SEMICONDUCTOR

Industry observers see the new facility giving Axcelis' rapidly growing customer base in China complete access to its industry-leading semiconductor manufacturing equipment, services and support. These resources include tool and applications expertise, spare and consumables parts management, productivity-enhancing upgrades, training and advanced process development. In 2006, Axcelis opened a major new Technology Center in Beijing, one of the fastest growing regions in China's burgeoning semiconductor industry. In addition to its operations in Beijing and Shanghai, Axcelis maintains a local presence in Zhangjiang, Tianjin, Suzhou and Wuxi. Axcelis also has facilities throughout the Asia-Pacific region, with direct offices in Taiwan, Korea, Singapore, Malaysia and Japan. Axcelis Technologies, Inc., headquartered in Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry.

Applied Materials (AMAT) Opening New Xi'an China Global Development and

Technology Support Center

Applied Materials has been in China for some 22 years and has seven offices located in Beijing, Kunshan, Shanghai, Suzhou, Tianjin, Wuxi and Xi'an, employing more than 500 people. The company provides sales and services for both domestic and international chip manufacturers at these locations. In Xi'an the company will perform product development, system localization, engineering and software support and sourcing throughout Asia-Pacific. The Center will also serve as a customer demonstration facility for 200m.m wafer processing and Applied Materials' most advanced metrology and inspection products.

Tundra Semiconductor Announces Share Repurchase Program

Tundra Semiconductor Corporation, the leader in System Interconnect, announced that the Toronto Stock Exchange has accepted the Company's notice of intention to make a normal course issuer bid. The Tundra Board of Directors has approved Tundra's purchase of up to 1,722,000 common shares (representing approximately 10 percent of Tundra's public float). The normal course issuer bid will commence on March 29, 2007 and will terminate on March 28, 2008 or on such earlier date as Tundra has purchased the maximum number of shares permitted under the bid. Tundra currently has 19,996,429 common shares outstanding and its public float is 17,224,412 common shares.

SMC Facility Expansion Project

SMC announced a multi-million dollar expansion project with plans to add an additional 18,000 sq. ft. addition to its current 55,000 sq. ft. facility. The increased capacity will provide an additional 16,000 sq. ft. of manufacturing space along with 2,000 sq. ft. of office space. The increased capacity will give the opportunity to maximize the efficiency of material flow throughout the manufacturing process.

Intel to Spend $2.5 Billion on Chip Factory in China

Intel Corp., the world's largest semiconductor maker, plans to build its first computer-chip manufacturing plant in China, a $2.5 billion investment that may spur rivals to follow.

The new factory in Dalian, a northeastern city located on a peninsula by the Yellow Sea, will be Intel's first chip factory in a new location in 15 years. Intel joins STMicroelectronicsNV, Taiwan Semiconductor Manufacturing Co. and South Korea's Hynix Semiconductor in building factories in China. Construction begins later this year and the factory will start producing chips in 2010. The plant will give Intel better access to computer factories in China, the world's biggest market for chips. The Dalian factory, which will employ 1,500 people when fully operational, will make chipsets — the supporting semiconductors that link Intel's main product, microprocessors, to the rest of the computer.

The investment will be the largest in northeast China since the country's investment

reforms in 1978, Zhang Xiaoqiang, vice chairman of China's National Development and

Reform Commission, said in the statement.

The plant will use 90-nanometer technology. Nanometers, or billionths of a meter, measure the circuits of a chip. The smaller the circuits, the more advanced the semiconductor.

The decision also may boost China's reputation among other chipmakers as some companies have been slow to invest on concern over intellectual-property.

While the new plant is Intel's first chip-manufacturing factory in China, it has other facilities there. The company owns plants for testing and packaging chips in Shanghai and Chengdu, and research centers in Beijing and Shanghai, according to its Web site. Intel first entered the country 22 years ago and has invested $1.3 billion there.

China Investment

Round Rock, Texas-based Dell Inc., the world's second- biggest PC maker, last May opened its second factory in the southeastern city of Xiamen to make servers, storage systems, notebooks and desktop computers for customers in China, Japan, South Korea and Hong Kong.

Total foreign direct investment in China is picking up. It increased 13 percent in the first two months of the year to $9.7 billion, after rising 4.5 percent last year to $63 billion. China's economy last year expanded 10.7 percent, the fastest pace since 1995.

