Recently Semico released a report touting the above average growth rates in the analog market as well as the healthy revenue per wafer for analog products.  Smart money is moving into power management and other analog applications which have gained in popularity in our mobile electronic world.

Over the next five years, semiconductor units will grow at a CAGR of 9.6%.  The analog market will grow at a CAGR of 10.1%.  Specific analog product categories such as power management devices will grow even faster, logging in a 13.2% CAGR over the next five years.  Companies are gearing up for this growth by offering increased fab capacity, more efficient manufacturing and innovative materials and process advances.

Although a majority of the analog products are run on 200mm and 150mm wafers, there is still a fab running 75mm wafers and of course, there is the one 300mm fab now being operated by Texas Instruments.  The flexibility of analog manufacturing is also exemplified by the fact that many of these fabs are capable of running two different wafer sizes.

Looking at the power management market, there are several factors that will make a product successful.  New process technology offerings are providing innovative solutions to control power and performance demands.  A robust BCD (Bipolar CMOS DMOS) process technology is critical.  Many of the foundries offer manufacturing services targeting this market.  One example is Dongbu HiTek’s BD180LV 0.18um BCDMOS process.  Their process is rated at 30V.  This process allows the flexibility to provide the customer with 30V LDMOS with a dense 1.8V CMOS logic.  The key to power management is striking the right balance between power, performance, reliability and process complexity in order to provide the most efficient and cost effective solution.

The figure below graphs revenue per wafer for analog products along with a few other notable categories.  Overall revenue per wafer for analog products has been very stable and is expected to remain stable over the forecast period.  Contrast that to the red line which is DRAM revenue per wafer.  DRAM revenue per wafer experiences significant ups and downs.  It is only during boom years when we see aggregate ASPs for DRAMs increase and revenue per wafer exceeds $2000.

The green line represents the total semiconductor revenue per wafer.  Note that analog revenue per wafer has been higher than the overall industry except for 2000 when the total semiconductor industry was booming.

Note:  Calculations are based on 200mm wafer equivalents

This phenomenon is not only occurring in the analog world.  We see similar opportunities in certain discrete categories, especially those centered around sensors and MEMS.  There’s still a lot of life left in those old fabs.

If you’re interested in finding out more information about Semico’s recent Analog market report or any of Semico’s services, please contact:  Debi Antoni at 623-387-4650 or debia@semico.com.

- Joanne Itow, Managing Director

The MEMS Executive Congress (Nov 2 to 3, 2011) held in Monterey, CA was filled with optimistic and rosy views of the future for MEMS.  This year’s event attracted 225 attendees – a 25% increase.  There were companies in attendance that covered the breadth of the MEMS supply chain: MEMS vendors, manufacturing equipment, materials suppliers, modeling, tools, etc.  Large and small players alike were represented.

Semico Research presented on the panel featuring market analysts.  The consensus on the panel and by many in the audience is that MEMS is a high growth market being driven by high volume applications in consumer electronics, most notably smart phones.  Semico brought a fresh new perspective.  MEMS are becoming more main stream.  The market dynamics for MEMS will more closely resemble the rest of the semiconductor market.  The high volume consumer market is a commodity market.  Therefore, the MEMS market needs to develop a more cohesive ecosystem.  This would allow companies to leverage standard processes and tools for volume production.  This will reduce costs and speed up time to market.

On other panels the issues of the ecosystem and the challenges of improving time to market were addressed.  There were differences of opinion.  On the panel for MEMS Foundry Models there were opposing views on reusing CMOS fabs being able to lower costs for IDMs and large IC foundries.  One issue that was put forward was that pure-play foundries compete via engineering know how and an “ecosystem” approach.

Among some of the topics that were raised during audience discussion is whether or not more intelligence should be integrated into the MEMS controller.  Increasing integration of MEMS sensors, such as various motion sensors, there will be more data.  Some attendees favored delivering the data to the host processor and embed the algorithms in that device.  Others were calling for the IP to be embedded in more advanced MEMS controllers.

