It's been a month or so since the drama unfolded around Verigy, LTXC (the fiancée) and Advantest (the 11th-hour suitor). In Nov. 2010 LTXC and Verigy announced a planned merger. In late December Advantest swooped in with its own unsolicited offer whichVRGY at first coyly rejected it, but with language that implied a sweetened offer might be better received. Barclays analyst CJ Muse has suggested VRGY-LTXC is a better strategic fit.
Today things are unusually quiet, though doubtless there's activity behind the scenes. "We think that Advantest and VRGY are still in merger discussions," writes Satya Kumar from Credit Suisse in a report. Regulatory concerns shouldn't be a problem (the combo would trail TER in marketshare by ~50% to 33%), and tech synergies are there (e.g. cross-selling probe cards and handlers, streamlining product roadmaps). Indeed, Kumar thinks the protracted silence is due to hammering out details in breakup fees and other terms in case the deal can't be closed.
A S1/A filing could happen in early Feb, with proxy mailings around the same time; Kumar thinks shareholders will lean toward ATE instead of LTXC (though VRGY might continue to press ahead with LTXC if only to get ATE to accept terms and sweeten the deal). The two sides, he believes, are close enough, and the opportunity attractive enough, that ATE is unlikely to make this a hostile bid and appeal directly to shareholders. "We still think there is enough incentive for Advantest to do what it takes to make this deal happen," he writes. "If there is a will, there can be a way."
Monday, January 31, 2011
Wednesday, January 26, 2011
WaferNEWS Watch: Semicap 1Q11 preview: Rising tides
Wall Street analysts handicap this week's field of semicap earnings announcements, and the impact of some big chipmakers recently lifting their 2011 capex ceilings.
Generally speaking, both CJ Muse (Barclays Capital) and Peter Kim (Deutsche Bank) expect a slightly better-than-thought 4Q10 from several key suppliers reporting their financials this week, as foundries and NAND flash suppliers get an early jump on what likely will be a very busy 2011 for both sectors. Kim sees things at the upper end of guidance ranges, with around -4% sales declines.
Both analysts also expect 1Q11 to be flattish (or slightly lower than 4Q10), though Kim thinks it'll be better than originally thought as recently hiked 2011 capex budgets would seem to erase a projected midyear capex gap. "Concerns of tool delivery schedules could motivate chipmakers to place longer lead time orders for tools to secure delivery slots)," which could pull in orders into 1Q11, Kim writes. Muse adds that ASML, which has the highest lead times in the SPE sectors, just reported near-term record orders. Look for bookings to climb again in 2Q10 as fabs firm up their ramp-up plans, Kim notes. Indeed, the next week will bear this out as Samsung, Hynix, TSMC, and UMC all report their quarterly results and 2011 capex plans; Kim sees Samsung and Hynix coming in flat or slightly lower in 2011 vs. 2010, while TSMC likely will raise its budgets (UMC is keeping its 2011 capex flat at $1.8B...Kim had been projecting $2.0B). Toshiba might also provide some clarity on its Fab 5 spending plans ahead of its fiscal year-end in March.
A rundown of their company-by-company expectations:
Lam Research: Intel's $9B capex surge in 2011 helps competitors and hurts LCRX which has little business there outside of bevel clean -- but this might indirectly help, too, if other chipmakers (e.g. foundries) feel compelled to open their wallets a little more to keep up, points out Kim. Other key accounts with anticipated big 2011 capex investments (Samsung, GlobalFoundries, TSMC) should pick up the slack, too. Muse sees inline C4Q10 revenue/shipments and a flattish C1Q11, with SEZ clean business picking up any slack in etch demand. Much of LRCX's business will be backend-loaded in 2011. "We think that $800+ revenues is definitely sustainable in the 1H of 2011, if not for the whole year," Muse writes. Keep an ear out, though, for any comments (however unlikely) made by LRCX CEO Steve Newberry during the results call regarding overspending or peak spending.
KLA-Tencor: KLAC has the largest exposure to logic and foundries who are leading the capex charge in 2011, and they generally buy high-end wafer and mask inspection tools, Kim and Muse agree. ASML's record orders also comes into play here, since those masks have to be inspected, Kim points out -- though he thinks some of that reticle inspection business could be split with AMAT, whose Aera 2 is believed to have a foothold at Intel. Muse sees KLAC coming in at C1Q11 guidance of flat/-10% orders, though like others this should quickly pick up in subsequent quarters. Kim also points bullishly at KLAC's new LED production tools, a market that "is quickly becoming large enough to be meaningful" to the company.