Applied Materials Joins New High-Tech Movement in Xi'an

Applied Materials Inc., the global leader in Nanomanufacturing Technology solutions, opened a new technology support center in Xi'an, capital of northwest China's Shaanxi Province. The new Global Development and Technology Support Center, which covers a 106,000 square-foot facility area, offers state-of-the-art laboratory, tool demonstration and assembly space. The US$250 million center is Micron's first manufacturing facility in China and is a project involving the biggest investment ever made at the Xi'an High-Tech Zone.

A fleet of semiconductor producers, including Japan's Renesa Technology are all eyeing Xi'an to set up new plants or research centers.

Inotera Memories Mulls Building New Chip Plant

Inotera Memories Inc., a joint venture between Nanya Technology Corp and Qimonda AG of Germany that manufactures computer memory, is considering building a new advanced plant to drive growth. Qimonda was previously Infineon Technologies AG's DRAM division.

Inotera said it had recently spent about NT$2 billion (US$60.6 million) to purchase a 6.7- hectare parcel of land from the Taoyuan government, to be used for the new plant. The company has planned to spend NT$40 billion on new facilities and equipment this year. A 12-inch chip plant using 90-nanometer technology would cost US$2.5 billion. With the land secured, they have no concrete plan for further development. The decision will be made on market situations.

Taiwanese computer memory chipmakers are among the most aggressive players in the world in expanding their capacity.

Inotera said it would produce 120,000 12 inch wafers by the end of this year, an increase of more than 70 percent year-on-year, following a 90 percent increase last year.

Rival Powerchip Semiconductor Corp. said its output would increase 75 percent year-on- year by spending NT$69 billion on new equipment.

Oversupply has caused the price of computer memory chips, or dynamic random access memory (DRAM) chips, to plunge over 40 percent since the beginning of this year.

Freescale Inaugurates New Design House in Noida

To expand its presence in India, Freescale Semiconductor inaugurated a new 27,870m2 semiconductor design centre in Noida.

Freescale's Noida campus houses about 700 employees and focuses on SoC integration and intellectual property (IP) design. Last year, the company opened a new 9,290m2 software design centre and sales office in Bangalore. This centre employs over 250 engineers focused on advanced technologies in wireless and networking markets.

Over the past two years, Freescale has acquired two new campuses and invested about

Rs.220.60 crore ($50 million) in its Indian operations.

Last year, Freescale expanded its presence in India with a 100,000-square-foot facility in Bangalore. The new facility-Freescale's India Software Centre, supports the company's research and development in software for wireless technologies.

Policy Initiatives to Propel Growth of Semiconductor Industry in India

India has been in the forefront of the global semiconductor technology -but of the fabless variety. Chip fabrication (fab) facilities are an important missing link in the growth of the semiconductor industry in India. Several weeks ago, the Indian State, announced policy decisions relating to fiscal incentives designed to encourage capital expenditure in the semiconductor industry. This may not bring about a tectonic shift in the global scenario, but provides an important backing for establishing manufacturing facilities in India.

The top ten global fabless design companies, and a good number of the top 25 semiconductor companies, have varying scales of operations already established in the country. A fabless semiconductor company specializes in the design and sale of hardware devices implemented on semiconductor chips, and the country is home to over 125 chip designers. Having grown from around $1 billion to $3 billion, the fabless design industry is likely to see business in excess of $40 billion by 2015, according to Indian Semiconductor Association (ISA). Chip-design, front-end, backend, testing other than fab, all processes are done in India and have played a pivotal role for the semiconductor technology driven industry globally, all without a fab facility. Not any more.

The State's semiconductor policy announcement includes incentives of up to 25 per cent of the capital expenditure incurred by chip fabrication companies for the first ten years. Investment targets are in the range of $10 billion in Special Economic Zones (SEZ) that provide for a 20 percent incentive, while other investment areas derive a 25 percent rebate on capital expenditure. This is expected to be either in the form of equity participation from the government, tax breaks, or interest-free loans. To avail themselves of the incentives, the companies will have to invest at least $550 million to set up a fab unit. Only the fab facilities established in the country before 2010 are eligible to avail of these benefits.

