Sensor
specialist ams is selling its NFC and RFID reader IP, technologies and
product lines to STMicroelectronics for $79.3million. The deal is also
said to include a ‘substantial deferred earn out consideration’.
Depending on future results, this could be worth another $37m. However,
ams will retain its sensor related NFC/RFID tags business and relevant
design capabilities as it looks to develop wireless IoT sensor solutions
and support upcoming sensor nodes.
Alexander
Everke, ams’ CEO, pictured, said: “Divesting certain RFID/NFC product
lines streamlines our product and technology portfolio around our core
sensor solutions competence while maximising the value of our high
performance wireless IP. This transaction is a next strategic step on
our way to make ams the world’s leading provider of sensor solutions for
all major end markets.”
Included in the deal are NFC front end
and antenna boost solutions, as well as integrated HF/UHF RFID reader
assets. Around 50 employees will transfer to ST.
Korean chipmakers Samsung Electronics and SK hynix arepouring more resources into producing chips for self-driving cars amid their slowing sales in key sectors such as PCs.
SK
hynix, the second-largest memory chipmaker next to Samsung, said on
July 26 that its car business now makes more than 10 percent of DRAM
sales. DRAM chips are used for temporary data storage.
The
company added the figure for NAND chips, used for long-term data storage
on smartphones and computers, is lower than that for DRAM but continues
to grow.
“We are also producing chips for ADAS (advanced driver assistance
systems) and self-driving cars since 2015,” the company said in a
conference call. “We will continue to focus resources into the
futuristic technologies.”
Chipmakers are recently struggling with falling prices as the demand for PCs and smartphones is continuing to decline.
SK
hynix said its second-quarter profit plunged 67.1 percent to 452.8
billion won (US$399 million) from a year ago especially due to its
slowing DRAM sales. Compared to its compatriot rival Samsung, it has a
large sales portion of DRAM chips.
Samsung, the market leader on
memory chips, has also been keeping a close eye on automotive chips.
The company’s vice chairman and semiconductor business chief Kwon
Oh-hyun currently oversees the company’s automotive parts business
overall.
Samsung recently acquired a 1.92 percent stake in
China’s BYD, the world’s largest electric vehicle maker, in a way for it
to expand its presence in the soaring automotive parts market in an era
of electric mobility.
The company plans to supply its own
connected car solution Samsung Connect Auto to US telecom behemoth
AT&T from next month. First unveiled in February this year, the
solution is a little plastic box powered by Samsung’s Tizen OS that
plugs directly into a vehicle’s on-board diagnostics to monitor the
car’s operation, provide updates on eco driving efficiency and offer
Internet connections for entertainment.
Tsinghua Unigroup Ltd. merged its memory chip-making operations with
Chinese government-run XMC’s, creating a $2.8 billion company to
spearhead the country’s effort to become a global semiconductor player.
The company is folding XMC, also known as Wuhan Xinxin Semiconductor Manufacturing Corp.,
into its growing portfolio of assets and consolidating their production
capacity, Tsinghua’s billionaire chairman Zhao Weiguo said via
e-mail. The newly merged entity is called Changjiang Storage Co. and has
a registered capital of 18.9 billion yuan ($2.8 billion), according to a
website operated by the State Administration for Industry and Commerce.
Changjiang
Storage will count among its shareholders the 138 billion-yuan National
Integrated Circuit Industry Investment Fund Co., whose mandate is the
development of a domestic chip sector and in which Tsinghua is an
investor. Other shareholders include the provincial governments of Wuhan
and Hubei, though the website didn’t list their stakes.
Zhao will become chairman of the new entity, he said. Tsinghua,
an affiliate of the prestigious Beijing university of the same
name, harbors ambitions of becoming a global player in semiconductors.
It has pursued deals around the globe as the standard-bearer of China’s
effort to build a local industry giant and wean the country off foreign
technology. Its core business of semiconductors is seen by the nation’s
political leadership as vital to national security.The company is
just one of several affiliates of state-backed Tsinghua University, the
school that’s produced Chinese leaders from President Xi Jinping to his
predecessor Hu Jintao. Other arms include Tsinghua Unisplendour Co. and
Tsinghua Tongfang Co.
Together they’ve spearheaded a spate of high-profile acquisitions in recent years. Unigroup bought RDA Microelectronics Inc. and Spreadtrum Communications Inc., and came close
to a potential $23 billion bid for Micron Technology Inc. But it
withdrew from a $3.8 billion investment in Western Digital Corp. in the
face of a U.S. security review.
Its latest target, XMC, began
operations in 2008 and says it’s one of the largest players in domestic
semiconductors. It’s unveiled plans to participate in the building of a
$24 billion semiconductor manufacturing mega-complex that the government is establishing in its home province. XMC didn’t respond to a phone call seeking comment.
Closely
held Unigroup had sales of 52 billion yuan ($8 billion) last year with
an after-tax profit of 3.9 billion yuan, according to the company. In
its chip design business, profit came to $200 million on sales of 13.5
billion yuan. Its target, XMC, began operations in 2008 as a foundry for
memory chip and image sensor production.
South Korean memory chip maker SK Hynix Inc (000660.KS)
on Tuesday tipped a strong pickup in DRAM memory chips for mobile
devices in the second half after its second-quarter operating profit
fell to its lowest in more than three years.
The world's No. 2 memory chip maker after Samsung Electronics Co Ltd (005930.KS)
said key clients would launch new smartphone products, boosting a
market which has been hurt by weak demand for consumer electronics.
"The
third quarter is a time when demand from key clients for new smartphone
products rises significantly, which will have a positive effect," SK
Hynix said in a statement.
SK
Hynix said in a regulatory filing its April-June profit was 453 billion
won ($397 million), the lowest since the first quarter of 2013 and
matching analysts' estimates from a Thomson Reuters StarMine
SmartEstimate survey.
The chipmaker's shares were down 2.1 percent as of 0206 GMT, compared with a 0.2 percent rise for the broader market .KS11, briefly touching their lowest price since July 8.
Yuanta Securities
analyst Lee Jae-yun said concerns about tougher competition amid
speculation about a takeover of U.S. Micron Technology Inc (MU.O) was weighing on investor sentiment.
Micron
earlier this month announced job cuts and other savings after guiding
for weaker-than-expected fiscal third-quarter sales, underscoring the
strains on the industry.
Sluggish
global economic conditions are weighing on demand for products ranging
from smartphones to personal computers, hurting prices for components
such as chips.
SK Hynix said
second-quarter shipments of DRAM chips, used for temporary data storage,
rose 18 percent from January-March while average selling prices fell 11
percent.
Shipments for NAND
chips, used for long-term data storage on products such as smartphones
and computers, rose 52 percent and the average selling price fell 11
percent.
Second-quarter
revenue SK Hynix fell 15 percent from a year earlier to 3.9 trillion
won, compared with a Thomson Reuters StarMine SmartEstimate of 3.8
trillion won.
The impending launch of new premium smartphones from firms such as Apple Inc (AAPL.O) and Samsung Electronics could help chipmakers in the current quarter, however.
Researcher
TrendForce said earlier this month contract prices for DRAM chips had
stabilized in June and would rise by between 4 percent and 8 percent in
the third quarter.
SK Hynix also
said it would push to grow its memory sales for vehicles, focusing on
high-end applications such as self-driving technologies.
