The Week In Review: Manufacturing

Qualcomm’s 10nm foundry; baseband leaders; KLA, Lam, Samsung results.


Qualcomm recently announced the new Snapdragon 820. The cell-phone chipset is based on Samsung Electronics’ new 14nm LPP (Low-Power Plus) process, the second-generation of the company’s 14nm finFET process technology. What’s next? Qualcomm is developing the Snapdragon 830. “Snapdragon 830 leaks indicate that the chip will sport 8GB of RAM, an enhanced Kryo custom architecture, and fabbed with Samsung’s 10nm process,” said Will Strauss, president of Forward Concepts, in a report.


The global cellular baseband processor market declined 12% year-over-year to reach $5.1 billion in the third quarter of 2015, according to Strategy Analytics. According to the research firm, Qualcomm, MediaTek, Samsung, Spreadtrum and HiSilicon grabbed the top-five baseband revenue share spots in Q3 2015. Qualcomm faced strong competition, but maintained its baseband market share leadership with 55% revenue share, followed by MediaTek with 23% revenue share and Samsung LSI with 7% revenue share, narrowly ahead of Spreadtrum, according to the research firm.

Sravan Kundojjala, an analyst with Strategy Analytics, said: “MediaTek’s LTE growth story continued in Q3 2015. MediaTek registered almost a five-fold year-over-year LTE baseband shipment growth on the strength of its LTE momentum in China and other emerging markets. MediaTek’s mid-range and high-end LTE chips all performed well during the quarter and featured in multiple high volume handsets from Chinese OEMs such as Xiaomi, Lenovo, Huawei, ZTE, TCL, Meizu, Oppo and others.”

Stuart Robinson, an analyst with the firm, added: “Despite drawing one hundred percent of their shipments from their in-house customer, Samsung LSI and HiSilicon both made good progress and ranked number three and four, respectively in the LTE baseband market in Q3 2015. Samsung LSI’s LTE basebands featured in flagship Galaxy S and Note series devices and mid-range Galaxy A and J series phones from Samsung Mobile while HiSilicon’s scored multiple high volume design-wins at its parent company Huawei. Strategy Analytics predicts continued baseband success for both Samsung LSI and HiSilicon on the strength of their broadening product portfolio and increased traction at in-house customer. It remains to be seen whether these companies can replicate their success outside their in-house customers.”


Samsung Electronics announced its financial results for the fourth quarter ended Dec. 31, 2015. In the quarter, Samsung saw weak demand for PC DRAM, but mobile and server DRAM were solid. NAND demand was also strong. “System LSI’s profits improved QoQ, driven by the 14nm foundry business, despite weaker seasonal demand for SoC and LSI chips,” according to Samsung.

Lam Research announced its financial results for the quarter ended Dec. 27, 2015. For the December 2015 quarter, revenue was $1.426 billion and net income was $223 million, or $1.28 per diluted share on a GAAP basis. This compares to revenue of $1.6 billion and net income of $289 million, or $1.66 per diluted share, for the quarter ended Sept. 27, 2015. “Lam’s strong December quarter concludes a historic year for Lam, headlined by the delivery of nearly $6 billion in shipments and revenue, and over six dollars in EPS,” said Martin Anstice, Lam Research’s president and chief executive.

“Lam Research reported a nice FQ2 beat, but offered very soft FQ3 guidance. Similar to ASML, Lam expects a soft March quarter as DRAM capex slips, NAND remains relatively flat, and logic/foundry demand is soft at the moment,” said Weston Twigg, an analyst with Pacific Crest Securities, in a research note. “Lam expects WFE to be roughly flat y/y in 2016 at $33 billion, plus or minus $2 billion. Lam expects memory WFE to be roughly $15 billion, plus or minus $1 billion, and down slightly y/y. Lam expects foundry/logic capex to be roughly $17 billion or $18 billion, up slightly y/y (foundry up, logic flat).”

KLA-Tencor, which is being acquired by Lam, announced operating results for its second quarter of fiscal year 2016, which ended on Dec. 31, 2015, and reported GAAP net income of $152 million and GAAP earnings per diluted share of $0.98 on revenues of $710 million. At the same time, KLA-Tencor has begun shipping its next-generation optical inspection tool. “The first GEN 5 platform has been shipped for evaluation. KLA-Tencor, and ultimately Lam Research, has a lot riding on the new GEN 5 inspection platform. The introduction should coincide with the 10nm logic and foundry ramp, and since it is the first new optical inspection platform from KLA-Tencor in years, we expect demand to be high. The company will begin taking orders for the platform this quarter, which could help drive another high order quarter in March,” Twigg added.

North America-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 0.99 in December, up from 0.96 in November, according to SEMI.

What happened to Korean foundry vendor Dongbu? The creditors for its parent company want to sell the unit, but there are calls to keep the group amid a positive performance for the foundry vendor, according to The Electronic Times of Korea

STMicroelectronics will discontinue the development of new platforms and standard products for set-top boxes and home gateways, a move that impacts 1,400 jobs.

Sony has acquired Altair Semiconductor for $212 million. Altair, an Israel-based company, develops chipsets for 4G wireless networks.

Samsung Electronics and Apple remained the top semiconductor buyers in 2015, representing 17.7% of the market, according to Gartner. Samsung Electronics and Apple together consumed $59.0 billion of semiconductors in 2015, an increase of $0.8 billion from 2014. Click here to see the rankings.

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