The Week In Review: Manufacturing

Smartphone withdrawal; Apple’s foundry biz; Intel’s CapEx; Applied’s outlook; new startups.

popularity

A majority of Americans cannot endure more than two hours without checking their electronic devices, according to new data released in the Crucial.com Tech-Life Balance Survey. One in four Americans becomes stressed by going longer than 30 minutes without checking their email or phone due to a fear of missing out. Additionally, one in five would sooner go to dinner with an ex significant other than separate from technology for a month.

Samsung has apparently recaptured Apple’s foundry business, according to analysts. For years, Samsung made Apple’s application processors on a foundry basis for Apple. Then, at 20nm, Apple shifted its foundry business over to TSMC. Now, Samsung is expected to produce a high percentage of Apple’s A9 application processors, which are based on 14nm finFET technology. “Samsung (is) likely getting a majority of Apple A9 orders,” said Srini Sundararajan, an analyst with Summit Research Partners, in a research note. “Samsung was positive and confident that System LSI 14nm finFET yields are improving enough that high-volume-production will start in early 2015 for its own ‘Exynos’ application processor and perhaps a few months hence for Samsung’s foundry customers (we think for Apple A9). In addition, Samsung also seemed to suggest that things are going well for its 14nm licensee GlobalFoundries and that GloFo should also be ready for fabbing different customers sometime later in 2015.”

What did Intel say at its annual analyst day this week? “Intel guided capital spending to decline 5% to $10.5 billion in 2015. Intel stated that its die sizes are trending down after a few years of stability, meaning that Intel can produce more die per wafer, which limits demand for new capacity. Conversion/capacity-related capital spending (the fab-related cost to do node transitions) remains in the $7 billion to $8 billion range,” said Michael McConnell, an analyst at Pacific Crest Securities, in a report. “One primary investor concern on Intel has been the company’s sizeable losses in mobile, which we expect to be $4 billion this year, or an estimated ($0.58) in EPS. Intel expects to pare these losses by $800 million in 2015, due to (1) lower tablet subsidies, (2) a more competitive cost structure with its SOFIA 3G/4G SoCs, (3) reduced investment, and (4) higher LTE baseband shipments. We estimate an $800 million reduction in wireless losses to $3.2 billion should lead to $0.12 of EPS accretion in 2015.”

In a recent conference call, Gary Dickerson, president and chief executive of Applied Materials, presented an outlook for the wafer fab equipment (WFE) sector: “We maintain that 2014 spending will be up 10% to 20% over 2013. Our current view is that 2015 wafer fab equipment will be higher, driven by the foundry finFET battle, more customers investing in 3D NAND and increasing DRAM spending.”

The global technology industry hailed a major breakthrough on the World Trade Organization (WTO) Information Technology Agreement (ITA), as U.S. and Chinese trade officials announced a pathway forward in the effort to expand the deal. Trade officials from both countries worked to find the middle ground necessary to revive ITA talks that broke down over a year ago. With this development, the ambitious tariff-elimination initiative to significantly expand product coverage of the ITA will now move forward.

A new startup, Carbonics, has emerged. The Los Angeles-based company leverages advanced carbon research conducted at UCLA and USC and is backed by a $5.5 million investment from Taqnia International. Carbonics intends to incorporate carbon nanomaterials into RF components.

Another new startup, Tempo Semiconductor, has completed the acquisition of IDT’s audio product line.

SanDisk has invested in Altair Semiconductor, a developer of high-performance, single-mode LTE chipsets.

GigOptix has withdrawn its previous offer to acquire GSI Technology.

Electro Scientific Industries has entered into a definitive agreement to acquire Wuhan Topwin Optoelectronics Technology. Topwin brings a portfolio of mid-range laser technology products.

IC Insights finds that of the six major end-use applications for ICs, the automotive IC market is forecast to experience the strongest average annual revenue growth rate through 2018.

Wearable electronic devices for fitness shipments are forecast to reach 68.1 million units in 2015, down from 70 million units in 2014, according to Gartner. This dip in sales will be driven by an overlap in functionality between smart wristbands, other wearable fitness monitors and smartwatches. However, the market for smart wristbands and other fitness monitors will rebound in 2016.