Varian Semi. Equip. Assoc.: This is a clear darling of both analysts; Muse gushes that it's "one of our favorite secular growth stories" (in both semi and solar), and Kim acknowledges that VSEA is the leader in both HC and MC implant, and the sole supplier of PLAD tools (all DRAM for now, but maybe NAND later). That means there's a lot of wind blowing to fill its sails, from 2011 capex projections from Intel, Samsung, and GlobalFoundries to increased penetration of its Solion tool (projected $25M sales in 2011 with possible upside, $100M in 2012, according to Kim). "With capacity expansion spending in full swing [and] our estimates incorporating only ~$50M in new market revenues, we see upside potential to our above-consensus CY11 and CY12 estimates," Muse writes.
Teradyne: Barclays' Muse expects -21% Q/Q decline in C4Q10 orders to $275M, but hopes to find in TER's results some "confirmation that the March Q is indeed the trough for tester demand." Leading the way back up the slope will be a pickup in NAND test demand, he says.
Novellus: NVLS is actually lagging in cycle-to-cycle revenue growth, Kim says, but PVD sales are trending higher thanks to marketshare gains in memory. Also, share buy-backs and "disciplined cost control" give it better earnings leverage growth, he adds.
Applied Materials: Though AMAT reports later than other SCE firms, it's still by far the industry 800-lb gorilla, and it'll get a windfall from Intel's capex splurge (CMP, RTP, epi, PVD, and mask inspection as stated above). But overall, AMAT could see a lag from EES (orders down in F1Q11, with added risk of a growing solar PV market oversupply situation) and FPD businesses (down "moderately" in F1Q11 and flat through F2Q11), Kim says.
Generally speaking, both CJ Muse (Barclays Capital) and Peter Kim (Deutsche Bank) expect a slightly better-than-thought 4Q10 from several key suppliers reporting their financials this week, as foundries and NAND flash suppliers get an early jump on what likely will be a very busy 2011 for both sectors. Kim sees things at the upper end of guidance ranges, with around -4% sales declines.
Both analysts also expect 1Q11 to be flattish (or slightly lower than 4Q10), though Kim thinks it'll be better than originally thought as recently hiked 2011 capex budgets would seem to erase a projected midyear capex gap. "Concerns of tool delivery schedules could motivate chipmakers to place longer lead time orders for tools to secure delivery slots)," which could pull in orders into 1Q11, Kim writes. Muse adds that ASML, which has the highest lead times in the SPE sectors, just reported near-term record orders. Look for bookings to climb again in 2Q10 as fabs firm up their ramp-up plans, Kim notes. Indeed, the next week will bear this out as Samsung, Hynix, TSMC, and UMC all report their quarterly results and 2011 capex plans; Kim sees Samsung and Hynix coming in flat or slightly lower in 2011 vs. 2010, while TSMC likely will raise its budgets (UMC is keeping its 2011 capex flat at $1.8B...Kim had been projecting $2.0B). Toshiba might also provide some clarity on its Fab 5 spending plans ahead of its fiscal year-end in March.
A rundown of their company-by-company expectations:
Lam Research: Intel's $9B capex surge in 2011 helps competitors and hurts LCRX which has little business there outside of bevel clean -- but this might indirectly help, too, if other chipmakers (e.g. foundries) feel compelled to open their wallets a little more to keep up, points out Kim. Other key accounts with anticipated big 2011 capex investments (Samsung, GlobalFoundries, TSMC) should pick up the slack, too. Muse sees inline C4Q10 revenue/shipments and a flattish C1Q11, with SEZ clean business picking up any slack in etch demand. Much of LRCX's business will be backend-loaded in 2011. "We think that $800+ revenues is definitely sustainable in the 1H of 2011, if not for the whole year," Muse writes. Keep an ear out, though, for any comments (however unlikely) made by LRCX CEO Steve Newberry during the results call regarding overspending or peak spending.
KLA-Tencor: KLAC has the largest exposure to logic and foundries who are leading the capex charge in 2011, and they generally buy high-end wafer and mask inspection tools, Kim and Muse agree. ASML's record orders also comes into play here, since those masks have to be inspected, Kim points out -- though he thinks some of that reticle inspection business could be split with AMAT, whose Aera 2 is believed to have a foothold at Intel. Muse sees KLAC coming in at C1Q11 guidance of flat/-10% orders, though like others this should quickly pick up in subsequent quarters. Kim also points bullishly at KLAC's new LED production tools, a market that "is quickly becoming large enough to be meaningful" to the company.
