May 2015 Issue Your monthly digest which aims to provide you a

May 2015 Issue
Key Take-Away
Your monthly digest which aims to
provide you a roundup of the
semiconductor headlines with a
special focus to the Asian arena direct to your inbox. Simply click on
the relevant links provided to get the
details.
Local Asia-Pacific News
Mergers, Acquisition, Joint Ventures,
Spin-offs and People
Market Outlook
Industry Headlines
Views and Opinions
Financial Watch
Stock Watch
Hi,
One of the “perks” of managing and chairing a session as well as moderating a panel discussion in it for SEMI, is that one gets
to have a good marketing and PR coverage – company logo displayed on banners and show handouts, online marketing
channels as well as listing under supporting partners, profiling etc. And of course, the complimentary access to all tracks and
invited events.
SEMICON Southeast Asia was held in Penang (22-24th April 2015). Apart from the Market Trends briefing, the panel
discussion in the Technology Innovation forum was my personal favourite. The panelists were quite candid in sharing their
perspectives on how semiconductor vendors can leverage the trending wave of IoT as well as the challenges and value
addition especially from the monetizing perspective. More on this here.
The M&A scene has also been quite active. One which hogged the trend lines, though, was the collapse of a $29 billion deal
of the proposed merger of Applied Materials and Tokyo Electron. The Intel-Altera “talks” also fizzled.
Last month saw some serious capex slash – TSMC slashed $1B of its 2015 capex forecast (disappointing demand for
smartphone chips this quarter) and Intel has cut from $10 billion plus or minus $500 million to $8.7 billion plus or minus
$500 million (weak PCs demand). The semiconductor cycle model is increasingly being driven by the worldwide economy
model which is more consumer driven – welcome aboard!
Have an interesting month ahead.
Warm Regards
Meenu
Ps: If you see a need for
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 Industry/Domain know-how for your financial/equity analysis
do let me know; we can value-add. Visit www.asic-vlsi.com for details or simply drop me an email
LOCAL ASIA-PACIFIC NEWS
Renesas Electronics to transfer partial assets of consolidated subsidiary to
ROHM
Source: Business Wire – 30th April 2015
Renesas Electronics Corporation and its wholly owned subsidiary Renesas
Semiconductor Manufacturing announced their decision to transfer the
semiconductor manufacturing equipment of the 8-inch front-end wafer
fabrication line at Renesas Semiconductor Manufacturing’s Shiga Factory to ROHM
Co., Ltd and to lease to ROHM the land and buildings associated with the wafer
fabrication line.
TSMC global market share tops 50% in 2014
Source: Focus Taiwan – 30th April 2015
In its annual report, TSMC said that its global market share rose to 54 percent in
2014, up from 49 percent recorded a year earlier, on the back of strong demand
for the chip maker's advanced technology processes.
ASE to invest RM300mil in new plant
Source: David Tan, The Star – 27th April 2015
The IC test and packaging house is investing over RM300mil for its new RM50mil
plant in Bayan Lepas, Penang in Malaysia over the next three to five years.
Samsung production line put into operation in Xi’an
Source: China Daily – 20th April 2015
Samsung's semiconductor packaging and testing production line was officially put
into operation in Xi'an, the capital of Shaanxi province, after one year's
construction. The production line mainly produces solid state drive (SSD) based on
3D vertical flash memory chips.
UMC outpaces TSMC in 12 inch fab project in China
Source: CENS.com – 13th April 2015
Equipment suppliers say UMC, reportedly the world's No.2 pure silicon foundry,
will begin to provide foundry service at its 12-inch silicon-wafer fab in Xiamen,
China by 2017, earlier than the 12-inch fab project planned in China by the
KEY TAKE-AWAY
Mergers & Acquisitions
Aixtron (PlasmaSi), Knowles
(Audience), Chinese investors
(Omnivision), Synopsys
(Codenomicon), ARM (Wicentric,
Sunrise Micro Devices), apple
(LinX)
bigger TSMC.
