The Week In Review: Manufacturing

Intel floats smartships; Applied-TEL update; fab tool forecasts; Veeco’s latest move.

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Intel and Royal Caribbean International teamed up to integrate Intel-powered tablets onboard the Quantum of the Seas, the world’s first “smartship.” Royal Caribbean is installing 15,000 Intel-based Dell Venue tablets at point-of-sale locations on the new ship.

When will Applied Materials’ proposed acquisition of Tokyo Electron Ltd. (TEL) happen? “Timing-wise we still think that it is by March/April of 2015,” according to Srini Sundararajan, an analyst with Summit Research Partners, who added that Applied and TEL may have to divest some operations to appease regulators. “Area of divestitures seem to mainly be electrochemical deposition (ECD) with potentially a closer look at gate-stack-area definition tools and at the 450mm tool development situation remaining. We would also encourage U.S. regulatory authorities to be in some consultation with MOFCOM and Eteris (AMAT-TEL), mainly as a check, to make sure sensitive technologies do not end up as a bottleneck, with China being a gating factor (a la the rare earth availability situation). So, bottom-line: U.S., MOFCOM China, Korea Fair Trade Commission (KFTC) and JFTC approval remains.”

Applied Materials announced that its board has approved a quarterly cash dividend of $0.10 per share payable on the company’s common stock. The dividend is payable on March 11, 2015 to stockholders of record as of Feb. 18, 2015.

Worldwide semiconductor capital expenditure growth for this year is expected to be 11% and will increase another 8% in 2015, according to SEMI. Back in August 2014, SEMI’s predicted fab equipment spending would rise by 21% for this year; however, push out in spending by some companies resulted in a slight downward revision.

The Internet of Things (IoT) may be all about sensors, but it’s not a win for all MEMS devices, according to SEMI.

Veeco has acquired Solid State Equipment Holdings (SSEC). SSEC makes single-wafer wet etch, clean and surface preparation equipment targeting high growth segments in advanced packaging, MEMS and compound semiconductors. “We think that this is a much better use of Veeco’s money compared to the Synos acquisition, which is yet to produce any tangible revenues,” said Sundararajan of Summit Research Partners. “The problem is that inherent in both South Korea and Japan is that prominent wet clean vendors such as SEMES and Shibaura Mechantronics are partly-owned by Samsung and Toshiba’s parent conglomerates, respectively. Hence, the markets are relatively tough to penetrate. A resurgent SPTS under Orbotech’s leadership might also try to enter these markets. The bigger question is: Has Veeco seen the light on LEDs; is it using its cash to diversify? Does this signal that the MOCVD market is still not going to improve in 2015?”

Ultratech has filed a lawsuit in federal court in the Northern District of California against Chinese-based company Ensure NanoTech (Beijing), its United States subsidiary and company President Dongjun Wang. The complaint alleges that Wang was president of Start Science (Beijing), a company that was formerly a sales agent in China for Ultratech/Cambridge NanoTech. The complaint further alleges that Wang and his company Ensure now manufacture and sell ALD equipment that infringes Ultratech’s United States Patent No. 8,202,575. In the complaint, Ultratech also alleges that Ensure and Wang misappropriated trade secrets from Ultratech’s advanced ALD systems, unfairly compete with Ultratech, and breached the terms of the sales agency agreement with Ultratech/Cambridge NanoTech. The complaint seeks an injunction and an award of enhanced damages.

CoorsTek has reached a definitive agreement with the Carlyle Group and Unison Capital Group to acquire Covalent Materials.

TowerJazz announced that Fairchild Semiconductor has started mass production at TowerJazz Panasonic Semiconductor’s fab facility in Tonami, Japan. This is a process transfer from Fairchild of their discrete devices for the industrial and consumer markets

The total production value of electronic systems is projected to increase 5% in 2014 to $1.49 trillion and climb to about $1.82 trillion in 2018, which represents a compound annual growth rate (CAGR) of 5.2% from $1.41 trillion in 2013, according to IC Insights. In 2014, cellphone handsets are expected to account for 18% of worldwide electronic systems sales ($265.2 billion) versus standard PCs being 13% ($196.0 billion) of the total this year.