SEMICONDUCTOR INDUSTRY
UPDATE
September
2017
McIlvaine Company
TABLE OF
CONTENTS
Skorpios Semiconductor Acquires Texas Fab
Korea’s Shipments of Semiconductor Manufacturing Equipment Came in First
TSMC to Make Advanced Chips In China
ITRI Partners with Anritsu to Build Test Lab
Samsung Electronics to Invest Billions in Xian Factory Expansion
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Skorpios Semiconductor Acquires Texas Fab
Skorpios Technologies, a US System on Chip (SoC) company, has acquired Novati
Technologies, a semiconductor integration company and fab located in Austin,
Texas.
The Novatis facility is known for its innovative work in 2.5D/3D integration,
photonics, MEMS sensors, and micro fluidics for medical applications. Skorpios
has a proprietary wafer scale process that allows it to monolithically integrate
silicon with III-V gain materials used as the active medium, to create silicon
photonic ICs.
Prior to the acquisition, Skorpios had developed its heterogeneous integration
process in collaboration with Novati, and was building its ICs in Novati's
foundry. After the acquisition, Skorpios will immediately ramp up production,
starting with its 100Gb QSFP CWDM4 optical transceiver.
Korea’s Shipments of Semiconductor Manufacturing Equipment Came in First
Korea’s shipments of semiconductor manufacturing equipment totaled US$4.79
billion, coming in first for the second consecutive quarter.
The Semiconductor Equipment and Materials International (SEMI) announced on
September 12 that semiconductor manufacturing equipment shipments totaled
US$14.1 billion worldwide in the second quarter of this year, up 8% from the
previous quarter and up 35% from a year earlier.
South Korea’s shipments totaled US$4.79 billion, coming in first for the second
consecutive quarter. Its shipments increased 36% from the previous quarter and
212% from the same period of the previous year.
Samsung Electronics put a new semiconductor manufacturing plant into operation
in Pyeongtaek, Gyeonggi Province in July this year. The plant has an area of
31.1 million sq. ft. (2.89 million square meters) and is the largest
semiconductor manufacturing plant in the world. More recently, Samsung
Electronics announced that it would invest a total of 30 trillion won until 2021
for semiconductor manufacturing facility expansion. Likewise, SK Hynix is
planning to invest no less than 9.6 trillion won in its facilities this year.
Chinese companies such as XMC and Tsinghua Unigroup, in the meantime, are
planning to invest approximately 200 trillion won for the same purpose.
South Korea was followed by Taiwan (US$2.76 billion) and China (US$2.51
billion). Taiwan’s shipments fell 21% from the previous quarter whereas China’s
grew 25%. They were followed by Japan (US$1.55 billion)North America (US$1.23
billion) and Europe (US$0.66 billion).
TSMC to Make Advanced Chips In China
Taiwan Semiconductor Manufacturing Co. said it would produce its first
16-nanometer chips next year at a new Chinese fab as planned, beating its peers
in supplying such advanced chips to one of the world’s biggest semiconductor
markets.
The facility in Nanjing, China, is scheduled to begin mass production of
advanced 16-nanometer chips in the second half of next year.
TSMC has earmarked a US$3 billion budget for the 12-inch fab, along with a new
design service center.
At a ground-breaking ceremony for the new facilities on July 7 last year, TSMC
chairman Morris Chang (張忠謀)
said the plant, dubbed Fab 16, would be the first factory in China capable of
producing 16-nanometer chips when construction is completed.
“This
prediction is still valid,” Chang said in a speech in Nanjing, having returned
after 14 months to host a ceremony marking the installation of equipment at the
facility.
It provides further proof that TSMC is a semiconductor leader in terms of
technology, capacity and client services, he added.
TSMC’s capitalization has continued to rise, jumping to a record-breaking US$180
billion, up more than 30 percent from US$136 billion on July 7 last year, Chang
said.
“TSMC
Nanjing will greatly help elevate China’s foundry capabilities,” Chang said.
“With our extensive ecosystem in [chip] design, we will help boost Chinese
semiconductor designers’ growth as well.”
In the second quarter of this year, China accounted for 11 percent of the firm’s
total revenue of NT$213.86 billion (US$7.12 billion), surpassing Japan’s 8
percent and Europe’s 7 percent, a TSMC financial report showed.
