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Week In Review: Manufacturing, Test

Fab tool export controls; mixed results; rosy IC forecasts.

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Fab tools
The U.S. Department of Commerce has announced new export control actions to prevent China, Russia, and Venezuela from obtaining U.S. technology for military purposes. This expands the “Military End Use/User Controls (MEU)” license requirement controls on China, Russia, and Venezuela, covering military end-users, as well as semiconductor equipment, sensors and other technologies.

For its fourth fiscal quarter, TEL’s sales were up 9.5% over the previous period. Net income was up 15.9%. “Although it will be necessary to continue to monitor the impact of Covid-19, the market for semiconductor production equipment is expected to continue to grow,” according to TEL. In addition, TEL announced that Tetsuro Higashi, former chairman, president and CEO, has received the Order of the Rising Sun, Gold and Silver Star in the 2020 Spring Conferment of Decorations, in recognition of his contributions to the development of the IC industry and TEL.

Solayer has secured $10 million in new financing from China’s Advanced Micro-Fabrication Equipment (AMEC). Solayer develops physical vapor deposition (PVD) sputtering tools for the optics market.

ACM Research has unveiled the Ultra Furnace, its first system developed for multiple dry processing applications. Initially optimized for low-pressure chemical vapor deposition (LPCVD), Ultra Furnace leverages the same platform for oxidation and annealing, as well as for atomic layer deposition (ALD).

NextFlex, America’s Flexible Hybrid Electronics (FHE) Manufacturing Institute, has announced $11.5 million in funding (including $6.3 million in cost-share contribution from participants) for 12 new projects.

D2S has announced the appointment of Mike Schuh to its board. Schuh has more than 40 years of experience in the software industry, including holding senior executive management and board-level roles at several companies.

Chipmakers and OEMs
UMC has reported its results for the first quarter of 2020. First quarter consolidated revenue was up 1% from the previous period and up 29.7% from a year ago. In 2020, capital spending is budgeted at $1.0 billion. “Utilization rate increased slightly to 93%, bringing wafer shipments to 2.15 million 8-inch equivalent wafers, primarily attributed to display driver demand in consumer and communication devices,” said SC Chien, co-president of UMC. “Looking into the second quarter of 2020, despite significantly higher levels of uncertainty caused by the Covid-19 pandemic, current outlook indicates slightly higher wafer demand, mainly supported by inventory replenishment across computer peripheral and consumer electronics end markets.”

Cree announced revenue of $215.5 million for its third quarter of fiscal 2020, ended March 29, 2020, a 21% decrease compared to revenue of $274.0 million reported for the third quarter of fiscal 2019, and a 10% decrease compared to the second fiscal quarter. CEO Gregg Lowe pointed to a positive future, though: “An incredible amount of our energy and focus has been deployed to confront the short-term headwinds associated with the COVID-19 pandemic and position our business to capitalize on the expected long-term growth opportunity for silicon carbide and GaN solutions,” he said.

Samsung reported its financial results for the first quarter ended March 31. “The memory business saw solid demand in the period, despite weak seasonality and the effects of COVID-19, thanks to continued investments in 5G infrastructure and increased demand from cloud applications related to remote working and online education,” according to Samsung. “In the second quarter, the company aims to expand EUV leadership, beginning with the start of mass production of 5nm products, while closely monitoring the uncertain market situation caused by COVID-19.”

Qualcomm posted its results for the quarter. “Qualcomm posted solid Q2/F’20 results with revenue of $5.2B and non-GAAP EPS of $0.88, consistent with guidance as the company continued to execute despite the pandemic driving a 21% global handset market decline in the quarter. Most of the decline was driven by China early in the quarter before rebounding in March, but then handset demand in the rest of the world weakened in March and led to management anticipating a 30% drop in handset demand during Q3/F’20,” said Michael Walkley, an analyst at Canaccord Genuity.

The CMOS image sensor scaling race continues. OmniVision has announced the OV64B, a 64-megapixel (MP) image sensor with a 0.7-micron pixel size. Samsung has also announced a 0.7-micron image sensor.

Packaging
ASE posted its results for the quarter. Sales were up by 10% year-over-year but down by 16% sequentially. In a conference call, Joseph Tung, CFO of ASE, said: “We’re expecting a fairly strong year for 2020, but of course there’s a lot of uncertainties in front of us, including a pandemic and also a lot of political, geographical tensions that could arise in the future. So as far as first and second quarter, we’re still seeing the seasonal pattern continuing. And for the second half of the year, I think there are too many uncertainties in front of us, so we’re refraining ourselves from making any comments on the second half. But as a whole, I think the whole industry momentum remains the same. I think the 5G deployments and also a lot of the new applications coming on stream will continue to be the growth drivers for the future. So at this point, we are investing for the longer term.”

Amkor posted mixed results for the quarter. In addition, JCET reported its results for the first quarter of 2020. Revenue was a record high in the quarter. For 2019, the company posted a profit, as compared to a loss in 2018.

Market research
There are mixed signals amid the Covid-19 outbreak. On one hand, TrendForce is forecasting a 5% to 9% growth in the foundry business this year.

The coronavirus crisis will undercut growth in the global semiconductor business in 2020. The worldwide semiconductor market now is expected to decline by 5% in 2020, excluding memory ICs, according to the Omdia. With memory included, global revenue for the overall market will total $439.3 billion in 2020, up 2.5% from $428.5 billion in 2019. This is a reduction from the previous forecast of 5.5% growth for this year.

On the down side, the global power semiconductor market is set for a steep decline in 2020. Omdia now forecasts that the overall power semiconductor market will undergo a 6.9% decline in 2020, with revenue falling to $43.1 billion in 2020, down from $46.3 billion in 2019. “Supply chain interruptions, store closures, stay-at-home orders, job losses and potential new model delays have combined to crater the wireless market,” said Kevin Anderson, senior analyst, power semiconductors at Omdia. “This is partially due to a decline in mobile handset shipments. But mobile handset makers are also offering more mid-range products that have a lower content of power-IC devices.”

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