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Week In Review: Manufacturing, Test

Self-cleaning etchers; 6nm vs. 5nm; On’s Fishkill fab plans.

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Fab tools and test
Lam Research has developed a new self-maintaining or self-cleaning chamber for its etch tools. With the technology, Lam announced a new industry benchmark has been set for productivity in etch processing using its self-maintaining equipment.

Etch process modules are typically cleaned weekly or monthly. Recently, Lam and a chipmaker reached the milestone of going 365 days without the need for a maintenance cleaning operation. “As demonstrated by this new industry benchmark, self-maintaining equipment enables enhanced efficiency with less human intervention,” said Vahid Vahedi, senior vice president and general manager of the Etch product group at Lam.

Analysts were impressed. “(The) new self-cleaning chamber could be a significant product. LRCX has developed a new self-cleaning chamber option for its etch tools, and it announced that one chamber just ran for a year with no maintenance cleaning. This is a big deal, and it could support further share gains and SAM expansion as memory demand resumes,” said Weston Twigg, an analyst at KeyBanc Capital Markets.

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For the March 2019 quarter, Lam reported sales of $2.439 billion and a net income of $547 million, or $3.47 per diluted share on a U.S. GAAP basis. Lam beat Wall Street’s forecast for the quarter with a better than expected outlook. “LRCX continues to execute well even as its core 3D NAND customers struggle through overcapacity and soft pricing. LRCX is benefiting from increased services revenue due to rapid installed base growth over the last two years as well as strong upgrade business as memory customers perform node transitions in lieu of new capacity,” KeyBanc’s Twigg said. “Full-year outlook mostly unchanged. LRCX noted that foundry may be tracking slightly stronger and DRAM slightly weaker than it expected last quarter, but for the most part, its outlook is unchanged. It expects foundry/logic to grow in 2019 and to be stronger in 1H over 2H, and it doesn’t anticipate a recovery from memory customers this year. It still projects overall 2019 fab equipment demand down mid- to high teens (we model -15%).”

Photronics has celebrated the grand opening of two new mask manufacturing facilities in China. One facility is geared towards masks for ICs, while the other is masks for flat panel displays (FPDs). Formal grand opening ceremonies were held on April 23 in Xiamen and April 25 in Hefei.

Advantest reported its consolidated results for the year. It has also moved its cloud test unit into the parent company.

Chipmakers
Here’s more on 5nm and 6nm process battle at two foundry vendors—Samsung and TSMC. Not long ago, TSMC announced delivery of a complete version of its 5nm design infrastructure. Last week, Samsung announced the completion of its 5nm process with 6nm technology in the works.

Then, at its annual event, TSMC officially rolled out a 6nm process and a new version of 5nm. Both 6nm and 5nm from Samsung and TSMC are based on finFET transistor technologies. “(TSMC’s) 5nm technology, which is expected to use EUV lithography extensively, entered risk production in 1Q, and volume production is expected in 1H20. TSMC touted its advantages, and it expects most 7nm customers to migrate to 5nm, though the initial ramp could be slow due to soft demand for high-end smartphones as well as more careful ramp management. This is expected to be a large and long-lived node,” KeyBanc’s Twigg said.

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United Microelectronics Corp. (UMC) has reported its results for the first quarter of 2019. “Although overall wafer demand declined during the first quarter, we observed stable wafer shipments from the wireless communications segment, solidified by smartphone related components such as display, RF, application processor and baseband modem,” said Jason Wang, co-president of UMC. “Entering the second quarter of 2019, UMC will sustain its energy on its continuing transformation, which will allow us to best take advantage of improving wafer demand within wired and wireless communication segments, with smartphones, networking, and display related products currently seeing better than expected conditions.”

Earlier this week, ON Semiconductor entered into a definitive agreement to acquire GlobalFoundries’ 300mm fab located in East Fishkill, N.Y. The total consideration for the acquisition is $430 million, of which $100 million has been paid at signing of the definitive agreement, and $330 million will be paid at the end of 2022, after which ON will gain full operational control of the fab, and the site’s employees will transition to ON. “With most of the company’s capacity on 200mm, ON should begin to see cost and margin benefits as it begins to (add) capacity to the Fishkill fab in 2020,” said John Vinh, an analyst at KeyBanc, in a research note. “Additionally, management expects to achieve $1B capex savings over the next several years through this acquisition as building a similar facility would cost ~$2B, while the total investment for Fishkill would only cost $700M, including the $430M purchase price. ON anticipates this fab will eventually expand revenue capacity by $2.2B to support growing demand in power and analog semiconductors over the next several years, and anticipates reaching 85%+ utilization in five years.”

SK Hynix posted its results. The company also plans to ramp up its 96-Layer 3D NAND in the second half. Overall, though, the company is slowing the ramp of its NAND products amid a slowdown in the arena. “Considering the demand situation, the pace of the ramp-up of the new M15 Fab in Cheongju, Korea, will be slower than planned. As a result, SK Hynix’s NAND wafer input this year is expected to decrease more than 10% compared to last year,” according to the company.

Separately, SK Hynix is looking at buying part of logic chip maker MagnaChip, according to a report from Reuters.

Xilinx has entered into a definitive agreement to acquire Solarflare Communications, a provider of high-performance, low latency networking solutions.

ROHM recently announced the acquisition of a part of the diode and transistor business from Panasonic Semiconductor Solutions, a group company of Panasonic Corp. The transfer is scheduled for October 2019 with ROHM handling sales of these products to Panasonic’s current customers thereafter.

Materials
Hitachi is looking to sell a majority stake in Hitachi Chemical, according to a report from Reuters.

Market research
North America-based manufacturers of semiconductor equipment posted $1.83 billion in billings worldwide in March 2019, according to SEMI. The billings figure is 1.9% lower than the final February 2019 level of $1.87 billion, and is 24.6% lower than the March 2018 billings level of $2.43 billion.

“March billings of North American test and assembly equipment manufacturers showed modest improvement over the prior month,” said Terry Tsao, chief marketing officer of SEMI. “Despite the increase for this segment, overall billings growth expectations for North American semiconductor equipment suppliers appear to be muted for the rest of the year.”



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