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Week In Review: Manufacturing, Test

Intel to expand fab?; Lam results; photoacoustic microscope.

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Chipmakers
Shares of Intel fell amid lackluster results for the company, according to a report from CNBC. But Intel is also boosting its capital spending to $15.5 billion, according to the report. Here’s more on Intel from PC World.

Meanwhile, Intel is expanding its research fab in Oregon, dubbed D1X, according to a report from The Oregonian. The company is in the process of building an “enormous, third section” to the fab, according to the report.

A spokeswoman for Intel said: “In December, we announced that expansion plans were getting underway in Oregon, Ireland and Israel with multi-year projects beginning in 2019. We haven’t detailed any of the plans and we didn’t comment for this Oregonian story beyond pointing back to our December announcement.”

Fab tools
For the December quarter, Lam Research posted sales of $2.523 billion and a net income of $569 million, or $3.51 per diluted share. This compares to revenue of $2.331 billion and a net income of $533 million, or $3.23 per diluted share, for the quarter ended Sept. 23, 2018. “Lam delivered solid results in the December quarter, and concluded the 2018 calendar year with record revenue and earnings per share performance,” said Timothy Archer, Lam’s president and chief executive. Lam also announced that its board approved a $5 billion share repurchase authorization.

Commenting on Lam’s results in a research note, Weston Twigg, an analyst at KeyBanc Capital, said: “LRCX posted a moderate F2Q revenue and EPS beat, and while F3Q was guided lower, guidance was pretty close to our and the consensus estimate. We consider this a pleasant surprise, as guidance could have been worse given deteriorating semiconductor market conditions. Still, LRCX noted that it expects stronger overall demand in C1H19 over 2H19 as logic and foundry customers pursue 10nm/7nm nodes, and it doesn’t expect any meaningful recovery from memory customers this year—a bleak outlook. We’re a little more optimistic than LRCX; we think memory companies will increase spending in 2H amid likely bit supply shortages and stable pricing (based on our memory supply forecast); either way, it’s likely just a matter of timing, as LRCX maintains a robust market position among memory customers.”

ASML posted its results for the quarter. “Our fourth-quarter sales came in above expectations to wrap up a record 2018 in terms of sales and profitability. During Q4, we received five EUV orders. We have customer demand for 30 EUV systems in 2019 and these shipments will include the first volume production systems to DRAM memory customers. We expect that chips produced on our EUV scanners will start to become available to consumers and enterprises in 2019,” said ASML President and Chief Executive Officer Peter Wennink.

Nikon, ASML and Carl Zeiss have signed a memorandum of understanding relating to a settlement of all legal proceedings over patents for lithography equipment and digital cameras. The three companies expect to execute a definitive settlement and cross-license agreement and dismiss all legal proceedings between the parties in February of 2019. The terms of the memorandum include a payment to Nikon by ASML and Zeiss of a total of 150 million euros. Furthermore, the cross-license agreement contemplated by the memorandum includes mutual royalty payments of 0.8% over the sales of immersion lithography systems for 10 years from the signature date of the parties’ definitive agreement.

Test
Advantest has announced its newest photoacoustic microscope. The system, dubbed the Hadatomo Z, visualizes blood vessels as 3D images at high speed. The new system is able to display 3D images of the vascular network by determining blood vessel structures with photoacoustic waves and dermis structures with ultrasonic waves.

Market research
North America-based manufacturers of semiconductor equipment posted $2.11 billion in billings worldwide in December of 2018, according to SEMI. The billings figure is 8.5% higher than the final November 2018 level of $1.94 billion, and is 12.1% lower than the December 2017 billings level of $2.40 billion. “December billings of North American equipment manufacturers ended 2018 on a positive note,” said Ajit Manocha, president and chief of SEMI. “Spending for logic and foundry offset the decline in memory investments for the month.”

2019 is expected to be a challenging, if not confusing, year for the semiconductor and fab equipment industries. So, to get a handle on what’s ahead, I’ve assembled chip and equipment forecasts from various research firms. Here’s what they are saying.



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