NTU and NXP launch smart mobility test bed in Singapore
Source: Zafirah Salim, Computerworld – 10th April 2015
Under this partnership, both NTU and NXP will develop and test advanced Vehicleto-Vehicle and Vehicle-to-Infrastructure technologies over the next four years.
Also known as Vehicle-to-Everything (V2X), this new technology enables wireless
communication between vehicles, as well as with intelligent roadside
infrastructures such as traffic cameras and traffic lights.
TSMC announces plans for 10nm, 16nm tech
Source: EET Asia – 9th April 2015
"A number of factors have made 2014 a robust year for foundries — inventory
stocking in the second quarter by customers, increase of units sold in ultramobiles, the strength of the Apple's supply chain riding the success of the iPhone
6 and 6 Plus in the second half of the year, a conversion of integrated device
manufacturer (IDM) revenue to foundry revenue and wafer demand from the
early adoption of wearables", said Samuel Wang, research VP at Gartner
TSMC leads global chip makers in saving water
Source: Focus Taiwan – 9th April 2015
For the same size of wafer produced, TSMC saves 3 times more water than
manufacturers in the U.S., twice as much as those in Japan and 1.5 times more
water than companies in South Korea, which are home to the world's major chip
makers, TSMC data showed
Philippines steps up efforts to develop fast charging battery
Source: EET Asia – 8th April 2015
A team of faculty members from the University of the Philippines (UP) Baguio and
the Department of Science and Technology (DOST) is currently developing a
graphene -based electrochemical super capacitor that can charge faster and even
store larger amounts of energy compared with ordinary batteries.
More deals ahead? China fund buys Silicon Valley chip maker
Source: Pete Carey, Mercury News – 5th April 2015
China's aggressive new policy to expand its semiconductor industry is worrying
U.S. chipmakers, many of which are based in Silicon Valley, and raising potential
national security concerns as it begins to acquire U.S. tech companies. The world's
largest market for integrated circuits, China is expected to spend up to $100 billion
on both domestic investments and acquisitions abroad to grow its semiconductor
industry by more than 20 percent annually over the next five years.
Back to top
INDUSTRY HEADLINES
Worldwide semiconductor foundry market grew 16.1 percent in 2014, Gartner
Source: Gartner – 13th April 2015
Focusing on the cloud is part of IBM's gradual shift away from its traditional
hardware and consulting business. The company is targeting $40 billion in annual
revenue from the cloud, big data, security and other growth areas by 2018, which
should be about 45 percent of its total revenue at that time, based on analysts'
growth estimates.
German firm Infineon Technologies to put its Newport semiconductor facility up
for sale
Source: Sion Berry, Wales Online – 28th April 2015
International Rectifier, which was sold to Infineon for $3.1bn, had acquired the
Newport business in 2002.
Back to top
FINANCIAL WATCH
Samsung to inject $10 billion into semiconductor business in 2015
Source: ZDNet – 30th April 2015
Samsung is increasing its production capacity for memory chips. An additional line
that will produce DRAMs is being built at Hwaseong, its main hub for memory chip
production in South Korea, which will be completed by the end of the year.
NXP Semiconductors reports first quarter 2015 results
Source: NXP – 29th April 2015
"Our results in the first quarter of 2015 were strong, as NXP delivered total
revenue of $1.47 billion and non-GAAP operating margin of 26 percent. Revenue
increased nearly 18 percent from the same period in the prior year, and declined
about 5 percent from the prior quarter, despite the strengthening of the US dollar
during the quarter." said Richard Clemmer, NXP Chief Executive Officer.
Samsung reviews a $5.5b operating revenue for Q1 2015
Source: Technology 2015 – 29th April 2015
Samsung Electronics has launched its monetary results for Q1 2015 and they mark
enhanced profits quarter-on-quarter regardless of an income drop of eleven%
over Q4 2014. The semiconductor division is doing well, and is not influenced by
seasonality. Increased sales of DRAM and SSD/UFS products are reported.