The chipmaker has a broad customer base that includes China’s Hisilicon
Technologies Co (海思半導體),
which is owned by Huawei Technologies Co (華為),
and Spreadtrum Communications Co (展訊通信),
as well as mobile phone chip designer MediaTek Inc. (聯發科),
which focuses on the Chinese market.
In Taiwan, TSMC has continued to invest in next-generation technologies. The
chipmaker plans to ramp up production of 7-nanometer chips next year,
outstripping rivals such as Samsung Electronics Co.
TSMC said it would tap-out 13 new 7-nanometer products this year.
AXT Purchases New Manufacturing Facility in Dingxing
AXT, Inc., a leading manufacturer of compound semiconductor substrates,
announced that it has completed the purchase of its new manufacturing facility
in the city of Dingxing in the People's Republic of China. Dingxing,
located in the province of Hebei and under the jurisdiction of the
prefecture-level city of Baoding, is approximately a 90-minute drive south of
the company’s current Beijing location.
The new site, which features ample space for expansion, currently has three
existing buildings, which comprise approximately 140,000 sq. feet of
manufacturing space, and 50,000 sq. feet designated for offices and dormitories.
The existing structures will enable the company to move more quickly to
production. AXT has already begun to prepare the site for gallium arsenide
substrate manufacturing, and is planning for a staged relocation of its gallium
arsenide equipment and personnel throughout 2017 and 2018, pursuant to its
relocation plan. Initial qualification substrates are expected to be available
in the fourth calendar quarter of 2017. The company expects to have
production-level quantities from both its current site in Beijing and the new
Dingxing site for a period of time, and then gradually increase production
volume at the new site.
AXT has acquired a total of approximately 18.8 acres and expects to increase
manufacturing capacity at the new location as needed to meet customer
requirements. In addition, AXT will continue to evaluate the potential timing of
relocation of its indium phosphide and germanium substrate manufacturing, which
is expected to remain at the Beijing facility while the relocation of its
gallium arsenide business is completed.
“Securing the location of our new facility is a positive step for AXT,” said
Morris Young, CEO. “We have worked closely and collaboratively with both local
and central government authorities in China to fulfill the government’s request
for the relocation of our gallium arsenide production, while ensuring that we
can continue to serve the needs of our customers and support the growth of our
business. This step underscores the desire of all parties involved to make
our relocation a success. I want to thank the city officials of Dingxing
and Baoding for welcoming AXT to this site.”
Young continued, “With its relative close proximity to our current facility, its
existing manufacturing space, and its room for expansion, we believe our new
location positions us for both a successful and efficient relocation of our
gallium arsenide business, as well as the expansion of our capacity as current
and emerging applications for our technology increase customer demand. Our goal
is to make our new location a world-class manufacturing facility and a showcase
of our capabilities for customers and investors.”
Wilson Lin, chief operating officer, said, “Our dedicated manufacturing and
operations teams have been working diligently over the past year to prepare for
a smooth and efficient transition for our customers. We are committed to
supporting their requirements from our current location, while providing an
efficient qualification process and transition plan for the new facility. I am
confident that we have a highly skilled team in place, and the deep executive
experience and oversight to ensure our success.”
About AXT, Inc.
AXT designs, develops, manufactures and distributes high-performance compound
and single element semiconductor substrates comprising indium phosphide (InP),
gallium arsenide (GaAs) and germanium (Ge) through its manufacturing facilities
in Beijing, China. In addition, AXT maintains its sales, administration
and customer service functions at its headquarters in Fremont, California.
The company’s substrate products are used primarily in lighting display
applications, wireless communications, fiber optic communications and solar cell
applications. Its vertical gradient freeze (VGF) process technology for
manufacturing semiconductor substrates provides significant benefits over other
methods and enabled AXT to become a leading manufacturer of such substrates. AXT
has manufacturing facilities in China and invests in joint ventures in China
producing raw materials. For more information, see AXT’s website at
http://www.axt.com.
Entegris Expands Its Taiwan Tech Center
Entegris Inc., a specialty materials provider, announced the expansion of its
Taiwan Technology Center for Research and Development (TTC) in Hsinchu, Taiwan.
The expansion adds a new Microcontamination Control Lab (MCL) that focuses on
filtration media development and is home to the company’s relocated Asia
Applications and Development Labs (AADL) for trace metal, organic contaminant,
and nanoparticle analysis. This addition to the Center’s existing R&D,
formulation scale-up, and pilot production capabilities also creates a single,
off-site collaboration location for our customers’ specialty chemical, CMP and
liquid filtration needs.