Through the investment, Samsung Electro-Mechanics will develop the
next-generation chip packaging facilities, which will be deployed at
Samsung Display’s manufacturing complex in Cheonan, South Chungcheong
Province.
Teaming up with Samsung Electronics’ system LSI
division, in charge of developing non-memory chips such as application
processors, the electronic components firm will start a project to
develop the fan-out wafer level package or FoWLP technology, which can
reduce the size of a chip and production cost in a dramatic manner.
Thanks
to an upper hand in its own FoWLP technology, TSMC, a Taiwanese chip
foundry firm, was able to strike a supply deal of mobile application
processor for Apple’s next iPhones.
Samsung Ventures,
the venture capital arm of Korean consumer electronics company Samsung
Electronics, led the $4.5 million equity financing round for Kazan
Networks Corp. Intel Capital,
the venture arm of the semiconductor-maker Intel (Nasdaq: INTC), and
data-storage products developer Western Digital (Nasdaq: WDC) also
invested, according to Kazan.
The
Auburn-based company, which launched in December 2014, has developed
technology to allow cloud data center servers to quickly access
solid-state memory that is not physically in or near the server. That
“allows for data center configurations that are game changers,” said Bryan Cowger, Kazan Networks' head of marketing.
n recent months, scientists
at the Pittsburgh Supercomputing Center reported progress in the fields
of genomics, public health, chemistry and machine learning thanks, in
part, to a new National Science Foundation-funded supercomputer –
Bridges. The system, which was also used to model the possible benefits
of influenza vaccine choice, provided compelling results that suggest
adopting a vaccine choice policy could curtail the national cost and enormous annual burden of influenza in the United States.
Federal
funding and support for supercomputers or high-performance computing
(HPC) projects, such as Bridges, is critical for enabling new scientific
discoveries and cures for diseases, enhancing national security and
cyber defenses and improving economic competitiveness. Yet, U.S.
leadership in this market is being contested as other countries are
beginning to invest aggressively as they recognize the technology’s
strategic importance.
Think
of it like the Space Race of the 1960s, but with investment going into
software and large-scale HPC systems rather than rockets. The stakes are
different, but the potential for world-changing results is just as
important.While the U.S. continues to hold a prominent position in HPC, the Associated Press recently reported that
China has now officially displaced the U.S. for the first time with the
most supercomputers on the Top 500 listing of the fastest
supercomputers in the world. Fifteen years ago China didn’t even have
one HPC on the Top 500 listing. According to the International Data Corporation, the
Asia Pacific region had a HPC growth of 15 percent in 2015, where the
U.S. was only at 5 percent. The European Union has recently doubled
their investment in supercomputing research, and Japan’s High
Performance Computing Initiative program shows they are focused on
building an exascale supercomputer by 2020, whereas the U.S. is currently on target for 2023.
The
reality is that HPC systems are no longer a technology reserved for
elite academic institutions, but are now bleeding into the enterprise,
disrupting industries and impacting our nation’s competitiveness and
innovation. For example, imagine a wind turbine. Without HPC,
researchers could only test for very general system-wide improvements.
With it, researchers can use HPC systems to handle massive amounts of
data and complex calculations to analyze the impact of friction at
multiple points on a single turbine blade, making improvements a
millimeter at a time. Efficiency gains can multiply quickly at that
level, leading to a whole new paradigm for investing in clean wind
energy.
Organizations like the Pittsburgh Supercomputing Center
are also pushing the HPC envelope with new and innovative architectures.
Bridges represents a new approach to supercomputing that focuses on
research problems that are limited by data movement. In addition to
serving traditional supercomputing users, Bridges will help researchers
tackle new kinds of problems in genetics, the natural sciences and
social sciences, where scientists are impacted by the volume of data
rather than computational speed. This project highlights another
innovative way HPC can help solve pressing issues facing the U.S.
But
we can’t stop there. Given the explosion of vast amounts of data and
the increasing importance of simulations in scientific research, we need
to make the next exponential leap in HPC, exascale computing and next
generation computing. To put in perspective, an exascale supercomputer
could operate faster than 50 million laptops. As
with the semiconductor industry, the country or region that leads HPC
and exascale will capture the related economic and societal benefits.
The U.S. simply cannot afford to fall behind in this race.
While
the private sector continues to make significant HPC-related
investments, the federal government also plays a vital role in advancing
HPC research. HPE recently participated in an Information Technology
Industry Foundation (ITIF) panel on Capitol Hill to urge Congress to
fully fund the Administration’s FY2017 request on the National Strategic
Computing Initiative (NSCI). The NCSI names three lead agencies,
Department of Energy (DOE), Department of Defense, and National Science
Foundation to lead these efforts.
Specifically, DOE plans to
establish, over the next 15 years, a viable path forward for future HPC
systems, and to research new progressive technologies that perform
“beyond Moore’s law,” including the all-important exascale computing.
We
continue to urge Congress to fund these critical investments, so the
U.S. can enjoy the greatest rewards of HPC-driven technology and give
our nation the advantage when attempting to solve the world’s most
pressing challenges.
Seagate today announced a new
line of hard drives with up to 10TB of capacity for desktops computers,
network-attached storage (NAS) and surveillance systems.
The
high-capacity drives, dubbed the Guardian Series, represent a 2TB
increase over the capacity of previous Seagate hard drives in the
consumer and small business category.
The Guardian series consists of the BarraCuda Pro desktop drive, the
Seagate IronWolf for NAS applications and the Seagate SkyHawk for video
surveillance systems.
Seagate also said it has resurrected the
Barracuda brand for its line of consumer desktop and laptop hard drives,
a name it did away with in favor of the "Desktop Hard Drive" brand a few years ago. Seagate changed the spelling to "BarraCuda."
The standard BarraCuda line now includes hard disk drives with
spindle speeds ranging from 5,900rpm to 7,200rpm and capacities ranging
from 500GB to 10TB. The drives also come with 16GB to 64GB of DRAM
cache, depending on the overall capacity, and are being offered in
2.5-in. laptop form factors and 3.5-in. desktop sizes. The thinnest
2.5-in. BarraCuda drive is 7mm thick, small enough for ultrathin
notebooks; it offers up to 2TB of capacity.
The updated BarraCuda
drive line will offer sustained data transfer rates of up to 210MB/s.
The 2TB models will retail for $81 and the 3TB models will sell for
$100.
Seagate also announced a new drive for PC "enthusiasts," the
BarraCuda Pro, which comes in capacities of up to 10TB. The drive has a
7,200rpm spindle speed and a data transfer rate of up to 220MB/s, and
comes with a five-year limited warranty. That's more than twice the
typical two-year BarraCuda HDD warranty.
"BarraCuda Pro offers the
highest PC Compute spin speed at 7200 RPM for 3.5-in. HDD drives on the
market," said Chris Deardorff, a Seagate senior marketing strategist.
The drive also comes with Seagate's Self-Encryption Drive (SED)
technology, which password protects data on the drive but also allows
users to crypto-erase it by changing the encryption key, ensuring no one can access it.
The BarraCuda Pro can sustain up to 55TB of data writes per
year, according to Deardorff. The 10TB BarraCuda Pro will retail for
$535.
Another hard drive announced today in the BarraCuda lineup
is the FireCuda, which is aimed at gamers and comes in both 2.5-in. and
3.5-in. Form factors, and either 1TB or 2TB of capacities.