Incentives are also approved for setting up manufacturing facilities for liquid crystal displays (LCD), organic light emitting diodes (OLED), plasma display panels, photo- voltaic cells, storage devices, solar cells and micro and nano technology products, including assembly and testing of these products. In the latter case, companies will have to make a minimum investment of $220 million.

There are good reasons why intent will see the desired transformation happening. Semiconductor and electronics industries are tightly coupled to each other, and a semiconductor-electronics ecosystem is emerging rapidly. Demand for a wide variety of consumer electronics products, mobile phones, and automotive products are surging, with the domestic demand for semiconductors slated to reach $36 billion by 2015. Mobile phone sales for example, already exceed 6 million a month, and the gross count has crossed 150 million. The policy will engineer manufacturing of cheaper mobile handsets, electronic goods and enable high-end features in automobiles.

There also is a concern at the rising reliance on imports, due to lack of fab manufacturing capabilities, in the background of surging market for electronics products in India. Opportunities for global semiconductor industry in India is set to become more attractive as the domestic market continues to stay vibrant, even as the global demand declines over the next three to five years for chips.

The rising cost of chip development that increased by over 30 percent in the last few years, has made VCs, who play a crucial role in this industry, direct their funds away from traditional regions of development to countries in Asia. India has been the beneficiary of this trend with over 40 funds making their presence in 2006 alone.

Michael J Scown, managing director, treasury (Asia Pacific), Intel Capital recently stated, "Asia-Pacific, especially India and China, are becoming attractive destinations for VC and PE funds. Studies show that VCs have invested $515 million in India in 2006, logging a near 74 percent year-on-year growth. Of this, 70 percent goes to the IT sector, which includes the semiconductor sector. Private equity investment in India stands at $7.5 billion, of which $1.5 billion is again in the IT and semiconductor segment."

With fab facilities in the offing, manufacturing alliances built on design expertise in chip making will firm up.

Skeptics have put forward many arguments about a semiconductor fab facility in India. These include, semiconductor is a cyclic industry; China's reach would be overwhelming, rendering new facilities unviable or even obsolete; utilization capacities for realizing profits will have to be in excess of 85 percent; and the industry will see a downturn in 2009. Such fears do not seem to deter some. Companies, such as SemIndia and AMD have announced their plans to go ahead with investments.

Freescale Contemplates Manufacturing Setup in India

Motorola's erstwhile semiconductor arm FreeScale is looking at the possibility of setting up a manufacturing facility in India. This comes just a few weeks after the government rolled out the red carpet for semiconductor companies to set up shop in India.

Michel Mayer, Chairman and CEO of Semiconductor, Freescale inaugurated the company's fourth campus in India. Having invested US$50 million last year, Michel says that the company will keep that run-rate going.

Freescale currently has about 1000 employees in India and the company hopes to grow that number to 3000 in the next two years. India after all houses the largest design centre for the company outside the US. The management says some of the key innovations in the company are now coming out of India. Last year alone India filed 33 patents and the company continues to ramp up R&D operations and is now giving manufacturing a serious thought.

Semiconductor 2.0 -Printed Semiconductor Factory Opens

Nanoident has opened the world's first manufacturing facility (in Linz, Austria), for printed semiconductor-based optoelectronics. The factory will offer high-volume production and will use the company's Semiconductor 2.0 Platform to deliver printed semiconductor-based products. With its environmentally friendly production process; the OFAB can produce printed electronic devices quickly and at a fraction of the cost of a traditional silicon-based semiconductor fab. The technology will yield cost-effective, custom designed devices for applications such as industrial, chemical, biological, biometric and X-ray sensors, printed OLED displays for smart packaging and electronic signage. A traditional factory that can produce 40,000 square meters of silicon computer chips would cost about $1.3 billion and require about 5,000 employees. The Nanoident factory costs about $10 million and can be run by about 50 people.

With the company's Semiconductor 2.0 Platform technology and OFAB production facility, Nanoident is enabling new, innovative solutions in a wide range of markets, including consumer, industrial, life sciences and security that were previously cost- prohibitive or simply not able to be created due to the physical constraints of silicon. Moreover, expensive masks, wasted material and dangerous acids used for etching are not needed with printed electronics. Toxic materials are not used in the OFAB, making it a green production process.

