Water cooler

Jan. 31, 2006

“January 2006 is shaping up to be a highly active management turnover month and continues the increasing trend of C-level management turnover in North America's public companies,” said Richard Jacovitz, senior vice president and director of research at Liberum Research, part of the Wall Street Transcript.

C-level managers include directors, CEOs, CFOs, and vice presidents. C-level changes might merit a second look from an investment perspective.

With just two days left, January already scored a monthly high of 2,342 for the number of C-level or top-level management changes registered since management change specialist Liberum first began maintaining management turnover statistics in December 2004.

Liberum Research said the drug/biotech industry had the most C-level changes with 262, followed by banking with 200, and business Services with 131.

Companies that had CEO changes in January were the following: Dow Jones, Valero, SFBC, Aetna, AET, Cambrex, First Fund, Columbia Labs, Fedex, Paradigm, Fuelcell Energy, Symbol Technology, Microvision, Allos, Gensym, Autodesk, Innovo, Gymboree, Tumbleweed, Advanced Viral, B&D Food, Borders Group, Dura Vest, Nike, Imclone, Immtech, Pervasive Software, Geneara, Erhc Energy, Dawson Geophysica, Electronic Sensors, Vignette, and 3Com.

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Jan. 27, 2006

Is the hot NAND-based, flash-memory market running out of steam? Some say the market is heading south.

“We believe that the market will continue to shift from constrained to over-supplied through the middle of 2006,” said Robert Witkow, president of Westwood Marketing LLC (Englewood, Colo.), a research firm. “New applications including hybrid flash hard disks, hard disk replacements, personal media players and mobile phone sockets will take up the capacity at beginning at the end of Q3.”

For high-density parts, NAND flash demand was strong last week, according to the DRAMeXchange, a DRAM clearing house. Spot prices for 4- to 16-Gbit parts jumped as high as 5 percent over the week Jan. 17-23. Low-density, however, headed south compared with previous weeks.

DRAMeXchange observes that NAND flash spot prices still enjoy a price premium over contract prices at a range from 5-to-23 percent. Among all parts, DRAMeXchange reveals that 2-Gbit is the item that enjoys the highest price premium.

Next week, many factories in Taiwan and China will shut down for Chinese New Year. DRAMeXchange believes limited transaction amount should drag overall NAND flash prices down from Jan 23.

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Jan. 23, 2006

Kyosha America Corp. is selling its former printed circuit board manufacturing facility in Tijuana, Mexico. This offering is a former Maquiladora manufacturing facility on an approximately 5.07-acre site.

Constructed in 1998, the facility is suitable for printed circuit board and other electronics manufacturing, such as optics, solar cell, biotechnology / biomedical, and microelectronics. The sale does not include any manufacturing equipment; Kyosha has vacated and moved out all equipment so the facility is immediately available to a buyer.

The property is being listed by Colliers International’s Advanced Technology Real Estate Group.

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Jan. 19, 2006

At last week’s Industry Strategy Symposium (ISS) event in scenic Half Moon Bay, Calif., there was much talk in the corridors about the problems with extreme ultraviolet (EUV) lithography.

In a nutshell, many believe that EUV will NOT be ready for the 32-nm node in 2009. Some say the technology will get pushed out at the 22-nm node in 2011. Some even speculate that EUV will never work.

As reported, Intel is pushing for EUV for 32-nm designs. ASML, Canon and Nikon are separately developing EUV systems. ASML will ship a demo unit this year and Nikon will do the same in 2007.

However, for some time, there have been no adequate power sources for EUV. The shelve life of a condenser for EUV is about a month now; many had hoped to see shelf lives of four years.

There are still photoresist problems with EUV and no way to inspect the masks, which are supposed to be defect free.

Other than that, EUV is going well…

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Jan. 17, 2006

Here comes the earnings for the semiconductor-equipment sector!

“We expect most companies in the space to slightly exceed their bookings guidance but more significantly exceed their shipment guidance of 5 percent,” said C. William Lu, research analyst at Piper Jaffray & Co.

“The average bookings guidance for 4Q ‘05 was around 7-8 percent; we believe most companies will report bookings at around 10 percent and guide for another 5-10 percent increase in 1Q06 bookings,” he said. “We also expect the 1Q06 bookings guidance to get revised higher intra-quarter as visibility from the foundries clears up post Chinese New Year.”

