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Top 10 global semicon predictions — where are we today

May 17, 2008 Comments off

It is always interesting to write semicon blogs! Lots of people come up to me with their own comments, insights, requests, etc. One such request came from a friend in Taiwan, who’s involved with the semiconductor industry.

I was asked forthrightly what I thought of the top 10 global predictions, which I had blogged/written about some time back late last year.

Top 10 semicon predictions
For those who came in late, here are the 10 global predictions on semiconductors made at that time (late December 2007.

1. Semiconductor firms may have to face a recession year in an election year.
2. DRAM market looks weak in 2008.
3. NAND market will remain hot.
4. Power will remain a major issue.
5. EDA has to catch up.
6. Need to solve embedded (software crisis?) dilemma.
7. Consolidation in the fab space.
8. Capital equipment guys will continue to move to other market.
9. Spend on capital equipment to drop.
10. Mini fabs in developing countries.

Well, lot of water has flowed since those predictions were made. Let’s see how things stand, as of now. The updated predictions would look something like these:

1. There have been signs of recession, but the industry has faced it well, so far. In fact, Future Horizons feels that if there is going to be a global economic recession, the chip industry (but not all companies) is in the best shape possible to weather the ensuing storm.

2. Memory market is changing slightly as well, though people are very cautious. According to Converge, memory market prices appear to be stabilizing. iSuppli has predicted a poor year for DRAM though!

3. NAND Flash could show some recovery later this year. Yes, Q1-08 QoQ sales seems to have slipped, but the market remains hopeful of a recovery. Even iSuppli warned of NAND Flash slowdown in 2008, while Apple slashed its NAND order forecast significantly for 2008! Keep those fingers crossed!!

4. Power remains a big issue, and will continue to be so. This will remain as we move up newer technology process nodes.

5. EDA is seemingly catching up with 45nm designs. Magma, Synopsys, and the other leading EDA vendors are said to be playing big roles in 45nm designs.

6. Fabless companies are gaining in strength. No doubt about it! The 2007 semicon rankings show that. Also, Qualcomm is now the leader in the top wireless semicon suppliers, displacing Texas Instruments.

7. There have been consilidations (or long term alliances) in: a) fab space b) DRAM space. In the fab space, Intel, Samsung and TSMC have combined to go with 450mm wafer fab line by 2012. And in the DRAM space, there have been new camps, such as Elpida-Qimonda, and Nanya-Micron partnering to take on Samsung. With the global semiconductor market seeing steady decline in growth rate, which would continue, look forward to more consolidations.

8. Investments in photovoltaics (PV) have eased the pressure on capital equipment makers and spend somewhat. In fact, 2007 will be remembered as the year when the PV industry emerged as a key opportunity for subsystems suppliers and provided a timely boost in sales for those companies actively addressing this market. Perhaps, here lies an opportunity for India.

9. Mini fabs — these are yet to happen; so far talks only. In India, a single silicon wafer fab has yet to start functioning, even though it has been quite a while since the semicon policy was announced. Conversely, some feel that India should focus on design, rather than go after something as mature as having wafer fabs. However, several solar fabs — from Moser Baer, Videocon, Reliance, etc., are quite likely.

10. Moving to 45nm from 32nm is posing more design challenges than thought. This is largely due to the use of new materials. Well, 45nm will herald a totally different structure — metal gate/high-k/thin FET/deep trench design, etc. It will herald a new way of system design as well.

Now, I am not a semicon expert by any long distance, and welcome comments, suggestions, improvements from you all.

Top 20 global semicon companies — DRAM, Flash suppliers drop out

May 16, 2008 Comments off

IC Insights recently published the May update to The McClean Report, featuring the Top 20 global semiconductor companies. Not surprisingly, there have been some significant movers and shakers. The most telling — quite a few of the major DRAM and Flash suppliers have dropped out of the Top 20 list!

First the movers! Fabless supplier Qualcomm jumped up four spots, ranking as the 10th largest semiconductor supplier in Q1-08. Next, Broadcom, the third largest fabless supplier, also moved up four positions, up to the 20th position. Panasonic (earlier, Matsushita), moved up to the 19th position, while NEC of Japan moved up to the 13th position.

TSMC, the leading foundry, moved up one position, registering the highest — 44 percent — year-over-year Q1-08 growth rate, besides being ranked 5th. Nvidia, the second largest fabless supplier, was another company registering a high YoY growth rate of 37 percent, and moved into the 18th position. Some others like Infineon, Sony and Renesas also climbed a place higher each, respectively. The top four retained their positions — Intel, Samsung, TI and Toshiba.

