SEMICONDUCTOR INDUSTRY
UPDATE
September 2014
McIlvaine Company
TABLE OF
CONTENTS
The
Colleges of Nanoscale Science and Engineering (CNSE) at SUNY Polytechnic
Institute
Murata to
acquire Peregrine Semiconductor
Infineon
to acquire U.S.-based Semiconductor Company
SMIC and
JCET Establish a Joint Venture
Fairchild
to Shut Down Penang, Bucheon Fab Lines
Eon
Silicon, China Sigma Team Up for NAND Flash
Toshiba,
SanDisk Open Semiconductor Fab 5
UMC joins
Fujitsu’s New Foundry Company
Google
Developing Quantum Computing Chip
(SUNY Poly) announced it is partnering with Graphene Frontiers, LLC, a world leader in the production of graphene for commercial and industrial applications, to develop next generation graphene-based processes, technologies, and techniques that will enable revolutionary innovation in the electronics industry. The collaboration will spur significant investment and job creation, including a $3 million capital investment by Graphene Frontiers at the Albany Nanotech Complex.
"This is an incredible opportunity for New York State to continue leading the charge in the development of next generation technologies, and a testament to the global reputation Governor Andrew Cuomo has built for this state as the leader in nanotechnology," said Dr. Michael Liehr, CNSE Executive Vice President of Innovation and Technology and Vice President for Research. "Graphene Frontiers has pioneered some industry changing technology and has chosen CNSE for collaboration on fabrication and production processes, thanks to our collection of world-class tools and expertise. We welcome them to the Albany Nanotech Complex and look forward to continued growth and expansion."
"A partner like the State University of New York's College of Nanoscale Science and Engineering will rapidly accelerate our development efforts," Graphene Frontiers CEO Mike Patterson said. "We look forward to sharing our vetted knowledge and resources, as well as exposing ourselves to key stakeholders who can further our company vision."
The partnership will leverage Graphene Frontiers' graphene growth technique with CNSE's process integration, development, and analysis capabilities to establish 300mm fabrication processes for production of the company's graphene biosensor. A dedicated 300 mm graphene growth and transfer production line for wafer scale graphene supply will also be established. This collaboration benchmarks the next step in bringing graphene and graphene device applications to commercial markets. These capabilities will enable tech companies with the means for advancing next generation electronics and to realize the vision of graphene. The project will support 27 employees and $3,000,000 in capital investment consisting of tools and related equipment, and enables additional employment opportunities for both CNSE and Graphene Frontiers.
Graphene Frontiers has developed an innovative and exclusive manufacturing process that makes it economically viable for tech companies to begin using graphene, the revolutionary nanomaterial with potential for disrupting numerous industries with its unique electrical and mechanical properties. Among graphene's many applications are advanced chemicals and biosensors, where the material offers distinct advantages in medical diagnostics and environmental monitoring. Graphene Frontiers has pioneered this cutting-edge sensor nanotechnology and has chosen to collaborate with CNSE on its widespread introduction to the global marketplace.
Murata Electronics North America, a wholly owned subsidiary of Murata Manufacturing and Peregrine Semiconductor Corporation announced that they have entered into a definitive agreement under which Murata will acquire all outstanding shares of Peregrine not owned by Murata, for $12.50 per share in cash, or a total transaction value of $471 million ($465 million excluding Murata’s existing holding).
Peregrine is the founder of RF SOI (silicon on insulator) and pioneer of advanced Radio Frequency (RF) solutions and is a leading provider of RF front-end (RFFE) solutions for mobile and analog applications.
Upon closing of the transaction, Peregrine will become part of Murata’s strategy to expand its core business. Peregrine will become a wholly owned subsidiary of Murata and continue with its current business model of solving the world’s toughest RF challenges.