Nanoident's OFAB is fitted with Class 100 cleanroom, ISO Class 5, (less than 100 half-micrometer particles per cubic foot). To produce printed electronics at the OFAB, nanomaterials are deposited onto a substrate using advanced printing methods. The process is extremely fast. For example, traditional chip manufacturing takes approximately two to three months. In the OFAB, the entire process can be completed in hours or days, depending on the application. Prototypes and volume production can be run on the same equipment, which allows for highly customized devices. Production capacity can easily be scaled as needed by adding more equipment.

Malaysia Develops ‘Smallest' WID Chip

After two years of R&D, the Malaysia Microchip Project gains success with the release of the world's 'smallest' RFlD microchip. The latest version of the Malaysia Microchip measures only O.7mm-by-O.7rnm.

In 2003, the Malaysian government bought the technology and the rights to design, manufacture and market the chip from Japan's FEC Inc. Following that, three versions of the chip have been developed.

The microchip emits radio waves on multiple frequencies, enabling detection even when embedded in paper documents such as money, or in objects or animals.

The first commercial application of the technology in Malaysia is for tagging and identifying original versions of movies on DVDs to curb the rampant video piracy in the country. The Malaysia government will also use the chip to prevent forgeries of documents such as passports and birth certificates.

In April or May, the technology will be used for a pilot project at Malaysia's and Hong Kong's international airports. The chip will be used in tagging luggage traveling between the two airports. This will help easily locate luggage lost or removed from airplanes as well 2s boost security services in the imports.

The development of the chip cost around Rs.220.60 crore to Rs.264.72 crore ($50-60 million). It costs Rs.2.65 (6 cents) each. At present, the chip is manufactured in Japan but there are plans to move the production to Malaysia.

Officials said that they will market the chip internationally. At present, "inquiries are

coming in" from countries about the chip, they added.

Freescale Opens New Development Centers in China, U.S.

Freescale Semiconductor has opened three development centers in the United States and China as part of its efforts to meet the rising demand for standard analog and power management products in consumer and industrial applications.

Shifting to a higher mix of standard versus custom analog products, Freescale has opened the Silicon Valley Development Center in Milpitas, California, the Southern California Development Center in Irvine, California and the Shanghai Design/Applications Center in China. The three centers will provide Freescale customers with system-level support and applications engineering capabilities for analog and power management designs in the consumer and industrial market, as well as local IC design capabilities.

picoChip Steps up R&D, Teams up with BUPT

It's a long way from Bath, England, to the Beijing University of Posts and Telecommunications (BUPT) Yet for U.K. start-up picoChip it's become one of the quickest ways to juice up its R&D. Lots of big foreign companies, ranging from Intel Corp. to ARM Ltd., have already forged close ties with Chinese universities, who are usually keen to access leading technology and cutting-edge equipment.

Not a lot of small companies have done so, however. Last week, picoChip, a multi-core DSP provider with less than 100 people, took the plunge. It established a wireless communications and networking lab with BUPT, and followed that with the opening of a small design centre in Beijing. The lab will focus on 4G technology, including work in 802.16m, UMTS-LTE, and China's own advanced wireless project, known as 4G Future.

picoChip has done some small-scale projects with BUPT before , and the results promoted them to continue in the relationship. There is some risk in intellectual property protection in China, but so far it has not been a problem.

Till now, most of the work in China has been on development, but picoChip plans to do more basic research there in the near future. Its design center will ramp up to about 40-50 people by the end of next year and that will represent about half of the company’s engineering team.

IM Flash Continues with Expansion Plans

Despite horrible market conditions that have decimated the average selling prices (ASPs) of NAND flash memory chips over the past few months, IM Flash Technologies LLC, the NAND joint-venture between Intel Corp. and Micron Technology Inc., will push ahead with its aggressive capacity expansion plans, the head of Intel's flash memory group disclosed recently.

IM flash, created in January 2006, already has a working 200mm fab in Boise, Idaho. A 300mm fab in Manassas, Virginia, is said to be rapidly ramping, while a 300mm fab in Lehi, Utah, produced its first wafers last week, according to Intel. A 300mm fab ticketed for opening in Singapore in 2008 is scheduled to break ground later this month. Harrison touted a strategy that will see the venture bring online roughly one fab per year.