And now, the shakers! The volatile DRAM and Flash markets have ensured the exit of several well known names such as Qimonda, Elpida, Spansion, Powerchip, Nanya, etc., from the list of the top 20 global semiconductor companies, at least for now.

Among the others in the list, the biggest drops were registered by NXP, which dropped to 14th from 11th last year, and AMD, which dropped two places, from 10th to 12th. Two memory suppliers — Hynix and Micron — also slipped two places, to 9th and 15th places, respectively. STMicroelectronics also slipped from 5th to 6th. IBM too slipped out of the top 20 list.

The top 20 global semiconductor firms comprises of eight US companies (including three fabless suppliers), six Japanese, three European, two South Korean, and one Taiwanese foundry (TSMC). Also, looking at the realities of the foundry market, TSMC’s lead is now unassailable. If TSMC was an IDM, it would be No. 2, challenging Intel and passing Samsung, said one analyst, recently, a thought shared by many.

IC Insights has reported that since the Euro and the Yen are strong against the dollar, this effect will impact global semiconductor market figures when reported in US dollars this year.

There are some other things to watch out for. Following a miserable 2007, the global DRAM module market is likely to rebound gradually in 2008 due to the projected recovery in the overall memory industry, according to an iSuppli report. That remains to be seen.

Some new DRAM camps — such as Elpida-Qimonda, and Micron-Nanya — have been formed. It will be interesting to see how these perform, as will be the performance of ST-backed Numonyx.

Further, the oversupply of NAND Flash worsened in Q1-08, impacted by the effect of the US sub-prime mortgage loan and a slow season, according to DRAMeXchange. The NAND Flash ASP fell about 35 percent compared to Q4-07. Although the overall bit shipment grew about 30 percent compared to Q4-07, the total Q1-08 sales of branded NAND Flash makers fell 15.8 percent QoQ to US$3.24bn. Will the NAND Flash market recover and by when?

NAND Q108 sales falls 15.8 percent

May 6, 2008 Comments off

There’s a nice report today by DRAMeXchange on the state of the NAND Flash market. It is reproduced here.

Impacted by effect of the US sub-prime mortgage loan and a slow season, oversupply of NAND Flash worsened in 1Q08. NAND Flash ASP fell about 35 percent compared to 4Q07. Although the overall bit shipment grew about 30 percent compared to 4Q07, the total 1Q08 sales of branded NAND Flash makers fell 15.8 percent QoQ to US$3.24bn.

Ranked by the overall 1Q08 sales, Samsung continues to lead. The top five NAND Flash branded makers shared 96.8 percent of the whole market share in 1Q08.

Although the NAND Flash market share by sales for Samsung in 1Q08 fell to roughly 39.6 percent compared to 4Q07, Samsung continues to be the leader in branded market.

Despite the increase proportion of 51nm node production, affected by the deep decline in NAND Flash price, 1Q08 sales fell 18.7 percent QoQ to US$1.28bn.

NAND Flash market share by sales for Toshiba rose to 26.4 percent compared to 4Q07 and continued to be in the second place among the branded NAND Flash makers.

Due to Toshiba’s successful increase in 56nm node production, it was able to resist the effect of the NAND Flash price decline. However, 1Q08 sales were flat compared to 4Q07 at US$855m.

The 1Q08 market share by sales for Hynix fell to 17.5 percent, though it continued to stay at the number three spot among branded NAND Flash makers. As Hynix lowered its NAND Flash production, 1Q08 bit shipment increased only 9 percent QoQ. However, due to the fall of NAND Flash ASP at 39 percent QoQ, 1Q08 sales for Hynix fell to US$569m, or a decline of 29.1 percent QoQ.

With the ramp up of 50nm node, Micron and Intel continued to see steady growth in a bit shipment in 1Q08. However, impacted by the large decline in NAND Flash price, their 1Q08 sales fell compared to 4Q07. Micron and Intel 1Q08 sales were US$248m and US$181m, respectively, with a market share of 7.7 percent and 5.6 percent, each.

As STMicroelectronics primarily produces NAND Flash for cell phone applications, revenue for 1Q08 was not as severely impacted by the price decline. Revenue for STMicro in 1Q08 fell slightly to US$85m, or a slight decline of 6.6 percent compared to 4Q07. The 1Q08 market share by sales was 2.6 percent.