“This acquisition will combine Murata’s world-leading mobile RF module capabilities with Peregrine’s best-in-class RF front-end products. Peregrine has a team of talented RF engineers,” said Norio Nakajima, Executive Vice President, Director of Communication Business Unit of Murata. “Peregrine invented RF SOI, has led its development for 20 years, and accomplished a large number of industry firsts. We have worked closely with them for many years. Their innovation, including the Global 1 all-silicon integrated RF front-end, is a key strategic area for the mobile industry. This transaction will deepen our existing partnership and position us to meet the expanding opportunities in this field.”
“Murata is the world’s leading RF module and filter provider, and we have benefited from our many years of partnership with them. The combination of Murata’s leading products with Peregrine’s leading-edge SOI products will position us to compete aggressively in our chosen markets,” said Jim Cable, PhD, Chairman and CEO of Peregrine Semiconductor. “As part of the Murata team, we will be able to expand our existing partnership and speed the industry’s transition to an integrated, all-CMOS RF front-end. We remain committed to providing leading solutions to customers in all our current markets. We have huge respect for Murata’s capabilities, and look forward to jointly accomplishing great things.”
The acquisition will deliver to Murata advanced RF Front-end capabilities and the world’s best Silicon on Insulator (SOI) process technology, key areas for the growing integration of mobile technologies. The radio requirements of smartphones and other wireless devices continue to grow more complex.
This complexity can only be solved with silicon technology. Peregrine supplies many wireless markets, including: smartphones, test & measurement, automotive, public safety radio and wireless Infrastructure. Peregrine will also provide Murata with a strong portfolio of Intellectual Property Rights (IPR) covering the entire RF SOI front-end.
The transaction, which has been approved by both companies’ boards of directors, is expected to close by the end of 2014 or early 2015, subject to Peregrine’s stockholders’ approval, regulatory approvals, and other customary closing conditions
Germany's Infineon Technologies AG will acquire U.S.-based semiconductor company International Rectifier Corporation $3 billion USD. The acquisition combines two semiconductor companies with leadership positions in power management technology. By the integration of International Rectifier, Infineon complements its offerings and will be able to provide customers with an even broader range of products and services. Infineon will also benefit significantly from greater economies of scale as well as a larger regional footprint.
The closing of the transaction is subject to regulatory approvals in various jurisdictions and customary closing conditions, as well as approval of International Rectifier stockholders. The transaction is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approval.
Infineon’s and International Rectifier’s product portfolios are highly complementary. International Rectifier’s expertise in low-power, energy-efficient IGBTs and Intelligent Power Modules, Power MOSFETs and Digital Power Management ICs will integrate well with Infineon’s offering in power devices and modules.
The transaction will result in a broad range of products creating a comprehensive provider in the market for silicon-, silicon-carbide- and gallium-nitride-based power devices and integrated circuits (ICs).
Semiconductor Manufacturing International Corporation, the largest and most advanced pure foundry provider in China; and Jiangsu Changjiang Electronics Technology Co., Ltd., the largest packaging service provider in China, jointly announced the formation of a joint venture for 12-inch bumping and related testing, from the previously signed joint venture agreement, which will be established in Jiangyin National High-Tech Industrial Development Zone (JOIND), in Jiangsu Province, China.
By setting up in Jiangyin National High-Tech Industrial Development Zone, the joint venture can benefit from Jiangyin’s unique location and mature industrial environment to quickly set up the 12-inch wafer bumping and CP testing production line (Middle-End-Of-Line). Meanwhile, the joint venture can also utilize JCET’s nearby advanced back-end packaging production line, which includes Flip-Chip to support advanced Back-End-Of-Line production for 40/45nm, 28nm and below. Together with SMIC’s 12-inch front-end advanced chip production line in development, this will be China’s first-ever domestic 12-inch advanced IC manufacturing supply chain. This supply chain will shorten the overall manufacturing cycle time. More importantly, its close proximity to China’s consumer electronic industry and the world’s largest end-market, will allow our customers to respond with a shorter time-to-market window, and therefore better serve the fast changing consumer electronic market.