The
FireCuda is a solid-state hybrid drive (SSHD), which means it uses a
small amount (8GB) of NAND flash as a caching element to increase
performance up to five times over standard BarraCuda drives. Data is
first written to the NAND flash prior to the hard drive, which enables
higher performance considering the spindle speed is just 5,900rpm. The
drive has a maximum sustained read rate of 210MB/s.
Seagate has been selling SSHDs since 2011, so the FireCuda is not new technology. The FireCuda will retail for $85 for a 1TB drive, $110 for the 2TB model.
For
small businesses, Seagate has refreshed its NAS drive lineup with the
IronWolf brand. The IronWolf is aimed at NAS devices with one to 16
drive bays and comes with up to 10TB capacity and Seagate's AgileArray
(formely NASworks) software on it. AgileArray technology supports error
recovery controls, power management and vibration tolerance for
reliability when used in multi-bay NAS devices.
The IronWolf, which is rated for up to 180TB of
writes per year, sports a higher resiliency than other Seagate drive
models with a one million meantime before failure (MTBF) rating,
according to Jennifer Bradfield, a Seagate senior director of product
marketing.
The drive can also power down into a sleep mode
while not being used, sipping only .8 watts of power compared with the
6.8 watts of power it uses while active.
The IronWolf HDDs offer a
Rescue Data Recovery Service plan that protects against data loss from
viruses, software issues, or mechanical and electrical breakdowns in a
NAS or RAID environment. A failed drive can be sent back to Seagate
where its in-house "Rescue Service" will attempt to retrieve data. The
drive also comes with a three-year limited warranty. The IronWolf 10TB
HDD will retail for $470.
Seagate's new SkyHawk HDD lineup is a
rebrand of the previous Sv35 series video surveillance hard drive. The
new 7,200rpm drive comes with up to 10TB of capacity for storing up to
10,000 hours of HD video. It also comes with ImagePerfect firmware from
MTC Technology. The firmware, which allows the drive to be used
by motion-sensing cameras, powers down the drive when it's not in use
to reduce power consumption and heat generation. It then powers up
quickly to provide uninterrupted recording.
Like the IronWolf, the
SkyHawk drives use rotational vibration sensors to help minimize
read/write errors, and it can support up to 64 HD cameras -- more than
any other drive on the market, according to Aubrey Muhlach, Seagate's
Worldwide Surveillance Segment marketing manager.
Designed for
modern, high-resolution systems running around the clock, SkyHawk drives
also come with a data recovery services option.
The SkyHawk HDD
supports up to 180TB worth of data writes per year, has a one million
hour MTBF and a three-year limited warranty.
The 10TB SkyHawk HDD will retail for $460.
China’s latest move to contend in the memory chips segment could
threaten the dominant positions of two South Korean firms in the global
market --Samsung Electronics and SK Hynix
-- and incur a possible technology leak through the departures of local
professionals to the neighboring country, market watchers warned
Tuesday.
China’s chip-maker JHICC recently broke ground for its
DRAM plant with an investment of around 6 trillion won ($5.2 billion),
aiming to produce 60,000 sheets of 12-inch (30-centimeter) wafers
monthly by 2018. It plans to double the production capacity within five
years.
JHICC is not the only Chinese firm making massive investment in memory chips in the neighboring country.
Tsinghua
Unigroup and XMC also announced that they would be investing 13
trillion won and 27 trillion won each for technological
self-sufficiency.
China, under the leadership of President Xi
Jinping, aims to replace more than 50 percent of DRAM and NAND flash
memory with their own products by 2025 by investing public funds worth
140 trillion won.
Market watchers said China’s push has caused a stir in the monopoly of the three firms.
The
global DRAM market has been dominated by Samsung Electronics, which has
an around 50 percent share, followed by SK Hynix with 30 percent and
Micron Technology with 20 percent. There has been no new entrant in the
market over the last three years due to high entry barriers.
“The
import volume of semiconductors in China is around 272 trillion won
annually. Even if only half of them becomes self-sufficient, that would
strike a huge blow to Korean companies in the long term,” said Lee
Seung-woo, an analyst from IBK Securities.
Samsung feels uncomfortable too.
“We
are not at ease with China’s push in the memory chip market. Although
there are still technology gaps between Korea and China, it appears to
be inevitable to lose our market (share)-- such as chips for low-end
smartphones or cars -- to the Chinese firms to some extent,” a senior
source from Samsung told The Korea Herald.
Chips for cars --
autonomous and electric -- are relatively bigger than those for
smartphones, which require tinier and more advanced technologies,
according to industry sources.
Apart from losing the market
share, China’s push to attract Korean engineers are also emerging as new
challenges. They have already hired engineers from Japan, Taiwan and
Silicon Valley by acquiring the firms.
“Brain drain is becoming a
serious issue in the local chip industry. Chinese companies are luring
Korean engineers by offering salaries nine times higher than they
receive here,” said Park Jae-gun, a professor of Hanyang University’s
engineering college.
By Shin Ji-hye (shinjh@heraldcorp.com)
http://www.koreaherald.com/view.php?ud=20160719000858
Toshiba Corp. and storage maker Western Digital Corp. (WDC) have
opened a new semiconductor fab dedicated to the manufacturing of
next-generation NAND flash memory.
The fab, located in Yokkaichi, Mie Prefecture, Japan, will support
the conversion of the companies’ 2-D NAND capacity to 3-D flash memory
used in smartphones, solid state drives and other applications. The
companies say the fab will allow for higher densities from the flash
memory as well as better device performance. A
photo of the cleanroom inside the Toshiba and Western Digital
semiconductor fabrication facility located in Yokkaichi, Mie Prefecture,
Japan. Source: Toshiba The fab began construction in
September of 2014 when Toshiba and SanDisk formed an agreement for the
mass production of 3-D flash memory. In May, Western Digital completed
its acquisition of SanDisk with this fab, and having access to a
high-volume supply of flash memory was one of the key aspects of the
deal. The first phase of production at the facility began in March.
Toshiba and WDC plan to invest to expand the fab capacity over time
and dependent upon market conditions. The Yokkaichi fab includes a
site-wide integrated production system—which uses big data to analyze
more than 1.6 billion data points each day—and will be used to improve
the efficiency and quality of the 3-D NAND flash memory.
South Korean
technology giant Samsung Electronics Co Ltd on Friday said it is in
talks to acquire a stake in Chinese automaker BYD to boost its chip
business for electric cars.
In
December, Samsung Electronics, the world's top maker of smartphones and
memory chips, created a team to develop automotive-related businesses,
seeking a new growth engine as the global smartphone industry is
slowing.
Automakers and technology
companies have formed a series of partnerships in recent years as the
race to develop electric, self-driving, internet-connected vehicles has
created demand for more electronics components and software.
"The
latest investment aims at strengthening electric vehicle parts and
smartphone parts businesses for the two companies," Samsung said in a
statement.
"We plan to discuss cooperation in various businesses going forward."
Samsung
said it has not finalised how much it would spend to buy the stake, nor
how big a holding it would take in BYD, which specializes in electric
vehicles and is backed by Warren Buffett's Berkshire Hathaway Inc.
The
Korea Economic Daily reported earlier on Friday that Samsung agreed to
buy new shares worth 3 billion yuan ($449 million) in BYD, which would
give Samsung a 4 percent stake in the automaker.
BYD confirmed in a
stock exchange filing that Samsung Electronics had participated in
their non-public issuance, but did not disclose the amount of its
investment as the offering had yet to close. The automaker, however,
denied Samsung Electronics would buy a 4 percent stake as reported in
the Korea Economic Daily.