The highlight of the MEMS Congress was the technology showcase.  There were seven companies demonstrating exciting new applications using existing MEMS devices.  The winner was Recon Instruments with ski goggles that have a heads up display that provide the user with various data.  This can also be applied to other HUD’s for other sports.

The MEMS Executive Congress featured lively and informative discussions.  These occurred during the panel sessions, as well as in the hall and over dinner.  The MEMS market has yet to mature, many issues are still in a state of flux.  This is a gathering of individuals who are working energetically on bringing exciting new technology to the masses.  The exchange of ideas and opinions is vital for the development of the MEMS market.

Tony Massimini

Chief Technology Officer

tonym@semico.com

602-997-0337 X3

As we head into November, Semico’s forecast of a weak second half is showing to be accurate. June, July, and August all had poor performance and according to the IPI, we will see that trend continue into 1Q12. February of 2012 is still forecasted to be the bottom as OEMs are currently burning off inventory while foundries cut back on capital expenditures.

This month, we are making a section of that report available to you as a free download.  Included in the White Paper is our IPI chart along with a section of the Mobile Devices: Analog discussion.  We invite you to download this free informative report, and contact Debi Antoni with any questions about our forecast.

Semico Forecasts 2011 Revenues will be Down 1.4%

In the last few days, many articles have been written about Steve Job’s contributions.  They tend to focus on recent product introductions, the iPod, iTunes, the iPhone and the iPad.  Those are sensational products; but, in my opinion the authors’ memories are too short.  The articles do not give proper recognition to Steve Job’s first big hit, the Apple II.

In 1978 I was working for EMM Semi, a pioneering 4K SRAM manufacturer.  Yes, 4K!  In June of that year I went to the National Computer Conference in Anaheim, Ca.  It was a big iron show.  The main hall featured exhibits by IBM and the Seven Dwarfs, (Burroughs, Control Data, General Electric, Honeywell, NCR, RCA and Sperry Rand) as well as minicomputer manufacturers such as Digital Equipment Corp. and Data General.  Microcomputers were only allowed, very grudgingly, in a much smaller, dingier hall across the street.  None of the big iron people thought microcomputers were a real market.

I remember counting something like one-hundred-forty small microcomputer manufacturers at that show.  Because almost every microcomputer manufacturer had a proprietary operating system, there were nearly as many operating systems.  The Wintel partnership was far in the future.

Microcomputers used so little memory that the total system cost for using SRAM was less than for DRAM.  Even though the cost per chip was much lower for DRAM, the lower cost for the few chips required did not cover the cost of the DRAM refresh circuitry.  Today, that seems laughable.

Because SRAM was the memory of choice, EMM Semi’s 4K SRAM sales grew exponentially during the first few years of microcomputer sales.  EMM Semi was at the National Computer Conference to show off its latest SRAM, an 8K SRAM.  The fate of that product is another story.

To properly display the 8K SRAM in the EMM Semi booth in the microcomputer hall, one of the EMM Semi engineers had procured an Apple II.  Since the Apple II was introduced in June, 1977, this had to have been a very early Apple II.  He had replaced 8K of the Apple II’s SRAM with the new EMM Semi 8K SRAM.  He had then put a piece of Plexiglas in a rectangular opening cut in the Apple II’s top so the EMM Semi 8K SRAM could be seen installed.

I had not seen the Apple II with the 8K SRAM installed before arriving at the show for booth duty.  When I reached the booth, I was in for a shock.  The booth was surrounded, people were packed in; but no one was paying any attention to the EMM Semi 8K SRAM.  They didn’t care.  They wanted to see the Apple II and play with it (use it).

The Apple II was like nothing else in the microcomputer hall.  The other microcomputers were rectangular brown or white boxes.  They looked like they had been designed by an engineer.  No surprise, they had been.  They looked like sample boxes.  They had no pizzazz.  No sizzle!  The Apple II had both.  I knew I was looking at the future when I saw the Apple II and the reaction to it.

