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Week In Review: Manufacturing, Test

3nm push outs?; strong fab tool sales; specialty gases.

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Chipmakers
Select foundries are beginning to ramp up their new 5nm processes with 3nm in R&D. There are already signs that the foundries have pushed out their 3nm production schedules. So, expect 7nm and 5nm to become long-running nodes.

At 3nm, Samsung and TSMC are going in different directions. Samsung is developing a gate-all-around (GAA) technology called nanosheet FETs. TSMC will extend today’s finFETs to 3nm and will introduce gate-all-around later.

Both technologies were due out later this year or next. “There are delays in Samsung GAA from the initial date of Q4 2021 to Q2 or Q3 2022. Samsung will fix the problems and GAA will become a key technology,” said Handel Jones, chief executive of IBS, in an e-mail exchange. “The 3nm finFETs from TSMC is also likely to be delayed to early 2022. The key reason is related to the design ecosystem and design implementation being delayed because of Covid-19.”

Samsung declined to comment. Commenting on the 3nm situation, TSMC referred to comments made by TSMC CEO C.C. Wei in a recent conference call. “Our N3 technology development is on track with risk production scheduled in 2021 and target volume production in second half of 2022,” Wei said. “We have carefully evaluated all the different technology options and decided to continue using finFET transistor structure to deliver the best technology maturity, performance, and cost. TSMC’s N3 technology will be another full-node stride from our N5 with about a 70% logic density gain, 10% to 15% speed gain and 25% to 30% power improvement as compared with our N5 process.”

Meanwhile, work is well underway for the 2nm node and beyond, but there are numerous challenges as well as some uncertainty on the horizon.

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Faraday Technology’s Gigabit Ethernet PHY IP can be licensed on UMC’s 40LP process. Gigabit Ethernet is designed to meet the increasing chip integration demands for Ethernet-enabled devices and industrial automation systems with shorter lead times.

Intel reported its first quarter 2020 results. First-quarter revenue was $19.8 billion, up 23% year-over-year. Data-centric revenue grew 34% and PC-centric revenue grew 14%. “Intel noted that its second generation 10nm products are on track for this year, and its first 7nm products are still expected to launch in late 2021; its factories are operational amid the pandemic, though some new construction is delayed,” said Weston Twigg, an analyst at KeyBanc, in a research note. “Intel is still planning significant wafer capacity expansion this year, though it didn’t reiterate its $17B capex plan and it only spent $3.3B in 1Q.”

Fab tools
The first wave of fab tool vendors reported their results. What does the market look like amid the Covid-19 outbreak? “Semicap companies have not seen any demand slowdown,” said Krish Sankar, an analyst at Cowen. “It appears that any weakness might be reflected in C3Q results at the earliest.”

In the March 2020 quarter, for example, Lam Research posted sales of $2.504 billion, and net income of $575 million, or $3.88 per diluted share on a U.S. GAAP basis. This compares to revenue of $2.584 billion, and net income of $515 million, or $3.43 per diluted share, for the quarter ended Dec. 29. “While there is limited visibility to near-term macroeconomic conditions and industry supply chain recovery, customer demand for our equipment remains strong,” said Tim Archer, Lam’s president and chief executive.

Lam’s quarter was better than expected despite some supply constraints. “Foundry was strong in the March Q and NAND was robust as well. DRAM shipments still remain low and looks like supply is under-shipping demand, for now. DRAM capex could drive the next leg up for LRCX in CY21,” Cowen’s Sankar said. “China sales were a record $801M (32% of sales) driven by domestic customers (~60%). We expect this strength to continue; the risk here is political.”

Meanwhile, CyberOptics reported sales of $16.4 million for the first quarter of 2020 ended March 31, an increase of 10% from $15.0 million in the first quarter of 2019. Net income was $844,000, or $0.11 per diluted share, up from $495,000, or $0.07 per diluted share, in the year-earlier quarter. “The Covid-19 pandemic has had a minimal impact on our business thus far, despite the resulting difficulties with global travel and shipping. We are closely monitoring this health crisis and its impact on our business in coming months,” said Subodh Kulkarni, president and chief executive of the company.

ATE giant Teradyne reported revenue of $704 million for the first quarter of 2020. GAAP net income for the first quarter was $176.2 million, or $0.97 per diluted share. “TER posted strong 1Q results and 2Q guidance amid strong demand for semiconductor and storage test, more than offsetting weak robotics demand. We’re lowering our 2020 estimates but keeping 2021 estimates nearly unchanged,reflecting our expectation for strong growth next year,” KeyBanc’s Twigg said.

Meanwhile, in a video, Ezequiel Russell of Micron answers these questions: “Why curvilinear masks? Why now?” By providing advanced memory use cases written by multi-beam mask writers, Micron demonstrated up to an 85% improvement in process windows.

Park Systems, a manufacturer of atomic force microscopes (AFM), has made an equity investment in Molecular Vista. Molecular Vista produces AFM tools to probe and understand matter at the molecular level through quantitative visualization using infrared photo-induced force microscopy (IR PiFM).

Materials
Air Liquide will invest close to 200 million euros to build new specialty gas and material plants for the semi fabs in Tainan and Hsinchu, Taiwan. Air Liquide will build and operate ultra-high purity hydrogen and oxygen plants in each basin. Two plants in Hsinchu will produce high-purity nitrogen and argon. It will also supply large volumes of helium to these fabs. The first plants are expected to start during the second quarter of 2021.

Market research
IC Insights forecasts that worldwide IC unit shipments will register their first-ever back-to-back annual decline in 2020.

VLSI Research has downgraded its 2020 CapEx forecast due to the COVID-19 pandemic. “We now expect CapEx to decline in mid-single digits compared to the previous forecast of +1%,” according to the firm. “Advanced logic & foundry will remain the brightest spot for yet another year with spending nearly flat as chipmakers ramp 5nm and prepare for 3nm deployment. Memory spending is expected to decline again in 2020, but at a slower rate compared to the previous year, as demand catches up with supply.”

North America-based manufacturers of semiconductor equipment posted $2.21 billion in billings worldwide in March 2020, according to SEMI. The billings figure is 6.8% lower than the final February 2020 level of $2.37 billion, and is 20.1% higher than the March 2019 billings level of $1.84 billion. “While March monthly billings of North America-based semiconductor equipment manufacturers are starting to reflect a challenging market environment, the year-over-year increase indicates companies across the semiconductor manufacturing supply chain thus far are effectively maintaining continuous operations despite COVID-19 headwinds,” said Ajit Manocha, SEMI president and CEO.

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