Foundries and Japan are the key drivers for 1Q ‘06 orders. “We expect strong Japan demand in C1Q06, with sizable orders from Toshiba, Elpida, and Sony,” he said. “The upside to 1Q orders are likely to come from foundries. The equipment companies have yet to see significant orders from the foundries, but with revenue forecasts for 1Q06 going up in the foundries and robust holiday sell-through, we believe foundry orders are imminent in late 1Q06 or 2Q06.”

Companies with strong exposure to foundry include Applied Materials, KLA-Tencor, Mattson, Lam Research, Rudolph Technologies, and UltraClean Holdings.

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Jan. 10, 2006

Big win for AMD! Piper Jaffray senior analyst Les Santiago upgraded Advanced Micro Devices (AMD) from “market perform” to “outperform” after saying that AMD will gain a big design win from Dell. In the second half, Dell will reportedly roll out an x86-based server, build around AMD’s Opteron microprocessor, he said. This is a big blow for Intel, which had been the sole processor supplier for Dell.

And big loss for Agilent. Tom Newsom, vice president of Agilent Technologies and general manager of Agilent's SOC Business Unit, is leaving the company to pursue other interests. Newsom had been with Agilent and HP for 22 years. The move follows Agilent’s move to spin-off its ATE unit, which will attempt to float an IPO.

Meanwhile, speaking at a conference, ATMI Inc. said it expects worldwide wafer starts to be up 6-to-8 percent in 2006 over 2005, according to a report from investment banking firm Canaccord Adams Inc. For 2005, material provider ATMI said worldwide wafer starts were up 7 percent, according to the report. ATMI said copper-enabled wafer starts grew 30 percent in 2005 and are expected to be up another 25 percent in 2006.

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Jan. 6, 2006

Micron Technology Inc., Idaho's largest private employer, is hiring! The memory maker said it will hire people to fill about 900 jobs in Boise, according to The Idaho Statesman.

Micron's openings are in manufacturing, engineering, accounting, finance and information technology, according to the report. Some 14,000 people work in the high-tech industry in Southwest Idaho, according to the report. Some 10,000 of those work at Micron.

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Jan. 5, 2006

A former sales representative for chip distributor Memec pled guilty to a federal charge of money laundering in an alleged scheme to bilk more than $2.2 million from his employer, according to the Dallas Business Journal.

Roy Driscoll, formerly of Memec, faces a maximum of 20 years in prison, a fine of up to twice any illicit gains he may have received, and restitution, according to the report.

“In a court filing, Driscoll admitted that he submitted to California-based Memec inflated invoices for products that were sold to Alcatel. He then had refunds wired to a bank account for an entity he set up called ‘Alcatel Asset Recovery,’ “ according to the report.

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Jan. 2, 2006

What a way to start the New Year! Silicon foundry giant Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) experienced a production delay in the fourth quarter of 2005 due to a manufacturing glitch, according to Forbes.com.

TSMC’s Fab 3 plant, an 8-inch facility, suffered about 10,000 damaged wafers in the period, according to DigiTimes.com. The problem was due to a production glitch, according to the report. TSMC’s Fab 3 produces chips for ESS, Freescale, SigmaTel and Zoran.

Meanwhile, a former stockbroker made nearly $23,000 on a pending acquisition by Applied Materials Inc. after using insider knowledge he learned from his girlfriend, according to the AP.

Lee Edelman, 34, was indicted on securities fraud charges after his girlfriend, an associate at a large Manhattan law firm, told him in March 2004 that Applied was in talks to acquire Metron Technology NV, according to the report.

“The Securities and Exchange Commission, which also filed civil insider trading charges against Edelman, said in a release that Edelman broke up with his girlfriend several weeks after he began buying Metron stock,” according to the report.

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Dec. 28, 2005

Doug Freedman, an analyst with American Technology Research Inc., said the holiday season was a mixed bag for chip makers.

“December bookings rates are hard to read as the December order pattern has traditionally been a poor indicator,” Feedman said in a report. “We believe December order rates were strong at the start, but ended on a very weak note. We expect to hear that new products targeted at flat panel TVs, new game systems, AMD processor-based products, and MP3 players sold well.”

