The Week In Review: Manufacturing

M&A mania; GlobalFoundries site visit; Samsung in China; Lam CEO speaks.

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Merger and acquisition activity continues to heat up across the semiconductor industry. On one front, Avago Technologies continues on its acquisition spree. And on another front, NXP Semiconductors is moving to spin off its RF power business. And there are other deals in the works as well, including Intel’s proposed move to buy Altera.

Weston Twigg, an analyst with Pacific Crest Securities, recently made a visit to GlobalFoundries’ Fab 8 site in New York. “We expect an increase in equipment installations at GlobalFoundries over the next two quarters. We observed lots of activity during a site visit, and we are raising our 2015 CapEx estimate to $5 billion from $4 billion,” Twigg said in a recent report. “The company is in the midst of rapid tool move-ins to support its 14nm ramp, and we think it’s possible it could exit the year at a run rate of between 20,000 to 30,000 14nm wafer starts per month (wspm) capacity. Apple is likely on the table, but not required to move forward with 14nm. We believe GlobalFoundries is still planning to grab some Apple A9 chip business, but we think yields and wafer output are too low to meet demand for a September phone launch. GlobalFoundries plans to ramp regardless of customer commitments, with significant capacity likely coming online late in the year. Samsung remains in the driver’s seat for the vast majority of 14nm Apple A9 chip production this year, in our view.”

Samsung is expanding its efforts in China. Not long ago, the company moved into NAND production within a fab in China. Now, Samsung SDI plans to invest around 200 billion won to build a polarizer production plant in the Wuxi Industrial District in China. Mass production will start in November 2016. Polarizing films, attached to LCD panels, control brightness, contrast and other optical features by either blocking or letting pass light coming from the back light unit. Polarizers are used in a wide range of display devices, such as laptop computers, tablet PCs and smartphones.

Martin Anstice, president and chief executive of Lam Research, gave a bullish outlook about the fab tool industry at the Cowen Annual Technology, Media and Telecom Conference. “We’re in the middle of the inflections,” he said at the event.

There has been a big shakeup at South Korean chipmaker MagnaChip amid a move to restate its financial results. The company announced the appointment of Y.J. Kim, a semiconductor industry veteran, as its new CEO.

Digital Specialty Chemicals (DSC), a provider of advanced materials, has received an equity investment from Intel Capital.

Worldwide sales of smartphones to end users reached 336 million units, an increase of 19.3% during the first quarter of 2015, according to Gartner. This growth was led by strong smartphone sales in emerging markets, excluding China.

In the first quarter of 2015, worldwide server shipments grew 13% year-over-year, while revenue increased 17.9% from the first quarter of 2014, according to Gartner.