The Week In Review: Manufacturing

Chipmakers
The situation between Toshiba and its fab partner, Western Digital (WD), has gone from bad to worse. As reported, troubled Toshiba recently selected a group to buy its memory business. The consortium includes the Innovation Network Corp. of Japan, the Development Bank of Japan and Bain Capital. Rival SK Hynix is also part of the group.

WD attempted but failed to buy the unit, and is now trying to block the deal. Then, Toshiba filed a petition with the Tokyo District Court against WD, seeking a provisional disposition order for an injunction against acts of unfair competition.

Now, Toshiba plans to invest in the equipment for its new Fab 6 facility in Japan without the help from WD. Toshiba and WD tried to negotiate, but they failed to reach an agreement. Toshiba’s Fab 6 will make 3D NAND, including its new 96-layer device. It’s unclear if WD will have access to the output of the fab. Toshiba and WD’s SanDisk unit are partners in other fab ventures in Japan and share the output.

“WDC and Toshiba could not reach an agreement over investments in Fab 6 at the Yokkaichi plant. Toshiba announced it would invest the required $1.8 billion in the new memory chip production line by itself,” said Amit Daryanani, an analyst with RBC in a research note. “Historically, Toshiba has owned the land and buildings, but the two parties have jointly invested in equipment. WDC has stated that it has the right to participate in investments related to Fab 6 equipment and intends to do so. Installation of new equipment at Fab 6 is planned to start in December 2017 and output will ramp through March 2019. We think this new dispute is a negative for both parties as it would stretch Toshiba’s already challenged financial position and impact WDC’s access to 3D NAND to be produced at the new line.”

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GlobalFoundries and Silicon Mobility have produced the industry’s first automotive field programmable controller unit (FPCU). Called the OLEA T222, the FPCU solution uses GF’s 55nm Low Power Extended (55LPx) automotive qualified technology platform, which includes Silicon Storage Technology’s SuperFlash memory technology. Silicon Mobility’s OLEA T222 allows automotive processing to be deterministic through embedding a flexible logic unit.

Invecas, a provider of silicon IP and ASIC design services, has signed a definitive agreement to acquire Lattice Semiconductor’s HDMI design team and Simplay Labs subsidiary.

Test
National Instruments (NI) has rolled out the PXIe-8301 remote control module, the industry’s first solution for laptop control of PXI systems using the Thunderbolt 3 technology. The PXIe-8301 offers PCI Express Gen 3 connectivity through two Thunderbolt 3 ports to maximize performance and delivers up to 2.3 GB/s of sustained data throughput.

Astronics reported its results for the quarter. Orders for the company’s Test Systems segment in the quarter were $23.9 million, for a book-to-bill ratio of 1.11 for the quarter. Backlog was $49.9 million at the end of the second quarter of 2017.

Market research
Apple posted strong results and also surprised analysts. “Apple delivered a strong June quarter print, but the material surprise was (a) strong September quarter guide that effectively implies ‘NO’ iPhone launch delay despite a myriad of blog and supplier commentary to the contrary,” RBC’s Daryanani said. In the iPhone segment, Apple reported total unit shipments of 41.0 million, down 7.5%, according to RBC. It reduced its iPhone channel inventory by 3.3 million units, the lowest in 2.5 years.

TrendForce presented some data on China’s IC market. The research firm said that China’s chipmakers will need government subsidies to minimize risks and losses.

Worldwide semiconductor capital spending is projected to increase to $77.7 billion in 2017, up 10.2% over 2016, according to Gartner. This growth rate is up from the previous quarter’s forecast of 1.4%. “Spending momentum is more concentrated in 2017 mainly due to strong manufacturing demand in memory and leading-edge logic. The NAND flash shortage was more pronounced in the first quarter of 2017 than the previous forecast, leading to over 20% growth of etch and chemical vapor deposition (CVD) segments in 2017 with a strong capacity ramp up for 3D NAND,” said Takashi Ogawa, research vice president at Gartner.

In March, IC Insights raised its worldwide IC market growth forecast for 2017 to 11%—more than twice its original 5% outlook. Now, IC Insights expects the IC market to increase by 16% in 2017 due to growth in the DRAM and NAND flash memory markets. “The DRAM market is now forecast to grow 55% and the NAND flash market is now expected to rise 35% this year—in both cases, almost entirely due to fast-rising prices rather than unit growth,” according to IC Insights. “Excluding these two markets, the overall IC market growth is forecast to show just 6% year-over-year growth.”