The
Korean company's shares firmed 1.2 percent, versus the broader market's
0.3 percent rise, hitting their highest levels in more than three years
and extending gains posted since it said last week it expected a 17.4
percent rise in quarterly profit.
Shares in the
electronics firm's affiliate Samsung SDI jumped more than 8 percent in
early trading in Seoul on hopes that it might be in line to supply
electric vehicle batteries to BYD.
But
Samsung denied that battery supply was part of the BYD tie-up. Samsung
SDI shares trimmed gains and were traded flat as of 0500 GMT.
Taiwan Semiconductor Manufacturing Co. forecast
better-than-anticipated sales as Apple Inc. prepares to trot out its
latest iPhone, helping the chipmaker defy the mobile industry’s
worst-ever downturn.
TSMC gave its outlook after reporting
second-quarter profit that topped analysts’ projections, as demand from
up-and-coming Chinese smartphone brands such as Oppo and Vivo filled a
void created by the global slowdown and a months-long lull ahead of the
iPhone 7’s debut.
The world’s largest contract chipmaker, as a
major supplier to Apple and other industry heavyweights from Qualcomm
Inc. to Huawei Technologies Co, has emerged as a key industry
bellwether. It’s now grappling with a pronounced slowdown in global
demand, with Apple predicting its second straight revenue decline and
smartphone sales in 2016 seen rising by a single-digit percentage for
the first time, according to Gartner Inc.
But
TSMC’s lead in chipmaking technology is helping it buck the
doldrums. As one of the key suppliers for the iPhone, TSMC may already
have begun to crank out chipsets for the latest model, according to
SinoPac Securities Investment Service. Smartphone-related demand will
support half of the Taiwanese company’s growth in the coming five years,
said Mark Liu, TSMC’s co-chief executive. For a Gadfly column on TSMC’s results and outlook, please click here.
Demand
for lower-end Qualcomm chipsets from Chinese brands “are keeping TSMC’s
factories busy,” said Roger Sheng, a research director at Gartner Inc.
“Although the iPhone series wasn’t doing well this year, TSMC was able
to get the majority of iPhone chip orders, which remains a lucrative
deal for them.”
TSMC now supplies more than half the world’s smartphones, Liu told investors on a call. The
custom chipmaker, which competes with Samsung Electronics Co. to make
processors for Apple, is predicting revenue of NT$254 billion to NT$257
billion for third quarter, exceeding the NT$250.1 billion that analysts
predict on average. That’s coming off its third-highest quarter for
sales on record and a second-quarter net income of NT$72.5 billion,
which also topped estimates.
Gross
margins came to 51.5 percent in the second quarter, up from 44.9
percent in the previous three months and surpassing the estimate.
Margins had declined due in part to an earthquake that disrupted
production in February.
TSMC’s shares ended Thursday up 0.3
percent. The stock has gained about 18 percent this year and is hovering
near an all-time high.
“The rising popularity of Oppo and Vivo
smartphones provides upside potential to our FY16-18 sales forecasts,”
CIMB Securities Ltd. analysts led by Eric Lin wrote before the results.
Scale
is pivotal in an industry grappling with rising production costs and
intensifying competition. TSMC’s now targeting capital spending of $9.5
billion to $10.5 billion in 2016, up from a previous target of $9
billion to $10 billion as it continues to upgrade and expand its
manufacturing capabilities to hold rivals at bay. The company now plans
to erect a $3 billion wafer plant in eastern China to help it win more
clients in the country.But questions
remain about when investments in more advanced 7-nanometer and 10
nanometer production processes will start to pay off. Gokul Hariharan,
an analyst at JPMorgan Chase & Co., downgraded TSMC to neutral from
overweight, warning that the third quarter is likely a peak for the
Taiwanese giant because demand for those higher-end processes may not
fully materialize till 2018.
While smartphone sales growth is
slowing, shipments should continue rising between now and 2020 and TSMC
in turn would benefit, said Steve Myers, an analyst at Haitong
International Securities Group.
“Is there growth likely from the
aggregate of TSMC’s customer base? Probably yes,” he said. “I don’t see
any reason to assume that either, both or neither 2017 and 2018 will be
gap years.”
What is going to happen to Atmel’s 8bit AVR microcontrollers now that Microchip has bought the company?
Nothing bad, is the short answer, according to Microchip’s strategic marketing manager for 8bit MCUs Lucio Di Jasio.
“There is a new generation of AVRs coming in the summer, if anyone doubted it,” he said.
Long-time Microchip employee Di Jasio is now free to admit a secret
admiration for the AVR architecture since it appeared in 1997 – with all
the advantages that two decades of architectural innovation had
delivered since 1976 when the first PIC was introduced.
According to Di Jasio, the 8bit PIC and 8bit AVR design teams (the
latter based in Trondheim Norway), have more than warmed to each other
since they were merged following the acquisition.
“It was like twins separated at birth. Most people in Microchip 8bit
division are really excited. We talked to the Atmel 8bit guys, and we
realised we came up with same solutions for same customers,” he said.
“Atmel had been focusing on its [ARM] Cortex-based 32bit parts, and they
were pleased that Microchip focuses on 8bit. We really believe in 8bit
continuing to develop, and we are going to do the same for AVR. We have
consistency of purpose.”
That said, from the 32bit point of view, “the addition of all the new
Cortex devices represents an important expansion of our portfolio”,
added Di Jasio. New AVRs
With the introduction of its ‘F1’ PICs five years ago, Microchip
added what it calls Core Independent Peripherals – peripherals that can
be set-up to co-operate while the processing core concentrates on other
tasks, or sleeps to save power.
Microchip’s view is that these peripherals are most valuable when
they are used to stretch the performance of low-pin-count PICs –
14-28pins – as it allows them to be used in applications not normally
open to 8bit parts.
Atmel has Event System, a mechanism through which peripherals can
communicate, and has been modifying peripherals to work with it.
“Atmel had done some development of core-independent peripherals, but
put the innovation into the XMega family – very large chips with a lot
of pins,” said Di Jasio. “We immediately discussed putting the
core-independent peripherals into its [lower pin-count] Tiny and Mega
ranges.”
And these are the parts that will start to appear in September.
Microchip doesn’t have a name for the logic in PICs that does the
same job as Atmel’s Event System, and Atmel never separately branded its
core-independent peripherals.
“We are merging our vocabulary for when we talk to customers,” said Di Jasio. “There is going to be a lot of cross-pollination.” Tools
Both firms have integrated development environments – MPLAB for Microchip and Atmel Studio for Atmel.
Is Microchip going to combine them?
“These are two pretty complete tool sets, and there is no way of
saying one is better than the other,” said Di Jasio. “We want to be very
cautious as we move along because it gets very personal to developers
very quickly.”
Some are resisting integration:
Microchip made a major change to MPLAB six years ago, moving from
PC-only MPLAB 8 to Java-based MPLAB-X which works on Windows, Linux and
MacOS.
“I still meet customers that say MPLAB 8 was much better, and people still download it every day,” said Di Jasio.
On the flip-side:
“Some users have been using both Microchip and Atmel architecture for
many years and immediately asked us to unify,” said Di Jasio. “Our main
concern is that we don’t want to alienate users; we don’t want people
to think we are going to dictate the future.”
