Greetings from Down-East Maine -- "the way life should be." On Tuesday, our annual 4th of July parade, complete with marching bands from Canada and the U.S., plus our governor and two U.S. senators, will march down the main street of Eastport, a nearby fishing village. Tied up at the town dock, and towering over downtown, will be a U.S. Navy guided missile ship. Happy 4th everyone! As usual, this Friday's column comments on important developments that have surfaced during the past week in the chip world.
New way to slash prices on DRAMs
New technology from IBM will either end up slashing the price of computer memory or at least help it to keep up with the exploding size of Microsoft programs. IBM researchers have come up with a new level of cache that's designed to more efficiently handle data and instructions on memory controller chips.
Called MXT, for Memory eXpansion Technology, the new design doubles the memory capacity of a computer or cut in half the amount of memory needed because it automatically stores frequently accessed data and instructions closer to the central processing unit for faster access. Less frequently accessed data and instructions are compressed and stored in memory and not on a disk. This concept will increase memory capacity by a factor of two or more, IBM claims.
"Big Blue" when's the last time you heard that? came up with the technology for servers designed around Intel MPUs, but says it could also be adapted for desktop and laptop PCs and Internet appliances. MXT could end up saving Internet service providers and large computing operations millions of dollars in memory costs, IBM figures. ServerWorks of Santa Clara, Calif., will incorporate MXT into core logic for servers based on Intel processors under a five-year technology sharing agreement with IBM.
(See June 26 story.)
May chip sales no surprise: just another record
The global chip business is still "putting the pedal to the metal." Sales once again hit a record in May and were in line with the Semiconductor Industry Association's mid-year forecast that sharply revised its earlier sales forecast of 21% to 31% for 2000.
For May, sales climbed 39.8% to $15.8 billion worldwide from $11.3 billion in
May 1999, the SIA reports. Sequentially, sales grew 3.9% in May over April.
Indeed, the SIA still sees nothing ahead that would slow down the industry's momentum for at least the next two years. Of course, the trade group is always accused of being over optimistic. Growth drivers in May included standard linear devices, field programmable logic, digital signal processors, flash memories, DRAMs, and PC microprocessors.
Demand in the Americas snapped back to life in May. Chip sales in the region grew 32.5%, far faster than in April when sales rose an anemic 0.7%. But Asia Pacific did even better, shooting up 45.8% over the same month last year.
Japanese sales also jumped, rising 43.6%, while European revenues were up 40%.
(See June 30 story.)
Picture brightens for Chartered
Singapore's Chartered Semiconductor will have better-than-expected news for its shareholders when it reports 2nd-quarter results on July 21. The big silicon foundry says revenues and profits will be substantially greater than expected because its fabs are running at higher capacities and prices for its processed wafers are higher.
Chartered expects to report revenues 10% higher than the $238.4 million it recorded in the previous quarter. It also expects net income to run 4%-to-5% higher than the $37.8 million profit it earned in the first three months of
Profit margins also are looking better than expected. Originally, margins were expected to be down sharply from the first quarter due to the costs of starting up its new Fab 6. But better business conditions will result in gross profit margins dropping only two percentage points from the first quarter's 35% of net revenues.
And even though it is starting up two new 8-inch wafer fabs, Chartered predicts that earnings per share will remain constant in the third and fourth quarters.
(See June 30 story.)
Did you hear the one about the San Jose heat wave?
I'll bet the folks in Dallas and Phoenix will roll in the aisles laughing when they read IMP's excuse today for reporting lower revenues in the current quarter. The San Jose company claims that a record heat wave caused manufacturing problems that hurt sales.
Yeah sure--it probably hit 80F. Heck, it's always hot in the summer in the Valley. That excuse is good only up here in Maine where the temp hit a high of 57F today.
For its fiscal year ended Mar. 26, IMP posted only a 4% increase in revenues to $34.8 million, but did manage to cut its net loss of $7.9 million last year to $3.6 million in fiscal 2000. Both losses were the result of low factory utilization, IMP explains. India's Teamasia Semiconductor recently invested $3.9 million in IMP and now holds a 62% stake. The discrete semiconductor supplier has already started using IMP as a chip foundry.