Key facts for the $8.5 million USD investment:
Class 1000 cleanroom
5x increase in lab space
Facility renovations and equipment upgrades
“Interactions and dependencies between process materials and equipment are at a
critical evolution point as device scaling continues to be a leading driver for
efficient construction of today’s devices. Bringing the industry’s brightest
minds together in a state-of-the-art facility enhances Entegris’ unique ability
to meet these needs,” offered Entegris Chief Operations Officer, Todd Edlund.
“By expanding the MCL facility, we bring together core-competencies in liquid
filtration, specialty chemicals, and CMP to create more holistic analytical
services and technology development solutions designed to meet our customer’s
Logic, DRAM, and 3D NAND device manufacturing challenges.”
Soitec Launches Pilot Line in Singapore
Soitec, a designer and manufacturer of semiconductor materials for the
electronics industry, is launching a pilot line to produce fully depleted
silicon-on-insulator (FD-SOI) wafers in its Singapore wafer fab. This is the
first stage in beginning FD-SOI production in Singapore and providing multi-site
FD-SOI substrate sourcing to the global semiconductor market.
“Our decision to launch this FD-SOI line in Singapore as well as the decision we
already made to ramp up our FD-SOI production in France are based on direct
customer demand,” said Paul Boudre, CEO of Soitec. “These are very important
milestones for Soitec and the expanding FD-SOI ecosystem. In Singapore, we plan
to get full qualification at the customer level in the first half of 2019 and
then increase capacity in line with market commitment.”
The FD-SOI ecosystem continues to strengthen and the use of FD-SOI technology is
progressing. Multiple foundries, IDMs and fabless customers are engaged with a
growing number of FD-SOI tape-outs and wafer starts. FD-SOI offers a unique
value proposition for low-power applications, which makes it well suited for
rapidly growing electronic market segments such as mobile processing, IoT,
automotive and industrial.
Soitec reports that its investment in Singapore to launch its FD-SOI pilot line
is approximately US$40 million, to be spent over a 24-month period.
II-VI Inc. Buys Kaiam’s 6-Inch Wafer Fab
II-VI Incorporated, a specialist in engineered materials and optoelectronic
components, has acquired Kaiam Laser, a 6-inch wafer fabrication facility in
Newton Aycliffe, UK for US$80 million.
The deal was agreed in August and the US company says the acquisition is
expected to be break even at the EBITDA level within 12 months. The 300,000 ft2
facility hosts a state of the art 100,000 ft2 cleanroom designed for high volume
manufacturing of compound semiconductor devices based on GaAs, SiC and InP
materials.
Dr. Chuck Mattera, President and Chief Executive Officer of II-VI said: “This
facility hosts one of the best cleanrooms in the entire compound semiconductor
industry and augments our capabilities at a time when industry capacity is
rapidly becoming fully subscribed.”
Mattera added: ”Given the demand we anticipate, this acquisition will allow us
faster time to market than building a proprietary green field site and will
enhance our leadership position in the supply chain. It adds to our in-house
capacity for VCSELs, and is also as part of a broader strategic move to provide
a versatile 6” wafer fab for GaAs, SiC and InP-based devices.”
This acquisition will significantly expand our capacity and is expected to
enable us over time to penetrate high growth markets driven by, for example, 3D
sensing, 5G wireless, the electrification of the car, and data center
communications.”
Headquartered in Newark, California, Kaiam is a private company commercializing
photonic integrated circuits and has large-scale manufacturing in Livingston,
Scotland. Dr Bardia
Pezeshki, the CEO of Kaiam, added “II-VI will be using this fab more effectively
by leveraging its full capacity and multi-purpose use. I am looking forward to
working with II- VI to establish a commercial relationship that includes having
II-VI provide InP-based epitaxial wafers and wafer fabrication services for our
products as we continue to expand our transceiver business in the rapidly
growing 100G and impending 400G datacenter markets.”
II-VI is expanding its VCSEL product family and plans to drive scale and
innovation through the development of high performance compound semiconductor
devices.