Since Renesas continued to reduce its AG-AND Flash production in 1Q08, Renesas/PSC camp sales fell roughly 60 percent compared to 4Q07 with a market share of 0.6 percent.

New camps promise exciting times ahead in memory market

April 30, 2008 Comments off

The last few weeks of this month witnessed some interesting developments in DRAM. No, there are not signs of a recovery, yet. Instead, the appearance of new DRAM camps, as well as a new memory interface working group, does generate some interest.

However, first, the stats. DRAMeXchange recently reported that the Q1-08 revenues of the branded DRAM makers, impacted by continual low DRAM prices, fell by roughly 5.8 percent compared to Q4-07. Likewise, the contract prices and the spot prices fell 19 percent and 11 percent respectively.

DRAMeXchange further reported that barring Elpida and Powerchip, all other DRAM makers experienced a decline in revenues. Both Elpida and Powerchip witnessed slight increase in their market share during Q1-08.

Categorizing the DRAM industry market share by countries, Japan only increased by 0.9 percent from 13.5 percent to 14.4 percent, as Elpida’s revenue increased in Q108. Taiwan’s share increased by only 1.1 percent from 13.6 percent to 14.7 percent, as Powerchip gained market share. Korea sustained the same market shares — 47.2 percent, as in Q4-07.

However, America and Germany lost share. America’s share slipped from 13.6 percent to 13 percent, while Germany’s share fell from 12.2 percent to 10.8 percent, respectively.

In a recent investor conference, Samsung announced it will increase its Bit Growth Rate from 70 percent to 100 percent, an indication of its desire to continue reigning as a DRAM market leader.

Now, to the really interesting developments. First, Nanya and Micron signed an agreement to create MeiYa Technology Corp., a new DRAM joint venture. One of Nanya’s 200mm facility in Taiwan will be upgraded to 300mm starting this year, with the facility going online for production in 2009. Besides MeiYa, Nanya and Micron will co-develop and share future technology.

If this wasn’t enough, close on the heels of the Micron-Nanya JV, Elpida Memory and Qimonda AG, signed a Memorandum of Understanding (MoU) for a technology partnership for jointly developing memory chips (DRAMs), and accelerate their roadmap to DRAM products featuring cell sizes of 4F2.

Analysts at DRAMeXchange believe that the Qimonda-Elpida alliance re-shuffles the DRAM competitive landscape. It is also a sign of Qimonda’s determination to develop stacked process.

Lastly, ARM, Hynix Semiconductor Inc., LG Electronics, Samsung Electronics, Silicon Image Inc., Sony Ericsson Mobile Communications AB, and STMicroelectronics announced the formation of a working group, the Serial Port Memory Technology (SPMT), which is committed to creating an open standard for next-generation memory interface technology targeting mobile devices.

SPMT, a first-of-its-kind memory standard for DRAM, is said to enable an extended battery life, bandwidth flexibility, significantly reduced pin count, lower power demand and multiple ports by using a serial interface instead of a parallel interface commonly used in today’s memory devices.

Handset vendors have joined the fray as this technology will not only extend battery life, it will allow high-performance media-rich applications as well, that are likely to be the norm on next-generation mobile phones.

Surely, these developments and the emergence of new camps promise some exciting times ahead in the memory market.

Top 25 semicon vendors of 2007

March 20, 2008 Comments off

Here are the top 25 global suppliers of semiconductors, according to iSuppli. First up, there are no surprises in the top 5 — Intel, Samsung, Texas Instruments, Toshiba and STMicroelectronics retain their spots for this year too. The surprises occur in the second rung — or, in the next five spots.

Renasas and Hynix exchanged places, with Hynix moving up from 7th position in 2006 to 6th position in 2007, and Renasas dropping from 6th last year to 7th. This is very interesting, because, despite memory market pains during 2007, South Korea’s Hynix Semiconductor and Japan’s Toshiba and Elpida Memory achieved memory-chip revenue growth of 15, 14.5 and 8.8 percent respectively in 2007, as per iSuppli.

Infineon, Sony major movers
The next three positions are the major surprises of the year. Well, the 10th position was no surprise to me — AMD, dropping from 8th in 2006 to 10th in 2007. Sony and Germany’s Infineon Technologies have been the biggest gainers of the year!

According to iSuppli, Infineon acquired TI’s DSL CPE chip business and its wireless baseband semiconductor unit, boosting its revenue. Qimonda, which spun off Infineon, dropped from 12th in 2006 to 16th this year. This split had seen Infineon go out of the top 10 last year.

