The Week In Review: Manufacturing

Trade
The trade tensions are building between the U.S. and China. In the latest move, the U.S. Department of Commerce has imposed a ban on U.S. companies selling chips to ZTE, a Chinese telecom equipment and mobile phone vendor. The ban has been implemented on ZTE for seven years after the firm “was caught illegally shipping U.S. goods to Iran,” according to a report from Reuters.

This follows other actions by the U.S. Not long ago, the top U.S. intelligence chiefs warned Americans from buying and using products from Chinese smartphone maker Huawei. Then, the Trump administration and China have been embroiled in a trade war.

Fab tools and EDA
SEMI unveiled plans to merge with the ESD Alliance, the chip industry’s top EDA tools group, following three similar moves by SEMI in other slices of the semiconductor supply chain.

Lam Research reported its financial results for the quarter ended March 25. Shipments and sales were up in the quarter. “Lam continues to deliver strong performance, again setting new records highlighted by shipments exceeding three billion dollars in the March quarter,” said Martin Anstice, Lam Research’s chief executive.

In a blog, Lam Research provides an explanation of the next-generation memory types, such as phase-change, MRAM and ReRAM.

Ten companies have been recognized by Texas Instruments as winners of its annual Supplier Excellence Award (SEA). TEL was one of the winners.

NASBITE International honored 31 U.S. companies that export goods and services during the 2018 National Small Business Exporter Summit. Companies from 24 states were recognized as exporters in their respective states as part of the second anniversary of these awards. Brewer Science was one of the winners.

Bruker has acquired Anasys Instruments, a privately-held company that develops nanoscale infrared spectroscopy and thermal measurement instruments. Financial details of the transaction were not disclosed.

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ASML posted its results. “ASML posted 1Q revenue and EPS above our estimates. Upside came from an increase in memory customer demand, likely as Samsung began to shift more resources to DRAM, in our view,” said Weston Twigg, an analyst with KeyBanc Capital Markets, in a research note.

“ASML grabbed nine additional orders for EUV tools this quarter, likely from TSMC and Samsung. This puts both Samsung and TSMC on track to ramp EUV aggressively over the next 2-3 years, with initial production likely in 2019. By our count (not counting NXE:3100 platforms, which were for development), TSMC has now ordered 26 EUV tools, with around 10 delivered, while Samsung has ordered 15 EUV tools, with six delivered. Intel appears to be running slightly behind, with 13 tools ordered and 7 delivered, in our view, perhaps as a function of delayed node transitions. ASML’s EUV shipment backlog now runs well into 2019. ASML also announced initial orders for its next-generation EUV platform, with initial shipments expected to commence in late 2021,” Twigg said. These numbers are estimated ASML EUV NXE:3300/3350/3400 (production-Worthy) systems delivered or ordered by customers.

Regarding the NXE:3400B, a spokeswoman for ASML said: “We’ve shipped a total of 13 NXE:3400B systems now.”

Packaging and chipmakers
STATS ChipPAC disclosed its results for 2017. Net revenues in 2017 were $1.160 billion.

TSMC posted its results and raised its capital spending, but it had a weak outlook. TSMC is also shipping 7nm finFET technology. “7nm is now expected to be ~9% of full-year 2018 wafer revenue, about one point lower than previous forecast due to weakness in smartphones. 10nm revenue is still expected to grow this year despite weakness in smartphones and customer migration to 7nm. TSMC noted that it has been seeing some weakness on the 28nm node due to cryptocurrency mining customers migrating to more advanced nodes, but that the number of tape-outs this year will still be the highest in the node’s history. Utilization for the 28nm and above nodes has been lower than what TSMC was expecting last year,” said Michael McConnell, an analyst at KeyBanc, in a research note.

“TSMC lowered its 2018 guide from 10-15% growth to ~10% levels due to smartphone demand and crypto-currency related demand as the key drivers behind soft outlook. We think TSMC’s outlook to a certain extent confirms our view that AAPL may work to curtail its iPhone channel inventory aggressively ahead of the fall 2018 product launches, especially as we think AAPL will launch all its devices this September (vs. doing a staggered launch),” said Amit Daryanani, an analyst at RBC.