Varian Semi. Equip. Assoc.: This is a clear darling of both analysts; Muse gushes that it's "one of our favorite secular growth stories" (in both semi and solar), and Kim acknowledges that VSEA is the leader in both HC and MC implant, and the sole supplier of PLAD tools (all DRAM for now, but maybe NAND later). That means there's a lot of wind blowing to fill its sails, from 2011 capex projections from Intel, Samsung, and GlobalFoundries to increased penetration of its Solion tool (projected $25M sales in 2011 with possible upside, $100M in 2012, according to Kim). "With capacity expansion spending in full swing [and] our estimates incorporating only ~$50M in new market revenues, we see upside potential to our above-consensus CY11 and CY12 estimates," Muse writes.
Teradyne: Barclays' Muse expects -21% Q/Q decline in C4Q10 orders to $275M, but hopes to find in TER's results some "confirmation that the March Q is indeed the trough for tester demand." Leading the way back up the slope will be a pickup in NAND test demand, he says.
Novellus: NVLS is actually lagging in cycle-to-cycle revenue growth, Kim says, but PVD sales are trending higher thanks to marketshare gains in memory. Also, share buy-backs and "disciplined cost control" give it better earnings leverage growth, he adds.
Applied Materials: Though AMAT reports later than other SCE firms, it's still by far the industry 800-lb gorilla, and it'll get a windfall from Intel's capex splurge (CMP, RTP, epi, PVD, and mask inspection as stated above). But overall, AMAT could see a lag from EES (orders down in F1Q11, with added risk of a growing solar PV market oversupply situation) and FPD businesses (down "moderately" in F1Q11 and flat through F2Q11), Kim says.
Wednesday, January 19, 2011
Common Platform alliance to use gate last at 20nm
At today's Common Platform Tech Forum event (Santa Clara, CA), Dr. Gary Patton, VP, IBM Semiconductor R&D Center, told attendees that the alliance will switch from a gate first approach to gate last at 20nm. He noted that 20nm technology demands different requirements than 28nm. He said both approaches have been evaluated in parallel since 2001 and stated that he is less concerned with the replacement gate process than he is about the other innovations that will be needed at 20nm (e.g., self-aligned contacts, local interconnects, and BEOL pitches).
The time frame for introduction of 20nm is 1Q2013 for early production. It is anticipated that third generation ArF immersion with double-patterning and source/mask optimization (SMO) will be used at 20nm.
The time frame for introduction of 20nm is 1Q2013 for early production. It is anticipated that third generation ArF immersion with double-patterning and source/mask optimization (SMO) will be used at 20nm.
Tuesday, January 18, 2011
WaferNEWS Watch: Takeaways from CES
Scanning products and trends at this year's CES show to get a sense of where the industry's going, Barclays' CJ Muse thinks the emergence of tablets and smartphones not only helps NAND demand overcome DRAM softness, it could signal "a paradigm shift" in the relationship of semiconductor sales and worldwide GDP. And there's a Beta vs. VHS battle brewing in LCDs.
Moore's Law is alive and well. More people are using and embracing tablets, smartphones, and smart TVs, which change consumers' relationship and interaction with the PC. On the devicemaker side this means greater functionality, smaller formfactors, and reduced power consumption -- all of which mean more high-end silicon. As such devices continue to penetrate into emerging markets, "we could be seeing a paradigm shift in terms of semiconductors contribution to worldwide GDP," he writes. (His supplier picks, with most exposure to node-shrinks and new wafer capacity: ASML, LRCX, VSEA, AMAT.)
Memory split, but overall strong. Tablets continue to cannibalize netbooks and lower-end notebooks, but surging NAND consumption (likely doubling to 128GB in the next-gen iPad) is only partially offset by decreasing DRAM consumption, so look for higher demand for more memory wafer starts, Muse writes. And this doesn't even factor in the potential for solid-state devices. (His picks: Memory makers, and suppliers with most exposure to them: LRCX, VSEA, TER.)
Displays: A Beta-vs-VHS battle brewing? No big new splashes in displays at this year's CES, it's all "evolutionary" vs. "revolutionary," Muse says. 3D-TV continues to gain steam, but with weaker forecasts than before (3.5M units in 2010 vs. 5M+, by his count), and "slightly less than 20M units" in 2011.
