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Week In Review: Manufacturing, Test

China semi fund; memory recovery; UMC Japan fab.

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Chipmakers
China has created a new $29 billion fund to help advance its semiconductor sector, according to reports from Bloomberg and others. Here’s another report. The The U.S. and China are in the midst of a trade war. This has prompted China to accelerate its efforts to become more self-sufficient in semiconductor design and production. This includes DRAMs as well as logic/foundry.

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There are ongoing signs of a recovery in the memory market amid a major downturn in the arena. Samsung, the leader in DRAM and flash memory, posted positive results for the third quarter. In DRAM, “shipments went up to address rising demand, mainly from mobile and server applications,” according to Samsung. In NAND, “sales to data centers expanded for high-density SSD over 2TB.”

“Samsung noted improving demand in 3Q across DRAM and NAND, due to strong seasonality, inventory restocking, and general demand recovery among datacenter customers, increasing SSD adoption, and higher density/loading among server/smartphone customers,” said Weston Twigg, an analyst at KeyBanc, in a report. “It expects 4Q NAND prices to rebound, driven by positive elasticity, continued SSD adoption, and content loading in smartphones. Regarding 2020, Samsung’s early read on datacenter demand is positive, along with increasing content loading in smartphones driven by 5G.”

Samsung also guided its 2019 semiconductor capital spending budget to $19.8 billion, according to KeyBanc. “We’re skeptical of the full-year number; we’re projecting it to be moderately below guidance, with some capex likely landing in 2020. Our 2019 Samsung semiconductor capex estimate is $17.9B, and we project this to grow to $21.1B in 2020,” Twigg said. “Our revised 2019 worldwide wafer fab equipment (WFE) projection is down 10% y/y, and our 2020 projection is up 8%.”

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United Microelectronics Corp. (UMC) posted its results. Third quarter consolidated revenue was NT$37.74 billion, up 4.7% sequentially but down 4.2% year-over-year. “Utilization rate increased to 91%, bringing wafer shipments to 1.81 million 8-inch equivalent wafers. The increase in wafer demand was primarily driven by inventory restocking in the wireless communication markets, which included products such as WiFi, RF switch and power management ICs,” said Jason Wang, co-president of UMC.

On Oct. 1, UMC completed the acquisition of Mie Fujitsu Semiconductor (MIFS), the former 300mm wafer foundry joint venture between UMC and Fujitsu Semiconductor Ltd. Based in Japan, the fab has been renamed United Semiconductor Japan Co. (USJC). It is currently manufacturing 90nm, 65nm and 40nm products. UMC has launched a new Web site for the unit.

GlobalFoundries and TSMC have dismissed all litigation between them as well as those that involve any of their customers. The companies have agreed to a broad life-of-patents cross-license to each other’s worldwide existing semiconductor patents.

Infineon has expanded its line of gallium nitride (GaN) power semis. The CoolGaN 400 V device (IGT40R070D1 E8220) is tailored for premium HiFi audio systems. The CoolGaN 600 V industrial-grade device (IGLD60R190D1) is geared for low- and mid-power applications, such SMPS and telecom rectifiers.

Fab tools
KLA posted its quarterly results. The company reported GAAP net income of $347 million, or $2.16 per share, on revenues of $1.513 billion. “KLAC posted F1Q results above guidance, and it offered a robust outlook amid high leading-edge foundry demand (TSMC ramping 7/5nm). Memory demand is still relatively soft, but it offers upside in a potential recovery next year,” KeyBanc’s Twigg said.

PDF Solutions reported its financial results for its third fiscal quarter ended Sept. 30. Total revenues were $21.9 million, compared to $20.6 million for the second fiscal quarter of 2019 and $20.2 million for the third fiscal quarter of 2018.

In a blog, Ellie Yieh, corporate vice president for advanced product technology development at Applied Materials, talks about the new era of AI computing and how to enable the technology.

The Global Semiconductor Alliance (GSA) will honor James Morgan, chairman emeritus of Applied Materials, with the Dr. Morris Chang Exemplary Leadership Award at its Annual Awards Dinner on Dec. 5.

Packaging and test
National Instruments (NI) announced that Alex Davern will step down as chief executive, effective Jan. 31, 2020. The board has appointed current President and COO, Eric Starkloff, as president and CEO, effective Feb. 1, 2020. Davern will take up a teaching position at the University of Texas McCombs School of Business starting in the fall of 2020. Davern will remain on staff at NI as a strategic advisor to the CEO through May and will continue to serve on the NI board.

NI also posted third quarter sales of $340 million, down 2% year-over-year and up 2% sequentially. In Q3 2019, the value of the company’s total orders was down 5% year-over-year.

ASE reported unaudited net revenues of NT$117,557 million for the third quarter, up by 9% year-over-year and up by 30% sequentially.

Market research
Total worldwide installed capacity for MEMS and sensors fabs is forecast to grow 25% to 4.7 million wafers per month from 2018 to 2023, according to SEMI.

The LCD market is in bad shape, according to WitsView, a division of TrendForce. “Its latest survey showed that TV panel prices generally have been lower than the cash costs. Thus, panel makers’ loss of money has continually expanded. Korean, Taiwanese and Chinese panel makers all started to lower their utilization rates (UT) of TV panel products from September on, in order to improve the severely unbalanced supply and demand and stabilize the prices,” according to the firm.

Fab delays and cancellations have reduced DSCC’s display equipment spending forecast. “We have been alluding to some fab delays and cancellations in some recent articles in the DSCC Weekly Review, so in this article, we will try and quantify it. Why is this happening? This is happening because of excessive TV panel inventory in Q3’19 and Q4’19, at a time when prices are already low, manufacturers are losing money and more capacity is coming online,” according to the firm.



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