The partners of IM Flash did not disclose the number of wafer starts per month that each fab is capable of. But Randy Wilhelm, VP and general manager of the NAND products group within the flash memory group, said that the Manassas fab is roughly twice the size of the Boise factory, and that the Lehi and Singapore fabs will be about three times its size.

IM Flash is not alone in ratcheting up the NAND capacity. Toshiba Corp. and SanDisk Corp. are currently building Fab 4 while simultaneously expanding Fab 3 at Toshiba's site in Yokkaichi, Japan he added. Samsung Electronics Co. Ltd and Hynix Semiconductor Inc. "appear to be throttling back" on NAND expansion at the moment, he said.

Qimonda Announces Expansion of Back-End Facility in China; Investment of €250 Million Will Double Capacity

Qimonda AG, a leading supplier of memory chips, today announced the planned expansion of its existing facility for the assembly and testing of memory ICs (back-end) in the Suzhou Industrial Park, Suzhou, China, located 80 kilometers west of Shanghai. In course of the expansion, Qimonda will construct a second building doubling the factory's capacity. Investment in construction of new facility, including infrastructure, production equipment and IT, amounts to around Euro 250 million over the next three years. The expansion adds to the ongoing investment in the existing manufacturing facilities in Suzhou Industrial Park which were established starting in 2003.

Construction of the new facility is scheduled to begin in March 2007, with the site ready for the equipment installation by late 2007. A new clean room of 10,000sqm will be added to the existing clean room of 10,000sqm. The expansion will also result in a significant increase of headcount. The facility currently has about 1,700 staff. At full capacity, the headcount is expected to move beyond 3,000 employees.

Qimonda has access to five 300mm manufacturing sites on three continents and currently uses four sites for back-end manufacturing. Back-end sites are located in Suzhou (China), Malacca (Malaysia), Porto (Portugal) and Dresden (Germany). The back-end manufacturing process comprises of two major steps. Firstly, the processed wafers are diced into individual chips and, after having added interconnecting pins, the chips are encapsulated into a packaged component using compound material. After testing, components are often soldered onto circuit printed boards to create modules. The surface- mount technology (SMT) describes a method developed in the 1960s in which the components are mounted directly onto the surface of the printed circuits boards.

The back-end facility in Suzhou is a joint venture of Qimonda AG and China-Singapore Suzhou Industrial Park Venture Co (CSVC), Ltd, set up in 2003, and operates under the name of Qimonda Technologies (Suzhou) Co., Ltd.

Enuclia Launches International Design Center

Enuclia Semiconductor, Inc., the pioneer of a new digital television architecture that delivers unparalleled image quality, today announced the opening of an international design center in Taiwan. The center is located in the Nei-hu region, which is rapidly emerging as one of Taiwan's leading high-tech clusters.

Samsung Investing in Second Plant in Suzhou

Samsung Electronics started investing 1.47 billion yuan (US$190 million) at a second plant in Suzhou, China on March 1for large-size LCD TV panels, with volume production to start in September.

Samsung's first plant in Suzhou is now mainly producing PC-use panels.

Dialog Semiconductor has New Design Center

Dialog Semiconductor Plc has announced it has started recruiting for a major new research and design (R&D) centre in Edinburgh, Scotland. The new R&D centre is part of the company's response to growing interest in its leading edge battery power management and HiFi audio products for next generation handheld electronics products running multiple consumer applications.

TSMC Shanghai Plans to Triple Output

Taiwan Semiconductor Manufacturing Company (TSM) might expand the production capability of its factory in Shanghai's Songjiang District. The factory is currently focused on 8-inch CMOS chips, and after getting an import license for its 0.18 micron technology, which was developed in Taiwan, the production capacity of their factory in Shanghai’s Songjiand district will be expanded from 30,000 to 90,000 in 2007.

TSMC’s expansion plans do pose a threat to other semiconductor manufacturers in China. TSMC has long been involved in both legal and business battles with Semiconductor Manufacturing International Corp. (SMI), the leader of semiconductor manufacturing in mainland China. SMIC says it produces about 180,000 chips per yearInitial production of Intel's 45nm products will be done at its Oregon development fab, dubbed DID. The company is currently building two other factories that will use the 45nm process. The Rs.13,596 crore ($3 billion) Fab 32 in Chandler, Arizona, will commence production late this year while the Rs.15,862 crore ($3.5 billion) Fab 28 in Kiryat Gat, Israel, will begin production the first half of next year.