So any changes are going to happen slowly and carefully: “We see some
low-hanging fruit,” said Di Jasio. “It is easy to merge some pieces
under the same umbrella.”
One of those is compilers.
C compilers for PIC24 and PIC32 microcontrollers are derivatives of
the GCC architecture and are already integrated into MPLAB-X. As the AVR
compiler is also GCC-derived, it would fit onto the hooks already in
MPLAB-X.
Atmel’s ‘Start’ automatic code generation is another.
Microchip has a tool – both MPLAB-based and web-based – called Code
Configurator that simplifies the creation of start-up code. The user
selects a particular PIC and fills in a series of dialogue boxes that
describe the required initial state of on-die peripherals. The tool
automatically writes C to set the chip into that state.
Atmel’s Start is similar, but only works for Atmel’s 32bit processors
– a situation that is due to change in September when Start will
support the new 8bit AVR product line.
A mobile chip faster than the one in flagship smartphones like
Samsung's Galaxy S7 and LG's G5 will start appearing in handsets this
quarter.
The Snapdragon 821, announced by Qualcomm on Monday, is an
incremental upgrade to the Snapdragon 820. In addition to mobile phones,
it's also aimed at tablets, drones, robots and virtual reality
headsets.
The Snapdragon 821 is about 10 percent faster than its
predecessor. It is also more power-efficient, meaning batteries in
smartphones and phablets will last longer.
Smartphone buyers can look at smartphone specifications to see if a device has a Snapdragon 821 or 820.
Qualcomm
is now the top dog of mobile chip companies, with Intel exiting the
race. The company routinely releases incremental upgrades to its
top-line chips. It released the Snapdragon 801 chip in 2014, with
performance and graphics improvements, as an upgrade to the Snapdragon
800.
The Snapdragon 821 will boast minor graphics improvements, so
smartphones with the new chip will be better equipped to handle
Google's DayDream mobile VR platform, for example.
The chip can also process 4K video in smartphones to show on external displays.
The
Snapdragon 821 will have an integrated modem that can provide download
speeds up to 600Mbps (bits per second), which is the same as its
predecessor.
The CPU will operate at speeds of up to 2.4GHz. The chip is based on a homegrown architecture code-named Kryo.
Qualcomm
didn't provide further details, saying they would be shared at a later
date. But it's safe to assume the new chip will support LPDDR4 memory,
and even Windows 10 Mobile, which works with Snapdragon 820.
By eliminating tariffs on trade in tech
products, ITA expansion will spur an estimated $190 billion in annual
GDP growth globally.
Last
week, as many Americans were busy finalizing plans for Independence Day
weekend, a new trade agreement took effect that eliminates tariffs on a
vast array of tech products, including next-generation semiconductors.
The Information Technology Agreement (ITA), first agreed to 20 years
ago, on July 1 began expanding to cover a whopping $1.3 trillion in tech
products, including myriad new devices that have sprung to life over
the last two decades. The expanded ITA is a hard-fought victory for free
trade, innovation, the semiconductor industry, and America’s economic
strength and global competitiveness.
By eliminating tariffs on trade in tech products, ITA expansion
will spur an estimated $190 billion in annual GDP growth globally. The
agreement covers a long list of products such as MRI machines, GPS
devices, solid state drives, video game consoles, loud speakers, video
cameras, and sophisticated testing equipment. It also includes advanced
semiconductors known as MCOs and a wide range of other products that
depend on semiconductors. For the MCOs alone, the ITA will eliminate
hundreds of millions of dollars in tariffs annually, and that number is
expected to rise considerably as use of MCOs becomes more widespread.
Tariffs on some products will disappear immediately, while other
tariffs will be eliminated over the next several years in a process
known as “staging.” While the vast majority of ITA countries completed
the necessary domestic procedures to begin implementing tariff
elimination on these products immediately, there are a few notable
slowpokes. China, Korea, and Japan, for example, did not yet complete
the technical customs work they needed to do to start tariff cuts on
July 1. While disappointing, we are hopeful they will get this work done
in the coming months.
These hiccups aside, the free flow of tech products across
international borders made possible by the ITA is great news for
consumers. By eliminating tariffs on a vast array of tech products, more
businesses will be able to ship their goods to customers the world
over, allowing for the spread of technology and greater economic
opportunities in disadvantaged areas of the world. Eliminating tariffs
on these products also helps keep costs down for consumers here in the
U.S.
The story of ITA expansion is a reminder of what can be accomplished
through hard work and international collaboration. The effort kicked off
with a major conference at the World Trade Organization (WTO) in Geneva
in May 2012. It has been a long and sometimes bumpy road since that
time, involving countless negotiating rounds in Geneva, myriad
statements of support by the Asia-Pacific Economic Cooperation
economies, significant backing from a global coalition of over 80 trade
associations, and substantial work by international negotiators and
industry stakeholders. The discussions experienced their share of fits
and starts, but on July 1 the effort proved to be well worth the wait.
In addition, ITA expansion marks a meaningful win for the WTO and
stands to give greater momentum to other tariff-elimination agreements,
including the Environmental Goods Agreement and the ongoing Trade in
Services Agreement talks. All these negotiations represent an important
new template for the WTO to make needed progress in opening markets
around the world.
The expanded ITA will strengthen the semiconductor industry, the tech
sector, and the U.S. economy. In the midst of heated anti-trade
rhetoric in the U.S. presidential campaign and the reverberations felt
around the world as a result of Brexit, July 1 was a good and
much-needed day for trade and innovation the world over.
Handset chip designer MediaTek Inc (聯發科) yesterday reported quarterly
growth of about 30 percent in second-quarter revenue after revenue hit
an all-time high last month, underpinned by rebounding demand for 4G
smartphones in China and emerging markets.
Revenue last month rose
0.95 percent from May to NT$24.87 billion (US$769.83 million), which
brought revenue for the quarter that ended last month to NT$72.53
billion, MediaTek said.
MediaTek, which counts several Chinese
handset vendors among its clients, generated NT$55.91 billion in revenue
in the first quarter.
The second-quarter figure fell in the high
end of the company’s revenue forecast, which ranged from NT$69.3 billion
to NT$73.8 billion, but surpassed HSBC Securities Taiwan Corp analyst
Yolanda Wang’s (王郁雅) projection of NT$71.44 billion and the NT$71.29
billion predicted by Macquarie Capital Securities Ltd’s Patrick Liao
(廖光河).
Accelerating migration to 4G handsets in China and
developing markets is to drive revenue growth in the second half and for
the whole year of this year, MediaTek chairman Tsai Ming-kai (蔡明介) said
last week, adding that a shortage of chips would extend into September.
MediaTek’s
chip packaging services provider, Advanced Semiconductor Engineering
Inc (ASE, 日月光半導體), yesterday said consolidated revenue last month grew
5.7 percent from May’s NT$20.6 billion to NT$21.77 billion.
In the second quarter, ASE’s consolidated revenue grew 0.4 percent quarter-on-quarter from NT$62.37 billion to NT$62.6 billion.
Revenue
from its core businesses, chip testing and packaging services,
increased 8.3 percent quarter-on-quarter from NT$35.54 billion to
NT$38.5 billion in the second quarter, in line with the company’s
expectation of “mild sequential growth.”
Separately, United Microelectronics Corp (UMC, 聯電), the world’s No. 2
contract chipmaker, yesterday posted record revenue of NT$13.53 billion
for last month, with quarterly revenue growing 7.56 percent from
NT$34.4 billion in the first quarter to NT$36.97 billion.