(See June 29 story.)
Altera ships world's largest PLD
Here's one thing you can do with eight layers of metal and a 0.18-micron feature size: Build the industry's largest programmable logic device. Altera says it's done just that, shipping this week a 1.5-million-gate programmable logic device that's aimed at the emerging market for a "system-on-a-programmable chip." Taiwan Semiconductor Manufacturing Co. fabricated the monster chip.
Believe it or not, it contains 2.5 -million "system gates" and is 35% denser than the nearest competing chip, the company maintains. Looking at it another way, the giant PLD contains 51,840 logic elements--the basic building blocks of programmable logic.
To design some complex systems in the past, designers have had to sacrifice performance by partitioning designs across multiple PLDs, Altera explains. But with the new PLD, the company says that its customers can develop complete systems by integrating multiple high-speed intellectual property cores all on a single programmable logic device.
The new PLD is aimed at such communications applications as routers, switches, baseband signal processing, wideband CDMA systems, and storage network equipment. Prototype cost is $4,995 each, but Altera says that in volume production mask-programmed versions of the device will sell for about $100 each.
(See June 30 story.)
Faster, cheaper testing coming for flash memory
Now here is something the fast-growing flash memory business should really be able to use. It's a faster, cheaper way to test flash memory.
Credence Systems has come up with a new nonvolatile memory tester that it claims will double the testing capacity for flash memories over other testers. The Kalos XW system tests up to 32 sites with 48 pins per site, or 16 sites with 96 pins in parallel, the Fremont, Calif., company says. It can test in parallel up to 32 NOR-based flash memories or 64 NAND-based flash chips, as well as 128 serial nonvolatile memories, according to Credence.
The ATE supplier claims the Kalos XW test head has "zero-footprint interface" to probers and handlers with overhead docking capability. This cuts the floor space needed in both final testing and in wafer sort cleanrooms, Credence
Parallel testing of flash chips is done at high speed while the chips are mechanically attached to a leadframe in an electrically isolated configuration. This "strip" or "panel" testing was used in the company's original Kalos testers. The new system will be shown at the Semicon West trade show in July.
(See June 27 story.)
Conexant pulls a Cisco and buys startup with technology it needs
Boy, these startups are expensive to buy. But as long as your stock price is way up there, it doesn't seem to matter all that much. Conexant Systems formerly Rockwell Semiconductor, is buying tiny, privately held HotRail, a San Jose supplier of high-speed switch fabric and backplane channel technology.
Conexant is coughing up 7.8 million shares for HotRail, or stock worth a cool $400 million. But Conexant says it needs HotRail's technology to deliver what its customers are beginning to need for next-generation Internet infrastructure equipment. Such systems now include everything from multi-terabit routers, asynchronous transfer mode (ATM) and Internet protocol switches to gigabit Ethernet switches and optical networking gear.
HotRail raised $34.5 Million in venture capital to come up with new ways to come up with terabit switching and scalable packet processing across backplane systems. The startup already has developed a scalable, parallel CMOS transceiver for 16-gigabit-per-second, full-duplex interconnects between chips and boards. It also has come up with a 3.125 gigabit-per-second, serial transceiver for Fibre Channel, InfiniBand, and Gigabit Ethernet standards.
Both products are now being sampled.
(See June 27 story.)
Now here's a switch: an IDM licenses technology from foundry
A couple of years ago, this deal would have been a man-bites-dog story. But today it also shows the new direction the semiconductor industry is taking. National Semiconductor is licensing advanced processing technology from Taiwan Semiconductor Manufacturing Co., the first time that a major integrated device manufacturer--better known as an IDM--has done such a thing.
Until now, the technology tables were reversed with the dedicated foundries paying IDMs for their latest processes. The 10-year pact covers future deep-submicron technologies, including copper interconnects and, eventually, 0.10-micron processes. Look for TSMC to strike similar technology licensing agreements with other IDMs in the future.