The Apple II revolutionized the microcomputer industry.  It appealed to consumers, not engineers.  It led the way in ease of use, features and expandability.  It was the genesis of the mass-produced personal computer industry.  Other microcomputer companies fell by the wayside.  The IBM PC followed.  But, by the end of production in 1993, somewhere between five and six million Apple II computers had been shipped, making Apple the leading microcomputer manufacturer of that time.  The Apple II was Steve Jobs through and through (With help from the “Woz” of course).  It was his first big success.  To me, it was his biggest success.

-Morry Marshall, VP

Although news from Japan regarding the earthquake and tsunami recovery efforts comes less frequently than before, the ripple effects of the disaster can still be felt in the semiconductor industry’s operation strategies.

At the GSA Ecosystem Summit held in Santa Clara last week, Hugh Durdan from eSilicon moderated a panel on the best practices for successful supply chain relationships.  IBM, Intel, Qualcomm and Tensoft, Inc weighed in on some of the changes they’ve implemented since the disaster in Japan.  IBM’s Dale Miller said they’ve made some very subtle changes looking at the whole system.  IBM looks at their needs over a 2-year horizon, not just one year.  They take a longer forecast approach to plan for capacity needs and that involves getting closer to both suppliers and customers.

Intel ‘s Tim Lloyd said they created a hierarchy of suppliers looking at both their upside and downside capabilities.  A blanket increase in capacity, without a corresponding needs assessment, doesn’t always mitigate risk.  The supply chain reaction should be significantly different depending on if the change is due to an overall shift in the industry or limited to one company’s market share.

They all agreed that better communication with customers and suppliers is critical in today’s environment but the question now is how much information do you provide them?

On the customer side, Intel recognizes they are not in the business of predicting  winners and losers, especially in the increasingly volatile computing and consumer markets.  Instead, Intel plans revolve around scenarios with outcomes that cover ranges.  Qualcomm’s Don Esses said they tailor different plans for different customer needs.   Locating hubs or logistic centers close to the customer is one way of keeping lines of communication open.

Multiple sources, better communications and worldwide locations have all gotten a fresh dose of attention this year due to the supply interruption from Japan.   Six months after the earthquake, it was good to see that the disaster has not been totally forgotten.  We certainly hope this type of event doesn’t happen again but we suspect it will.   The subtle changes that have been made as a result of the earthquake/tsunami will help improve the industry supply chain and avert a total work stoppage in the future.

Joanne Itow

The semiconductor market may be experiencing a downturn, but that doesn’t have to mean all news is bad news. Analog, within the Computing, Consumer, and Communications markets, will see some strong growth over the next few years, growing 13.8%, 8.6%, and 12.8% in 2011, 2012, and 2013 respectively.

These numbers are pulled from our MAP Model database, Semico’s way to track semiconductor migration within end-use markets. This method accounts for about 80% of the overall market.

Our overall Analog numbers include the following categories:

• Standard Linear
• Amplifiers
• Interface
• Voltage Regulators and Reference Circuits
• Data Conversion Circuits
• Comparators
• Application Specific Analog ICs (Small Scale Complexity)
• Application Specific Analog ICs (Medium Scale Complexity)
• Application Specific Analog ICs (Large Scale Complexity)

All of these categories combined will reach $61.9 billion, a 7.9% increase over 2010’s $42.4 billion.

Breaking this number out farther, we can see that in 2010, the consumer market accounted for 33.3% of the Analog market, but in 2015, it will only account for 23.4%. Where is that Analog migrating?

To smartphones.

In fact, “High Performance Analog IC: The Catalyst for Electronic System Success,” is the title of Jim Feldhan’s speech for the annual Analog Semiconductor Leaders’ Forum being held on October 13th, 2011 in South Korea. It is being held during i-SEDEX at the Korea International Exhibition Center. This Forum is the place to learn about high-performance analog trends.