However,
Vanguard International Semiconductor Corp (世界先進), which makes
controller chips for LCD panels, and memorychip maker Marconix
International Co (旺宏電子) reported that monthly revenue last month
declined 4.6 percent to NT$2.21 billion and 2.3 percent to NT$1.7
billion respectively.
In the second quarter, Vanguard reported
that quarterly revenue increased 4.02 percent from NT$6.22 billion to
NT$6.47 billion, while Macronix’s quarterly revenue expanded 1.77
percent from NT$5.09 billion to NT$5.18 billion.
Taiwan’s electronics industry has been a pillar of its prosperity for
the past four decades, turning the island into a key supplier for the
likes of Apple, IBM and Dell, and spawning billionaires such as Hon
Hai’s Terry Gou and Quanta’s Barry Lam.
Yet rising competition from China is increasingly challenging
Taiwan. Just how badly? To learn more, I exchanged with Matt Cleary,
head of research at Trenchant Tech Research in Taipei. Excerpts follow.
Q. The fortunes of Taiwan’s richest tech entrepreneurs are lower on
the new Forbes Taiwan Rich List in part of because of relatively
short-term worries about orders from Apple. (Click here
for link to main list.) Longer term, how seriously is Taiwan’s
electronics industry being challenged by mainland China companies in
global markets?
A. Taiwan’s electronics industry is arguably facing its greatest
challenge ever, as both the central government in Beijing and the
regional and city governments throughout China are redoubling efforts to
bolster domestic, state-invested competitors. Under these subsidy
regimes, system makers which can reach a targeted percentage of
component value from approved vendors are granted what, by the standards
of prevailing profit margins are massive rebate subsidies. Whereas mere
import substitution had once been a sufficient goal of state
policy, now the Chinese government is trying to foster domestic
champions.
Q. Which segments of the industry are most threatened for Taiwan and why?
A. Clearly the smartphone and tablet food chain companies are the
most vulnerable, followed by the PC component group. Conversely,
networking and automotive component makers are far less vulnerable.
Moreover, there are certain products such as high-end camera lenses and
4K LCD TV panels where the inherent engineering challenges will buffer
the leading manufacturers, such as Largan Precision and AUOptronics,
respectively. TSMC should also be largely insulated, as advanced wafer
foundry too is an area with steep technological barriers to entry.
As for why the smartphone and tablet food chain, I would say that the
reasons are mainly threefold. First, these are areas where the Chinese
government has most focused it subsidies, as these are large and still
growing segments. So it makes sense to concentrate efforts here.
Secondly, most of the components going into mid-range and low-end
smartphones and tablets are less technically advanced, and thus within
the reach of aspiring new Chinese competitors. Finally, these are
consumer products where there is both more willingness to buy
lesser-known brands, and less overall end-market scrutiny of the
components within. The situation is very much the opposite in both
networking and automotive electronics.
Q. Do you expect China’s capabilities to continue to improve and and why?
A. I expect that we will continue to see Chinese would-be national
champions narrow the technological gap, although this will happen at
varying degrees. These barriers to entry will likely prove most durable
in foundry wafer production. But these technology deficits should also
prove relatively persistent in advanced displays and optics, as
resolution migrations continue. While IC packaging and testing has thus
far suffered little impact from the so-called “red supply chain,” we are
concerned that the advantage of the Taiwanese incumbents ASE and
Siliconware Precision will prove less durable over the 2-3 year view.
Global chip makers are eager to avoid being singled out, as Qualcomm was
in recent year. One way that they’ll seek to do this is to engage in
hand-holding of Chinese manufacturers, helping these newer entrants up
the quality curve.
Q. How does the ASE-SPIL deal fit into this picture? Originally,
SPIL was looking to team up with a mainland investor that was also
looking to invest in other Taiwan tech companies (Tsinghua Unisplendor).
A. We are pretty skeptical that the ASE-Siliconware Precision tie-up
will yield a great deal of benefits without any integration of the two
companies. Simply putting these two competitors under the same umbrella
company is likely to yield meager benefits in such areas as procurement
of supplies. Moreover, combining the industry’s largest and
third-largest players is likely to increase their customers’ interest in
fostering Chinese suppliers which can meet their technological
requirements. Even if the new umbrella firm were to invite Chinese
investment, it is very unlikely to be of the scale necessary for the
firm’s products to be considered domestic Chinese content.
Q. What are the risks for the likes of Hon Hai and Quanta?
A. The risk is that the Chinese government continues to throw state
funds at the tech sector in a desperate effort to foster world-class
players. They’ve already seen, for instance in foundry chip production,
that a decade and a half of lavish subsidies have not enabled SMIC to
either appreciable close the technology gap nor win leading-edge orders
from global chip makers without the sort of behind-the-scenes
arm-twisting that Qualcomm has suffered. This sort of industrial
coercion can only get China’s national champions so far, as the SMIC
case clearly demonstrates. The risk to Taiwanese component vendors is
that not all segments of the electronics industry place such a high
premium on cutting-edge technologies as do high-end logic chips.
Companies like Hon Hai may have some ability to defend themselves
through their global network of clients, manufacturing capabilities, and
distribution. But even Hon Hai is not immune to these pressures.
Companies like Delta and Quanta however have a few relatively more
sheltered, more technologically-intensive product areas where they can
easily hold off the new entrants from China. In the case of Quanta,
servers and other data center hardware will play that role. For Delta,
automotive electronics should offer them a means to win business that
the global car makers are unlikely to entrust to Chinese firms. Even HTC
is likely to find refuge in its Vive line of VR hardware, given the
company’s early-mover status and the fact that they’ve aligned
themselves with a very capable software partner in the form of Steam.
HTC’s management have clearly learned from their smartphone struggles
the importance of establishing a viable platform. And we believe that
they’re well positioned to do so in VR in a defensible manner.
Q. You mentioned AUO. What’s ahead for Innolux?
A. I’m personally quite optimistic about both Innolux and AUO. While
both of the Korean display giants (Samsung and LG Display) have tried to
avoid rising Chinese completion by shifting to organic light-emitting
diode (OLED) displays, both have struggle to really make this pay off.
In the meantime, both AUO and Innolux have worked to leverage their
expertise in LCDs. And this ha worked out well for them, especially as
the migration to 4K (UHD) TVs has happened more quickly than expect.
While the Chinese display makers have used lavish government subsidies
to build new capacity, they’ve found that quadrupling pixel density a
massive engineering challenge. Their resulting low yields have muted the
resulting supply impact. At the same time, TV makers are telling us
that Samsung is unable to fill orders for a number of TV panel sizes, as
they are also suffering product migration hiccups, as they try to move
to thinner motherglass and incorporate other new technologies.
Consequently, we’ve seen prices for some panels bounce by as much as 15%
from their lows, with further gains likely.
For Innolux, the big question is of course what Hon Hai boss Terry
Gou plans to do with the newly-acquired Sharp assets. While many in the
industry expect that he will ultimately find a way to leverage Sharp
technologies within Innolux, he has yet to show his hand. Innolux has
already completed an important transition, migrating a great deal of the
labor-intensive, ‘back-end’ module assembly back to Taiwan – a move
that will both yield logistical efficiencies, and enable the company to
avoid rising Chinese wages by applying greater use of automation back
home in Taiwan. These changes leave Innolux in a strong position.
http://www.forbes.com/sites/russellflannery/2016/07/06/taiwan-tech-industry-faces-greatest-challenge-as-rival-china-backs-natl-champions/#79801d653f19
Demand for instant application performance is up, but supply is down in the DRAM production business, thanks to several factors.
