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Week In Review: Manufacturing, Test

TSMC raises CapEx; rare earth IPO; China’s rare earth quotas.

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Chipmakers
TSMC posted mixed results in the quarter, although the news was generally positive. The foundry giant raised its capital spending plans. “Our second quarter business was sequentially flat, as the continued 5G infrastructure deployment and HPC-related product launches offset weaknesses in other platforms,” said Wendell Huang, vice president and CFO at TSMC. “Moving into third quarter 2020, we expect our business to be supported by strong demand for our industry-leading 5nm and 7nm technologies, driven by 5G smartphones, HPC and IoT-related applications.”

“TSMC raised its 2020 industry outlook (ex-memory) to flat to slightly up vs. prior 1Q20 guidance of flat to slightly down, due to improving HPC demand and 5G deployment,” said Weston Twigg, an analyst at KeyBanc, in a research note. “It raised its 2020 capex to $16B-$17B from $15B-$16B to support a strong 5nm ramp, led by demand from 5G and HPC customers. TSMC expects to grow revenue above 20% in 2020, well above the industry level. Reported 2Q revenue of $10.4B was slightly above the consensus estimate of $10.3B and in line with the high-end of prior guidance of $10.4B, driven by strong HPC demand and ramping 5G deployment. 3Q guidance of $11.2B-$11.5B (up 9.3% q/q at the midpoint) was higher than the consensus estimate of $10.7B, with weaker automotive and IoT offset by strong HPC and 5G demand.”

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Faraday Technology has launched its next-generation IoT SoC development platform, called Ariel, which is built on UMC’s 40uLP logic process combined with Infineon’s SONOS eFlash technology. Compared with its predecessor, the 55nm Uranus+ platform, the Ariel platform demonstrates a 35% reduction in operating power, driving ever-lower power consumption levels in SoC designs for use in AIoT, IIoT, smart grid, wearable, and portable devices.

Taiwan-based financial management company Oak Stone reported that SMIC soared over 200% during its Shanghai debut after a stock offering that is set to be China’s biggest in a decade.

China’s Tacoma (Nanjing) Semiconductor Technology, a chip hopeful, will undergo compulsory liquidation and bankruptcy, according to reports.

STMicroelectronics has acquired the share capital of ultrawide-band specialist BeSpoon and of the cellular IoT connectivity assets of Riot Micro.

Spin Memory, a developer of MRAM technologies, has announced an extension of its Series B funding round, having received additional investment from all major investors. The funding includes recent investors, Arm, Applied Ventures and Abies Ventures as well as the company’s founding investor, Allied Minds.

The JEDEC Solid State Technology Association has announced the publication of the widely-anticipated JESD79-5 DDR5 SDRAM standard. The standard addresses demand requirements being driven by intensive cloud and enterprise data center applications, providing developers with twice the performance and much improved power efficiency.

Fab tools
ASML posted its results. The company has also agreed to acquire all shares of Berliner Glas, a privately-held manufacturer of ceramic and optical modules for lithography products. Financial details of the transaction will not be disclosed. “ASML reported June Q results that were shy of consensus but the September outlook was above. C2Q bookings of €1.1B were light, but not a surprise due to COVID-induced volatility. The management maintained FY outlook and backlog is just under €10B. Memory is expected to continue its growth into C2H20, and EUV is progressing per plan,” said Krish Sankar, an analyst at Cowen, in a research note. “There was no real change to the EUV outlook, and is still largely driven by logic, while it appears that Micron (3rd DRAM customer) placed an order for EUV. We model 47 units in CY21, of which 27 to be the 3400C at €130M ASP and 20 units of the 3600D product at €150M ASP.”

The SEMI Foundation has announced the appointment of Katy Crist, director of marketing and communications at TEL, to the SEMI Foundation Board of Trustees. Crist currently co-chairs the SEMI Workforce Development/Diversity & Inclusion Council.

Materials
MP Materials, owner and operator of Mountain Pass, the only rare earth mining and processing site of scale in North America, announced a definitive agreement to merge with Fortress Value Acquisition. MP Materials will also go public in a $1.47 billion deal, according to a report from Reuters.

More rare earth news: “The Chinese Ministry of Industry & Information Technology (MIIT) and Ministry of Natural Resources (MNR) have released the first batch of smelting quota for rare earth production this year, totaling 63,500t REO split between six state-owned enterprises. The H1 2020 quota represents an increase of 10.4% YoY, though the 2020 annual quota is likely to remain unchanged, with the H1 2020 quota forming exactly half of the 2019 annual volume,” according to David Merriman, an analyst at Roskill.



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