UMC reports first quarter 2015 results
Source: PR Newswire – 29th April 2015
28nm contribution reaches 9% of sales; total shipments in 2Q expected to remain
firm.
Lam Research Q3 earnings beat on higher revenues
Source: Yahoo Finance/Zacks Equity Research – 21st April 2015
Revenues of $1.39 billion increased 13.1% sequentially and 13.5% year over year.
TSMC slashes $1B to 2015 capex
Source: EET Asia – 17th April 2015
Due to improvements in capital efficiency and faster migration to the16nm
process technology, Taiwan Semiconductor Manufacturing Co. has cut by $1
billion its planned capital expenditure for 2015.
Intel sees revenue holding, cuts capital spending, shares up
Source: Reuters – 14th April 2015
Intel said it would cut 2015 capital expenditures to $8.7 billion from $10 billion, a
reduction that analysts said should improve free cash flow.
EDA sets new record
Source: Ed Sperling, Semiconductor Engineering – 13th April 2015
EDA revenue grew 11.9% in Q4 2014 to $2.1 billion, a new record for the industry,
propelled by strong growth in both IP and physical design. On a sequential basis,
that represented a 15.1% increase, while on a year-over-year basis it was 11.9%.
The four-quarter moving average, which takes into account quarterly aberrations,
showed a 7.3% increase.
ASE shares boosted by investment plan, sales report
Source: Focus Taiwan – 9th April 2015
Shares of Advanced Semiconductor Engineering got a boost from a new
investment plan indicating that the integrated circuit packaging and testing
services provider remains upbeat about future market demand, dealers said.
Worldwide semiconductor revenue grew 7.9 percent in 2014, according to final
results by Gartner
Source: Gartner – 7th April 2015
Worldwide semiconductor revenue totaled $340.3 billion in 2014, a 7.9 percent
increase from 2013 revenue of $315.4 billion, according to final results by Gartner,
Inc. The top 25 semiconductor vendors' combined revenue increased 11.7
percent, which was more than the overall industry's growth. The top 25 vendors
accounted for 72.4 percent of total market revenue, up from 69.9 percent in 2013.
Samsung’s 1Q profits beat forecasts as chip strategy starts to pay off
Source: Reuters, Fortune Editors – 7th April 2015
Operating profit likely reached 5.9 trillion won ($5.44 billion) in the first quarter,
the South Korean manufacturer said, against a 5.3 trillion won average estimate
by 41 analysts in a Thomson Reuters I/B/E/S survey.
Back to top
MERGERS, ACQUISITIONS, JOINT VENTURES, SPIN OFFS AND PEOPLE
Aixtron acquires OLED encapsulation company PlasmaSi
Source: The OSA Direct – 4th May 2015
Aixtron believes thin-film encapsulation is an essential process for OLED high
volume manufacturing, and wants to add significant value in the production of
OLED applications
Infineon acquires outstanding shares of Korean manufacturing joint venture
Source: Infineon – 4th May 2015
Following the acquisition of International Rectifier, which offers a highly
complementary portfolio of IPMs, the acquisition of the outstanding shares in LS
Power Semitech represents a strategic move to provide customers worldwide with
optimized and unique system offerings.
Distressed audio chip maker Audience sells itself to Knowles
Source: Lehar Maan, Reuters – 30th April 2015
Knowles, which has a market value of about $1.7 billion, said it expected to save
about $25 million on an annual basis after the deal closes, with the acquisition
adding to earnings by the fourth quarter of 2016.
OmniVision to be bought by Chinese investors in $19 billion deal
Source: Lehar Maan, Reuters – 30th April 2015
The maker of chips for smartphone and tablet cameras, agreed to be taken private
by a group of Chinese investors for about $1.9 billion (£1.23 billion) in cash.