With more demand in the markets for real-time or near
real-time performance in enterprise and mobile applications, DRAM
(dynamic random access memory) is now becoming a hotter commodity, and
market prices are soon going to show it.
DRAM is used in virtually all smartphones, laptops and tablet PCs to
handle hot data and in most servers for in-memory-based applications.
In-memory servers such as SAP's HANA and Oracle's Database In-Memory run
their entire application in DRAM.
DRAMeXchange, a division of market analyst TrendForce, reported July 5
that DRAM prices -- which had been in decline from October 2014 to June
2016 -- have leveled off and will be going up during the coming months.
Over the last two years, the average contract price of 4GB DDR3 plunged
62 percent, from $32.75 to $12.50. DRAMeXchange expects DRAM contract
prices to rebound up in the third quarter, with the increases ranging
from about 4 percent to 8 percent, due to a tightening of supply because
of a downturn in sales of laptop PCs and other factors.
According to Avril Wu, DRAMeXchange research director, demand
from mobile and server applications will be the main driving force that
help raise average contract prices in the DRAM market during the third
quarter. But PC demand remains in a slump, and the Windows 10 licensing
scheme, which sets fees according to system specs, further discourages
PC vendors from increasing the memory content per box for their
products.
The effects of tight supply in the NAND flash market also will
contribute to the rebound of DRAM prices in the coming months, Wu said.
Strong demand for solid-state disks have raised flash prices, and NAND
flash and DRAM work together in virtually all connected devices.
Another factor is that Samsung's memory fab in Xian, China, suffered a
sudden power outage on June 18. Since this accident cut out a day's
worth of NAND flash and DRAM supply for memory module makers, spot
prices for both products jumped across the board.
In other DRAM news, Micron recorded a loss in its third fiscal quarter
from March to May and said it is planning to cut 2,400 jobs.
At the same time, however, Micron continues to search for various forms
of partnerships within the DRAM industry. Last year, Chinese technology
conglomerate Tsinghua Unigroup tried to acquire Micron for $23 billion,
but the deal was blocked by the Committee on Foreign Investment in the
U.S. (CFIUS).
There are reports that China's semiconductor sector is again gathering
forces to make another offering to Micron concerning other non-DRAM
products. Such a deal would not come in conflict with Micron's plan to
acquire Inotera. On the other hand, another U.S.-based semiconductor
company has been recently reported to be in talks with Micron as well.
DRAM is a type of random-access memory that stores each bit of data (1
or 0) in a separate capacitor within an integrated circuit. Since even
non-conducting transistors always leak a small amount, the capacitors
will slowly discharge, and the information eventually fades unless the
capacitor charge is refreshed periodically.
Because of this refresh requirement, it is a dynamic memory as opposed
to static random-access memory (SRAM) and other static types of memory.
Unlike flash memory, DRAM is volatile memory, since it loses its data
quickly when power is removed.
http://www.eweek.com/pc-hardware/why-dram-prices-are-expected-to-rise-in-q3.html
A year after GlobalFoundries was paid $1.5 billion to take over the
IBM microchip business, it has established itself as the second largest
chip manufacturer in the world.
GlobalFoundries, designers and
manufacturers of nanotechnology for everything from faster, more
powerful smartwatches and smartphones to missiles and satellites, jumped
from fourth to second in terms of revenue following the takeover of
IBM's microchip manufacturing facilities in East Fishkill and Burlington, Vermont, last year, according to Gartner, a high-tech research firm.
GlobalFoundries
had nearly $4.7 billion in revenue in 2015, up from $4.4 billion in
2014. GlobalFoundries now has control of 9.6 percent of the market. The
world’s largest chip manufacturer, Taiwan Semiconductor Manufacturing
Co., had $26.5 billion in revenue last year.
One year after the
acquisition, GlobalFoundries executives say they are leveraging the
might and prestige of former IBM researchers and developers from East
Fishkill to create what they call an “innovation hub” there. The company
is looking to shed unused or underused buildings at the southern
Dutchess campus as it faces uncertain economies in Europe and Asia and a
tepid semiconductor sales market.
An innovation hub
The
fabrication facility at East Fishkill is also part of a burgeoning
Northeast Technology Corridor, which includes GlobalFoundries’ Fab 8
facility in Saratoga County and research and development locations at SUNY Polytechnic Institute’s College of Nanoscale Science and Engineering in Albany.
As
part of the deal, GlobalFoundries acquired the East Fishkill chip
fabrication facility and absorbed 5,000 employees, bringing the number
of employees up to roughly 18,000. Those former IBMers now work in East
Fishkill or Burlington, Vermont.
In
the deal, GlobalFoundries also acquired thousands of patents and
inventions from IBM created at the East Fishkill site since 1962. Since
July 2015, the company added an additional 142 patents. All told,
GlobalFoundries now has 10,000 patents.
By leveraging the
experience and research of the former Big Blue staff, GlobalFoundries
was able to secure a major government contract in June to supply
microchips for U.S. spy satellites, missiles and combat jets.
In
the future, GlobalFoundries plans to improve on its current technology
to create applications for drones, robotics and even self-driving cars,
executives say.
“What we are trying to do in East Fishkill now is
we are trying to use Fishkill as an innovation hub,” said Anthony Yu,
head of East Fishkill’s innovation and technology division. “We have
tremendous technologists and people here know they are part of a leading
semiconductor innovation here. Employees are excited. They are really
driving these new product releases.”
One of the latest
developments in innovation at East Fishkill, and one that also leverages
10 years of research at IBM, is the rollout of silicon
photonics. Silicon photonics is technology that enables a device such as
a smartphone to send enormous amounts of data over great distances
using light, allowing for faster bandwidth speeds.
With the
explosion of real-time video, texting of photos, and downloading movies
onto your phone, photonics allows you to pass huge amount of data at
faster speeds and without errors, according to Yu.
“It’s the
perfect storm,” Yu said. “He were are in Fishkill, a high volume
manufacturing site, leveraging the research that IBM was developing with
us as we became GlobalFoundries. We are seeing the demand for bandwidth
double every three years. There’s an incredible appetite for bandwidth
and we are rolling out products next year to meet those demands.”
Basically, it means computing at the speed of light. And, who wouldn’t want a faster smartphone?
“As
I travel, I see people on the plane watching movies on their phones.
The appetite for data transmission is going up. It’s not going to slow
down,” said Mike Cadigan, senior vice president for product management
at GlobalFoundries. “A lot of people’s lives are tied to phones. That
will continue to drive massive amounts of data and video. Meanwhile,
voice is becoming the lowest consumption of bandwidth.”
But, as
technology becomes more advanced and expensive to develop, executives
say they will have to be mindful of cost-competitiveness with other chip
manufacturers.
“We’re in an industry that is very competitive,”
Cadigan said. “In every location, there is a drumbeat around cost
competitiveness. You’re not going to avoid it — no matter where you go.”
New company, new culture
As a result of the transition, the culture at the East Fishkill site also has shifted, according to executives.
Cadigan said
that former IBM developers, who once had to focus on a myriad of
things, including keeping an eye on the financial markets, are now
solely focusing on what they do best: designing semiconductors.