Last week Semico released its industry forecast outlook for the balance of 2011 and 2012. Unfortunately, all the indicators have moved 2011 into the negative territory. Semiconductor sales will end the year 1.6% lower than 2010. That should not be too surprising as the Semico IPI began moving down in May of 2010, warning us of a sluggish second half 2011. The economic malaise, along with the natural disasters around the world has only made semiconductor sales even more challenging.

The good news is that the Semico IPI points to a bottom in the first quarter 2012. Not only are all the economic and supply chain indicators pointing to a better 2012, but it is also consistent with the industry technology cycles. Intel is rolling out their 22nm process technology by the end of this year. GLOBALFOUNDRIES and TSMC are ready with their 28nm processes.

New technologies mean new products or at least new features for our existing electronics devices. In addition, the good news is that GLOBALFOUNDRIES remains committed to their capacity expansion and technology development plans. Fab expansions at their Fab 1 in Dresden and Fab 8 in New York remain on schedule. And at their recent GLOBALFOUNDRIES Technology Conference in Santa Clara, company executives proudly discussed their continued push to develop 20nm processes and even 14nm.

This is all good news for the industry. New technology opens the door for new electronic products and new features for our existing products. The addition of large scale manufacturing capacity helps reach economies of scale quickly for reduced costs. How can this be a stimulus? Cell phone vendors and tablet makers (including ultrabook manufacturers) and even TV/set-top box companies have a great opportunity to stimulate the electronics market by enticing us to buy a new device with a ‘must-have’ feature that consumers can’t live without.

This industry has always grown on the backs of those who lead the pack with new technology and innovative designs. Combine a faster, lower power processor with a sensor and a new application and that’ll get consumers and businesses excited again! A good time to roll out some new products will be the second half of 2012. Cell phones and PCs will be in another refresh cycle and the automotive market will return to normal production levels after suffering setbacks in 2011.

If you’d like more details on Semico’s IPI and the outlook for semiconductor sales in 2012, visit Semico’s website.

Joanne Itow
Managing Director

It’s an accepted fact these days that smart phones are rampaging through the handheld industry, wiping out single use products one after another.  Portable media players, GPS, satellite radio… are handheld games next?

Handheld gaming has had problems over the last few years because high start-up costs keep competition at a minimum.  Microsoft, Sony, Nokia, and a score of small companies have tried, and only Sony has managed to compete against Nintendo.  This lack of competition could be a reason why this industry was so prime to be taken over by smart phones.

The most popular Nintendo games can sell between 15 – 25 million units.  Angry Birds has had 200 million downloads.

According to Guardian, some of the best smartphone games of 2011 (with their prices) are:

• Chillingo, iOS (link here), £1.19
• Namco Bandai, iOS (link here), 59p
• Simogo, iOS (link here), £1.79
• Ragtime Games, iOS (link here), 59p
• SilverTree Media, Android, free (with in-game payments – link here)
• EA, iOS (link here), £3.99
• IdeaWorks Game Studio, WP7
• Nyarlu Labs, iOS (link here), £1.19
• Spilt Milk Studios, iOS (link here), £1.19
• Kairosoft, iOS (link here) Android (link here), £2.39
• SouthEnd Interactive, WP7
• Gamevil, iOS (link here), Android (link here), 59p
• YoYo Games, Android, iOS (link here), Android (link here), £0.59

Though this list is based on nothing more than the preferences of their readers, it is a good indication of the differences between the types of games available on phones and those available on handhelds, especially the price difference.

Meanwhile, for handheld games, the Japanese magazine Famitsu lists the best selling handheld games for the first half of 2011:

