The Week In Review: Manufacturing

China’s OSAT play; GF ramps finFETs; Vermont fab; Obama’s roundtable; Intel and Samsung VC efforts.


China is investing billions of dollars in the IC industry and equipment sectors. The nation is also in the midst of an acquisition and an investment spree, especially in IC packaging. For example, Jiangsu Changjiang Electronics Technology (JCET), a Chinese OSAT, shook up the landscape by recently announcing a deal to acquire STATS ChipPAC for $780 million. The deal was completed in August of 2015. Now, China’s Tsinghua Unigroup has invested $600 million for a 25% stake in Powertech Technology, a Taiwan OSAT. In addition, China hopes to build a memory plant in Wuhan, according a report from Nikkei.

GlobalFoundries has invested $55 million in its Essex Junction, Vt.-based fab. The company has also made an investment in new capacity to help meet sustained demand in the market. The fab, which produces chips based on RF SOI and other specialty processes, was previously owned by IBM. GlobalFoundries acquired the fab when it bought IBM’s chip unit. “I’m extremely encouraged by the investments GlobalFoundries has made and their continued commitment to growing in Vermont,” said Vermont Governor Peter Shumlin, in a statement. In the same statement, Janette Bombardier, GlobalFoundries’ senior location executive, said: “The capacity uplift has already borne fruit by increasing the overall capability of the facility.”

GlobalFoundries has demonstrated silicon success with its previously-announced 14nm finFETs. AMD has taped out multiple products using GlobalFoundries’ 14nm Low Power Plus (14LPP) process technology and is conducting validation work on 14LPP production samples. The announcement represents another milestone towards reaching full production readiness of 14LPP process technology, which will reach high-volume production in 2016. The company’s 14LPP finFET is ramping with production-ready yields and model-to-hardware correlation at its Fab 8 facility in New York. In a statement, Mike Cadigan, senior vice president of product management at GlobalFoundries, said: “Through our close design-technology partnership with AMD, we can help them deliver products with a performance boost over 28nm technology, while maintaining a superior power footprint and providing a true cost advantage due to significant area scaling.”

Martin Anstice, president and chief executive of Lam Research, and Dave Hemker, senior vice president and chief technology officer at Lam, recently joined U.S. President Barack Obama, government officials, and business leaders for the President’s climate forum in Washington, D.C. on Oct. 19, 2015. Lam’s executives, along with representatives from major companies including Berkshire Hathaway Energy, Hershey’s, Intel, Johnson & Johnson, and PG&E, participated in a roundtable discussion with the President.

As reported, Lam Research recently moved to acquire KLA-Tencor. Meanwhile, KLA-Tencor announced that its board of directors has declared a quarterly cash dividend.

Applied Materials announced the appointment of Eric Chen to serve on its board of directors. Chen has also been appointed to serve as a member of the strategy committee of the board. Chen is founder and chief executive of BaseBit Technologies. From 2008 to 2015, he served as a managing director of Silver Lake.

Intel Capital announced new investments totaling more than $22 million in 10 startups. Separately, Interlude, a company that is pioneering a new kind of video that responds to a person’s emotions and interests, announced that Samsung Ventures has made a strategic investment in the company.

China’s Montage Technology Group has revised its bid to acquire Pericom. Montage believes that its $18.50 per share cash offer is superior to Diodes, which is also bidding to acquire Pericom. However, Pericom announced that its board is urging shareholders to vote for the merger agreement with Diodes.

FEI announced a definitive agreement to acquire DCG for $160 million. DCG is a supplier of electrical fault characterization, localization and editing equipment.

While conventional TFT LCD displays are trending towards commoditization and suffering from declining prices and margins, China is quickly adding capacity in all flat-panel display (FPD) manufacturing segments. Supported by financial incentives from local governments, Chinese TFT capacity is projected to grow 40% per year between 2010 and 2018. In 2010, China accounted for just 4% of total TFT capacity. However by 2018, China is forecast to become the largest FPD-producing region in the world, accounting for 35% of the global market, according to IHS Inc.

According to Strategy Analytics, China’s smartphone shipments grew 0% in Q3 2015. “China was once again lower than the global average for the third quarter in a row since 2010, due to increasing penetration maturity and an unfavorable economic climate. Huawei outperformed and took the No. 1 position, tied with Xiaomi. Other rising brands–like Vivo and Meizu–continue to harm established local rivals such as Lenovo, Coolpad, as well as Samsung,” according to the firm.

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