Chinese private equity firms Hua Capital Management Co Ltd, CITIC Capital
Holdings Ltd and GoldStone Investment Co Ltd will pay $29.75 per share for the
company.
Applied Materials scraps Tokyo Electron takeover on US antitrust concerns
Source: Emi Emoto and Junko Fujita, Reuters – 27th April 2015
The all-share purchase would have combined the No.1 and No. 3 makers of the
equipment that makes semiconductor chips into a group with a stock market
value of more than $38.5 billion.
Synopsys to acquire software security company Codenomicon
Source: PRNewswire – 20th April 2015
Based in Finland, Codenomicon Oy is well-known and highly respected in the
global software security world with a focus on software embedded in chips and
devices
ARM announces acquisition of Wicentric and Sunrise Micro Devices
Source: Design & Reuse – 16th April 2015
This portfolio will complement ARM’s existing processor and physical IP targeting
end markets requiring low-power wireless communications such as the Internet of
Things (IoT).
Apple buys camera technology company LinX
Source: Lars Rehm, Digital Photography Review Connect – 16th April 2015
The Wall Street Journal reports that Apple has acquired camera technology
company LinX Computational Imaging Ltd. for approximately $20 million. LinX is a
small company based in Israel and specializes in very small camera modules that
are suitable for implementation in smartphone cameras.
Intel, Altera acquisition plans fail
Source: EETAsia – 14th April 2015
The deal would help Intel diversify beyond the slumping PC market, noted EE
Times. Intel is Altera's 14nm supplier, and analysts questioned whether the latter's
FPGA volumes, and $2 billion in annual revenue, were enough to justify a $13
billion price tag.
Nokia in talks to buy Alcatel-Lucent; France backs deal
Source: Jussi Rosendahl and Leila Abboud, Reuters – 14th April 2015
In a joint announcement, the Finnish and French companies said they were in
"advanced discussions" on a "full combination, which would take the form of a
public exchange offer by Nokia for Alcatel-Lucent". The two, which have been seen
as a possible combination for the last several years, cautioned that the discussions
could still fall apart.
Investor pressures Qualcomm to spin off chip unit
Source: ZDNet – 13th April 2015
In an effort to boost flagging share prices, activist investor Jana Partners has asked
the chip maker to divide its chip and patent licensing businesses.
Back to top
MARKET OUTLOOK
ASE expects slower Q2 sales growth momentum
Source: Taipei Times – 1st May 2015
Slowing demand for communication devices in China would weigh on sales, but
contributions from its SiP business should support growth, ASE said
Fibre optic sensor market worth $4 billion by 2018
Source: PRNewswire – 1st May 2015
The Global Fiber Optic Sensor Market is forecast to grow at 9.6% CAGR during
2015 to 2019 due to technological advancements and budding investments
happening in this industry.
Inertial measurement unit market to approach $3.37B in 2020
Source: EET India – 10th April 2015
For commercial application, the increase in passenger travel demand in countries
such as India, China, the Middle East and other Asia-Pacific countries is the reason
for growth in the aircraft market
Back to top
VIEWS AND OPINIONS
How electronics affects automotive manufacturing
Source: EET India – 10th April 2015
Wolfgang Ziebart, group engineering director at Jaguar Land Rover, gives his two
cents on the effect of the fast-paced world of electronics on the steadier field of
automotive manufacturing.
Back to top
STOCK WATCH
Source: NASDAQ
1 month chart for Intel, TSMC, TI, Broadcom, STM, Xilinx, KLA-Tencor, Qualcomm, Avago, UMC, Applied Materials, Teradyne, ARM
Holdings and Altera
INTEL
TSMC
TI
BROADCOM
STM
XILINX
KLA-TENCOR
QUALCOMM
AVAGO
UMC
APPLIED MATERIALS
TERADYNE
ARM HOLDINGS
ALTERA
Back to top
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