Week In Review: Manufacturing, Test

Chipmakers and OEMs
Several foundry vendors are building new fabs. The memory vendors, such as Samsung and SK Hynix, are also building new capacity. In another example, Taiwan DRAM supplier Nanya Technology plans to construct a new 300mm fab in the Taishan Nanlin Technology Park in New Taipei City. The plant will produce DRAMs with Nanya’s in-house developed 10nm-class process technologies and will deploy extreme ultraviolet (EUV) lithography technology, with a monthly production capacity of approximately 45,000 wafers. The investment plan will involve three phases within seven years. The company expects to break ground on the fab in late-2021. Volume production is slated for 2024. This total investment is approximately NTD 300 billion.

Taiwan’s Foxconn has scaled back its manufacturing plans in Wisconsin, and the state has renegotiated its contract with the world’s largest electronics manufacturer. The original contract negotiated in 2017 authorized $2.85 billion in tax credits to build a generation 10.5 flat-panel display plant. Now, it’s unclear what Foxconn will make in the plant. Under a contract amendment by the state, Foxconn is eligible to receive up to $80 million total in performance-based tax credits over six years if it meets employment and capital investment targets.

Intel posted its results for the quarter. “Intel on Thursday raised its annual sales outlook but fell short of analyst expectations for first-quarter data center chip sales and its second-quarter profit forecast, signaling a turbulent road ahead as the company aims to catch up to rivals with faster chips,” according to a report from Reuters.

Renesas is trying to recover after a fire hit one of its fabs last month in Japan. The company hopes to resume production soon. This week, however, Renesas had another incident in the same fab, that is, the emission of smoke from the power panel of a rail guided vehicle located on the basement of the N3 Building (300mm line) of Naka Factory. “The smoke was extinguished immediately by Renesas employees after it began,” according to the company. “Following the confirmation of the site by the fire department and maintenance of the power panel, which was the cause of the smoke, production has been resumed on the first floor and the second floor of the N3 Building. There are no impacts to the production and shipment outlook.”

Silicon Labs has entered into a definitive asset purchase agreement to sell its Infrastructure & Automotive (I&A) business to Skyworks for $2.75 billion in cash. The transaction includes Silicon Labs’ power/isolation, timing and broadcast products, intellectual property and associated employees.

Cerebras has unveiled the world’s largest AI processor. The Wafer Scale Engine 2 (WSE-2), is based on TSMC’s 7nm technology with a single chip that boasts 2.6 trillion transistors and 850,000 AI optimized cores. By comparison, the largest graphics processor unit has 54 billion transistors – 2.55 trillion fewer transistors than the WSE-2.

Fab tools
For the March 2021 quarter, Lam Research has reported revenues of $3.848 billion, and net income of $1.071 billion, or $7.41 per diluted share on a U.S. GAAP basis. This compares to revenue of $3.456 billion and net income of $869 million, or $5.96 per diluted share, for the quarter ended Dec. 27, 2020. “Lam’s growth trajectory continues with record revenue and earnings per share delivered in the March quarter,” said Tim Archer, Lam Research’s president and chief executive.

“March quarter revenue strength was driven by NAND, foundry and services (+13% Q/Q),” said Krish Sankar, an analyst at Cowen. “Foundry had record revenues in the March quarter. Given CapEx investments from TSMC (and Intel foundry in the future), we expect this to continue to grow. Services revenue grew an impressive 13% Q/Q driven by increased chamber count, customers improving productivity and some inventory stocking.”

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ASML posted strong results for the quarter. “ASML reported a big 1Q beat and offered very strong 2021 guidance amid surging demand,” said Weston Twigg, an analyst at KeyBanc, in a research note. “Consistent with its prior outlook, ASML expects EUV revenue to grow 30% in 2021, to roughly €5.8B, implying around 40 units. ASML reiterated its plans to build the capacity to manufacture 55 EUV systems in 2022 to meet customers’ expanding adoption of EUV systems. With shipments of ASML’s new NXE:3600D platform on track to begin in 2H21, the company expects EUV GM to gradually improve to reach the corporate average by the end of this year.”

TEL has been recognized as the “Most Honored Company” in the Electronics/Precision Instruments sector, in the 2021 All-Japan Executive Team Rankings, released by Institutional Investor.

In a blog, KLA talks about fabs and ways to reduce their environmental impact. “A comprehensive process control solution not only helps chip manufacturers improve yield, but also reduces scrap and rework, reducing the fab’s overall impact on the environment,” according to KLA.

SEMI has announced the appointments of Luc Van den hove, president and CEO of Imec, as chair and Paul Boudre, CEO of Soitec, as vice chair of the SEMI Europe Advisory Board. The SEMI Europe Advisory Board is the board that plays a critical role in the development and growth of Europe’s semiconductor industry.

Government policy
U.S. Senators Todd Young (R-Ind.) and Senate Majority Leader Chuck Schumer (D-N.Y.), along with Representatives Ro Khanna (D-Calif.) and Mike Gallagher (R-Wis.), have reintroduced the bipartisan Endless Frontier Act. The bill is an initiative to solidify the United States’ leadership in scientific and technological innovation through increased investments in the discovery, creation, and manufacturing of technology critical to national security and economic competitiveness. Congress must pass the bipartisan legislation before it’s enacted. Here’s some background on this and a similar bill called CHIPS.

Market research
The 5G packaging market was a modest $520 million business in 2020, according to Yole Développement. The business is expected to grow at 31% CAGR to reach $2.6 billion in 2026, according to Yole. 5G packaging includes RF modules, antennae-in-package for 5G sub-6 GHz & 5G mmW connectivity. “5G added even more complexity requiring more densification in front-end modules to enable 5G sub-6 GHz and mmWave band integration. A single die is cost-efficient for components like tuners or discrete filters. For high-end phones, SiP technology is preferred for performance efficiency,” said Santosh Kumar, an analyst at Yole.

The global pressure MEMS market fell from $1.685 billion in 2019 to $1.645 billion in 2020, according to Yole. By 2026, the market is expected to grow to $2.214 billion, according to the research firm. “Pressure sensors are widely used throughout the industry across numerous applications,” said Dimitrios Damianos, an analyst at Yole. “In the last couple of decades, automotive has been one of the main sectors to drive demand for these devices. The development of new systems in conventional internal combustion engine vehicles, as well as hybrid electric vehicles, is demanding complex control systems”.

OLED panel revenues will increase by 36% year-over-year in the first half of 2021, according to DSCC. This is due to increased panel shipments for smartphones and other products.

According to Strategy Analytics, global smartphone shipments were 340 million units in the first quarter of 2021, up 24% year-over year. This represents the highest growth since 2015. “The China smartphone market had a sensational quarter driven by 5G product success across multiple price tiers. China smartphone shipments were up +35% YoY reaching 94 million units in Q1 2021. Globally, the top five vendors combined took a 76% market share in Q1 2021, up from 71% one year ago. Chip shortages and supply side constraints did not have a significant impact in Q1 among the top 5 brands but was and will be a concern for smaller vendors over the next few quarters in our view,” said Linda Sui, an analyst at Strategy Analytics.