On a company-by-company basis, the news is also mixed. For example, Cypress Semiconductor’s solar unit, SunPower, “has been on fire as we expected,” he said. “Now as we begin to focus on the core business at Cypress, we see good things happening. The PSoC product line has been very successful; we also like the clock and USB exposure. We are looking forward to the SunPower divestiture and improvements in the SRAM and TCAM product lines in 2006. We are skeptical on the image sensor business.”

On the other hand, Micron Technology’s image sensor business is strong and “should continue its rapid growth, with handsets, DSCs, and PC cameras driving the unit growth,” he said.

It’s also a mixed bag at Freescale Semiconductor, whose chip supply agreement ends with its former parent company, Motorola.

“Wireless products could be the growth engine in 2007 and beyond with strong sales and profits,” he said. “We believe 2006 will be another year of transformation for Freescale as the new products that were introduced post-separation should begin to ramp.”

There are some positive signs in analog despite an inventory glut in the arena. “We believe that 2006 will be an above average year as inventory management improvements have pushed inventory levels below reasonable levels,” he said.

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Dec. 26, 2005

More trouble for Singapore’s Citiraya Industries, the electronics recycling company that is under “judicial management” amid a scandal involving 3M, AMD, Seagate and STMicroelectronics. “Judicial management” is Singapore’s lingo for bankruptcy.

Citiraya recently said that its subsidiary, Citiraya (Singapore) Pte. Ltd. (CSPL), had joined it in seeking protection from creditors. Citiraya in total owes about SGD$56.6 million ($34 million) in its books, and faces claims of more than half a billion Singaporean dollars or roughly US$300 million, according to the Business Times.

As reported, former employees from 3M, Advanced Micro Devices, Seagate and STMicroelectronics were recently jailed over an alleged chip resale scandal involving Citiraya Industries, an electronics waste recycling specialist.

The former chip and disk-drive employees pleaded guilty in taking bribes from executives of Citiraya. In return for the bribes, the individuals allegedly resold chips in the open market that were meant for destruction at Citiraya.

Ng Teck Boon, the former assistant general manager of Citiraya and younger brother of its missing ex-chief executive Ng Teck Lee, was sentenced to eight years' jail for his part in the corruption scandal, according to reports. Nine people have thus far been jailed for their parts in the Citiraya scandal.

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Dec. 16, 2005

There are major and troublesome quality problems with Japanese-made CCD parts, which are used in digital cameras and camcorders.

Sony has big problems in the arena. In fact, the company’s problems are mounting, which is also a troublesome sign for the holiday season uptick. It has suspended sales of its digital still cameras in China in response to Zhejiang province's injunction to stop sales of its digital still cameras judged by authorities there to have fallen short of quality criteria

Since October, a series of announcements have been made by Sony and other major Japanese manufacturers of digital still cameras and camcorders regarding problems with the CCDs.

Sony issued a statement acknowledging the problem and said it would fix all cameras made between October 2002 and March 2004 with the problem.

“Seems like this could turn into a big black eye for CCDs in Japan and elsewhere, while the CMOS image sensor movement gains momentum,” according to one source. “Sony's problems were apparently related to packaging issues. Several reports I've seen on the Web said moisture was getting into the CCD package and causing them to fail.”

Here's some links to digital photography sites that have been posting stories about the problem:

One report can be found on this site.

Another can be found here and here.

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Dec. 15, 2005

Shortages of select components and product price hikes are hitting the market, especially capacitors, flash memories and Intel’s Prescott processors. And there are also major quality problems with Sony’s CCDs, which are used in its digital cameras and camcorders.

The push towards DDR2-based SDRAMs is getting a bit stronger. But due to a lack of product available through Intel and the gray market, pricing has jumped above direct on the company’s Prescott 521 processors, which are moving around $165-to-$169, according to Fusion Inc., an independent distributor, in an e-mail newsletter.

“There have been several mergers and acquisitions as companies struggle to stay profitable in this very competitive environment,” according to Fusion. “Manufacturers have cut down and sometimes even closed out production on their unprofitable lines, leaving large gaps in the supply of board level components.”

In the passive market, for example, ceramic capacitors have continued to be an issue in many areas. “This quarter alone, we have seen lead times increase from 6 weeks to 10 weeks to 16 weeks and more,” according to the newsletter.

“There have been shortages across all the major capacitor manufacturers, especially in X5R dielectrics and parts with values over 100,000pF,” according to Fusion. “Another area to keep a close eye on is the tantalum capacitor market. There are hints of an impending shortage in the slightly increasing lead times. Prices on tantalum caps are also going up as we enter the New Year.”

