The Week In Review: Manufacturing

ADI to shut fab; Intel fab investment; Xcerra deal blocked.

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Chipmakers
Last year, Analog Devices Inc. (ADI) completed the acquisition of Linear Technology. Now, ADI plans to shut down one of Linear’s fabs as well as a test operation.

“Analog Devices plans to close the smallest of its four wafer fabs, which was acquired as part of its March 2017 acquisition of Linear Technology and is located at Hillview Drive in Milpitas, California. This closure is expected to take place in approximately three years (i.e., February 2021),” according to an e-mail from spokeswoman for ADI. “ADI made this decision after a comprehensive review of our future manufacturing requirements. ADI’s remaining three fabs, including a fab in Camas, Washington that was also acquired as part of the LTC acquisition, combined with ADI’s existing supply chain, provide ample capacity for growth into the future. By announcing the closure date well in advance, we are providing clarity to our affected employees and reassuring our customers that there will be no interruption to their supply.

“This was announced on January 30th in an 8K filing along with Analog Devices’ plans to close its Test Operation in Yishun, Singapore, which was acquired as part of its March 2017 acquisition of Linear Technology. This closure is expected to take place in approximately two to four years (i.e., between 2020-2022),” according to the ADI spokeswoman. “ADI made this decision after a comprehensive review of our future assembly and test requirements. ADI’s remaining two facilities, including our facility in Penang, Malaysia that was also acquired as part of the LTC acquisition, combined with ADI’s existing supplier network, provide ample capacity for our future growth.”

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Intel plans to invest $5 billion to expand its fab production in Kiryat Gat, Israel, according to a report from Reuters. The fab will be upgraded to run Intel’s 10nm process, according to another report.

Molex and Invecas have announced a joint collaboration to develop an automotive infotainment media module. The module is designed by Invecas and manufactured by GlobalFoundries.

Test
The United States has blocked Xcerra’s sale to a Chinese state fund. Xcerra and Hubei Xinyan Equity Investment Partnership have mutually agreed to withdraw their joint voluntary filing to the Committee on Foreign Investment in the United States (CFIUS) in relation to their proposed transaction and have terminated their merger agreement.

“We believe that our transaction with Xinyan was in the best interests of our shareholders, our customers, and our employees. Despite our best efforts to secure approval, it has become evident that CFIUS will not clear this transaction and we and Xinyan have mutually decided to terminate our merger agreement,” said Dave Tacelli, president and CEO of Xcerra, a supplier of ATE, test handlers and other products. “Xcerra is a strong and well-positioned company. The business environment remains robust for all of our semiconductor test products and bare-board flying probe test systems, and we will continue to innovate and unlock opportunities for the business in existing and new markets.”

Last year, the group from China entered into a definitive agreement under which it would acquire Xcerra for $10.25 per share in cash. The deal is worth approximately $580 million. The transaction was expected to close before the end of the 2017 calendar year. Then, in August, reports surfaced that Cohu was attempting to block the sale, citing national security concerns, according to reports.

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National Instruments (NI) has announced plans to collaborate with Samsung Electronics to develop 5G test UE exchanges for 5G New Radio (NR). The first public demonstration of this collaboration will show Samsung’s 28GHz base station communicating with an NI test.

Advantest has received a supplier excellence award from iTest, a Silicon Valley-based start-up providing semiconductor testing services.

Market research
North America-based manufacturers of semiconductor equipment posted $2.36 billion in billings worldwide in January 2018, according to SEMI. The billings figure is 1.4% lower than the final December 2017 level of $2.40 billion, and is 27.2% higher than the January 2017 billings level of $1.86 billion. “The strong billings levels from late 2017 have carried over into the new year,” said Ajit Manocha, president and chief executive of SEMI. “We maintain a positive outlook for the 2018 market, marking three years of growth for equipment spending.”

The U.S. Department of the Interior is seeking public comment by March 19, 2018, on a draft list of minerals considered critical to the economic and national security of the United States. Markets for critical metals are becoming turbulent, creating shortages and widespread supply chain concerns.



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