The Week In Review: Manufacturing

Foundry rankings; NI’s IoT lab; ISS forecasts; CapEx outlook.


IC Insights has released its rankings of the top 10 pure-play foundries in 2016. TSMC was the largest foundry in terms of sales, followed by GlobalFoundries, UMC, and SMIC, according to IC Insights. TSMC held a 59% share in 2016. According to IC Insights, the three top-10 pure-play foundry companies that displayed the highest growth rates in 2016 were X-Fab (54%), SMIC (31%) and TowerJazz (30%).

TSMC reported its results for the fourth quarter. The numbers were above guidance, driven by strong demand for 16nm products, according to Amit Daryanani, an analyst with RBC. “Management forecasts 5%-10% year-over-year revenue growth for 2017, mostly driven by smartphone-related demand. TSMC expects to spend $10 billion capex in 2017, in line with 2016. Notably, management expects 10nm revenue to ramp up strongly in 2H17,” Daryanani said. “7nm development is well on track. Management estimates 15-20 tape-outs in 2017.”

UMC reported unaudited net sales for the month of December 2016. Sales were up for the period.

Austrian chip manufacturer ams AG recently cancelled plans to build a fab in Utica, N.Y., according to a report from the Albany Business Review.

Packaging and test
Advanced Semiconductor Engineering (ASE) has announced that its Kaohsiung, Taiwan facility has received the ISO 26262 certification from TÜV NORD, a technical service provider that helps companies to validate the safety of products and services. ISO 26262 is a standard related to the safety of electrical and electronic systems within a car and addresses possible hazards caused by malfunctioning behavior of safety-related systems, including interaction of these systems.

ASE reported its unaudited consolidated net revenues for December and the fourth quarter of 2016. Sales were up for the period.

National Instruments (NI) has opened its new NI Industrial IoT Lab at its Austin, Tex.-based headquarters. The NI Industrial IoT Lab will focus on micro-grid control and communications, advanced control for manufacturing, and asset monitoring for heavy equipment.

Market research
From 2004 through 2014, over $70 billion was spent on semiconductor equipment and materials in China, according to SEMI. China now captures about one third of the annual global spend for assembly and packaging equipment, according to the trade group.

SEMI’s Industry Strategy Symposium (ISS) took place this week. The conference gave the year’s first strategic outlook for the global electronics manufacturing industry.

The pure-play IC foundry market will increase by a compound annual growth rate (CAGR) of 7.6%, growing from $50.0 billion in 2016 to $72.1 billion in 2021, according to IC Insights.

Worldwide semiconductor capital spending is projected to increase by 2.9% in 2017, to $69.9 billion, according to Gartner. This is down from 5.1% growth in 2016. “The stronger growth in 2016 was fueled by increased spending in late 2016 which can be attributed to a NAND flash shortage which was more severe in late 2016 and will persist though most of 2017. This is due to a better-than-expected market for smartphones, which is driving an upgrade of NAND spending in our latest forecast,” said David Christensen, senior research analyst at Gartner. “NAND spending increased by $3.1 billion in 2016 and several related wafer fab equipment segments showed stronger growth than our previous forecast. The thermal, track and implant segments in 2017 are expected to increase 2.5%, 5.6% and 8.4%, respectively.

Here’s more from TSMC: “TSMC estimates fabless days of inventory at the end of 2016 above seasonal level by two days,” RBC’s Daryanani said. “For 2017 from a product end-markets perspective, management expects smartphone units to grow 6% (from 1.47 billion to 1.55 billion), PC units to decline 5%, tablets to decline 7% and IoT to grow 34%. TSMC expects its total revenue to grow 5%-10% in 2017 (~10% in 1H, ~5% in 2H), with semiconductor growing 4% and foundry revenue growing 7%.”

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