The NOR-based flash marketplace is seeing a lot of activity this quarter. Spansion LLC has yet to “reach a flow in their process of replacing AMD parts with the new Spansion numbers,” according to Fusion. “Many issues have led to this current state, including a lack of testing capacity and flaws in their ability to market the change in part numbers.”

Intel and STMicroelectronics are working together to create a new line of multi-level-cell (MLC) products. “This will increase production on the higher density flash (512-Mbit and 1-Gbit), but it will leave the lower density flash very short throughout the market. We are already seeing signs of this in increasing prices from other manufacturers of low-density flash.”

Going into the New Year, flash shortages will continue to cause production problems. “Deliveries have been delayed or cancelled in the 128- and 256-Mbit product lines. The manufacturers who can stay on top of this demand will win out in the end,” according to the firm.

DDR discrete product should start to see some constraint and pricing is already starting to reflect this possibility. The push to DDR2 is getting a bit stronger. Expect DDR400 modules to be at a premium within 3-to-6 months, according to Fusion.

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Dec. 14, 2005

What happened to the long-awaited upturn in DRAMs? A clearing house says the upturn will happen in mid-2006. But now, the DRAM market is weak.

DRAM bit growth slipped 2.65 percent in November, down from October’s 10 percent sequential growth, says DRAMeXchange. The DRAM clearing house also believes DDR2 will make gains with the desktop PC segment, with the crossover projected in 1Q06. DRAM spot prices remains flat with slight drops over the week of Dec. 6-13. NAND flash, on the contrary, reported accelerated drops, especially high-density parts.

On the bright side, DRAMeXchange also observed stronger demand from the China and U.S. markets. Hynix and Micron both received increasing inquires for DDR2 512-Mbit 533-MHz chips.

DRAMeXchange expects DRAM supply bit growth will show mild growth in 1H06, limited by the already full 300-mm capacity.

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Dec. 13, 2005

Infineon Technologies AG and Zoran Corp. separately rolled out new chips for emerging applications.

Infineon Technologies AG said that its 512-Mbit GDDR3 (Graphic Double-Data-Rate 3) graphics DRAM were selected by ATI Technologies for use with its Mobility Radeon X1600 graphics processor targeting notebook PCs.

The Mobility Radeon X1600 is ATIs new mobile graphics processor. Infineon's 512-Mbit GDDR3 graphics DRAM for high-performance mobile and desktop 3D graphics applications supports clock frequencies of up to 800-MHz and uses a 32-bit interface.

Meanwhile, Zoran announced availability of two new reference designs for DVD recorders with integrated support for digital broadcast standards, one with ATSC for the U.S. and another with DVB for Europe.

Both new platforms are based on the Activa 100/150 DVD recorder solution, currently shipping to leading manufacturers worldwide, and support stand-alone DVD or hybrid DVD+HDD (hard-disk drive) recorders.

For the U.S. market, Zoran's DVDR+ATSC reference design uses the SupraHD 640 high-definition digital TV processor and Zoran's Cascade 2 front-end demodulator with the Activa 100/150 to enable recording of high-definition broadcast signals to DVD or hard disk. This solution includes a transport processor, high-definition MPEG video decoder, and Zoran's proven HDXtreme video processing and picture-enhancement technology.

For DVB systems in Europe, the Zoran reference design uses the SupraTV 150 integrated standard definition digital TV processor to support free-to-air satellite or terrestrial broadcasts throughout Europe and Asia, including support for third-party middleware such as MHEG-5 for the U.K. market and selected conditional access systems for other markets.

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Dec. 9, 2005

Two companies rolled out a pair of novelty items: solar-powered cars and electric hybrid buses.

Solatec LLC introduced flexible, rooftop-mounted solar panels for hybrid vehicles, starting with a kit for the 2004-2006 Toyota Prius.

With Solatec panels installed on the roof, the prototype SolaPrius averages 55 miles per gallon (MPG) in the city and 62 miles per gallon (MPG) on the highway — an overall 10 percent improvement over the pre-installation numbers.

Solatec's photovoltaic kit (patents applied for) adds two flexible, conformal panels that charge the hybrid automobile's auxiliary battery through a proprietary charger/current-limiter system concealed behind interior trim panels. The self-adhesive, rooftop-mounted panels are only 0.6mm thick and cause no change in aerodynamic drag.

