Week In Review: Manufacturing, Test

Market research
VLSI Research has raised its forecast for semiconductors and fab equipment in 2020. In its previous forecast, VLSI Research projected that the equipment market would reach $84.8 billion in 2020, up 10.1% over 2019.

Now, in its latest forecast (See page 2), the equipment market is projected to hit $89.8 billion in 2020, up 16.6%. “The equipment business is booming,” said Risto Puhakka, president of VLSI Research. “We expected to see the market to slow in the fourth quarter. It’s not slowing. For quarter-over-quarter, we originally projected minus 8% in the fourth quarter. Now, it’s looking like plus 2%. That is enough to swing it over to positive growth big time. The growth is in foundry and memory. Korea is coming back real strong right now.”

In 2021, VLSI Research predicts that the equipment market will increase by 5.8%. The research firm also expects the semiconductor market to grow by 8.2% in 2020 and 7.9% in 2021.

Others are also bullish. “Semiconductor equipment demand will likely be lumpy, but strong, for several years,” said Weston Twigg, an analyst at KeyBanc, in a research note. “We believe the equipment industry is still in the early innings of a multiyear growth phase, and we forecast semiconductor capex growth of 11% in 2020, 8% in 2021, and 11% in 2022, though we anticipate demand lumpiness. We believe Samsung has accelerated its NAND capex through 2H, which will likely carry through 1H21 before dropping off; it will likely accelerate its DRAM capex in 1H21 and its EUV-based foundry capex through 2021. MU, SK Hynix, WDC, and Kioxia remain relatively conservative this year, but will likely expand capex in 2021-22 amid a predicted undersupply. INTC capex will likely remain muted through 2021. YMTC (Chinese NAND) is expected to remain aggressive through 2022. Altogether, we anticipate capex stabilization in 1H21, with strengthening capex heading into 2022.”

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IC Insights has released its top-15 semiconductor supplier rankings in terms of sales for 2020. Intel is still the leader. There are expected to be two new entrants into the top-15 semiconductor sales ranking for this year—MediaTek and AMD, according to IC Insights.

Citing the shift towards 5G, the global smartphone market is expected to return to growth during the holiday quarter this year, according to IDC. Smartphone shipments are forecast to grow 2.4% in the fourth quarter, followed by 4.4% year-over-year growth in 2021, according to IDC.

Chipmakers and OEMs
Bob Swan, Intel’s chief executive, has sent an open letter to the president-elect Joseph R. Biden Jr. In the letter, Swan urged the U.S. government to invest in U.S-based technology, manufacturing and the workforce. As reported, the U.S. is falling behind in several key chip manufacturing sectors.

“Your planned investment in American-made goods is critical to U.S. innovation and technology leadership. According to the Semiconductor Industry Association, the U.S. accounts for just 12% of global semiconductor production capacity, with more than 80% taking place in Asia. Rising costs and foreign government subsidies to national champions are a significant disadvantage for U.S. semiconductor companies that make substantial capital investments domestically. A national manufacturing strategy, including investment by the U.S. government in the domestic semiconductor industry, is critical to ensure American companies compete on a level playing field and lead the next generation of innovative technology,” Swan said in the letter.

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Faraday Technology, an ASIC design service and IP provider, said that its memory compilers based on UMC’s 28nm embedded High Voltage (eHV) process technology have been used by major mobile OLED driver IC customers. This IP solution brings power, performance and area advantages to display driver chips.

STMicroelectronics and China’s YTO Group have announced an agreement to establish a joint laboratory in YTO’s Research Institute of Intelligence and Information in Luoyang, Henan province. The lab will focus on the research and development of electronic solutions for engine, vehicle, and agricultural controls in tractors.

Ten members of the Association of Southeast Asian Nations (ASEAN), along with China, Japan, South Korea, Australia and New Zealand, recently signed a Regional Comprehensive Economic Partnership (RCEP) agreement, according to Roskill, a research firm. What does it all mean? Click here for some analysis.

The Philippine Board of Investments (BOI) has launched a new campaign, which aims to attract investment to the Philippines. The Philippines is a manufacturing base in electronics, automotive, aerospace and IT.

Fab tools
Nikon plans to reduce about 2,000 employees, or 10% of its total workforce, according to a report from Nikkei. The move is in response to a slowdown in its camera and semiconductor equipment businesses.

In a blog, Lam Research talks about semiconductors and how that relates to financial technology, or FinTech.

Onto Innovation has announced a $100 million share repurchase authorization. This authorization replaces the remaining balance of $28 million from the prior repurchase authorization.

Drew Nelson, founder and CEO of IQE, plans to step aside from his current role once a successor has been found. IQE also provided a trading update for its fiscal year.