ITRI Partners with Anritsu to Build Test Lab
Industrial Technology Research Institute (ITRI), a Taiwanese research
organization, and the test and measurement firm Anritsu have announced a
collaboration to build a high-speed test lab to provide a bit error rate test
(BERT) system with symbol rate up to 56Gbaud PAM4 and 56Gb/s NRZ per channel.
The BERT system incorporates a wideband optical spectrum analyzer (OSA),
high-precision pulse pattern generator (PPG) and high-sensitivity error detector
(ED) modules for generating high quality PAM/NRZ test signal outputs with fast
Tr/Tf, low jitter and noise, and high amplitude, and supporting
high-sensitivity, real-time error detection and analysis functions. It can be
used for high-speed laser transceiver modules and silicon photonics related
components, to accurately measure their characteristics as well as transmission
and reception capabilities.
With this BERT system implementation, ITRI is expected to become the leading
test lab for testing 400GE and silicon photonics related applications in Asia,
giving a further booster to the goal of Taiwan’s future plan to become a
high-speed photoelectric devices R&D center.
Anritsu's Signal Quality Analyser MP1800A is a plug-in module type BERT that can
provide high quality bit error rate analysis function using built-in PPG and ED
modules. Combining the MP1800A with variety of remote probe heads allows the
BERT to flexible support both 28G/56G NRZ and 28G/56Gboud PAM4 tests, and to
output high-amplitude test signals of 4.4 Vp-p (differential, max.).
In addition, through the multi-channel PPG sync function can controls 3Eye
amplitudes of PAM4 signals independently, enables high-reproducibility
evaluation of optical modulator without using an external driver amplifier. With
built-in PAM4 decode and CTLE functions, the remote test platform also supports
real-time PAM4 BER measurements using 28bit/s high sensitivity ED module, to
improve system’s test and analysis capabilities.
Furthermore, the MS9740A can also provide high-quality analysis and signal
detection for optoelectronic semiconductors and related passive components.
“With continued growth in network traffic driven by demanding of real-time audio
and video, there is an urgent need for cloud data centers to support 400G
Ethernet transmission, in response to explosive network data growth. ITRI will
be dedicated to laser devices, photodiode and silicon photonic research and
development, providing optical devices and transceiver technologies required by
400GE, thereby enhancing Taiwan’s industry capacity," said ITRI.
Samsung to Ramp up Chinese Fab
Samsung will invest $7 billion over a three-year period to ramp up a Chinese fab
to expand production of NAND flash memory that’s in strong demand for
smartphones and other mobile devices.
The investment is for a new fab in Xi’an that would be the second chip facility
at the northern China site. On Monday (Aug. 28), Samsung approved $2.3 billion
of the expected investment of $7 billion, according to reports that said the
South Korea-based chipmaker was their news source.
The company has been investing aggressively as industry-wide capital spending is
expected to soar by 20 percent in 2017, largely driven by Samsung, according to
market watchers. The key driver behind strong growth this year has been the
memory chip segment.
Samsung’s full-year 2017 capital expenditures could range from $15 billion to
$22 billion. If Samsung spends $22 billion this year, total semiconductor
industry capex could reach $85.4 billion, representing a 27 percent increase
over the $67.3 billion the industry spent in 2016.
China is expected to become the world’s second-largest market for chip equipment
by 2018 as a number of startups in the nation are ramping up new fabs.
China will increase overall fab spending, including construction and equipment,
by 54 percent annually as the nation’s spending rises from $3.5 billion in 2016
to $5.4 billion in 2017, according to global chip equipment industry association
SEMI. By 2018, the figure will jump to $8.6 billion in 2018, according to SEMI.
A Samsung Electronics spokesman declined to comment on the amount of capacity to
be added in the second Xi’an China fab. Samsung built its first fab in Xi’an in
2014, and that facility is in full operation.
The company, which just this year is expected to become the world’s largest
chipmaker, snatched 38.3 percent of the global NAND flash memory market revenue
during the April-June period this year, according to the news reports.
In the meantime, China has been trying to build a domestic memory industry to
satisfy its huge demand for semiconductors that as of today, the nation has no
choice but to import. In the meantime, companies such as Samsung have been
investing in expansion of Chinese memory chip production, anticipating growth of
the domestic industry.
A memory boom propelled Samsung to record profit in the second quarter this
year, and the company has forecast that situation is likely to continue in the
current July-to-September quarter.
Samsung’s strength in memory chips has driven the company’s earnings to a record
in the most recent quarter, and helped it become more profitable than Apple Inc.
