Thursday, March 29, 2012

Semiconductor and display fab trends gleaned from AMAT's Analyst Day

Applied Materials Inc. (AMAT) is the leading supplier of semiconductor fabrication
fab equipment to the global semiconductor industry. After Applied Materials' (AMAT) Analyst Day this week, Citi, Barclays Capital, and Credit Suisse share their bullet-point takeaways about the semiconductor and related manufacturing industries, gleaned from Applied's presentations:

There are several positive trends in semiconductors, Barclays notes: increasing
process steps in the move to 2Xnm/1Xnm nodes, the move to 3D NAND, and a sustainable wafer fab equipment (WFE) spend. AMAT believes the macro environment for WFE spending is still very strong and expects this year to be the third year of $30+B in WFE spending, Barclays reports.

On the mobility front, AMAT sees a combination of strong consumer pull, silicon functionality, and process complexity driving a sustained wafer cycle, with potential for foundry capacity additions of over 1 million wspm from 2012-2014.

In the displays fab sector, a mix shift to metal oxide and low temperature polysilicon [LTPS] capacity is intensifying capital expenditures, although the display industry as a whole is dampened by low utilization rates and dropping panel costs.

Investment into large sized a-Si LCD capacity has almost come to a standstill, Barclays reports. The industry is shifting from LCD to organic light emitting diode (OLED) displays, Citi says. But expect recovery in large-sized panel capacity spending -- AMAT estimates another ~13 new Gen 8.5 fabs will be required between now and 2015 to meet end demand -- as well as a continued ramp in high resolution small/medium sized capacity and touch panel capacity for mobile displays.

Applied Materials highlighted 3 "megatrends" for the coming years:
1. The ramp in mobility devices, which is driving increased demand for high performance and high efficiency chips, increased use of Flash memory, and growing penetration of high-resolution touch displays.
2. The growth of emerging end-markets, which is elevating the purchasing power of ~1B new consumers.
3. A continued focus on clean energy, which is fueling the cost per Watt declines in solar and growing solar installations.

Applied Global Services (AGS) sector notes a trend of declining 200mm demand and utilizations offset by stronger wafer starts.

On the packaging side, AMAT noted that copper interconnect is becoming the de-facto standard in the back-end of the line (BEOL) process, for chip-level interconnect.

On the light-emitting diode (LED) side, Applied Materials de-emphasized comments on metal-organic chemical vapor deposition (MOCVD), an important tool in LED manufacturing, Credit Suisse notes.

Applied Materials also noted that it has increased its R&D spending for new technologies such as 450mm wafer processing, Citi points out.

And Applied Materials, as well as most other semiconductor manufacturing equipment providers, is adjusting its business model as its customer base consolidates.

You can also check out the previews for AMAT's Analyst Day here, or check out the reports from last year's Analyst Day here.

-- Meredith Courtemanche, digital media editor,

Wednesday, March 28, 2012

ElectroIQ is now Solid State Technology!

Our site has a new name, but it's one you already know: Starting today, will re-brand under Solid State Technology. This closely matches with the design of Solid State Technology magazine, which incorporates technical features for semiconductor, MEMS, displays, and LED manufacturers and packaging providers.

Looking for photovoltaics manufacturing content? Don't worry, you can find Photovoltaics World articles and archives on our sister site, Photovoltaics World is part of the Renewable Energy World network, and has relocated to better fit with related content in that business. For your convenience, we have a link to Photovoltaics World's home still on the navigation bar.

On Solid State Technology's website, you'll find all of the electronics manufacturing articles and archives focused on the semiconductors, semiconductor packaging, MEMS, display, and LED industry sectors. We recently added dedicated channels for displays and LED manufacturing, and will continue to provide in-depth, technical, and timely news and articles on all aspects of solid state technologies.

--Meredith Courtemanche, digital media editor,
Happy Pi Day!

Friday, March 9, 2012

Texas Instruments (TI, TXN): Trouble with wireless, analog is stable

March 9, 2012 -- Texas Instruments Incorporated (TI, NASDAQ:TXN) narrowed and lowered its expected ranges for revenue and earnings per share (EPS) in Q1 2012. The reductions are due to lower demand for wireless products, TI said in its report (PRNewswire).

Revenue: $2.99-3.11 billion
EPS: $0.15-0.19

Analysts' take:
This is TI's fourth mid-quarter update cut in a row, noted FBR Capital Markets. The company's entire $100 million revenue cut was attributed to wireless shipments, mainly OMAP sales as well as connectivity. Contributing factors include Q1 2012 sales seasonally falling after an exciting Q4 2011 with new OMAP design wins and initial orders, and chip/device inventory reduction activities also pressuring TI, FBR reports. Short lead times imply soft demand and weaker OMAP, warned Sterne Agee analysts, who also see near-term gross margin challenges for TI due to an under utilized (currently at about 50% capacity) fab base.

OMAP suffered from a lack of high profile design wins at the International CES and the Mobile World Congress (MWC). Some designs may have been sidelined in anticipation of OMAP 5, TXN's dual core A15 OMAP refresh expected in 2H12, FBR asserts, but notes that "OMAP has lost some of its differentiated value proposition" in the face of competitive products. TXN is not expecting an OMAP rebound, says Sterne Agee.

The analysts expect a Q2 2012 reacceleration, noting that "TI has done a good job of focusing on its analog core, building competitive barriers, and growing scale." OMAP and Connectivity "are not the most critical parts" of Texas Instruments, agree the analysts at Barclays Capital. Despite the guidance cut, analog is tracking in line, led by automotive/communications infrastructure/industrial applications, they point out. With "order growth, backlog, and visibility improving," TI should see Q2 begin an upward climb.

Texas Instruments decided to close 2 semiconductor fabs, one in Texas and one in Japan, earlier in 2012.

--Meredith Courtemanche, digital media editor,