The $2,195 kits will be available nationwide through dealer franchises.

Meanwhile, Azure Dynamics Corp., a developer of hybrid electric and electric powertrains for commercial and military vehicles, this week announced the unveiling of its first hybrid electric CitiBus.

Azure announced the launch of its shuttle bus program with the sale of five hybrid electric, 20-passenger shuttle buses to The Bronx Overall Economic Development Corporation ("BOEDC"). Azure's hybrid electric CitiBus will employ the same chassis and hybrid electric drive system currently used in delivery vans supplied to other Azure customers such as Purolator Courier Ltd. The hybrid chassis is fitted with a conventional shuttle bus body.

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Dec. 3, 2005

Intel Corp. is debating whether or not to build a 450-mm fab in Hillsboro, Oregon. The proposed fab is called D1E.

Intel claims that the semiconductor equipment makers are in development with 450-mm tools.

I’m sure Intel’s key tool and material suppliers are exploring next-generation, 450-mm equipment, but how many can really afford to develop it?

Answer: None.

Until other chip makers jump on the 450-mm fab bandwagon, there is no business model or profits for 450-mm tools.

Meanwhile, Intel is exploring future interconnects based on carbon nanotubes. The technology could have a potential current-carrying capacity of 1,000 times greater than copper.

For wire lengths greater than 100-nm, carbon nanotubes shows lower resistance than copper, according to Intel. New progress is being made on PECVD techniques to enable the technology.

Don’t look for nanotube interconnects in the near term.

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Dec. 1, 2005

Spurring the move to build a new wafer fab, Intel Corp. recently obtained a $25 billion property tax break from the Oregon government.

The so-called Strategic Incentive Program (SIP) is the fourth tax break for Intel in Oregon. Under the new 15-year program, Intel will not pay property tax on semiconductor equipment in a fab. Which fab? Intel said that it is considering a plan to build a new development fab in Oregon, which could possibly become the world’s first 450-mm facility. During a press and analyst conference here on Wednesday (Nov. 30), officials from Intel acknowledged that the chip giant has the so-called D1E wafer fab on its manufacturing roadmap in Hillsboro (see Nov. 30 story).

Meanwhile, Korea’s Samsung last year outspent Intel in capital expenditures.

Intel’s reaction? “A lot of people believe who spends the most money wins,” said Andy Bryant, Intel’s CFO, at a conference. “I don’t believe that. It’s how you spend the money.”

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Nov. 29, 2005

United Kingdom’s BP plans to double its investment in alternative and renewable energies to create a new low-carbon power business with the growth potential to deliver revenues of around $6 billion a year within the next decade.

Building on BP Solar -- which expects to hit revenues of $1 billion in 2008 -- BP Alternative Energy will manage an investment program in solar, wind, hydrogen and combined-cycle-gas-turbine (CCGT) power generation, which could amount to $8 billion over the next ten years.

The first phase of investment would total some $1.8 billion over the next three years, spread in broadly equal proportions between solar, wind, hydrogen and CCGT power generation. Investment will be made step by step, and will depend on the nature of opportunities and their profitability.

BP Alternative Energy will be based in Sunbury, Middlesex and initially employ some 2,500 people around the world. It will be headed by Steve Westwell, reporting to Vivienne Cox, chief executive of BP's Gas, Power & Renewables division.

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Nov. 28, 2005

Amid a shortage of materials in the market, Evergreen Solar Inc., Q-Cells AG and Renewable Energy Corp. ASA (REC) announced a partnership in the solar cell and materials business.

The world's largest manufacturer of solar-grade silicon and multicrystalline wafers, REC, is joining EverQ, a venture between Evergreen Solar and Q-Cells that is currently building a 30-megawatt solar wafer, cell and module manufacturing plant in Thalheim, Germany.

In conjunction with becoming a stakeholder in EverQ, REC has agreed to the long-term supply of solar-grade silicon to Evergreen Solar and EverQ.

Under terms of the seven-year agreement, REC will initially supply Evergreen Solar with 60 metric tons and EverQ with 190 metric tons of solar-grade silicon annually. Additionally, REC will license to EverQ certain of its proprietary manufacturing technology.

In exchange, REC will acquire a 15 percent ownership position in EverQ on a cost-of-capital basis. Following REC's initial investment, Evergreen Solar will own 64 percent of EverQ, Q-Cells will own 21 percent and REC will have 15 percent.

