Week In Review: Manufacturing, Test

Trade
As reported, the U.S. recently implemented more restrictions on U.S. chip sales to Huawei. In response, SEMI has released the following statement in response to the new export control rule changes announced by the U.S. Commerce Department:

“SEMI recognizes the role of export control measures to address threats to U.S. national security. However, we are very concerned the new export control regulations issued on August 17, 2020, by the U.S. Department of Commerce will ultimately undermine U.S. national security interests by harming the semiconductor industry in the U.S. and creating substantial uncertainty and disruption in the semiconductor supply chain. On July 14, in public comments on the May 15 regulations, SEMI cautioned that those relatively narrow actions created unique disincentives to purchase U.S.-origin semiconductor equipment and design software and had already resulted in $17 million lost sales of U.S-origin items to firms unrelated to Huawei.

“Commerce’s decision to significantly expand these unilateral restrictions will likely lead to more lost sales, eroding the customer base for U.S-origin items. The new restrictions will also fuel a perception that the supply of U.S. technology is unreliable and lead non-U.S. customers to call for the design-out of U.S. technology. Meanwhile, these actions further incentivize efforts to supplant these U.S. technologies.

“SEMI respectfully requests Commerce immediately extend to 120 days the savings clause for items in production before August 17, ensure predictable and timely license decisions for all items and significant flexibility for licenses unrelated to 5G items. We also urge the administration to pursue policies with fewer unintended consequences and damage to U.S. technology leadership. Revenue from global sales is a major source of U.S. research and development (R&D) funding in these technologies; lost global revenue will lead to a decrease in R&D, undermining U.S. semiconductor innovation and thereby harming national security.”

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Meanwhile, the U.S. Department of Commerce’s actions have impacted several companies. “At a conference, Micron provided an update regarding its Huawei business, suggesting that shipments to Huawei will likely have to stop after September 14th. We believe Micron had been selling memory products to Huawei under a temporary license; this license is likely no longer valid under new Department of Commerce rules, and Micron would presumably need a new license to ship to Huawei after September 14th (unlikely, in our view). We believe Huawei is currently a 7-9% customer for Micron, and the new restrictions could lend risk to its F1Q (November) and F2Q (February) revenue as products produced for Huawei will likely need to be reallocated to other customers. Micron views any Huawei-related risk as short term, noting that it is well-positioned with other smartphone makers,” said Weston Twigg, an analyst at KeyBanc, in a research note.

Chipmakers
At the virtual TSMC Technology Symposium, the silicon foundry giant showcased its latest technologies. Many of the technologies, such as 5nm, 4nm and 3nm, were announced in prior events. TSMC did announce a new low-power 12nm technology. In addition, TSMC introduced 3DFabric, an umbrella of the company’s portfolio of IC packaging technologies.

One analyst, who attended the virtual event, had these observations. “With the disclosure of an aggressive expansion plan of fab capacity, it seems that TSMC is fully confident of high demand for 5nm and 3nm,” said Samuel Wang, an analyst at Gartner. “3nm using a finFET transistor structure is on schedule for risk production in late 2021 with mass production in 2H 2022.”

Demand is also high for mature processes. “To ease the bottleneck of 200mm tight wafer supply, apparently TSMC choose to ask customers to move from 200mm to 300mm fabs, rather than expanding their 200mm capacity,” Wang said.

Packaging is also a key for TSMC. “To enable a wider adoption of heterogenous advanced 3D packaging involving chiplets and interconnects, TSMC recognized the importance to have OIP partners’ support in establishing the ecosystem,” he added.

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Kioxia, the NAND flash spinoff from Toshiba, has filed for an initial public offering in Japan, according to a report from Bloomberg.

Arm will keep its IoT Platform and Data units as independent businesses, according to a report from Bloomberg. That’s a reversal of its previous plan.

OmniVision has announced the OS02G10 security image sensor, which is designed for mainstream, high-volume security cameras requiring 1080p resolution and low-light pixel performance. The OS02G10 offers best-in-class low-light captures via a 2.8-micron pixel built on the OmniPixel 3-HS architecture.

Fab tools and materials
proteanTecs, a developer of deep data solutions, has announced the closing of its growth equity financing round of $45 million. The round was led by Koch Disruptive Technologies (KDT) and joined by Valor Equity Partners and Atreides Management, as well as existing investors. The investment will be used to accelerate proteanTecs’ market penetration and scale its business operations to meet growing demand.

Lam Research has approved a $0.15 or 13% increase in its quarterly dividend from $1.15 to $1.30 per share of common stock. This increase is consistent with the intent for disciplined annual dividend growth.

The U.S. Department of Energy announced $20 million for basic research aimed at ensuring a stable U.S. supply of rare earth elements.

Here’s the latest from Roskill: “Recent Yangzte flooding in southern China is serious and affecting many metal industries including rare earth productions.” The research firm also drilled down into the reasons behind the recent rapid copper price recovery.

Market research
Foundry revenues are projected to grow by 14% in the third quarter, according to TrendForce. The research firm also released its foundry rankings in terms of sales.

The worldwide smartphone market is forecast to decline 9.5% year over year in 2020 with shipments totaling 1.2 billion units, according to the International Data Corp. But a strong 5G push is expected to bring the market back to growth in 2021, according to IDC.

5G is gaining steam, that is, based on the number of base station deployments in the market. China built 130,000 5G base stations in 2019, with plans to install 500,000 more in 2020, according to Handel Jones, chief executive of IBS. By 2024, China’s goal is to deploy 6 million systems, Jones said. “South Korea had about 80,000 5G base stations installed by the end of 2019 and it is expected that another 120,000 will be installed in 2020,” Jones said. “U.S. and others had about 20,000 5G base stations installed at the end of 2019 and another 50,000 expected to be installed in 2020.”

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As reported, demand is increasing for power amplifier chips and other RF devices for 5G base stations. Many of today’s power amps for 5G base stations are based on RF gallium nitride (GaN) using silicon carbide (SiC) substrates. Several vendors are working on competitive silicon substrates for RF GaN or GaN-on-silicon.

“GaN-on-silicon substrates provide a low-cost GaN device solution even though the high-power performance is not as good as that of GaN-on-SiC. But it can be used for lower or medium power applications or TRX circuits in base stations or even in 5G handsets in the future. Its cost can be very comparable to GaAs or even LDMOS when the volume is high enough,” said Barry Lin, CTO of Wavetek, a III-V foundry that is part of UMC. “Due to the high-volume applications of GaN-on-silicon power technology, a lot of companies entered into the development in the past decade and this benefits the development of GaN-on-silicon RF. In the near future, we may see high-volume applications based on GaN-on-silicon RF in the handset power amplifier area, which was an unthinkable application in the past.”