• [PSP] Monster Hunter Freedom 3 (Capcom) – 968,269 (4,449,258)
• [NDS] Dragon Quest Monsters: Joker 2 – Professional (Square Enix) – 469,469
• [PSP] Dissidia: 012 (Duodecim) Final Fantasy (Square Enix) – 454,522
• [PSP] Dai-2-Ji Super Robot Wars Z: Hakai-hen (Bandai Namco) – 364,881
• [PSP] Phantasy Star Portable 2: Infinity (Sega) – 352,511
• [PSP] SD Gundam G Generation: World (Bandai Namco) – 332,278
• [NDS] Pokemon Black / White (Pokemon Co.) – 303,299 (5,218,112)
• [3DS] Professor Layton and the Miracle Mask (Level 5) – 301,156
• [PSP] Tales of the World: Radiant Mythology 3 (Bandai Namco) – 275,202
• [3DS] Nintendogs + Cats: French Bulldog / Shiba / Toy Poodle & New Friends – 244,048
• [3DS] The Legend of Zelda: Ocarina of Time 3D (Nintendo) – 223,260
• [NDS] Ni no Kuni: The Ebony Wizard (Level 5) – 217,847 (550,158)
• [NDS] Ace Attorney Investigations: Miles Edgeworth 2 (Capcom) – 214,994

The average price for a handheld game is between $10 – $40, with newer games closer to $40, a significant difference from the listed smart phone games.

There are two types of gamers out there – “Casual” and “Hardcore.”

Casual gamers are a huge market, and with the Wii, Nintendo specifically targeted this demographic.  But for handhelds, smart phones did a great job of grabbing this market with easy-to-play games that used the phone’s touch screen to innovate game play.  Casual gamers have made the smart phone the number one handheld gaming device, bumping the Nintendo line down to number two.

According to Adrienne, the head of a casual gaming household:

“My 7 year old has wanted a DS for the past few years, and may just get one for Christmas this year.  However, we’ve been thinking that an iPod touch might make more sense.  Not a lot more money, and the apps are so inexpensive (free-$5) compared to the DS games ($15-$35).  By the time we purchase a few games for him, we’d be at the price of an iPod Touch.  And the DS still uses a stylus?!  A stylus and game cartridges are just more things to lose.  Plus we already know he loves Angry Birds.”

Adrienne’s point of view ends by referencing a game that really draws her kids to the smart phone platform.  So is there a game on the Nintendo side kids are anxious to play?  Not at the moment, though in the past there has been Nintendogs, Pokemon, Animal Crossing, Mario,  Zelda, etc.

If we look at the line-up above, we can see that Nintendo is in a big gaming slump, with none of the best selling games for 2011 coming close to the 15 – 25 million units previous best sellers have sold.  This slump is making the handheld market look bleak, but if Nintendo can push out a best seller within the next year, then Semico believes they’ll maintain a significant portion of the market share.

On the other hand, Nintendo is facing a lot of pressure to start porting their games to the iPhone.  If they give into pressure, then their hardware sales might as well be finished.

And while content is still king – it’s not the full story – how has the hardware side been fairing?

Japanese hardware sales are usually a pretty good indication of what is going on in the market, though their recent numbers have been affected by the earthquake – sales are down and slightly off from usual.

Shipments between the 1^st and 8^th of August:

• PSP: 35,619 [DOWN] 1,040 (2.84%)
• PS3: 18,338 [DOWN] 2,366 (11.43%)
• Wii: 17,004 [DOWN] 1,228 (6.74%)
• DSi LL: 4,176 [DOWN] 1,091 (20.71%)
• 3DS: 4,132 [DOWN] 12,283 (74.83%)
• DSi: 3,900 [DOWN] 725 (15.68%)
• Xbox 360: 1,406 [DOWN] 210 (13.00%)
• PS2: 1,529 [DOWN] 65 (4.08%)
• DS Lite: 102 [DOWN] 36 (26.09%)
• PSP Go: 0 [DOWN] 7 (100.00%)

The main thing to take away from that list is everything is down down down.

PSP is doing great in Japan, a more recent trend, with almost all PSP sales now shipping there.  The DS line in total is 12,310 units, about a third of the PSP shipments.  The recent release of the 3DS has been a complete let down for Nintendo, partly because the earthquake happened so close to its release date, and partly because it has too high a price point and too few games.  When this changes, these numbers should bump up, something Nintendo is counting on as they continue to slash the 3DS price.