Fab 11X currently manufactures 90nm computer chips on 300mm wafers. Fab 11X began production in October 2002 and was Intel's first 300mm, high-volume manufacturing facility. It was also the company's first fully automated, high volume factory producing 300mm wafers.

Intel Opens

Intel plans to open a fourth 45nm production facility by converting its Rio Rancho site in

New Mexico.

Initial production of Intel's 45nm products will be done at its Oregon development fab, dubbed DID. The company is currently building two other factories that will use the 45nm process. The Rs.13,596 crore ($3 billion) Fab 32 in Chandler, Arizona, will commence production late this year while the Rs.15,862 crore ($3.5 billion) Fab 28 in Kiryat Gat, Israel, will begin production the first half of next year.

The conversion is expected to cost between $l billion and $1.5 billion, and work will start in the second half of 2008. The facility currently manufactures 90nm chips.

Intel's first 45nm chips are currently under development in Hillsboro, Oregon and the

first examples are scheduled to arrive later this year. A new plant in Chandler, Arizona is scheduled to start production late this year, followed by a new fab under construction in Kiryat, Israel by the first half of 2008. Both facilities require an investment of about $3 billion.

Intel typically has three production facilities live within a short period of time after introducing a new production technology, followed by a fourth at a later stage.

AMD has stated that it will start shipping its first 45nm chips by 2008. The firm is expected to have two 45nm production facilities live by the end of this year, and will outsource some chip manufacturing to Chartered Semiconductor.

Chartered Extends Technology Development Agreement with IBM to 32nm

Chartered Semiconductor Manufacturing, one of the world's top dedicated foundries, announced the extension of its joint development efforts with IBM to include 32- nanometer (nm) bulk complementary metal oxide semiconductor (CMOS) technology. Financial terms were not disclosed.

The extension to 32nm builds on the multi-year agreement that the two companies first signed in November 2002. The joint collaboration has enabled Chartered to accelerate its technology roadmap for leading-edge manufacturing solutions, spanning four major generations of advanced process technology, including 90nm, 65nm, 45nm and 32nm logic processes. "Today's announcement demonstrates IBM’s and Chartered's commitment to next-generation technology, and promises to extend our track record of success in developing.

As with previous nodes, 32nm development activities will be conducted at IBM's state- of-the-art 300 millimeter (mm) semiconductor fabrication facility in East Fishkill, N.Y. Each company will have the ability to implement the jointly developed processes in its own manufacturing facilities.

New Semiconductor Policy to Bring Huge Investments to India

The Indian government's new semi-conductor policy is expected to attract multibillion dollar investments, create more jobs and build an eco-system to make the country a manufacturing hub for chips and electronics goods.

Indian Semiconductor Association (ISA) Chairman Rajender Kumar Khare told reporters in Bangalore city in the south Indian state of Karnataka Friday that the pro-active initiatives of the government could lead to huge investment flows into India in the coming years, IANS reported.

"We could see investment commitments in the order of US$6-10 billion in the semi-con industry by 2010 from global and Indian majors, as the policy facilitates a conducive environment for creating the eco-system to set up the entire chain ranging from chip fabrication units to manufacturing facilities for high-tech products," Khera said.

The policy, cleared by the union cabinet, seeks to offer a host of incentives such as capital subsidy of 25 percent for 10 years to set up fab facilities and other high-end manufacturing units outside the special economic zones (SEZ) and 20 percent in the SEZs, with exemption from counterveiling duty (CVD) of 16 percent on capital goods.

To avail of the subsidy, the threshold investment for chip manufacture will be Rs 25 billion (US$566 million) and Rs 10 billion for all semi-conductor products such as storage devices, assembly and testing facilities, advanced micro and nano technology products, liquid crystal displays (LCDs),organic light emitting diodes (LEDs), solar cells and photo voltaics.

Although the policy and the quantum of incentives do not meet the industry's wish list, the ISA hopes the measures will enable India to become the next global manufacturing hub for global players in the semi-con space as the domestic market for electronics goods is projected to be a whopping US$363 billion by 2015 with the demand for semi- conductors alone around US$36 billion.