The agreements contemplate that when REC establishes planned additional facilities for the production of silicon, it will offer to EverQ a second long-term supply agreement that would substantially increase REC's supply of silicon to EverQ. Should REC offer this second supply agreement, REC will be entitled to increase its ownership stake in EverQ to as much as one-third.

The amended master agreement contemplates that Q-Cells will also be able to increase its ownership stake to one-third of EverQ.

"The addition of REC to the EverQ partnership is a landmark event for our joint venture and the entire solar industry," said Richard M. Feldt, president and CEO of Evergreen Solar, in a statement.

"At a time of potential silicon shortages and extremely high prices, EverQ now has an increased supply of silicon to facilitate rapid growth," he said. "Uniting REC's newly developed granular silicon with distinctive technologies from our three companies has the potential to dramatically reduce the overall cost of producing solar products and set a new worldwide standard for solar power."

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Nov. 27, 2005

Wake up world! Wind energy is blowing away the market, while fuel cell buses are making their debut in China.

The American Wind Energy Association (AWEA) recently said the U.S. wind energy industry will install about 2,500 megawatts (MW) of new wind power this year. This is a record amount that will help lower skyrocketing home heating and electric bills by reducing the demand for natural gas.

According to AWEA's assessment of the wind energy market, the building boom that is underway could bring the cumulative total of U.S. installed wind capacity to over 9,200 MW, serving the equivalent of 2.4 million average U.S homes. One megawatt of new wind energy is enough electricity to power 270-300 homes.

“Wind power’s rapid growth provides what is potentially the quickest and best supply-side option to ease the natural gas shortage,” said AWEA Executive Director Randall Swisher. “We are hopeful that the momentum started in this record-breaking year will continue because of the Congress’s foresight in extending the wind energy production tax credit through December 31, 2007. The wind power industry is stepping up to provide the U.S. with a significant amount of its power needs in this time of uncertainty.”

Meanwhile, Ballard Power Systems and DaimlerChrysler were recently in China to attend the launch of three Mercedes-Benz Citaro fuel cell buses.

The buses, powered with Ballard’s fuel cell engines, will enter revenue service in the city as part of a two-year demonstration project being led by the Chinese Ministry of Science & Technology, with support from both the Global Environment Facility and the United Nations Development Program.

Ballard Power Systems designs and manufactures zero-emission proton exchange membrane fuel cells. Ballard's mission is to develop fuel cell power as a practical alternative to internal combustion engines.

"Governments and regions around the world are assembling the building blocks of the hydrogen economy in fuel cell vehicle demonstrations," said Ballard Chairman and Interim President and Chief Executive Officer, John Sheridan.

"Fuel cells and hydrogen can play a critical role in the development of a sustainable transportation strategy in China. Fleet demonstrations, like the one here in Beijing, will seed the market and will provide many people with the opportunity to experience first-hand the clean, quiet and comfortable ride of zero-emission transportation alternatives," he said.

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Nov. 22, 2005

Having lived in Asia for five years — that is, in Taiwan from 1993-to-1998 — I find it interesting to track the progress of the region.

This is especially true for Asian’s Tigers: Hong Kong, Singapore, South Korea and Taiwan.

Back in the 1960s, these countries were at similar levels of wealth as many nations in Africa. But between the 1970s and 1990s, the Asian Tigers suddenly emerged with high growth rates and rapid industrialization.

Today, Korea is a powerhouse, but the nation faces several internal problems. Hong Kong is barely a blimp on the radar screen as it has been absorbed into China. Taiwan and Singapore face an uncertain future — if not oblivion.

And the Sleeping Giant — China — continues to arise and gather momentum, leaving some to wonder if that nation will eclipse and drive the Asian Tigers into extinction.

Meanwhile, Korea stands out among Asian’s Tigers. Propelled by the likes of Hyundai, Samsung and others, Korea has established global brand names in automobiles, consumer products and semiconductors.

On the other hand, many of Korea’s top brands are plagued by an assortment of scandals. Hyundai and Samsung fall into that crowd. It’s as though Korea is in the self-destruct mode.

In contrast, Hong Kong failed to establish global brand names or a major manufacturing base in electronics. But Hong Kong did emerge as the Asia-Pacific business center and conduit into China back in the 1970s and 1980s.