So, the complete story is – don’t give up on Nintendo yet.  Semico’s forecast leans to the more optimistic outcome for handheld gaming, because Nintendo has a history of turning things around after most everyone has given up on them.

But we need to keep in mind two caveats:

• If Nintendo lets smart phones dictate the game release line-up, then in a few years Nintendo will be at current PSP numbers worldwide, with the decline continuing thereafter.
• If Nintendo ports their games to smart phones, then the decline is going to happen even sooner.

-Michell Prunty

Frequent readers of the Semico Spin know that I am a fan of ComicCon and attend it in San Diego, CA during my family vacation.  This is the eighth year in a row we attended.  As I say every year, there were more nerds than you can shake a light saber at.

For those unfamiliar with ComicCon (www.comic-con.org) it is the largest convention for comic books in the world.  However, it covers a great deal more.  Science fiction and fantasy TV and movies are heavily represented.  These are usually tied in with comics and animation.  There is also a strong tie in with video games.  For the fourth straight year ComicCon was sold out for all four days with attendance of 125,000 each day.  It is the largest convention throughout the year for the city of San Diego.

The show began 43 years ago as a small convention for Sci-Fi fans focused on comics and literature.  It has ballooned into a huge media event attracting TV and movie producers to promote their work.  These productions usually have a tie in with comics and Sci-Fi, but Comic-Con has expanded to pull in other pop culture media.

Content is King!  Without enough material there is little incentive to buy the hardware.  What consumers want to see and how they want to interact with it drives the development of the electronics.  It is not surprising that many attendees are technically savvy early adopters.

ComicCon 2011

At ComicCon one sees the rich source material for new entertainment.  This is very important for the video game market.  The fans of the sci-fi/comic genre want cutting edge graphics and special effects.  They represent a key segment of the video game market.  ComicCon is a venue for previewing many new upcoming games for the holiday season.

Many new games were being demoed for all of the video game consoles, the handheld games and PC platform.  These have ever-increasing levels of graphics, explosions and interaction.  There were several panels for attendees to listen to and ask questions of the game developers.  The gaming has outgrown the convention center.  While there were demos in the exhibit hall, many companies had larger showcases offsite.  Nintendo and Microsoft used these venues to show off the latest games for Wii and Kinect.  These drew large crowds.  However, it was rather perplexing to find that Sony had no alternate venue outside the convention center.  In fact the only games being demoed for Sony were for Playstation 3.  There were no demos for the Playstation 3 Move.  This is the motion sensing technology that Sony was showing off at last year’s ComicCon.  This does not look promising considering the audience at ComicCon wants to see what will be available during the holiday season.

Sony had a demo for the upcoming video on demand service on the Playstation 3.

The PC gaming area was a bit smaller than prior years.  There were no contests or other type of participatory activity as in the past.  The real action was off-site.

AMD Makes a Big Splash at ComicCon 2011

This year AMD made its presence known at ComicCon.  It was the sponsor for the annual Eisner Awards, the “Oscars” of the comics industry.  More importantly, AMD had a large demo area for PC gaming at the Omni Hotel.  In addition, across the street at a local pub more demos were available.  AMD was drawing numerous attendees to these locations.  An AMD marketing manager said to me that he was pleasantly surprised not only at the number of people visiting but also how many were technically savvy and were interested in the platform details.

AMD was showing off a wide variety of systems.  One impressive platform was a gaming desktop featuring the upcoming FX processor (Bulldozer series) with 8 cores on one chip manufactured on 32nm.  It had an advanced ATI graphics card that is currently available and driving three panels as a single monitor for a panoramic effect.  The most amazing part is that the box (excluding monitors) retails between $699 and $999.  The FX processors will be available later this summer.

