Week In Review: Manufacturing, Test

Semicon recap
The virtual version of Semicon West took place this week. Virtual events have their places. It’s no substitute for an in-person event.

Nonetheless, the virtual version of Semicon West is still a place to get an update on the latest equipment, test and packaging technologies. It is also interesting to visit the virtual booths. It’s a fast way to meet people. I chatted with a dozen or more companies.

Here’s a recap of Day 1 and 2 as well as Day 3.

There were also several other announcements at and around the show. For example, ASE has joined the Apple Supplier Clean Energy Program. ASE is supportive of industry efforts to advance the use of clean energy within the supply chain and join the Apple Supplier Clean Energy Program. This program is focused on transitioning suppliers to clean, renewable energy. Meanwhile, Apple this week unveiled its plan to become carbon neutral across its entire business, manufacturing supply chain, and product life cycle by 2030.

Coventor, a Lam Research Company, announced the availability of CoventorMP 1.3 – the newest version of its MEMS design automation platform. CoventorMP 1.3 addresses the need to design complex MEMS devices in consumer, automotive, aerospace, industrial and IoT applications. In addition, Lam released its sixth annual corporate social responsibility (CSR) report, which provides an update on the company’s progress in CSR for 2019.

CyberOptics reported sales of $16.0 million for the second quarter of 2020 ended June 30, an increase of 6% from $15.0 million in the second quarter of 2019. Net income for the second quarter of 2020 was $1.6 million, or $0.22 per diluted share, up from $464,000 or $0.06 per diluted share in the year-earlier period.

EV Group has completed the construction of its new Cleanroom V building at its corporate headquarters in Austria. The new building nearly doubles the cleanroom capacity at EVG’s headquarters, and will be used for product and process development, equipment demonstrations, prototyping and pilot-line production services. The Cleanroom V building, which is part of a 30 million Euro investment announced last year, will officially open in August.

KLA rolled out the eSL10 e-beam patterned-wafer defect inspection system. The new system is designed to accelerate the time-to-market for high-performance logic and memory chips. The system detects defects that cannot be routinely captured by optical or other e-beam defect inspection platforms. “With a single, high current-density electron beam, the eSL10 system has raised e-beam inspection performance to a new level,” said Amir Azordegan, general manager of the e-beam division at KLA. “Before now, e-beam inspection systems have offered either sensitivity or speed, severely limiting practical application. Our talented engineering team has taken an entirely new approach to e-beam architecture and algorithms, designing a system that can solve problems not addressed by existing tools. Today KLA is putting e-beam inspection on the list of equipment critical for leading-edge device manufacturing.”

SEMI presented its latest fab tool forecast. Global sales of semiconductor manufacturing equipment by original equipment manufacturers are projected to increase by 6% to $63.2 billion in 2020, compared to $59.6 billion in 2019, according to SEMI. In 2021, the equipment market is expected to reach a record high revenue of $70 billion, according to SEMI.

North America-based manufacturers of semiconductor equipment posted $2.32 billion in billings worldwide in June 2020, according to SEMI. The billings figure is 1.1% lower than the final May 2020 level of $2.34 billion, and is 14.4% higher than the June 2019 billings level of $2.03 billion. “June billings of North America-based semiconductor equipment manufacturers continue to show signs of resilience as the world copes with new realities posed by COVID-19,” said Ajit Manocha, SEMI president and CEO. “The year-over-year billings increase points to strong fundamentals that are enabling the semiconductor industry to effectively navigate these challenging times.”

Chipmakers
Intel has posted mixed results in the quarter, and also disclosed delays with its 7nm technology. Still in R&D, Intel’s 7nm process will be delayed by 6 months or more.

At one time, Intel had a commanding lead in technology. Now, the troubled company, which struggled to get 10nm out the door, continues to fall behind Samsung and TSMC in the process technology race. TSMC has already begun shipping its 5nm technology, which is roughly equivalent to Intel’s 7nm. Intel is expected to ship a processor based on 7nm in late-2022, meaning the company is behind TSMC in technology by nearly two years.

Intel’s 7nm was supposed to be out by 2021. “We now expect to see initial production shipments of our first Intel-based 7nm product, a client CPU in late 2022 or early 2023. We are also focused on maintaining an annual cadence of significant product improvements independent of our process roadmap, including the holiday refresh window of 2022. In addition, we expect to see initial production shipments of our first Intel-based 7nm data center CPU design in the first half of 2023,” Intel CEO Bob Swan said in a statement.

Intel’s so-called “Ponte Vecchio,” a discrete 7nm-based GPU for high-performance computing, was planned for 2021. Based on its 3D technology, “Ponte Vecchio will now be released in late 2021 or early 2022.

“We are seeing an approximate six-month shift in our 7nm-based CPU product timing relative to prior expectations. The primary driver is the yield of our 7nm process, which based on recent data, is now trending approximately twelve months behind our internal target. We have identified a defect mode in our 7nm process that resulted in yield degradation. We’ve root-caused the issue and believe there are no fundamental roadblocks, but we have also invested in contingency plans to hedge against further schedule uncertainty. We’re mitigating the impact of the process delay on our product schedules by leveraging improvements in design methodology such as die disaggregation and advanced packaging. We have learned from the challenges in our 10nm transition and have a milestone-driven approach to ensure our product competitiveness is not impacted by our process technology roadmap,” Swan said.