However, Hong Kong lost its crown as the Asia-Pacific business center in the 1990s. Many multinationals moved the bulk of their important staff functions from Hong Kong to other Asian nations, especially China, — leaving the former British colony less important, if not irrelevant today.

Taiwan and Singapore possibly face a similar fate. Over the years, Singapore has developed relatively few domestic electronic companies and global brand names.

Singapore, however, has embarked upon an impressive strategy to lure multinationals to invest in the city-state, by providing a strong infrastructure and attractive incentives.

Like Singapore, Taiwan is a dynamo in electronics. Unlike Singapore, Taiwan has developed a plethora of domestic electronics companies, which have turned into global powerhouses: Acer, TSMC, UMC, among others.

But Taiwan must find ways to establish more global brand names and move up the value-added chain in terms of developing new industries, said Stan Shih, founder of Taiwan’s Acer Group and former chairman and CEO. Now, Shih is group chairman of iD SoftCapital Inc., a venture capital firm.

Like Taiwan, Singapore must also move up the value chain. In fact, both Singapore and Taiwan face another problem: they rely on manufacturing to fuel their respective economies.

The trouble is that the Sleeping Giant — China — is slowly but surely taking more and more of the manufacturing pie — at the expense of Singapore, Taiwan, and, to a lesser degree, Korea.

And many of the industries, key jobs and intellectual property (IP) are also moving to China and elsewhere. Over time, Taiwan has seen its key industries move to China. First, it was the textile industry, followed by low-end components, then PCs, and now, semiconductor manufacturing.

Singapore has also seen more and more of its electronics industry move offshore to Indonesia, China and elsewhere. This includes the disk-drive and IC assembly and test sectors.

One doubts that Singapore and Taiwan will get hollowed out to the degree of Hong Kong. But one wonders if Singapore and Taiwan could become less important over time — if they can’t move fast enough and re-invent themselves.ML

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Nov. 18, 2005

Chip-equipment vendor Axcelis Technologies Inc. disputes a report from an analyst (See entry below), who said that the company is late to market with its single-wafer ion implanter.

Here’s what Axcelis wrote in an e-mail to me:

“A quick scan of our press releases or earnings releases reveals we started shipping our Optima MD system early this year. AMD, IMEC, and several fabs in Europe and Asia are customers. We also just announced that we have just received our first multiple system order for our new Optima HD high dose tool. We hope to leverage this success in the single wafer space into increased market share in the future. As the market share leader for 9 out of the past 11 years, I'm confident this will happen.”

Maureen Hart
Vice President, Corporate Communications
Axcelis Technologies Inc

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Nov. 17, 2005

At a recent trade show in Korea, I was impressed by the amount of domestic semiconductor-equipment and materials vendors in that nation. Dongjin Semichem, Doosan, IPS, Jusung, Kookje, Leaders Mask Technology are among the leading chip-equipment/materials makers in Korea.

If one talks to these companies, most — if not all — Korean chip-equipment makers focus more on the domestic market. They do not pay too much attention to the international markets.

Some even believe that Korean chip-equipment makers only sell to one account: Samsung. In fact, Samsung funds much of the R&D for Korea’s chip-equipment industry and procures most of the tools.

So is Samsung building up a collection of captive semiconductor-equipment companies? Samsung still buys a ton of equipment from the foreign vendors.

But maybe Samsung is going back to the good ‘ole days when IDMs built their own equipment to gain a competitive advantage. Still others believe Samsung is propping up the Korean equipment industry to get better pricing terms from the foreign companies.

In other words, play one against your own captive firm. Fair or unfair? It could be a moot point, especially when you’re one of the world’s largest fab-equipment buyers.

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Nov. 14, 2005

The rumors are flying on two fronts in South Korea.

Reports have surfaced that Samsung Electronics Co. Ltd. will make cell-phone chip sets on a foundry basis for Qualcomm Inc., according to the Chosun Ilbo Web site. Qualcomm uses several foundries right now, including IBM, TSMC and UMC.

And according to DigiTimes, Apple Computer Inc. is reportedly looking for additional sources of supply for NAND-based flash memory parts. Apple is reportedly talking to Korea's Hynix Semiconductor Inc. about obtaining such parts, the report said.

Apple’s current suppliers, Samsung and Toshiba Corp., are having trouble meeting demand.