The following video shows the line-up of netbooks

AMD also showed off the current family of Phenom II and Radeon GPUs for desktops.  These continue to improve and offer impressive performance at competitive prices.  Of particular note were the notebooks with the recent A-series of APUs.  This is the Fusion family which integrates the CPU and GPU functions.  An ATI graphics card is included.  AMD’s technology allows the two graphics engines to work together resulting in greatly improved performance.  In most other PCs an external GPU will just disable the integrated GPU.  This is also the first time that I have seen gaming notebooks at ComicCon.  There is now enough horsepower for notebooks to be serious gaming machines.  Also on display was a tablet PC design based on the Brazos platform.  This features the C-series and E-series APUs (codenamed Ontario).  The interesting feature of this tablet PC is that it attaches to a keyboard docking station.

Interview with AMD’s Marketing Manager:

Another interview with AMD:

3D TV

Like last year, there were a few 3D gaming demos, but nothing for 3D TV.  Sony is a major exhibitor at ComicCon and can tap into its broad product spectrum from movies and TV content to consumer electronics.  It appears there is little marketing effort for 3D TV.  There is not enough content yet.  I do not expect this holiday season will be a big push for 3D TV.

Future for Comics

How will comics fare in this changing world?  This industry is still producing print content even while presenting futuristic themes.  One panel featuring long-time comic book writers admitted that they will be going digital.  A vision of this future was on display at the DC Comics booth.  The company was showing off their comics on iPads.

ComicCon International is a whirlwind of activity.  It can be an overwhelming flood of visual and audio stimuli.  One sees Harry Potter reading a Kindle, a Star Wars storm trooper checking the schedule on his iPhone and attendees tweeting or posting to Facebook so they can win a prize.  This is an event that I find provides insight into how our popular activities and electronics become intertwined.

The following video shows the scope of the gaming floor, including an appearance from Felicia Day.

Tony Massimini, Chief of Technology

tonym@semico.com

Another SEMICON West has come and gone.  This was a good year.  Although there are signs that things have slowed a bit, the general outlook was positive.  In addition to the need for more semiconductor capacity due to continued growth in tablets, cell phones and a host of other electronic applications, the increased complexity of advanced processes has created a positive outlook for equipment vendors.  More complexity has translated into more layers, more process steps, and more new equipment.  There continues to be significant interest in TSV, EUV, used equipment productivity and MEMS.  And finally, this year the discussion around 450mm wafers took a new turn.  It was not “if” it would happen but when and how.

The 450mm wafer is still one of the most contentious topics.  Who’s going to pay for the research and development costs?  Equipment vendors are asking for guarantees that there will be buyers at a specific time and technology node.  We certainly operate in an exceptional, and sometimes odd, market.  Equipment vendors maintain a unique relationship with their customers.  Sometimes it works in great harmony such as the renovation of the Renesas Naka facility following the March earthquake and tsunami.  But when it comes to 450mm wafers, I’m baffled.  I’m not aware of any other industry where suppliers can get their customers to invest in the development of a new product and also require a guarantee that after they develop the product it will be purchased at a designated time.  Every manufacturer, whether it’s Apple with a new phone or Boeing with a new jet, takes a risk with regard to timing, price and functionality.

It is promising to hear AMAT commit $100 million to the 450mm effort.  Many say that amount is far from the investment necessary but it’s a major step forward.  Especially when only a few short years ago, the comments from CEO’s were “not in this decade”.  A couple of key executives even said they expect to be long retired by the time 450mm wafers begin rolling out of fabs.

R&D investment is one of the major challenges facing the development and implementation of 450mm wafers.  I have a solution.  ATIC and GLOBALFOUNDRIES are planning a 300mm wafer facility in Abu Dhabi.  We all know ATIC has the funding to make that kind of commitment.  What if they spent those dollars on a research facility in Abu Dhabi that focused on 450mm, productivity and manufacturing excellence?  If they funded the research, how hard would it be to attract ASML, AMAT, and TEL to participate?

ATIC could use the research facility as a training ground for future engineering talent.  Equipment vendors would have a funding source for development efforts.  And GLOBALFOUNDRIES could use the facility as their first 450mm pilot line.  Sounds like a win-win for ATIC, the equipment vendors and semiconductor manufacturers.

- Joanne Itow, Managing Director