“Employees
appreciate that,” he said. “They know when they come in to work each
Monday that they are going to be working on semiconductors — that’s it.
It’s good for morale and it’s good for our focus.”
Nate Buel, of
Hyde Park, works on the production side of GlobalFoundries at East
Fishkill as a senior wafer fab line lead. Before the acquisition, Buel
worked with IBM for 16 years. One year later at GlobalFoundries, Buel
said he has noticed “a lot more positive energy” around the fab.
“We
were always compared to other groups and always held accountable for
different sectors,” Buel said about his time at IBM. “We were always
wondering how we can make more chips. Now, we don’t have to worry about
other sectors and whether (it will effect) our raises. We know what our
goal is.”
Buel said he felt a change in the culture most recently
when he was able to bring his family to the fab as part of Family
Day. Employees' families took tours of the facility, ate ice cream and
even got to douse executives in a dunking booth. Family Day was once a
popular tradition at the fab site under IBM but had been abandoned in
recent years.
“It was something we always heard about it,” he said
about Family Day. “It was great to let (my family) see what we actually
do all day.”
Buel said he feels optimistic about his future at GlobalFoundries.
“I
think we hit the mark this year,” he said. “We’re less concerned about
the transition. There is a lot more positive energy, and I feel pretty
confident going forward (with GlobalFoundries).”
Going forward,
there are some challenges ahead for GlobalFoundries. Mainly, balancing
costs of manufacturing of its technology within an unpredictable and
competitive marketplace. In East Fishkill, executives are faced with
selling more than 50 percent of the property or 300 acres, much of which
has been vacant for several years.
But, with the successful transition, GlobalFoundries executives in East Fishkill say they are optimistic about the future.
“It
could not have gone better. There’s a track record in the technology
industry that these types of mergers do not play out very well,” Cadigan
said. “…We beat the odds — bar none.”
Cadigan is the former head
of IBM Microelectronics. Now he leads worldwide sales for the company,
and, although his office is in East Fishkill, he often spends his time
traveling the world to meet with each of the company’s 250 multinational
corporate customers.
“The motivation, the excitement, and the
response in the marketplace has been very, very positive for us and our
people,” he said.
Time of change
A
year ago, IBM, which was among the first companies to develop the
transistors that eventually became microchips, suddenly found itself
falling behind companies whose sole business was microchip
manufacturing. The company was quickly losing money. As the chip market
became more competitive, it was untenable for IBM to continue to produce
the chips and expect to remain a major player in the market.
But,
IBM still needed chips for its own hardware products and a buyer for
its East Fishkill site. GlobalFoundries, which was launched in 2009, had
been slowly buying up smaller manufacturers, but was competing with
chip makers who had a well-established client base. Seeing the needs of
each company, IBM and GlobalFoundries struck a deal.
GlobalFoundries
still supports IBM’s mainframe products as part of a 10-year deal to
supply high-end chips. The chips are manufactured in East Fishkill, sent
to GlobalFoundries location in Burlington to be packaged and then
shipped to IBM in Poughkeepsie.
"IBM’s strategy is one of innovation, transformation and a constant evolution," said Jamie Thomas,
general manager of Strategy and Development at IBM Systems. "As IBM
continues to perform the fundamental research, as well as semiconductor
circuit and system design, GlobalFoundries has proven to be a trusted
manufacturing partner and supplier. Systems of the future will continue
to be differentiated at the systems and chip design level, which is
where IBM is focused."
Future challenges
Unpredictable stock markets, such as in China, and Britain’s vote to exit from the European Union create unknowns for the company.
“Brexit
was a surprise,” Cadigan said. “We continue to see ramifications of
that. My call is that it will level out, but it will take a little time.
Right now, we haven’t seen any fatal signs, but it is still pretty
early since the post-Friday outcome. We have a senior meeting coming up.
Part of the discussion is going to be, ‘What headlights can we draw
from this thing? What could it mean to us?’”
Semiconductor
sales across the market were off to a sluggish start in 2016, according
to the Semiconductor Industry Association. Industry forecast projects
sales will decrease 2.4 percent in 2016, but increase 2.0 percent in
2017, according to the association.
“The pundits who predict the
industry outcome for 2016, there is some scatter around those numbers,
some people would say the industry will be flat this year,” Cadigan
said. “That’s after a relatively flat or slightly minus last year. A lot
of it depends on what market segments you service. Fortunately, for us,
we serve two of the market segments. One that is doing quite good — the
enterprise segment, the networking also known as cellphone data traffic
infrastructure. The other segment is smartphone.”
One way to
ensure their success, executives say, is to continue to expand. Although
the company is based in Silicon Valley, it has manufacturing operations
in Malta, New York, Dresden, Germany, and Singapore, in addition to the East Fishkill and Essex Junction sites.
Most
recently, GlobalFoundries announced it has a memorandum of
understanding to establish a joint venture in China to manufacture
silicon there. Cadigan said that the company hopes to reach a definitive
agreement in August.
“It’s competitive market, but if you are
going to be a major player in China you have to have a facility in
China. There are indications that the Chinese government is putting
additional pressure on companies if they are consuming silicon that the
silicon has to be made onshore,” Cadigan said. “Maybe that is not today,
maybe it’s not tomorrow, but it could eventually occur. So we moved
ahead.”
Changes also are in the works for the East Fishkill site.
Once rolling farmland in southern Dutchess County,
the 464-acre plot that sits between Route 52 and Interstate 84 in the
Town of East Fishkill has become a massive microelectronics complex.
But more than 50 percent of property at GlobalFoundries has been dormant in the past year. Approximately 300 acres will be up for sale. That includes parking lots, woods and 10 buildings with a range of square footage.
Some
of the larger buildings were built specifically for industrial
manufacturing, while some of the smaller buildings were constructed for
mixed use. It would be up to the new property owners to decide whether
to redevelop the buildings or tear them down and start from scratch.
Cadigan said the company is still discussing strategies to divide and sell the property with the town.
“The
town has been very supportive. The underutilized space and buildings
don’t do a lot for commerce,” Cadigan said. “So, if we can do something
on the development side, we see it as a positive for the community.”
JustRight
Surgical, LLC, a pediatric medical device company, has received FDA
clearance for specific use of their 3mm vessel sealing system in
pediatric surgery.
To achieve the additional clearance from the FDA, JustRight subjected
its 3mm vessel sealer through rigorous testing, according to the
company. The final data was presented at the Society of American
Gastrointestinal and Endoscopic Surgeons (SAGES) clinical congress
in May.
The sealer was shown to be safe to use in extremely tight or small
spaces found in teens, children, infants and neonates. The new,
low-power vessel sealing technology was found to permanently fuse
vessels while using significantly less energy and was therefore
determined to be safe to use in the smallest patients without risk of
damaging critical, adjacent structures.
Company achievements have included development a 5mm stapler using
the classic titanium wire staple in a clinically accepted "B" shape and
the 3mm vessel sealer. Its devices, many of which are five to nine times
smaller than previously available, are currently in use for general and
thoracic procedures in more than 100 children's hospitals in the U.S.
and Europe.
"Pediatric surgeons have been requesting 'right-sized' surgical
instruments and technologies for years," according to Russ Lindemann,
president and CEO. "This pediatric indication for use of vessel sealing
is the first of its kind."
All of JustRight Surgical's products are designed and manufactured in the United States.