Dr. Tzu-Yin Chiu, SMIC’s Chief Executive Officer and Executive Director commented, “The Yangtze River Delta is regionally the strongest, largest, and most developed ecosystem in China’s IC industry. Jiangyin is located in the center of Yangtze River Delta’s ‘Golden Triangle’ comprised of Suzhou, Wuxi and Changzhou, and is only 180km from Shanghai. Furthermore, Jiangyin has good transportation infrastructure and is a hub of human talents. With our strategic partner JCET located in Jiangyin, our joint venture will rely on JCET’s existing manufacturing base and established facilities, thus, the mid and back-end lines will be constructed nearby to increase its dominance in the area, shorten its lead-time, and provide a one-stop service for customers. The initiation and implementation of the project will benefit SMIC’s ramp up of 28nm mass production and will help increase the capability of China’s semiconductor industry.”
Mr. Xinchao Wang, Chairman of JCET stated, “SMIC and JCET’s joint venture in Jiangyin will combine our companies’ strengths and enhance our long-term relationship; furthermore, the joint venture will focus on upgrading the domestic 3D IC industry chain to world-class standards.”
Jian Shen, Mayor of Jiangyin and Director of Jiangyin High-Tech Zone said, “SMIC and JCET are the most prominent companies in China’s semiconductor industry. The joint venture will help Jiangyin to become an important component of China’s most advanced semiconductor ecosystem. The Jiangyin municipal government gives its full support to this project in order to establish Jiangyin as one of the leading integrated circuit manufacturing bases, and to accelerate the growth and development of China’s semiconductor industry.”
Fairchild Semiconductor International Inc. is closing down two of its manufacturing facilities as part of a bold initiative the firm is taking to cut costs and enhance manufacturing capabilities.
Fairchild said it will eliminate its internal five-inch and reduce its six-inch wafer fabrication lines by next year. This move involves closing its manufacturing and assembly facilities in West Jordan, Utah, and Penang, Malaysia, as well as the remaining five-inch wafer fabrication lines in Bucheon, South Korea. In an email exchange with EE Times Asia, the company disclosed that the shutdowns will impact 15 per cent or approximately 9,000 of its employees worldwide.
Fairchild, which makes power-management ICs, said it will continue to operate its eight-inch wafer fabs in Maine and Pennsylvania, as well as its six-inch and eight-inch fabs in South Korea. It will also continue to operate its assembly and test facilities in Cebu, Philippines and Suzhou, China.
"The realignment we are announcing will maximize the utilization of eight-inch factories and reduce the complexity of our manufacturing footprint, while creating the flexibility to support ongoing customer demand through a greater use of external manufacturing sources," said Mark Thompson, Fairchild's chairman and chief executive, in a prepared statement.
The reason behind the shutdowns in Asia is to get rid of ageing five-inch lines, a Fairchild spokesperson told EE Times Asia. While the industry is moving toward larger wafers, these actions are expected to increase eight-inch wafer production from the current total wafer output of 30 per cent to approximately 75 per cent. Fairchild will then be better able to flex capacity among eight-inch lines and thus ramp up eight-inch development lines to production much faster—costs will be reduced significantly, while quality will improve as well.
"Meanwhile, foundry partners will account for more wafer production, increasing from less than 10 per cent of total wafer output today to up to 30 per cent, enabling higher internal utilization and lower capital spending," the spokesperson added.
The company expects to achieve between $45 million and $55 million in annualized savings after it completes the cost-cutting measures. In addition, it said that it will incur approximately $36 million in restructuring costs, and plans to record a non-cash charge of $25 million.
Fairchild in California has been working on a strategy to improve its manufacturing execution that it hopes will boost its gross-profit margins to nearly 40 per cent by the end of 2015. Indeed, its gross margins continue to climb. In its second quarter of 2014, gross margin was 33.4 per cent compared to 30.3 per cent in the first quarter of 2014 and 29.1 per cent in the second quarter of 2013.