Analysts lowered Intel’s capital spending outlook. “Intel’s updated CY20 capex guidance is for $15B. The original guidance (January ’20) was $17B, but the company did not update the guidance in April. We lowered our Intel capex to $16B in April, now we lower the est to $15B, or down 7% Y/Y (the $16.2B in 2019 capex included around $1.5B of prepayments),” said Krish Sankar, an analyst with Cowen, in a research note.

It wasn’t all bad news. “INTC posted good results and guidance, though the headline was a delay in the launch of 7nm CPU products, a significant concern given long delays at the 10nm node. However, the new INTC is not solely focused on manufacturing, and it is designing products to ramp internally or externally (or both); instead, INTC has been investing heavily in product development, which should pay off as compute demand continues to expand into large new markets,” said Weston Twigg, an analyst at KeyBanc, in a research note. “Intel is aggressively developing products to address expanding compute applications. It has also begun designing products with flexibility in mind: it can produce all, some, none, or a combination (disaggregated die) in-house or at foundries. It has a massive R&D budget, and it has been acquiring product technology at a rapid pace. With or without 7nm, Intel appears well positioned for the expanding universe of compute (AI, cloud, edge, 5G, autonomous, etc.). It could also begin to stem recent share losses as 10nm ramps; for example, it expects to gain market share in low-end notebooks as it expands its production capacity.”

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Meanwhile, on Monday (July 27), Intel reorganized its operations following delays with its 7nm technology. As a result of the 7nm delays, reports have also surfaced that Intel will outsource some of its leading-edge chip production to TSMC. ”For example, we expect Intel’s Ponte Vecchio GPU, which was originally planned to be the lead 7nm product, to be made with a GPU tile likely using TSMC’s 6nm process (with supporting tiles produced at Intel), packaged with Intel technology. In our view, Intel could ramp its planned 7nm CPU products using TSMC’s 3nm process technology in the same way, still hitting the 2022 ramp plan,” KeyBanc’s Twigg said.

Still, this has prompted a major reorganization at Intel. As part of the moves, Venkata (Murthy) Renduchintala, group president of Intel’s Technology, Systems Architecture and Client Group (TSCG) and chief engineering officer, will leave Intel on Aug. 3.

TSCG will be separated into the following teams, whose leaders will report directly to Intel CEO Swan.Intel’s Technology Development will be led by Ann Kelleher. Kelleher has been head of Intel’s manufacturing unit. She will now lead Intel’s technology development, focusing on 7nm and 5nm. Mike Mayberry, who has been leading Intel’s Technology Development, will consult and assist in the transition until his planned retirement at the end of the year.

Intel’s Manufacturing and Operations will be led by Keyvan Esfarjani. Esfarjani most recently led manufacturing for Intel’s Non-Volatile Memory Solutions Group (NSG). Meanwhile, Intel’s Design Engineering will be led in the interim by Josh Walden. Most recently, he has been leading the Intel Product Assurance and Security Group (IPAS), which will continue to report to him.

Intel’s Architecture, Software and Graphics unit will continue to be led by Raja Koduri. Intel’s Supply Chain unit will continue to be led by Randhir Thakur.

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Cadence’s millimeter-wave (mmWave) reference flow has achieved certification on UMC’s 28HPC+ process technology. With this certification, Cadence and UMC customers have access to an integrated RF design flow. The complete mmWave reference flow, based on UMC’s foundry design kit (FDK), includes a demonstration circuit with an automated circuit design, layout, signoff and verification flow. This in turn provides more seamless design in 28HPC+.

Softbank is reportedly putting Arm on the block. Now, Arm is attracting takeover interest from Nvidia, according to reports from Bloomberg and others.

Government policy
The Department of Commerce’s Bureau of Industry and Security (BIS) added to the Entity List 11 Chinese companies implicated in human rights violations and abuses in the implementation of the People’s Republic of China’s (PRC) campaign of repression, mass arbitrary detention, forced labor, involuntary collection of biometric data, and genetic analyses targeted at Muslim minority groups from the Xinjiang Uyghur Autonomous Region (XUAR).

The Consumer Technology Association (CTA) endorsed Congress on its recent spectrum policy. “Now more than ever, Americans need better broadband access. During the COVID-19 pandemic, millions have relied on the internet for remote work and school, connecting with their doctors and staying in touch with friends and loved ones. Today’s hearing marks a critical step toward long-term solutions for our nation’s growing demand for spectrum,” said Gary Shapiro, president and CEO of the CTA. “We are pleased to see bipartisan leadership on spectrum policy coming from both houses of Congress. In addition to today’s hearing in the Senate, Republican members of the House Energy and Commerce Committee recently introduced dozens of forward-thinking bills that could improve Americans’ access to wireless connectivity. We urge Congress to enact policies that expand access to spectrum and speed up infrastructure deployment to get broadband into the hands of all hardworking Americans.”

Market research
Technology industry retail sales revenue will reach $406.8 billion in 2020 in the U.S., a 2.2% decline year-over-year – as consumers struggle with economic uncertainty from the COVID-19 pandemic, according to a new report by the CTA.