Week In Review: Manufacturing, Test

Coronavirus
The coronavirus in China has been declared as a global health emergency by the World Health Organization (WHO). The situation appears to be much worse than SARS (severe acute respiratory syndrome), which hit in 2003. Several companies are taking precautionary measures to prevent widespread transmission of coronavirus. For example, ASE has devoted a Web page for the measures it is taking here. In addition, one fab tool vendor appears to be taking a more conservative view of its outlook due to the coronavirus (See below).

The coronavirus could impact the display industry. “Wuhan is a city of 11 million people and was the first city quarantined. Surrounding cities are also now quarantined resulting in a total of 50M unable to travel. Wuhan is also quickly becoming a major hub for display manufacturing with LCD and OLED fabs already in production and a few more starting production in 2020. In 2020, Wuhan is expected to account for 6% of worldwide mobile OLED capacity, 3% of mobile LCD capacity and 2% of LCD TV capacity,” according to a blog from DSCC. In 2021, these figures should rise to 9% of mobile OLED capacity and 4% of LCD TV capacity, according to DSCC.

According to a report from AppleInsider, one analyst sees five potential risks to Apple in China because of the coronavirus. It is also impacting South Korean manufacturers’ production activities in China, according to a report from BusinessKorea. Meanwhile, TSMC and UMC say their production in China remains on track, according to DigiTimes.

With the WHO’s declaration of the coronavirus as a global health emergency, SEMI will no longer host SEMICON Korea 2020 at COEX in Seoul, South Korea, Feb. 5-7 as originally scheduled.

Packaging and test
Brewer Science has introduced its first materials for permanent bonding applications. The material, dubbed PermaSOL, is designed to address device- and wafer-level packaging requirements. The new material addresses a range of needs identified for permanent bonding applications, which include low-temperature bonding, extreme chemical resistance and UV or thermal curable bonding processes.

National Instruments (NI) has announced that Eric Starkloff, the current president and chief operating officer, has been appointed to the board. This will come into effect on Feb. 1, when he assumes the role of NI’s president and chief executive. In addition, Gayla Delly, the previous chief executive of Benchmark Electronics, has been appointed to NI’s board, effective March 1. Delly currently serves on the boards of Broadcom and Flowserve.

Fab tools
CyberOptics has introduced an in-line particle sensor that identifies, monitors and enables troubleshooting of particles in fab processes down to 0.1µm.

The technology, called the In-Line Particle Sensor (IPS), includes the company’s CyberSpectrum software for semiconductor tool set-up and equipment diagnostics. The IPS detects particles in gas and vacuum lines in semiconductor process equipment.

“We have incorporated our proprietary airborne particle sensing technology into an in-line form factor,” said Subodh Kulkarni, president and CEO of CyberOptics. “The IPS delivers the same benefits fabs worldwide have recognized with this proven technology. It can significantly save time and expense while improving yields and productivity.”

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For the December 2019 quarter, fab tool vendor Lam Research reported sales of $2.584 billion and a net income of $515 million, or $3.43 per diluted share on a U.S. GAAP basis. This compares to revenue of $2.166 billion and a net income of $466 million, or $3.09 per diluted share, for the quarter ended Sept. 29, 2019.

“LRCX (Lam Research) noted ongoing strength from logic and foundry customers and improving demand from NAND customers as it posted a F2Q beat and offered F3Q guidance well above consensus (it also noted guidance would have been stronger, but it was trimmed to reflect coronavirus risk),” said Weston Twigg, an analyst at KeyBanc, in a report. “LRCX expects wafer fab equipment demand to be in the mid- to high-$50B range, well above our current estimate of $54B. Based on LRCX estimates, this implies around 22-23% equipment demand growth in 2020, which LRCX would likely outgrow. LRCX noted that logic and foundry demand should stay strong, and will likely be more 1H-weighted, while NAND demand is improving and is not expected to decline in 2H. LRCX has not seen a material improvement in DRAM demand, but it anticipates this to pick up later in the year.”

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Amtech has announced the sale of its shares of Tempress Group Holding for nominal consideration to Stichting Continuiteit Tempress, an independent foundation that was formed under Dutch law.

Chipmakers
Cree has announced revenue of $239.9 million for its second quarter of fiscal 2020, ended Dec. 29, 2019. This represents a 14% decrease compared to revenue of $280.5 million reported for the second quarter of fiscal 2019, and a 1% decrease compared to the first quarter of fiscal 2020. “We continue to see growing momentum for silicon carbide as demonstrated by our robust opportunity pipeline and recent customer wins,” said Cree CEO Gregg Lowe.

Cree has also announced that Glenda Dorchak has been appointed to the board. Dorchak has served as a director of Mellanox. Additionally, she serves as a director of Viavi, ANSYS and GlobalFoundries.

Western Digital has developed its fifth-generation 3D NAND technology. The technology, called BiCS5, was developed jointly with its partner, Kioxia. The 112-layer device offers up to 40% more bits of storage capacity per wafer compared to Western Digital’s 96-layer BiCS4 technology. Western Digital has commenced initial production of BiCS5 TLC in a 512-gigabit chip.

Kioxia, the NAND spinoff from Toshiba, has appointed Nobuo Hayasaka as president and chief executive. Hayasaka has served as acting president and chief executive since July of 2019, during former president and CEO Yasuo Naruke’s medical leave of absence. Naruke has stepped down as president, CEO and member of the board to focus on his health.

Amid sluggish sales, Xilinx expects to reduce its global workforce by approximately 7%.

Market research
Samsung posted its results in the fourth quarter of 2019. Strong memory sales were fueled by the datacenter and new smartphone launches. “It anticipates seasonal weakness in 1Q, partly offset by some mobile and server demand. It also expects its memory inventories to reach normal levels in 1H20,” KeyBanc’s Twigg said in a report. “For 2020, Samsung expects memory market conditions to be stable and gradually improve amid constrained industry production, with demand strength driven by datacenter customers and 5G smartphone adoption. It anticipates mid-teens percentage industry DRAM bit demand growth and mid- to high-20s percentage NAND bit demand growth in 2020.”

Samsung spent $19.3 billion in semiconductor CapEx in 2019, moderately below its guidance of $19.8 billion. “It didn’t provide guidance for 2020; however, it suggested that it will be flexible with equipment additions to meet demand this year. We project Samsung’s 2020 capex to be $21.5B, with strong investments in foundry and NAND, followed by DRAM later in the year,” Twigg said.

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