In 2013, Fairchild closed its eight-inch line at its Salt Lake wafer fab facility and transferred manufacturing to its eight-inch lines in South Korea and Pennsylvania, according to 10-Q documents filed with the Securities and Exchange Commission. Earlier this year, Fairchild said that it was refocusing its efforts on integrated power components for mobile and green electronics, promising to tighten lead times for its products. It also made a foray into the MEMS market with the $60 million Xsens Technologies BV buyout in May.
During the company's recent earnings call with analysts, Thompson said the company has improved its operations, supply chain, marketing and sales to "enable the steady improvement in revenue and financial performance. In operations, we have reduced cycle times in our factories, significantly improved our management of the supply chain and increased flexibility within our internal and external manufacturing. This has enabled us to maintain short lead times and be more responsive to our customers."
Fairchild posted second-quarter sales of $371.6 million, up eight per cent from the prior quarter and four per cent higher than the second quarter of 2013. Net income was $17.8 million compared to a net loss of $9.3 million in the prior quarter and a net loss of $7.5 million in the second quarter of 2013.
Eon Silicon Solution, a Taiwan-based flash chip supplier, has been revealed that it will team up with China Sigma to set up a NAND flash joint venture in China, according to industry sources.
Since early 2014, market speculation has indicated that Taiwan-based Elite Semiconductor Memory Technology (ESMT) and US-based Integrated Silicon Solutions (ISSI) have been competing with each other to take over the management of Eon.
SDRAM vendor ESMT became one of the major shareholders of Eon in 2011 and has been trying to take over Eon in order to integrate its SDRAM, NOR/NAND flash businesses, eyeing the booming MCP NAND flash market.
The Eon-China Sigma joint venture is likely to focus on the development and production of single-level cell (SLC) NAND flash chips, a move which is set to compete directly with Taiwan-based flash memory suppliers Macronix International and Winbond Electronics, the sources contended.
Toshiba Corp. and SanDisk Corp. have opened the second phase of the No. 5 semiconductor fabrication facility and have started construction of the new No. 2 fabrication facility at Yokkaichi Operations, Toshiba's NAND Flash memory plant in Mie prefecture, Japan.
Toshiba started construction of the second phase of Fab 5 in August 2013, and Toshiba and SanDisk have overseen installation of production equipment in the expanded facility since July this year. Production in phase 2 began at the start of this month, with 15nm NAND flash memory process technology, the world's smallest and most advanced node. Toshiba and SanDisk announced deployment of this jointly developed 15nm NAND flash process in April this year, with initial production in part of Fab 5 phase 1, and now target conversion of the remaining capacity in phase 1 to the new process technology.
Toshiba is constructing the New Fab 2 to secure space to convert Toshiba and SanDisk's current 2D NAND capacity to 3D NAND, with expected readiness for production in 2016. Toshiba and SanDisk will together install production equipment and will determine installed capacity and output targets and schedules by closely monitoring market trends.
Yasuo Naruke, Corporate Executive Vice President of Toshiba Corp. and President and CEO of Semiconductor & Storage Products Co., says, "Our determination to develop advanced technologies underlines our commitment to respond to continued demand of NAND flash memory. We are confident that our joint venture with SanDisk will allow us to produce cost competitive next generation memories at Yokkaichi."
Sanjay Mehrotra, President and Chief Executive Officer of SanDisk, says, "We are delighted to further advance the SanDisk/Toshiba collaboration as well as to continue both companies' more than decade- long partnership with the city of Yokkaichi, Mie Prefecture, and Japan. Fab 5 Phase 2 and the future New Fab 2 will provide both companies with the cleanroom space needed to continue converting our installed NAND capacity to new advanced technology nodes."
