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Week In Review: Manufacturing, Test

Chip forecast; NAND shortages; GDP outlook.

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Market research
The worldwide semiconductor market is forecast to reach $409 billion in 2019, down 12.8% over 2018, according to the World Semiconductor Trade Statistics (WSTS) organization. Memory fell by 33.0% in 2019, while analog dropped 7.9% and logic declined by 4.3%, according to the WSTS.

In 2020, the IC market is expected to recover and grow by 5.9%, according to the WSTS. Optoelectronics is expected to grow the fastest in 2020, followed by logic.

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Despite a cyclically weak season, NAND flash demand is expected to be strong heading into 2020, according to TrendForce. In fact, supply is expected to remain tight with rising contract prices, according to the firm.

Amid a downturn in 2019, NAND suppliers reached a break-even point or losses last year, according to the firm. So, suppliers reduced their capital expenditures for 2020.

Today, inventories are low. Bit shipments are expected to be slightly over 30% in 2020 compared to 2019, according to the firm. “Thus, the 2020 supply and demand of NAND flash is expected to show a stronger market shortage,” according to the firm. “Therefore, contract prices of NAND flash products are expected to keep rising in 1Q20.”

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What about global GDP? After a sluggish campaign in 2019, global growth is expected to stabilize at a rate of 2.5% in 2020 before edging up to 2.7% in 2021, according to IHS Markit. Despite high levels of policy uncertainty, the probability of a recession has decreased for 2020, and now stands at one in five.

“While the global economy seems to have dodged a recession, risks remain daunting,” said IHS Markit Chief Economist Nariman Behravesh. “In the near term, the biggest threat is either an escalation of the U.S.-China trade conflict or the spark of trade conflicts in other regions, notably Europe. Premature repeal of fiscal stimuli is another potential risk to the stabilization we forecast. A return to global growth is most likely in the second half of 2020. We are watching trade and industrial production in Europe and China for the green shoots of accelerating growth.”

Chipmakers
Broadcom wants to sell its RF chip business unit, according to the Wall Street Journal. Chris Taylor, an analyst with Strategy Analytics, lists some possible suitors.

Imagination Technologies has replaced a multi-year, multi-use license agreement with Apple. The first deal, was announced in 2014, fell by the wayside in 2017. Under the new deal, Apple has access to a wide range of Imagination’s intellectual property in exchange for license fees.

Knowles has acquired the MEMS microphone ASIC design business from ams AG. The transaction includes intellectual property, rights to source ASIC wafers from multiple foundry partners, and the transfer of the ASIC design team. The purchase price of $58 million was paid from cash on hand.

Fab tools and packaging
Veeco Instruments has announced that John Kiernan was promoted to senior vice president and chief financial officer, effective Jan. 1. Kiernan, previously senior vice president of finance, chief accounting officer and treasurer, succeeds Shubham (Sam) Maheshwari, who recently announced his resignation from Veeco.

JCET has entered into a strategic business agreement with Analog Devices (ADI) under which JCET will acquire ADI’s test facility in Singapore. As part of this agreement, JCET will take on additional ADI test business in this newly acquired facility. The final transfer of ownership of the ADI Singapore test facility to JCET will be completed by May of 2021.

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