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Nov. 13, 2005

During Cypress Semiconductor Inc.’s analyst meeting last week, T.J. Rodgers, president and CEO, failed to show up for the event, said analyst Doug Freedman of American Technology Research.

Moore’s Law also failed to show up at the event, Freedman said in a report, adding that Cypress’ CMOS image sensor business is losing money, while the company is exploring options for its search-engine CAM business.

It was unclear why T.J. was absent at the event, but “Cypress is in the midst of major product transitions in almost every business unit,” Freedman said.

The company is moving towards a “fab lite” strategy, but moving away from Moore’s Law, Freedman said. “The company was very clear that R&D spending on leading edge technology would slow after the 65-nm node is reached as most of the spending on 65-nm is now complete,” he said. “The slow-down in chasing Moore's Law was attributed to a reduction in the Cypress product mix that requires leading edge technology. It appears that technology for technology's sake days are gone at Cypress.”

In terms of its product segments, Cypress’ CCD business unit is OK and “leading Cypress back to profitability,” he said. “The PSoC, USB, and clock businesses make up the CCD business unit. We believe this is the second most valuable business unit within Cypress as the company's products in this segment are the most unique and have been growing the fastest.”

The CMOS image sensor business is in the tank. “The image sensor products were shown and time lines for revenue extended as handset wins were not achieved in 2005 as originally planned,” he said. “We believe that Cypress’ present 3MP sensor will have to undergo a redesign to smaller pixel sizes before becoming competitive in the market place.”

The network search engine “business was mentioned as a business that is not profitable, and for which the company is exploring other options,” he said.ML

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Nov. 9, 2005

Glad to hear about the IC recovery. Too bad Freescale Semiconductor Inc. is cutting back and handing out pink slips.

By Dec. 24, Freescale is planning to shut down its IC design center in North Andover, Mass., according to a report from the Eagle Tribune.. The move will affect 70 jobs, the report said. The facility produces chips used in networking equipment.ML

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Nov. 8, 2005

The ion-implantation market is a competitive field, although Varian Semiconductor Equipment Associates Inc. is dominating the single-wafer, high-current sector of the business, said Mark Bachman, an analyst with Pacific Crest Securities Inc. (Portland, Ore.).

Varian’s competitors — Applied Materials and Axcelis — are behind in single-wafer, high-current implanters, which are critical for 65-nm semiconductor production, Bachman said.

“Axcelis is late to market and has yet to introduce its single-wafer, high-current tool,” he said in a recent report. “Applied introduced the Quantum X, which has seen limited success at Intel and AMD, in our view.”

Earlier this year, Axcelis Technologies Inc. said it had developed a single-wafer ion implantation tool. The company added that the first example of a family of machines had been well accepted by customers and would start shipping in March (see Feb. 16 story).

But where is the machine?ML

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Nov. 7, 2005

Heard from some knowledgeable analysts and sources, who expressed doubts about a new, $2.5 billion fab project in China, dubbed CMD International (Tianjin) Electronic Co. Ltd.

And reports have also surfaced that a firm called the Schaumbond Group is behind this fab project, which will be lucky to get off the ground, according to some.

As reported, a little-known group called CMD International has broken ground on a large-scale semiconductor and R&D project in Tianjin, China, with claims that it will build both 200- and 300-mm fabs in that nation.

Over the next five years, CMD claims that it will build a plant to produce 200- and 300-mm CMOS chips, a gallium-arsenide (GaAs) integrated circuit fab, and an R&D center for related products. The total investment will exceed $2.5 billion (see Oct. 3 story).

Officials declined to comment on the project. Sources believe the “leading actor” in the project is the Schaumbond Group, based in Pasadena, Calif. Calls to this company were returned by a spokesman, who also declined to comment on the project.

Who are these guys? “While consolidating and developing its business in America, Schaumbond Group, Inc. has focused on highly profitable trades and project investments with China,” according to its Web site.

“Over the years, Schaumbond Group, Inc. has shifted its direct and indirect investments towards the semi-conductor industry to several companies including Universal Semiconductor Technology (UST) and Universal Semiconductor, Inc. (USI) in Silicon Valley,” according to the firm. “Schaumbond also owns individual IC technologies and competencies for use in the marketing development of its core products, and is prepared to invest in a brand new 8-inch fab in the near future.”

Sounds like a pie in the sky project to me.ML