As per iSuppli, logic application specific integrated circuits (application specific standard products and ASICs) enjoyed the strongest performance among all semicon segments in 2007. Sony and Toshiba were key drivers of growth in this segment due to their sales of semiconductors for the PS3.

Fabless is surely in
The presence of Qualcomm and nVidia in the top 25 list speaks volumes of the power of fabless companies. Qualcomm moved up from 16th to 13th position this year, while nVidia moved up from 25th to the 20th position this year. There is every chance that we will see a fabless company in the top 10 next year! There is an even better chance that more fabless companies will make it to the top 25 companies next year and in future.

All other key players dropped in their rankings. NXP dropped from 9th to 11th; NEC dropped from 11th to 12th; Freescale from 10th to 14th; Micron from 13th to 15th; Elpida moved up from 19th to 17th; while Matsushita and Broadcom dropped a place each.

An iSuppli release says: “Overall, the top 25 semiconductor suppliers significantly outperformed the combined performance of companies ranked lower than them in 2007. The Top-25 as a group achieved revenue growth of 4.5 percent in 2007 while the combined growth of all other semiconductor suppliers was only 0.8 percent.”

On a personal note, I would love to see names like SemIndia and HSMC making it to the list. If not now, then at least sometime in the near future. However, it seems from certain published reports that the Indian fab story has gone all wrong. I’ll take up this topic in a future blog for sure!

Top 10 semicon firms of 2007 by revenue

December 15, 2007 Comments off

According to Gartner, the top 10 semiconductor firms for 2007 by revenue are: Intel, Samsung Electronics, Toshiba, Texas Instruments, STMicroelectronics, Infineon Technologies (including Qimonda), Hynix Semiconductor, Renesas Technology, NXP Semiconductors, and NEC Electronics.

Worldwide semiconductor revenue totaled $270.3 billion in 2007, a 2.9 percent increase from 2006, according to preliminary results from Gartner Inc.

Vendor performances were mixed with two vendors in the top 10 that experienced double-digit growth and two vendors that showed declines in revenue.

“Semiconductor vendors need to watch the performance of their end customers even closer as a major part of the industry becomes increasingly tied to consumer spending patterns,” said Andrew Norwood, research vice president at Gartner. “Loss of market share in an end-user application, such as a mobile phone, by a customer (a mobile phone manufacturer) can have a dramatic effect on a vendor’s business.”

Intel grew revenue more than twice as fast as the semiconductor market average, and it is likely to edge up its market share to 12.2 percent in 2007 from 11.6 percent in 2006.

Intel’s growth came primarily from strong shipments of mobile PCs. Armed with a strong product lineup for enthusiast desktops and servers, Intel regained lost share in those markets from AMD.

While the global market for dynamic random-access memory (DRAM) is expected to decline in 2007 due to a severe drop in prices caused by oversupply, Samsung Electronics is likely to increase its revenue by slightly higher than the overall global semiconductor market growth rate (DRAM is one the firm’s main products).

Samsung’s growth is driven by steady revenue growth in NAND flash memory and strong revenue growth in nonmemory areas such as application processors, media integrated circuits (IC), complementary metal-oxide semiconductor (CMOS) image sensor, smart card ICs and LCD driver ICs.

Toshiba’s revenue increased 27.8 percent in 2007 to $12,504 million, gaining three places in the rankings and moving into third place. The rapid gains mainly came from NAND flash memory.

Toshiba also increased production of CMOS image sensors for mobile phones and application-specific integrated circuits (ASICs)/application-specific standard products (ASSPs) revenue for digital consumer electronics, including LCD TVs, next-generation DVDs (HD DVDs) and video game consoles.

Google phone beckons as industry leaders announce open platform for mobile devices

November 5, 2007 Comments off

Is the Google Phone finally going to see the light of the day? Well, the following release (below) has all the makings of a mega telecom happening. Read on!

A broad alliance of leading technology and wireless companies today joined forces to announce the development of Android, the first truly open and comprehensive platform for mobile devices. Google Inc., T-Mobile, HTC, Qualcomm, Motorola and others have collaborated on the development of Android through the Open Handset Alliance, a multinational alliance of technology and mobile industry leaders.

