The Week In Review: Manufacturing

Chipmakers
At upcoming the 2016 IEEE International Electron Devices Meeting (IEDM) in San Francisco, TSMC will square off against the alliance of IBM, GlobalFoundries and Samsung at 7nm. IEDM will take place Dec. 3-7, 2016.

TSMC will present a paper on 7nm finFET technology. Using 193nm immersion and multi-patterning, the 7nm technology features more than three times the gate density and either a speed gain (35-40%) or power reduction (>65%) versus the company’s 16nm finFET process. TSMC built a low-voltage 256-Mb SRAM test chip with full read/write functionality down to 0.5V, and the smallest SRAM cells ever reported (0.027µm2).

Not to be outdone, the trio of IBM, GlobalFoundries and Samsung technology will also present a paper on 7nm. It will use extreme ultraviolet (EUV) lithography. With EUV, the 7nm technology will feature a contacted polysilicon pitch of 44nm/48nm and metallization pitch at 36nm. “The technology also features dual-strained channels on a thick strain-relaxed buffer (SRB) virtual substrate to combine tensile-strained NMOS and compressively strained SiGe PMOS for enhancement of drive current by 11% and 20%, respectively, versus a common planar HKMG process,” according to an abstract from the companies.

Interestingly, though, Samsung plans to use EUV for production at 7nm. Initially, GlobalFoundries won’t use EUV at 7nm. It plans to extend optical, according to the company.

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Samsung has commenced mass production of system-on-chip (SoC) products, based on 10nm finFET technology. Others have also announced 10nm. In addition, Samsung has rolled out the industry’s first 8-gigabyte LPDDR4 mobile DRAM. The 8-GB mobile DRAM package utilizes four of 16-gigabit LPDDR4 memory chips and 10nm-class process technology.

Samsung, meanwhile, announced that it estimates a negative impact of approximately mid-3 trillion won in operating profit from the fourth quarter of 2016 through the first quarter of 2017, due to the discontinuation of Galaxy Note7 sales. The company already allocated the expected direct cost from the discontinuation of Galaxy Note7 sales in its third quarter earnings guidance revision announced on Oct. 11, but expects the drop in revenue from the discontinued sales to continue to have a negative impact on operating profit for the next two quarters.

Fab tools
Lam Research announced financial results for the quarter ended Sept. 25. For the quarter, revenue was $1.632 billion and net income was $264 million, or $1.47 per diluted share on a GAAP basis. This compares to revenue of $1.546 billion and net income of $259 million, or $1.46 per diluted share, for the quarter ended June 26, 2016.

Commenting about Lam’s results, Weston Twigg, an analyst with Pacific Crest Securities, said: “Lam posted in-line FQ1 revenue and a slight EPS beat, but blew the lid off guidance, with strength likely coming from TSMC’s 10nm ramp, Intel’s 10nm ramp and strong 3D NAND activity. The only problem here is that we may get two to three quarters of declining revenue as TSMC winds down its 10nm ramp and pauses before 7nm, and as Intel capex is likely front-end-loaded in 2017; 3D NAND demand should remain strong, providing a reasonably high baseline even with a potential drop-off in logic/foundry demand.”

Twigg added: “Lam noted that it expects modestly higher overall WFE in 2017 y/y; we model WFE up 2% in 2017. Lam also noted that it expects flat to a modest pullback in logic/foundry spending in 2017; we model logic up 1% and foundry up 2%. Lam believes NAND and DRAM are biased higher in 2017; we model NAND WFE up 7% in 2017 but DRAM down slightly.”

KLA-Tencor announced operating results for its first quarter of fiscal year 2017. It reported GAAP net income of $178 million and GAAP earnings per diluted share of $1.13 on revenues of $751 million.

ASML also posted its results. “ASML reported strong Q3 revenues, above expectations, driven by strength in 10nm node and incremental revenue recognition for an EUV system,” said Amit Daryanani, an analyst with RBC Capital Markets. “Importantly, ASML is making progress on EUV targets across both tool availability (>80%) and wpd (~1,500). Beyond EUV, ASML should continue to benefit from 10nm transitions and with regards to memory, ASML expects memory to be stable to slightly positive (after a weak H1:16). Finally, HMI is on track to close by Q4 and isn’t factored into the current guide.”

Packaging, assembly and test
Advanced Semiconductor Engineering (ASE) has announced that its Kaohsiung facility in Taiwan has achieved ISO 28000:2007 certification through SGS, a globally acclaimed accreditation organization. The ISO 28000:2007 standard sets the framework for a security management system that enhances the security of the supply chain, transportation and logistics systems. ISO 28000 accreditation demonstrates that a company has put in place robust processes that are compliant with the international standards for security management. Four of ASE Kaohsiung’s factories; K7, K8, K10 and K15 were duly certified in September this year.

Market research
North America-based manufacturers of semiconductor equipment posted $1.60 billion in orders worldwide in September 2016 (three-month average basis) and a book-to-bill ratio of 1.05, according to SEMI. Last month, the book-to-bill was 1.03.

“Qualcomm thrashes Intel but not where it really matters. It appears that Qualcomm has once again demonstrated superiority over its peers when it comes to radio but we think it highly unlikely that users will notice. Radio performance analysis specialists Cellular Insights have run a series of tests on the iPhone 7 powered by Qualcomm’s MDM9645M modem and the iPhone 7 powered by Intel’s XMM7360 modem to compare radio performance,” said Richard Windsor, analyst at Edison Investment Research. “In this case the Qualcomm modem has consistently outperformed the Intel modem on 4G by 30% when the signal was moderate and 75% when the signal was at its weakest. When the signal was at full strength, both modems performed similarly.”

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