Week In Review: Manufacturing, Test

R&D
Imec and CEA-Leti have signed a memorandum of understanding under which the two R&D organizations will form a strategic partnership in the domains of artificial intelligence and quantum computing. Europe hopes to accelerate its effort in both AI and quantum computing.

Market research
TrendForce announced the ranking of top 10 fabless IC design houses worldwide based on their revenues for the third quarter of 2018. Broadcom was in first place, followed by Qualcomm and Nvidia. Qualcomm was the only one to post a slight decline in the rankings. Following Nvidia, Marvell registered the second highest revenue growth.

North America-based manufacturers of semiconductor equipment posted $2.06 billion in billings worldwide in October 2018 (three-month average basis), according to SEMI. The billings figure is 0.9% percent lower than the final September 2018 level of $2.07 billion, and is 2.0% higher than the October 2017 billings level of $2.02 billion. “October billings of North American equipment suppliers reflect near-term weakening of demand for PC, mobile phones and servers,” said Ajit Manocha, president and CEO of SEMI. “Additionally, memory manufacturers have pulled back investments in response to recent softening of memory pricing.”

On SEMI’s site, Alissa M. Fitzgerald, founder and managing member of A.M. Fitzgerald & Associates, talks about the latest MEMS and sensor trends.

Sales of automotive electronic systems are forecast to increase 7% in 2018 and 6.3% in 2019, respectively, according to IC Insights. Sales of automotive-related electronic systems are forecast to increase to $152 billion in 2018 from $142 billion in 2017, and are forecast to rise to $162 billion in 2019, according to the firm.

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After a massive expansion campaign in China’s display market, the flat-panel display (FPD) equipment market is expected to decline after an unprecedented buildup in 2017, according to IHS Markit. The FPD equipment market is forecast to fall from $20.2 billion in 2017 to $14.0 billion in 2020, declining at a compound annual rate of 11.6%, according to the firm.

Panel makers are taking a more cautious approach in capital spending “as they wait for demand to catch up to rapidly ramping capacity,” according to the firm.

“The expansion of the FPD equipment market that started in 2016 has been driven by the high equipment intensity of new flexible active-matrix organic light-emitting diode (AMOLED) display factories and the scale of Gen 10.5/11 LCD factories,” said Chase Li, senior analyst at IHS Markit. “This expansion has been further fueled by Chinese local governments, which have supported panel makers with various mechanisms, such as financing, land grants, reduced taxes, infrastructure and direct subsidies.”

Now, China’s support of Chinese display fabs is starting to distort the supply/demand balance as the new capacity begins to ramp.

China has spent millions of dollars on AMOLED factories. Yet, panel makers have not proved they can make high-quality panels at high yields and competitive costs. The glut of AMOLED panels for mobile applications is forecast to exceed 40% of the demand in terms of area in 2019, according to the firm.

“Even South Korean panel makers have pulled back from their previous plans to expand Gen 6 flexible AMOLED capacity continuously due to slower-than-expected panel demand growth,” according to the firm. “Reduced spending on AMOLED fabs for mobile applications accounts for most of the decline in equipment spending in 2018 and 2019.”