According to Engadget Mobile, Google will be holding a conference call at noon eastern (November 5) to unveil the details of its long-rumored Android mobile operating system. Joining CEO Eric Schmidt will be other members of the 34-member Open Handset Alliance, including the chief executives of Deutche Telekom, HTC, Qualcomm, and Motorola. So keep watching this space!

According to the release, this alliance shares a common goal of fostering innovation on mobile devices and giving consumers a far better user experience than much of what is available on today’s mobile platforms. By providing developers a new level of openness that enables them to work more collaboratively, Android will accelerate the pace at which new and compelling mobile services are made available to consumers.

With nearly 3 billion users worldwide, the mobile phone has become the most personal and ubiquitous communications device. However, the lack of a collaborative effort has made it a challenge for developers, wireless operators and handset manufacturers to respond as quickly as possible to the ever-changing needs of savvy mobile consumers. Through Android, developers, wireless operators and handset manufacturers will be better positioned to bring to market innovative new products faster and at a much lower cost. The end result will be an unprecedented mobile platform that will enable wireless operators and manufacturers to give their customers better, more personal and more flexible mobile experiences.

Fully integrated Android platform
Thirty-four companies have formed the Open Handset Alliance, which aims to develop technologies that will significantly lower the cost of developing and distributing mobile devices and services. The Android platform is the first step in this direction — a fully integrated mobile “software stack” that consists of an operating system, middleware, user-friendly interface and applications. Consumers should expect the first phones based on Android to be available in the second half of 2008.

The Android platform will be made available under one of the most progressive, developer-friendly open-source licenses, which gives mobile operators and device manufacturers significant freedom and flexibility to design products. Next week the Alliance will release an early access software development kit to provide developers with the tools necessary to create innovative and compelling applications for the platform.

Android holds the promise of unprecedented benefits for consumers, developers and manufacturers of mobile services and devices. Handset manufacturers and wireless operators will be free to customize Android in order to bring to market innovative new products faster and at a much lower cost. Developers will have complete access to handset capabilities and tools that will enable them to build more compelling and user-friendly services, bringing the Internet developer model to the mobile space. And consumers worldwide will have access to less expensive mobile devices that feature more compelling services, rich Internet applications and easier-to-use interfaces — ultimately creating a superior mobile experience.

Open Software, Open Device, Open Ecosystem
“This partnership will help unleash the potential of mobile technology for billions of users around the world. A fresh approach to fostering innovation in the mobile industry will help shape a new computing environment that will change the way people access and share information in the future,” said Google Chairman and CEO Eric Schmidt. “Today’s announcement is more ambitious than any single ‘Google Phone’ that the press has been speculating about over the past few weeks. Our vision is that the powerful platform we’re unveiling will power thousands of different phone models.”

“As a founding member of the Open Handset Alliance, T-Mobile is committed to innovation and fostering an open platform for wireless services to meet the rapidly evolving and emerging needs of wireless customers,” said René Obermann, Chief Executive Officer, Deutsche Telekom, parent company of T-Mobile. “Google has been an established partner for T-Mobile’s groundbreaking approach to bring the mobile open Internet to the mass market. We see the Android platform as an exciting opportunity to launch robust wireless Internet and Web 2.0 services for T-Mobile customers in the US and Europe in 2008.”

“HTC’s trademark on the mobile industry has been its ability to drive cutting-edge innovation into a wide variety of mobile devices to create the perfect match for individuals,” said Peter Chou, Chief Executive Officer, HTC Corp. “Our participation in the Open Handset Alliance and integration of the Android platform in the second half of 2008 enables us to expand our device portfolio into a new category of connected mobile phones that will change the complexion of the mobile industry and re-create user expectations of the mobile phone experience.”

“The convergence of the wireless and Internet industries is creating new partnerships, evolving business models and driving innovation,” said Dr. Paul E. Jacobs, Chief Executive Officer of Qualcomm. “We are extremely pleased to be participating in the Open Handset Alliance, whose mission is to help build the leading open-source application platform for 3G networks. The proliferation of open-standards-based handsets will provide an exciting new opportunity to create compelling services and devices. As a result, we are committing research and development resources to enable the Android platform and to create the best always-connected consumer experience on our chipsets.”

“Motorola has long been an advocate of open software for mobile platforms. Today, we’re excited to continue this support by joining Google and others in the announcement of the Open Handset Alliance and Android platform. Motorola plans to leverage the Android platform to enable seamless, connected services and rich consumer experiences in future Motorola products,” said Ed Zander, Chairman and CEO of Motorola, Inc.

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