Week In Review: Manufacturing, Test

Chipmakers and OEMs
Taiwan specialty foundry vendor Vanguard International Semiconductor (VIS) will acquire GlobalFoundries’ Fab 3E facility in Singapore for $236 million. Fab 3E manages a monthly capacity of approximately 35,000 200mm wafers. The transaction includes buildings, facilities, and equipment, as well as IP associated with GF’s MEMS business.

VIS currently has three 200mm fabs with a monthly capacity of approximately 199,000 wafers in 2018. VIS is a listed company in Taiwan and its main shareholders include TSMC, National Development Fund and other institutional investors.

Under the terms, VIS will extend employment offers to all GF employees currently working at Fab 3E, as well as continuously provide existing customers at Fab 3E with its foundry service, including MEMS customers. GF will continue to operate the facility through the end of 2019, providing a transition period to facilitate technology transfers for VIS and existing GF customers.

“This transaction is part of our strategy to streamline our global manufacturing footprint and increase our focus in Singapore on technologies where we have clear differentiation such as RF, embedded memory and advanced analog features,” said GF CEO Tom Caulfield. “Consolidating our 200mm operations in Singapore into one campus will also help reduce our operating costs by leveraging the scale of our gigafab facility in Woodlands.”

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AMD posted its results. AMD has also entered into a seventh amendment to its wafer supply agreement with GlobalFoundries. GF continues to be a partner to AMD for 12nm and above. The amendment establishes purchase commitments and pricing at 12nm and above from 2019 to 2021. The amendment provides AMD flexibility for wafer purchases from any foundry at the 7nm node and beyond without any one-time payments or royalties.

Intel has named Robert Swan as chief executive. Swan, who has been serving as Intel’s interim CEO for seven months and as chief financial officer since 2016, is the seventh CEO in Intel’s 50-year history. Swan has also been elected to Intel’s board. Separately, Intel has made a bid to acquire Mellanox for $5.5 billion to $6 billion in cash and stock, according to various reports.

Foxconn is rethinking its plans to mass produce LCDs within a plant in Wisconsin, according to a report from Reuters. Instead, Foxconn may turn the facility into an R&D site. This is a reversal from what the Trump administration hoped to accomplish with Foxconn, that is, bringing LCD production to the U.S.

TSMC’s shares fell after it disclosed a production glitch for 16nm and 12nm chips at 14B Fab in Taiwan, according to a report from Focus Taiwan. The issue impacted more than 10,000 wafers, which was caused by a sub-standard resist material, according to reports.

United Microelectronics Corp. (UMC) has reported its results for the fourth quarter of 2018. “Utilization rate was 88%, bringing wafer shipments to 1.71 million 8-inch equivalent wafers. Despite softened wafer demand during the fourth quarter, UMC continued to maintain stable capacity utilization for 8- and mature 12-inch geometries,” said Jason Wang, co-president of UMC.

Chinese DRAM maker Jinhua Integrated Circuit Co. (JHICC) may be forced to halt its production amid legal issues with Micron, according to a report from the Financial Times. UMC licensed technology to JHICC. UMC has suspended its work with JHICC.

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Samsung posted mixed results amid a downturn in the memory market. “Samsung reported soft earnings and outlined expectations for weak memory demand in 1H19, with unclear (but likely lower) capex plans entering 2019, reflecting the consensus market view. Samsung expects memory demand to improve in 2H19, particularly as datacenter customers resume buying,” said Weston Twigg, an analyst with KeyBanc Capital Markets, in research note. “For 2019 demand, it projects high-teens percentage DRAM industry bit growth and mid-30% NAND industry bit growth, very close to our supply projections of 16.7% bit growth for DRAM and 37% bit growth for NAND.”

Twigg added: “We project Samsung’s semiconductor capex to decline meaningfully in 2019 on limited memory expansion, to US$16 billion (18 trillion KRW), down 26% year-over-year in USD and down 24% year-over-year in KRW. Samsung noted that it plans to ramp its 7nm foundry business this year, using EUV, consistent with prior commentary. For reference, we project its foundry capex to increase 34% (off a low base), its DRAM capex to decline 39%, and its NAND capex to decline 31% year-over-year. Our worldwide wafer fab equipment (WFE) projection is down 10% year-over-year.”

Fab tools and materials
ASML has acquired the assets of Mapper Lithography, a supplier of multi-beam e-beam tools for lithography applications. Mapper has been developing and shipping a multi-beam tool. However, ASML will not continue to develop Mapper’s technology, according to multiple sources. It will cease development of the technology, according to sources.

Mapper’s R&D employees will join ASML. Mapper was declared bankrupt on Dec. 28, 2018. Financial details of the asset deal are not disclosed. ASML’s HMI unit is developing a multi-beam inspection tool. This is different than Mapper’s technology.

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For the second quarter, KLA has reported GAAP net income of $369 million, or $2.42 per share, on revenues of $1.120 billion. “KLA reported excellent results for the December quarter, with shipments, revenue, and earnings per share each closing above the range of guidance in the period, capping the third consecutive year of double-digit growth for the company in calendar 2018,” commented president and chief executive Rick Wallace. Separately, KLA announced the appointment of Victor Peng to its board. Peng is president and chief executive of Xilinx.

TEL posted mixed results. It expects worldwide wafer-fab equipment (WFE) spending to fall 15% to 20% in 2019. The decline is due to memory and trade issues with China.

Screen Holdings has finalized construction of S-Cube, its new manufacturing base specifically designed for semiconductor production equipment. Work on the facility started at the site of Screen’s existing Hikone Plant since Jan. 1, 2018.

In the latest mega-merger in materials, Entegris has acquired Versum. Upon completion of the merger, Entegris will own 52.5% and Versum will own 47.5% of the combined company. The combined company will retain the Entegris name and will be headquartered in Billerica, Mass.

Packaging and test
For 2018, ASE Technology Holding’s sales were up by 28% over 2017. The revenue contribution from packaging operations, testing, EMS and others represented approximately 48%, 10%, 41% and 1%, respectively.

Here’s a sign of things to come in the packaging equipment market. Kulicke & Soffa (K&S) reported first-quarter revenue of $157.2 million with a diluted EPS of $0.11. Sales were down 26.4% from a year ago. Amid a slowdown in wire-bond and other technologies, the company currently expects net revenue in the second fiscal quarter of 2019 ending March 30, 2019 to be approximately $110 million to $130 million.

ATE giant Advantest posted strong results in the quarter, but it forecasts a slowdown in memory and logic testers in the first half of this year.

Teradyne has acquired Lemsys, a provider of test equipment for the high-power semiconductor industry.

ZEISS has rolled out a new suite of high-resolution 3D X-ray imaging solutions for failure analysis (FA) of advanced semiconductor packages, including 2.5D/3D and fan-out wafer-level packages.

Market research
Worldwide silicon wafer area shipments in 2018 increased 8% year-over-year to a record high, while 2018 worldwide silicon revenue jumped 31% during the same period, topping the $10 billion mark for the first time since 2008, reported the SEMI Silicon Manufacturers Group (SMG) in its year-end analysis of the silicon wafer industry.