And there's a "Beta vs. VHS battle" brewing in this space. LG Display wants to move from active shutter glasses to a passive technology aided by its fill-type patterned retarder (FPR) display, which lowers passive costs by up to 30% and enables use of lower-cost glasses ($1-$2 vs. $100+). Sony and Samsung are sticking (for now) with the active technology. And Toshiba is working on a third option (autostereoscopic) that is glasses-free. With more larger-size displays incorporating 3D technology, this is a battle to watch, Muse points out.
Muse also was surprised at a lack of OLED TVs at CES; LG had a 31" model (ready in the US later this year) and Sony had a 24.5" one, while Samsung pulled its offering from the floor. It's clear, Muse writes, that OLED's high production cost is limiting its penetration into larger panel sizes, and mass production is (for now) only viable for small-size displays (Gen 4 and 5.5). Samsung hopes to gain first-mover advantage this year with a massive AMOLED capex ramp, he notes.
For Internet-connected TVs, it's still unclear where the functionality will reside (the TV or set-top box), and also how TV panel/set makers will differentiate themselves.
Moore's Law is alive and well. More people are using and embracing tablets, smartphones, and smart TVs, which change consumers' relationship and interaction with the PC. On the devicemaker side this means greater functionality, smaller formfactors, and reduced power consumption -- all of which mean more high-end silicon. As such devices continue to penetrate into emerging markets, "we could be seeing a paradigm shift in terms of semiconductors contribution to worldwide GDP," he writes. (His supplier picks, with most exposure to node-shrinks and new wafer capacity: ASML, LRCX, VSEA, AMAT.)
Memory split, but overall strong. Tablets continue to cannibalize netbooks and lower-end notebooks, but surging NAND consumption (likely doubling to 128GB in the next-gen iPad) is only partially offset by decreasing DRAM consumption, so look for higher demand for more memory wafer starts, Muse writes. And this doesn't even factor in the potential for solid-state devices. (His picks: Memory makers, and suppliers with most exposure to them: LRCX, VSEA, TER.)
Displays: A Beta-vs-VHS battle brewing? No big new splashes in displays at this year's CES, it's all "evolutionary" vs. "revolutionary," Muse says. 3D-TV continues to gain steam, but with weaker forecasts than before (3.5M units in 2010 vs. 5M+, by his count), and "slightly less than 20M units" in 2011.
And there's a "Beta vs. VHS battle" brewing in this space. LG Display wants to move from active shutter glasses to a passive technology aided by its fill-type patterned retarder (FPR) display, which lowers passive costs by up to 30% and enables use of lower-cost glasses ($1-$2 vs. $100+). Sony and Samsung are sticking (for now) with the active technology. And Toshiba is working on a third option (autostereoscopic) that is glasses-free. With more larger-size displays incorporating 3D technology, this is a battle to watch, Muse points out.
Muse also was surprised at a lack of OLED TVs at CES; LG had a 31" model (ready in the US later this year) and Sony had a 24.5" one, while Samsung pulled its offering from the floor. It's clear, Muse writes, that OLED's high production cost is limiting its penetration into larger panel sizes, and mass production is (for now) only viable for small-size displays (Gen 4 and 5.5). Samsung hopes to gain first-mover advantage this year with a massive AMOLED capex ramp, he notes.
For Internet-connected TVs, it's still unclear where the functionality will reside (the TV or set-top box), and also how TV panel/set makers will differentiate themselves.
Steve Jobs goes on medical leave from Apple
In an email subsequently released to the media, Steve Jobs informed the Apple team that he will take a medical leave of absence to focus on his health. Jobs will continue as Apple's CEO and be involved in major strategic decisions for the company.
Tim Cook, chief operating officer, will be responsible for all of Apple’s day to day operations.
Apple recently made a stir in the photovoltaics sector when it won a patent for a mobile device that derives power from a solar panel in a "plug-and-play" configuration. The patent shows that the solar panel would be removable and could be used to charge the device or batteries/accessories.
The company also influenced the MEMS microphone sector in 2010 with incorporation of MEMS microphones into the iPhone 4.
The PV and MEMS sectors will watch carefully to see how Apple's technology and design decisions are affected with Jobs on this medical leave. The Associated Press reports that Cook spent significant time at IBM before joining Apple, where he has taken the reins twice due to Jobs' medical leaves (2004 and 2009).
Tim Cook, chief operating officer, will be responsible for all of Apple’s day to day operations.
Apple recently made a stir in the photovoltaics sector when it won a patent for a mobile device that derives power from a solar panel in a "plug-and-play" configuration. The patent shows that the solar panel would be removable and could be used to charge the device or batteries/accessories.
The company also influenced the MEMS microphone sector in 2010 with incorporation of MEMS microphones into the iPhone 4.
