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Week In Review: Manufacturing, Test

Intel CEO shakeup; TSMC CapEx; inspection; China cobalt grab.

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Chipmakers and OEMs
Intel has appointed Pat Gelsinger as its new chief executive, effective Feb. 15. Gelsinger will also join Intel’s board upon assuming the role. He will succeed Bob Swan, who will remain CEO until Feb. 15. Most recently, Gelsinger served as the CEO of VMware since 2012. He also spent 30 years at Intel, becoming the company’s first chief technology officer.

The move follows a recent push by Third Point, a hedge fund that wants Intel to explore its strategic alternatives, including a breakup of the chip giant. As reported, Intel has fallen behind TSMC and Samsung in process technology amid delays at 10nm and 7nm.

“We would expect Mr. Gelsinger to be a strong Intel CEO, bringing technology experience to the role; however, the Intel he left is not the Intel that exists today, as the company has stumbled badly with its technology and execution over the last several years. Mr. Gelsinger’s appointment would likely increase the chances that Intel will remain focused on internal manufacturing at the leading edge (refocusing on 7/5nm), which is not necessarily the best path, in our view; we would prefer to see a focus on outsourcing CPU tiles, with internal manufacturing retained for other tiles. Still, a change in leadership could spark a broader effort to improve execution and competitiveness at the company,” said Weston Twigg, an analyst at KeyBanc, in a research note.

But there are signs that Intel plans to outsource more production to the foundries. “Intel has outsourced the production of about 15-20% of its non-CPU chips, with most of the wafer starts for these products assigned to TSMC and UMC,” according to TrendForce. “While the company is planning to kick off mass production of Core i3 CPUs at TSMC’s 5nm node in 2H21, Intel’s mid-range and high-end CPUs are projected to enter mass production using TSMC’s 3nm node in 2H22.”

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TSMC reported strong quarterly results and raised its capital spending for 2021. “TSMC expects calendar year 2021 CapEx to be $25 billion to $28 billion, well above consensus of $20 billion to $22 billion. This year’s CapEx allocation is 80% advanced technologies, 10% for advanced packaging and mask making, and 10% for specialty technologies. It also includes construction for the U.S. fab,” said Krish Sankar, an analyst at Cowen, in a research note. “Our CY21 WFE (wafer fab equipment) spending forecast moves to $68 billion or +15% year-over-year (from +6%), and our initial forecast for CY22 is +3% year-over-year growth.”

UMC reported the status of its operations following abnormalities in its power supply that affected its Fabs 8A and 8CD on the afternoon of Jan. 9. “There will be no significant impact on UMC’s overall financial situation,” according to the foundry vendor.

Semiconductor shortages have hit the automotive industry, according to a report from Bloomberg. Several car makers have been impacted. On the flip side, fab tool vendors like TEL are seeing strong demand, according to Bloomberg.

Qualcomm has entered into a definitive agreement to acquire NUVIA for $1.4 billion. NUVIA is developing chips for high-performance computing environments.

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The Brazilian government plans to shut down CEITEC S.A., a state-owned semiconductor company reporting to the Ministry of Science, Technology, Innovations and Communications (MCTIC). Located in the city of Porto Alegre, CEITEC was supposed to play a role in the strategic development of Brazil’s microelectronics industry.

CEITEC has been developing a small fab and IC design centers in Brazil. But now, the government plans to shut down the entire organization. If a third party shows interest in buying the fab, it will be sold. However, there are efforts to save the organization, including lawsuits. The organization is also searching for help in the form of funding and technology.

Packaging and test
Onto Innovation has announced the availability of its new Dragonfly G3 inspection platform for advanced packaging and specialty devices. The Dragonfly G3 platform includes a new optical system with sub-micron resolution, improving 2D defect detection capability. The system scans more than 30% faster than the previous platform.

Advantest has announced that its DC Scale XPS256 Device Power Supply (DPS) card, developed for use with the V93000 EXA Scale SoC test system, is now ramping up. Providing the industry’s first universal DPS pin capability, the XPS256 delivers high-accuracy response for a variety of data-driven applications.

Fab tools/materials
The U.S. Department of Defense (DoD) has added more Chinese companies to its Entity List, including Advanced Micro-Fabrication Equipment (AMEC), Xiaomi and others. AMEC is a supplier of etch and deposition tools. “The Department is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities,” according to the DoD.

China has strengthened relations with the Democratic Republic of the Congo (DRC) through debt relief. The main goal is to gain a stronger foothold in the cobalt market. “No other country in the world by far has as sizable cobalt resources as the DRC. According to USGS, the country had over 51% of global reserves in 2019,” said Ying Lu of Roskill, a research firm. “However, a stronger Sino-Congolese partnership and China’s increasing control of copper and cobalt resources could pose a threat to western market participants. Even closer ties will cause concerns about security of supply and pose problems to those in the West looking to build up self-contained localized battery supply chains.”

Advanced Energy has acquired Versatile Power, a provider of radio frequency (RF) and programmable power supplies for medical and industrial applications.

Brewer Science is celebrating 40 years in developing and manufacturing advanced materials utilized in cutting-edge devices.

Market research
Banning Chinese vendors from Western countries’ 5G deployments on the grounds of alleged equipment security concerns will have a detrimental effect on 5G rollouts, according to a report from ABI Research. “Our research shows that banning Huawei and ZTE from 5G deployments and restricting their access to silicon and semiconductor supply chains will have severe implications on economic performances. Furthermore, banning these Chinese vendors will hamper 5G and 6G R&D,” said Leo Gergs, research analyst for 5G markets at ABI Research.



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