Toshiba and SanDisk see long-term demand growth for NAND flash memory, particularly for smartphones, tablets, and SSDs. The companies will continue to strengthen their competitiveness and market leadership through development and production of advanced flash memory technologies.
United Microelectronics Corporation (UMC) and Fujitsu Semiconductor Limited announced an agreement for UMC to become a minority shareholder of a newly formed subsidiary of Fujitsu Semiconductor that will include its 300mm wafer manufacturing facility located in Kuwana, Mie, Japan.
UMC’s advanced 40nm technology will be also licensed to Fujitsu Semiconductor. The company will provide high quality foundry services to customers by combining Fujitsu Semiconductor’s low power process and embedded-memory technology with UMC’s foundry expertise and advanced process technology. Under the terms of the agreement, UMC will invest JPY 5 billion as an initial investment by which UMC will subscribe for approximately 9.3% of the company’s shares.
Po Wen Yen, CEO of UMC, said, “We are continuously exploring ways to expand our operations to increase our customers’ competitiveness while also delivering maximum value to our stakeholders. Partnering with a leading Japanese semiconductor company like Fujitsu Semiconductor for a local joint venture will not only offset the time, risk and cost of building a new fab, but also provide access to another 300mm manufacturing source in addition to UMC’s own 300mm operations in Taiwan and Singapore. With three 300mm operations in different regions throughout Asia, both parties will hold unique positions to be able to serve customers looking to mitigate manufacturing risk, such as Japan’s automotive chip makers, who vigorously seek suppliers that implement robust business continuity plans (BCP). UMC will also be able to leverage this strategic partnership to gain new foundry business within the Japanese market.”
Haruki Okada, President of Fujitsu Semiconductor, said, “Fujitsu has been in search of a partner with whom to jointly operate a new foundry company based on its Mie 300mm wafer fab. I am pleased to announce that Fujitsu Semiconductor and UMC, a leading global semiconductor foundry, have entered into the joint venture agreement. Since Fujitsu Semiconductor and UMC have built up a good relationship while Fujitsu Semiconductor has outsourced its products to UMC for years, I am confident that the joint venture will succeed. The joint venture will provide excellent foundry services to customers, based on a wide variety of CMOS technologies with highly-skilled process developing and porting ability, the 40nm process technology licensed by UMC and high quality manufacturing system certified by automotive customers. I am expecting that the joint venture will be not only one of the best foundry companies in the world, but also a bridge between Taiwan and Japan.”
UMC will license its 40LP (Low Power) process technology to Fujitsu Semiconductor as an expanded process offering for the Company and contribute capital to expand the Company’s 40nm manufacturing capacity. The products currently manufactured by Fujitsu Semiconductor at Mie Fab will be manufactured and delivered by the Company to customers including Fujitsu Semiconductor.
Through this partnership, the new Japan-based joint venture will aim to expand its business globally as a pure-play foundry company by strengthening its production and development capability as well as cost competitiveness.
The Google Quantum A.I. Lab Team announces that John Martinis and his team at UC
Santa Barbara will be joining Google to start a hardware initiative to build new
quantum information processors based on superconducting electronics.
The Quantum Artificial Intelligence team at Google is launching a hardware
initiative to design and build new quantum information processors based on
superconducting electronics. We are pleased to announce that John Martinis and
his team at UC Santa Barbara will join Google in this initiative. John and his
group have made great strides in building superconducting quantum electronic
components of very high fidelity. He recently was awarded the London Prize
recognizing him for his pioneering advances in quantum control and quantum
information processing. With an integrated hardware group the Quantum AI team
will now be able to implement and test new designs for quantum optimization and
inference processors based on recent theoretical insights as well as our
learnings from the D-Wave quantum annealing architecture. We will continue to
collaborate with D-Wave scientists and to experiment with the “Vesuvius” machine
at NASA Ames which will be upgraded to a 1000 qubit “Washington” processor.
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