The PV and MEMS sectors will watch carefully to see how Apple's technology and design decisions are affected with Jobs on this medical leave. The Associated Press reports that Cook spent significant time at IBM before joining Apple, where he has taken the reins twice due to Jobs' medical leaves (2004 and 2009).
Monday, January 10, 2011
WaferNEWS Watch: Best of 2010
In a banner year for semiconductor makers and the suppliers who sell chipmaking tools, industry stocks generally did pretty well, up ~22% on average for our WaferNEWS Fab 50 list. Congrats to AXT, which climbed more than 200% for the year; kudos also to Axcelis, which more than doubled its stock in the past year. Heading the other direction were Tegal (languishing most of the year in the $0.50 range) and FormFactor (whose problems and possible solutions have been the subject of speculation).
Note that as in every year there were changes and casualties: EGLS, ASYT, AVZA, BESI, and ICOS are no longer on our list. Also, LTX and Credence merged, while Semitool was bought by AMAT.
Note that as in every year there were changes and casualties: EGLS, ASYT, AVZA, BESI, and ICOS are no longer on our list. Also, LTX and Credence merged, while Semitool was bought by AMAT.
Sunday, January 9, 2011
Silicon Valley Engineering Council banquet
If you're in the Silicon Valley area, you might want to check out the Silicon Valley Engineering Council (SVEC) banquet. Register at http://svecbanquet2011.eventbrite.com/
Friday, January 7, 2011
Dr. Robert Doering featured in January 2011 SST
Please be sure to check out the cover feature by Dr. Robert Doering of TI in the January issue of Solid State Technology. And thanks to NRI Southwest Academy of Nanoelectronics at the University of Texas at Dallas for the beautiful SEM that graces the issue's cover. (Any comments - please send to debrav@pennwell.com)
Wednesday, January 5, 2011
CES will be a staging ground for the new TV remote, brought to you by MEMS
We'll challenge the inner TV infomercial announcer here.
Does your arm ache from pointing the remote at the TV? Are you sick of scrolling with endless button clicks just to get to the channel you want? Don't you wish there was a better way?
At the upcoming Consumer Electronics Show (CES), January 6-9 in Las Vegas, several TV manufacturers are teaming up with micro electromechanical system (MEMS) makers for the new, modern TV remote. LG is using InvenSense's MEMS in its TV remote at CES, as is Universal Electronics. Hillcrest is partnering with Broadcom at CES to showcase the powers of Bluetooth SoC and MEMS integration, all in the name of better TV remotes.
MEMS in the remote control allow TV viewers to scroll through channels and showtimes more easily. They don't require direct line-of-sight to the box either. This kind of user-synched control is what you experience when playing Nintendo's Wii, which also uses motion control MEMS.
This might be a good time to brush up on what MEMS are, their uses, and why they fit right in at a cutting-edge electronics show like CES. The acronym is generally pronounced "mems" rather than saying each letter. Get started by reading STMicro's article, Introduction to MEMS gyroscopes, then explore further on the ElectroIQ MEMS center at http://www.electroiq.com/index/mems.html
This is the point in the infomercial where I'd repeat the phone number to call about 5 times. But hey, if you had a MEMS-enabled remote, you would be able to change the channel pretty quickly!
Does your arm ache from pointing the remote at the TV? Are you sick of scrolling with endless button clicks just to get to the channel you want? Don't you wish there was a better way?
At the upcoming Consumer Electronics Show (CES), January 6-9 in Las Vegas, several TV manufacturers are teaming up with micro electromechanical system (MEMS) makers for the new, modern TV remote. LG is using InvenSense's MEMS in its TV remote at CES, as is Universal Electronics. Hillcrest is partnering with Broadcom at CES to showcase the powers of Bluetooth SoC and MEMS integration, all in the name of better TV remotes.
MEMS in the remote control allow TV viewers to scroll through channels and showtimes more easily. They don't require direct line-of-sight to the box either. This kind of user-synched control is what you experience when playing Nintendo's Wii, which also uses motion control MEMS.
This might be a good time to brush up on what MEMS are, their uses, and why they fit right in at a cutting-edge electronics show like CES. The acronym is generally pronounced "mems" rather than saying each letter. Get started by reading STMicro's article, Introduction to MEMS gyroscopes, then explore further on the ElectroIQ MEMS center at http://www.electroiq.com/index/mems.html
This is the point in the infomercial where I'd repeat the phone number to call about 5 times. But hey, if you had a MEMS-enabled remote, you would be able to change the channel pretty quickly!
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