Week In Review: Manufacturing, Test

Trade wars; materials merger; Magic Leap flops.


Trade wars
It’s difficult to keep up with the U.S.-China trade war. In the latest event, the U.S. Trade Representative (USTR) recently released a 25% tariff on $16 billion in imports from China. This includes 29 tariff lines that represent the heart of the semiconductor industry, according to SEMI. “SEMI, along with hundreds of companies, including Lam Research and KLA-Tencor, submitted written comments, requesting the removal of tariff lines from the proposed list. SEMI also testified on behalf of the semiconductor industry, joining more than 80 other companies, including Applied Materials, in opposing the duties before an U.S. government interagency panel in late July,” said Jay Chittooran, public policy manager at SEMI, in a blog.

Fab tools and materials
Applied Materials posted its results for its third quarter ended July 29. Compared to the third quarter of fiscal 2017, Applied grew net sales by 19% to $4.47 billion. GAAP earnings per share (EPS) grew 38% to $1.17. “While we have seen some near-term adjustments in customer spending, fiscal 2018 is on track to be another record-setting year for Applied Materials and we expect each of our major businesses to deliver strong double-digit growth,” said Gary Dickerson, president and CEO. “Our future outlook remains positive as the A.I.-Big Data era requires new breakthroughs in technology, from materials to systems, providing Applied with a great opportunity to play a larger and more valuable role in the ecosystem.”

The consolidation in the electronic materials business continues. Cabot Microelectronics, the world’s leading supplier of chemical mechanical planarization (CMP) polishing slurries and second largest CMP pads supplier, and KMG Chemicals, a provider of specialty chemicals, have entered into a definitive agreement under which Cabot Microelectronics will acquire KMG in a cash and stock transaction with a total enterprise value of approximately $1.6 billion.

SEMI has announced that all legal requirements have been met for the ESD (Electronic Systems Design) Alliance to become a SEMI Strategic Association Partner. Full integration of ESD is expected to be complete by the end of 2018. The integration will extend ESD Alliance’s global reach in the electronics manufacturing supply chain.

In a blog, Lam Research explains the art of electroplating, a manufacturing process that applies a thin layer of one metal onto another.

In a blog, Applied Materials says it is seeing an increased use of wafer-level packaging (WLP) for chips used in mobile products.

Market research
What ever happened to Magic Leap? The high-profile company recently launched its VR product. “After nearly 8 years and more than $2 billion in funding, Magic Leap finally managed to launch an actual device. Reviewers universally panned the hardware,” according to David MacQueen, an analyst with Strategy Analytics, in a blog. “So the device sits uncomfortably between the consumer and enterprise markets. The price is too high and the design too ugly to attract consumers. Yet the focus on content (rather than useful business applications) positions it outside of the enterprise market.”


TECHCET, an advisory services firm, said that the global market for consumable quartz components used in semiconductor manufacturing equipment in 2017 was over $1 billion in revenues, having grown 26% from 2016.

In 2017, lead times doubled due to the high demand. The supply-chain is still constrained for hot-work parts. The market for fabricated quartz parts in 2018 will continue to be strong, although growing at a lower rate of 9% over 2017, and with longer-term CAGRs moderating.

Kuang-Han Ke, TECHCET senior analyst, said: “Quartz supply and demand seems to have returned to a healthy balance, and the leading suppliers are working hard to differentiate their portfolios with new base material offerings.”

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