Week In Review: Manufacturing, Test

Fab tools and materials
Applied Materials is expected to remain the world’s largest semiconductor equipment supplier in terms of projected sales for 2018, according to a preliminary forecast of the rankings from VLSI Research.

Applied will have $14 billion in sales in 2018, according to the firm. Applied is the leader in terms of overall projected sales in 2018, followed in order by ASML ($12.9 billion), TEL ($11.4 billion), Lam ($10.9 billion), KLA ($4.1 billion), Advantest ($2.5 billion), Screen ($2.3 billion), Teradyne ($1.5 billion), Hitachi High-Technologies ($1.4 billion), and ASM Pacific ($1.2 billion), according to VLSI Research. The figures were shown by Andrea Lati, an analyst with VLSI Research, at SEMI’s recent Industry Strategy Symposium.

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PDF Solutions has rolled out its second generation Design-for-Inspection solution, which includes the eProbe 250. This is designed to enable early detection of defects in the semiconductor manufacturing process by placing on-chip instruments with calibrated electrical responses directly in the product wafer without any die area penalty.

Saint-Gobain has reached an agreement with private equity firm OpenGate Capital under which OpenGate will acquire Saint-Gobain’s silicon carbide division.

Ford, Huayou Cobalt, IBM, LG Chem and RCS Global have announced plans to use blockchain technology to trace and validate ethically sourced minerals. The group will begin with a pilot program focused on cobalt. Cobalt is in high demand for its use in lithium-ion batteries, which power a wide range of products, such as laptops, mobile devices and electric vehicles.

Here’s what Benchmark Mineral Intelligence says about lithium, which is used in lithium-ion batteries: “A new year for the lithium market has already begun to spark fresh concerns about oversupply.”

Chipmakers and OEMs
TSMC posted lackluster results with a gloomy forecast due to weakness in the smartphone market. As reported, Apple, one of TSMC’s big foundry customers, recently lowered its forecast. TSMC’s “1Q revenue guidance of $7.3-$7.4 billion is well below the consensus estimate of $8.05 billion, and is down roughly 22% quarter-over-quarter at the midpoint,” according to analysts Weston Twigg and John Vinh of KeyBanc Capital Markets in a research note. “CapEx is expected to be $10-$11 billion in 2019, which, at the midpoint, is above our current estimate of $10 billion and in line with the $10.5 billion spent in 2018. TSMC noted that the 1Q outlook is dampened by a weakening macro, soft mobile seasonality, and high inventory in the supply chain.”

Twigg and Vinh added: “7nm technology continues to ramp aggressively, accounting for 23% of (TSMC’s) revenue in 4Q on strong communications demand. 7nm+ is on track to ramp in 2H19. This is the first TSMC node to use EUV lithography. However, TSMC doesn’t anticipate this to be a major node, as customers will likely migrate to 5nm quickly. 5nm technology (using EUV for more layers than 7nm+) is on track to ramp in volume production in 2020, and TSMC expects this to be a very large and popular node. However, it did note that initial 5nm demand is likely to be lower than originally expected due to softening demand for high-end smartphones.”

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In 2016, Chinese DRAM maker Jinhua Integrated Circuit Co. (JHICC) broke ground on a 300mm fab in Jinjiang City in the Fujian province in southern China, at a cost of $5.65 billion. JHICC hoped to move into production with 22nm specialty DRAMs. It obtained the technology from a licensing/R&D alliance with UMC.

Then, after some legal issues, the U.S. Department of Commerce recently moved to restrict exports of equipment and software to JHICC.

Now, UMC is shifting a number of engineers that work in the DRAM program with JHICC, according to a report from Nikkei. The engineers will move to other positions within UMC. UMC, according to the report, may pull out of the deal with JHICC.

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AR vendor Niantic, the creator of Pokémon GO, Ingress Prime, and the forthcoming Harry Potter: Wizards Unite, is raising $245 million in Series C financing led by IVP and other investors. The financing brings the company’s post-round valuation to nearly $4 billion.

Market research
More bad news for Apple. In a research note, KeyBanc’s Vinh this week had this to say about the latest iPhones. “Our latest carrier survey indicates increasingly disappointing demand for both iPhone XR and XS/Max, resulting in spiking carrier store inventories m/m. While initial demand for the iPhone XS/Max had been largely stable relative to the XR, which has been disappointing since launch, our latest survey indicates XS/Max sell-through slowed dramatically in December, as inventories for both XS models in addition to the XR have increased significantly m/m to over four days, which indicates this could be one of the most disappointing phone cycles since the 6s.”

What happened to the merger and acquisition activity in the semiconductor business? “The historic flood of merger and acquisition agreements that swept through the semiconductor industry in 2015 and 2016 slowed significantly in 2017 and then eased back further in 2018, but the total value of M&A deals reached in the last year was still nearly more than twice the annual average during the first half of this decade,” according to IC Insights.