"The policy will go a long way in making India an attractive destination for global semi- con and hi-tech firms and investors. We have a burgeoning market demand in the communications industry, automotives, security cards, defense and other verticals," Khera said.

The granting of SEZ status to the semi-con industry, with pre-operative and post-

operative benefits, will attract prospective investors to set shop and encourage existing

players to expand their operations.

"At the same time, the government offerings, including SOPS, are less than what other countries like Israel and Germany provide to the industry at 32 percent and 40 percent, respectively, with 7-10 year tax holidays. Nonetheless, a beginning has been made and the measures augur well for all stakeholders," Khera pointed out.

Cultivation of a robust and scalable semi-con industry is the key to making the great electronic revolution happen within the country.

Semi-conductors form the heart of hardware and are the soul of software in any electronic system.

"The electronics manufacturing eco-system can succeed and be globally competitive if there is an accompanying semi-conductor manufacturing eco-system and vice-versa. We are looking forward to other details of the policy, including eligibility to avail of the benefits," ISA President Poornima Shenoy noted.

As in the case of other commodities, the per capita consumption of electronic goods in

the sub-continent is estimated to be about USD 300 per annum by 2015 as against US$20 at present.

"The presence of global players in the semi-con industry spanning design, manufacturing and distribution (triple play) will have a force multiplier effect on the entire value chain covering product engineering, embedded software and a plethora of applications or features from consumer to industrial products," Khera added.

NEC Closes 8-inch Line, Exits Structured ASIC

Coping with a "crisis" amid losses in its business, NEC Electronics Corp. announced last week a three-year restructuring plan that included the exit from the structured ASIC and single-chip cell phone sectors. The company, which is also terminating 600 engineers, will consolidate its nine front-end manufacturing lines in Japan to four.

NEC Yamagata will primarily manufacture SoC products in its 300mm line and will close its 8inch line. Another fab, NEC Kyushu, will be the flagship facility for flash-based controllers and automotive MCUs on its 8-inch line and will close its 6inch line.

Meanwhile, NEC Kansai will focus on manufacturing display drivers and power management devices on its 8-inch line. It will close its 6-inch line. NEC Yamaguchi will manufacture multi-purpose MCUs, multi-purpose ASICs, and LCD driver ICs while improving manufacturing efficiency on the existing 6-inch line.

According to NEC, the 8-inch line at NEC Yamagata, as well as the 6-inch lines at NEC Kansai and NEC Kyushu, will be closed by fiscal year 2010. The 5-inch lines at NEC Yarnagata and NEC Kansai will be closed eventually, according to the firm.

The moves follow a slowdown at the chipmaker. The company lowered its business forecast for this fiscal year ending March 3 1. In fact, NEC revised the forecast downward twice, including at the end of the mid-term.

NEC's sales are projected to be at around $5.9 billion, down $865 million from the forecast at the beginning of this term. The company attributed the revision to slow sales of LCD drivers and semiconductors for PCs.

Initially the company forecasted a $41 million operating profit with a net loss of $41 million. The latest revision said that the operating loss would expand to $247 million and net loss would be $370 million.

NEC to Cut Japan Production Lines

NEC Electronics is reorganizing its facilities with some "consolidations" in Japan. Earlier in the month the US branch announced hiring of 60 people to support a new 0.15micron ling at its 150,m (6incb) Roseville, California, faci1ity.

In terms of manufacturing in Japan, nine lines are to be consolidated to four. Yamagata will close its 200mm and focus on system on chip (SoC) production on 300mm wafers. Kyushu is to close a 150mm line and will be the company's "flagship facility" producing microcontrollers (MCUs) with embedded Flash options for the automotive and other markets on its 200mm line. Kansai is also to close a 150mm line and will consolidate its activity on to 200mm (display drivers and power management devices). Yamaguchi has the task of improving "manufacturing efficiency" on its 150mm line.

The above three closures are due by NEC's fiscal year 2010 (NEC is about to end "2007", so "2010" will begin April 1, 2009). Two further closures, of 5-inch facilities at Yamagata and Kansai, are scheduled "eventually", "but the timing will be considered carefully while being mindful of fulfilling existing commitments to customers, as well as the need to improve profits."

The IC packaging and assembly operations are already being shifted overseas, a process that is to be accelerated, with Japan facilities serving to primarily manufacture high value-added products, and support overseas facilities.

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