Samsung had about 41 percent of the NAND market in the March quarter, more than
double the 18 percent of Toshiba Corp., which developed the technology,
according to data compiled.
To be sure, Samsung’s outlook isn’t totally rosy. Five top executives of South
Korea’s largest conglomerate that accounts for nearly a fifth of the nation’s
economy have been sentenced to jail terms of up to five years on charges of
bribery involving top-level officials of the South Korean government.
Nearly a decade ago, Samsung and its other competitors in the memory chip
business paid a fine of about $1 billion to the U.S. government for price
fixing.
Samsung Electronics to Invest Billions in Xian Factory Expansion
Samsung Electronics revealed in an official announcement on August 28 that the
company plans to invest $7 billion over the next three years to expand Samsung
Semiconductor’s NAND flash memory factory in Xian, China. The decision was made
to “respond to growing demand for NAND flash drives over the mid-to-long-term,”
according to the company.
On July 4, Samsung Electronics began operating its semiconductor plant in
Pyeongtaek, Gyeonggi Province, while also announcing that the company was
considering expanding its production facilities in Xian. The first Xian
production line was completed in 2014 and is currently operating at full
capacity.
Samsung’s expansion of the factory is a strategic move that will allow for
greater economies of scale and production to meet the needs of the Chinese
market, which has the highest demand for NAND flash drives in the world. Despite
concerns that the large-scale investment decision would be postponed as Samsung
Vice Chairman Lee Jae-yong was sentenced to prison, the company has decided to
push ahead with the plan as a way to respond to growing demand.
In an executive meeting of Samsung Electronics’ management committee which was
held the same day, a loan of $2.3 billion to Samsung Semiconductor was approved.
The new facility is expected to serve as a dedicated production hub for V-NAND
flash drives.
Wales on the Global Technological Map
The ten councils that make up the Cardiff Capital Region City Deal, which
includes Caerphilly, have bought the former LG Semiconductor site at Newport’s
Imperial Park from the Welsh Government.
It is hoped the site, which is being leased by Cardiff-based tech firm IQE, will
become the world’s first compound semiconductor ‘cluster’, attracting other
firms developing the technology and eventually creating 2,000 new jobs.
Compound semiconductors are more complex than silicon technology and offer lower
power consumption, higher operating speeds and temperatures, light-emitting and
detecting properties.
These properties are opening up significant markets in the automotive, health
and security sector not least in helping deliver 5G smart phones, the Internet
of Things, tele-health and autonomous driverless vehicles.
Dr. Drew Nelson, Chief Executive of IQE, said: “Compound semiconductors are
rapidly defining 21st Century technologies and Wales is uniquely positioned to
be center stage of this global, high-tech industry sector.
“This dedicated compound semiconductor facility between Cardiff and Newport will
act as a key component of the burgeoning cluster that is already cementing
Wales’ reputation for technology leadership.
“The initiative is a shining example of what can be achieved through
collaboration. The Welsh and UK governments, along with the ten councils that
form the Cardiff Capital Region, have worked closely with academic institutes
and industry to build an innovation infrastructure that will support and nurture
the region as a true global player in new and emerging technologies.
“The facility will become the base for a number of compound semiconductor
related activities, including IQE, where we expect to rapidly expand our
production capacity to meet increasing demand for our technology.”
It is the first investment under the £1.2bn Cardiff Capital Region City Deal
programme and the £38m spent has the potential to bring in a further £375m of
private sector investment.
The Welsh Government has already spent £12m on the cluster project and the UK
Government has spent £50m.
The proposal seeks to return the original investment plus interest over the life
of the project.
Economy Secretary Ken Skates AM said: “It is hugely encouraging that Welsh
Government’s initial £12m investment in developing the cluster back in 2015 has
been the catalyst for the announcement that IQE plans to expand into the City
Deal’s new facilities.
“Not only is it extremely exciting news for the Welsh economy, securing
additional jobs and investment, but it further cements Wales as a world leader
in this state-of-the-art technology.”
Secretary of State for Wales Alun Cairns said: “Government does not create
innovation, but it can be a catalyst to getting the scientists and engineers,
the designers and the entrepreneurs together to make it happen.
“This collaboration is important because innovation is a shared endeavor and I
look forward to seeing the cluster take shape and create a lasting engineering
and manufacturing legacy in Wales.”
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