The Week In Review: Manufacturing

Trade
President Trump this week announced his decisions on the actions the administration will take in response to China’s alleged unfair trade practices covered in the USTR Section 301 investigation of “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.” Trump has proposed import tariffs that amount to about $60 billion on products from China, according to reports.

John Neuffer, president and chief executive of the Semiconductor Industry Association (SIA), issued the following statement: “The U.S. semiconductor industry shares the Trump Administration’s concerns regarding unfair and discriminatory trade practices that put at risk American intellectual property in China.

“We are reviewing the Administration’s Section 301 findings and proposed actions, and encourage an outcome that protects U.S. intellectual property in a manner that avoids a costly trade conflict. We welcome the opportunity to provide input on proposed tariffs, and hope to work with the Administration to avoid tariffs that would harm competitive U.S. industries and their consumers.

“Intellectual property is the lifeblood of the semiconductor industry. Semiconductors are America’s fourth-largest export and are fundamental to the strength of our economy. U.S. semiconductor companies invest nearly one-fifth of their revenue in research and development to stay at the forefront of innovation. They should be able to compete in foreign markets without putting their critical IP at risk.

“At the same time, we welcome China’s participation in the global semiconductor value chain as long as it conforms with its international obligations and is consistent with market-based principles. In the end, strong protections for intellectual property serve the long-term interests of both the United States and China.”

For years, there have been IP issues in China. So, Trump’s actions make sense from that angle. But still, the administration is playing a dangerous game, as China will likely retaliate.

It’s unclear how that will impact U.S. electronics companies—yet. But to be sure, U.S.-based chipmakers realize a large percentage of their sales in China. China is the world’s largest market for chips. In 2017, China consumed $138 billion, or 38%, of the world’s chips, according to IC Insights.

China is expected to become the world’s second largest market for fab equipment in 2018, behind South Korea, according to SEMI. U.S.-based fab tool vendors are banking on sales in China, as the nation continues to build a number of fabs. Fab tool companies in Europe and Japan are also seeking orders in China and may end up getting the upper hand.

And, of course, Apple and other U.S.-based companies have a lot at stake in China.

Fab tools
In a move to expand into the process equipment and other new businesses, KLA-Tencor has entered into a definitive agreement to acquire Orbotech for approximately $3.4 billion.

In a video, Aki Fujimura, chief executive of D2S, highlighted several hot topics from this year’s SPIE conference. This includes EUV shot noise, nanoimprint lithography (NIL), multi-beam mask writing, and deep learning.

In a separate video, Laurent Pain, patterning program manager at Leti, discusses the topics from Leti’s new workshop at SPIE, including maskless lithography, directed self-assembly (DSA) and NIL.

Chipmakers
GlobalFoundries has rolled out a new ecosystem partner program, called RFwave. The program is designed to simplify RF design and help customers reduce time-to-market for a new era of wireless devices and networks, including 5G.

TowerJazz has rolled out a silicon photonics manufacturing process with EDA design support. The process enables optical networking and data center interconnect applications. Cadence, Synopsys and Lumerical have collaborated to develop design enablement for TowerJazz’ technology.

On March 20, a magnitude 5.2 earthquake struck Chiayi County, Taiwan, near the southern city of Tainan. UMC’s Fab 12A complex in Tainan was not impacted. All personnel are safe at UMC facilities. “After thorough inspection of UMC’s fab operations, we have concluded that there will be no material impact to UMC’s business,” according to UMC.

Packaging and test
Advanced Semiconductor Engineering (ASE) presented its tool and material supplier awards. In total, seventeen suppliers received an “Outstanding Supplier” award while three companies received an ‘‘Excellence in Sustainability” award. Applied Materials, Lam Research, Tokyo Electron Ltd. (TEL), and others received awards.

Automotive manufacturers like Subaru are using National Instruments’ hardware-in-the-loop (HIL) technology to simulate actual road conditions for electric vehicle testing, eliminating environmental factors to reduce test time and costs. With the HIL system, Subaru eliminated environmental factors and tested a vehicle’s embedded controller in a virtual environment before running real-world diagnostics on the complete system.

Market research
North America-based manufacturers of semiconductor equipment posted $2.41 billion in billings worldwide in February 2018, according to SEMI. The billings figure is 1.7% higher than the final January 2018 level of $2.37 billion, and is 22.2% higher than the February 2017 billings level of $1.97 billion. “February billings remain at a level indicating another positive year for semiconductor equipment spending,” said Ajit Manocha, president and CEO of SEMI. “We expect 2018 to mark the fourth consecutive year of spending growth, which last occurred in the 1990s.”

Where are self-driving cars today? “The call to terminate the testing of autonomous driving vehicles on public roads have risen predictably in the wake of the fatal crash between an Uber automated driving test vehicle and a pedestrian walking a bicycle in Tempe, Ariz. Uber halted its testing of such vehicles and, surprisingly or not, Automotive News reports that Toyota has halted its own public road testing,” according to Roger Lanctot from Strategy Analytics, who offers some interesting comments.

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2G wireless networks aren’t dead. There is a surge of growth for older generation 2G feature phones in emerging markets, while saturated regions await for next-generation 5G smartphones, according to Strategy Analytics.

The research firm finds that while the first 5G commercial handsets will go on sale from early 2019, sales will not begin to scale up until 2021 when volumes approach 5% of global handset sales. “5G smartphone sales will begin in China, Japan, South Korea and the USA from 2019,” said Strategy Analytics analyst Ville-Petteri Ukonaho. “But volumes in 2019 will be in just the millions, and only barely in the tens of millions in 2020.”

David Kerr, another analyst at the firm, said: “Meanwhile, some older generation wireless technologies will continue to flourish. Specifically, 2G and 4G handsets will continue to have long lifespans, with both carrying on into the next decade, even as 3G devices fade away.”

Strategy Analytics new report concludes that even as 5G smartphone sales are rapidly ramping up in 2023, 2G feature phones will account for nearly one in ten handsets sold that year, as new-to-mobile customers in emerging markets, particularly in Africa, purchase their first mobile phones.