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Week In Review: Manufacturing, Test

Next takeover targets; 3D NAND tool growth; fab spending.

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Chipmakers
Earlier this year, the semiconductor industry saw little merger and acquisition activity. More recently, though, there has been a flurry of deals. In July, ADI moved to acquire Maxim. Then, Nvidia announced plans to acquire Arm for $40 billion, followed by AMD’s proposed move to buy Xilinx for $35 billion. Not to be outdone, Marvell has announced plans to buy Inphi.

Companies are buying others for two reasons. “1) Given maturity within the semiconductor universe, companies are increasingly focused on pursuing long-tail secular growth opportunities within cloud/data center, IoT/edge computing, and automotive; and (2) Scale, as companies with greater scale are able to invest more in R&D spending, and with greater scale, these companies also tend to be the most profitable within the sector,” according to KeyBanc analysts Weston Twigg, John Vinh and John Kim in a research note.

So who are the next takeover targets? “Our favorite consolidators and scale plays include: AVGO, INTC, MCHP, NXPI, QCOM, and SWKS,” according to KeyBanc. “MCHP, MRVL and SYNA are our favorite names that we believe could be consolidated. We also believe AMBA, ON, SIMO, and SLAB are potential take-out candidates.”

The deals that make the most sense to the firm are: “QCOM for MRVL, NVDA/AMD for AMBA, SWKS for SLAB/SYNA, NXPI for MCHP, and MCHP for ON,” according to the firm.

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GlobalFoundries and Soitec have announced a multi-year supply agreement for 300mm radio frequency silicon-on-insulator (RF-SOI) wafers. The RF-SOI substrates are developed by Soitec. The driver of this wafer supply agreement is the growth of GF’s most advanced RF-SOI solutions. RF-SOI is used to develop switches and low-noise amplifiers in smartphones.

Microchip Technology announced that CEO Steve Sanghi will transition to an executive chair role effective March 1, 2021. Microchip’s current president, Ganesh Moorthy, will step into the role of president and CEO effective March 1, 2021. Moorthy will also join the board effective Jan. 4, 2021.

Allegro MicroSystems has recently closed its previously-announced initial public offering. Allegro also announced the appointment of Christine King to its board.

Fab tools
Lam Research has recognized six companies with its Supplier Excellence Awards. Click here to see the winners. Lam also announced that its board approved a $5 billion share repurchase authorization and a quarterly dividend of $1.30 per share of common stock.

PDF Solutions reported its financial results for its third quarter ended Sept. 30. Total revenues for the third quarter of 2020 were $23.1 million, compared to $21.4 million for the second quarter of 2020 and $21.9 million for the third quarter of 2019.

ASML has completed its previously-announced deal to acquire Berliner. The deal was announced in July.

Packaging
Qorvo has been selected by the U.S. government to create a heterogeneous integrated packaging RF production and prototyping center. The program will ensure that microelectronics packaging expertise is available for both U.S. defense contractors and commercial clients.

Market research
The 3D NAND equipment market, which includes etch, deposition and lithography, is expected to grow from $11 billion in 2019 to $17.5 billion by 2025, according to Yole. This industry will be driven by the etch segment, with a CAGR around 10%, and deposition, with a CAGR around 9%, between 2019 and 2025, according to the firm. “The 3D NAND manufacturing equipment market will keep growing, propelled by robust long-term NAND-bit demand and ever-increasing manufacturing complexity,” said Simone Bertolazzi, an analyst at Yole.

300mm fab investments in 2020 will grow by 13% year-over-year to eclipse the previous record high set in 2018, according to SEMI. “The SEMI 300mm Fab Outlook to 2024 shows the chip industry adding at least 38 new 300mm volume fabs from 2020 to 2024, a conservative projection that does not factor in low-probability or rumored fab projects. During the same period, per-month fab capacity will grow by about 1.8 million wafers to reach over 7 million,” according to SEMI.

Separately, worldwide silicon wafer area shipments contracted by 0.5% to 3,135 million square inches in the third quarter of 2020, compared to the second quarter of the year, according to the SEMI Silicon Manufacturers Group (SMG). But shipments registered a 6.9% increase from the 2,932 million square inches shipped a year ago, according to SEMI. “After a strong rebound in the first half of 2020, global silicon wafer shipments in the third quarter were flat to the previous quarter,” said Neil Weaver, chairman of SEMI SMG and vice president of product development and applications engineering at Shin Etsu Handotai America.



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