The TSMC technology will be transferred to National's facility in South Portland, Maine. It expects to boost the capacity of this fab from 15,000 to 25,000 eight-inch wafer starts per month by the end of next May. The deal certainly marks a change in strategy for National. The chip maker had been looking for a year for someone to buy a majority stake in its Maine fab after it had pulled out of the MPU business and was realigning its production operations.
TSMC had looked at the Maine fab, but decided to expand on its own sites instead. The Maine fab, which is currently processing wafers with National's 0.25- and 0.18-micron technologies, will gain access to five generations of TSMC processes, or down to 0.10-micron design rules.
(See June 28 story.)
But moving 300-mm process to 200-mm fab could be tough
Moving the advanced processing technology it is licensing from Taiwan Semiconductor Manufacturing Co. to its eight-inch Maine fab may be trickier than National Semiconductor realizes.
TSMC's 0.10-micron, full-copper process that it is making available to the U.S. Integrated Device Manufacturer is being developed specifically for TSMC's new 12-inch wafer fab lines. For now, National says it has no plans to upgrade its South Portland fab to 12-inch wafers and will most likely adapt TSMC's 0.10-micron technology to its 200-mm wafer line.
But it may be difficult and costly to modify TSMC's 300-mm technology to the smaller and older wafer fab. National will mostly like find it will have to modify its fab equipment to take full advantage of the 0.10-micron process if it doesn't move to 300-mm tools, industry observers believe.
TSMC, which hopes to have its 0.10-micron process ready for early production runs by the end of 2002, is using a "copy exact" strategy from its current 200-mm process lines. But it wasn't able to completely copy the use of 8-inch wafer tools in 12-inch process development because of changes in shallow-trench isolation etch systems. So the Taiwan foundry, working with its etch system supplier, has modified the recipes and added a new platform for its first 300-mm process.
(See June 29 story.)
Brad Mattson puts together Top 15 chip equipment maker
No one ever said Brad Mattson wasn't ambitious. This week, the CEO of Mattson Technology agreed to acquire not one but two chip-production equipment operations. His company will acquire the semiconductor equipment division of
Germany's Steag Electronic Systems and CFM Technologies, a Pennsylvania supplier of wet-wafer cleaning systems.
With the two acquisitions, the Fremont, Calif., company will immediately become a top 15 industry equipment supplier in annual sales, Mattson points out. He predicts that sales of the combined companies will hit $497 million this year and $733 million in 2001. That's quite a leap forward. Last year Mattson reported revenues of $103 million. Mattson, which will pay with stock valued at about $645 million, expects to close both purchases simultaneously next January.
The 12-year-old company currently supplies strip, etch, deposition, rapid thermal processing (RTP), and epitaxial systems for wafer fabrication. It expects to strengthen its market position in RTP tools by acquiring Steag, as well has moving into new markets such as cleaning processes and chemical vapor deposition (CVD) tools. The deal does not include Steag's optical storage and photomask operations.
"The combination of CFM and Steag places the combined new company into the first tier of suppliers in the wet technology market," believes analyst Dan Hutcheson, president of VLSI Research.
(See June 28 story.)
TI: Another week, another half-billion dollar acquisition
Why do startups need to go public in order to cash in? All they have to do now is sell out to a big company like Texas Instruments. And TI is keeping plenty busy these days trading its stock for companies that will add to its expertise in core technologies.
After announcing two big acquisitions last week Burr-Brown and Alantro Communications, the big chip maker did it again Thursday. It is buying Dot
Wireless for $475 million in stock in a move that it hopes will bring even more strength to TI's third-generation (3G) cellular phones and wireless devices. Once the deal is completed by the end of the third quarter, TI expects to set up a new wireless group in San Diego to increase its emphasis on digital signal processing applications in 3G systems.
Dot Wireless develops and markets 3G wireless CDMA-based technologies, software, and transceiver reference designs that help companies quickly design products that combine both data and wireless technologies. The acquisition should help TI to offer programmable DSP and analog solutions for so-called 2.5-generation and 3G wireless standards. Dot employs 75 workers.
(See June 29 story.)
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