shipments, inclusive of 2-in-1 devices, are expected to decline 8% in 2015, representing a notable slowdown from IDC’s previous forecast of minus 3.8%. Shipments are now expected to reach 212 million with the vast majority being pure slate tablets.

According to IDC, smartphone shipments are expected to grow 10.4% in 2015 to 1.44 billion units. This is lower than IDC’s previous smartphone forecast of 11.3% year-over-year growth in 2015. IDC expects to see a noticeable slowdown in smartphone shipments in 2015 as China joins North America and Western Europe in a more mature growth pattern.