august 07 update

Lam Research, in Livermore, CA, a maker of equipment for the semiconductor industry, is planning to open a facility with 375 workers in the next few months. The number of workers could expand to 700 within two years.

IQE Preferred epi Supplier to Anadigics

Substrate and epiwafer supplier IQE plc of Cardiff, UK says that its RF Business Unit has been selected by RFIC maker Anadigics Inc of Warren, NJ, USA to be its preferred supplier of GaAs epiwafers.

As part of a multi-year contract valued at about $50 million over the first two years, IQE will provide a range of wafer products to be used to manufacture wireless chips for 3G handsets and base-stations, latest-generation (802.11n) Wi-Fi systems for infrastructure and Wi-Fi- enabled laptop computers, WiMAX, broadband fibre-optic systems, and satellite set-top-box applications.

In early July, Anadigics broke ground on construction of its second 6” GaAs wafer fab, sited in Kunshan New and Hi-Tech Industrial Development Zone, China. “

EU Gives Thumbs-Up to Intel, STMicro Flash Memory Partnership

Numonyx, the company formed with the flash memory chip units of Intel and STMicroelectronics, has been officially approved by the European Union.

Regulators from the European Union (EU) have given their blessing for a plan by Intel and STMicroelectronics to spin off and combine their respective flash memory chip units.

The proposal, which also calls for a major cash infusion from a private equity firm, would not pose an unfair risk to competition in the robust flash memory market, the EU said. A number of competitors exist in the markets for both NAND flash -- which retains data after power to a device is shut off and is used in digital cameras, the Apple iPod and other gadgets -- and NOR flash, used in phones and other electronics to store and retrieve software applications.

The two companies announced in May they would separate their flash businesses and sell them to a stand-alone company. Last month, the two companies said they would call the new venture Numonyx.

Intel will own 45.1 percent of the firm, Switzerland-based STMicro will own 48.6 percent and Francisco Partners, a private equity firm based in Menlo Park, Calif., will gain a 6.3 percent ownership stake in exchange for a US$150 million cash infusion.

Other major flash producers include SanDisk and Spansion as well as a slew of smaller, niche players.

Both Intel and STMicro will get onetime windfalls from the merger plan, with Intel set to receive $432 million and STMicro around $468 million. Perhaps even more important is the chance for the companies to focus on more profitable lines of business. Intel, for one, has been moving away from flash for some time and the flash unit has long been a source of red ink. Intel lost $283 million on sales of $469 million in the first quarter of 2007.

The companies believe the standalone company can find more efficient ways to produce flash and find new markets in the rapidly growing list of devices that rely on flash to store data and programs.

The flash memory is expected to remain a challenging on for the next few years, Gartner analyst Richard Gordon told the E-Commerce Times, with an abundance of the technology helping to make it a commodity with shrinking profit margins. Many technology firms that use NOR flash, meanwhile, are embracing phase change memory, or PCM, as an alternative. That, plus slowing growth in some parts of the flash market — Apple has reportedly been mulling whether to cut production of the iPod, for instance — helped convince the companies it was time to seek a strategic alternative.

Together, Intel and STMicro hold around 2,500 patents and have another 1,000 pending, he said. STMicro is also likely to have some of its underused chip fabrication facilities pressed into service by the new venture, with the companies likely looking to roll out products that leap ahead of those from rivals in short order.

Elpida Memory to Mass Produce 65 Nanometre DRAMs
Japanese semiconductor maker Elpida Memory plans mass production of 65-nanometre DRAMS by March 2008, becoming the first in the business to do so. The 65 nanometer DRAMs have narrower circuit widths and smaller surface areas than conventional 70 nanometre versions, helping to boost productivity and lower costs by 30 percent. Once mass production kicks off at its Hiroshima plant in western Japan, Elpida will introduce the technology at Taiwan-based Rexchip Electronics Corp., a joint venture between Elpida and a local DRAM producer.

TriQuint Named Fastest Growing Top Company in New Strategy Analytics Report

TriQuint Semiconductor, a leading manufacturer of wireless products, was named the fastest growing company out of the top three among Gallium Arsenide (GaAs) device manufactures in a report issued by Strategy Analytics. According to the report, TriQuint revenues grew 37 percent year-on-year for the year ending 2006. Strategy Analytics estimates that total GaAs device market (merchant and captive) revenues grew 10 percent year-on-year in 2006 to $3.1 billion, with the three market leaders, including TriQuint, consolidating their overall ownership of the market from 47 percent to 55 percent.

Hoku Signs Construction Contract for Polysilicon Plant

Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. established to manufacture and sell polysilicon for the solar market, announced that it has awarded a contract to JH Kelly LLC, a Washington-based general contractor, to provide construction services for Hoku Materials' polysilicon production plant located in Pocatello, Idaho. The contract is for construction services estimated at $120 million for a production facility capable of producing 2,000 metric tons of polysilicon annually with additional incentives of up to $5 million if certain construction schedule milestones, cost targets, and safety standards are met.

For more information visit www.hokuscientific.com.

Qimonda Plans Design Center in China

Memory chip manufacturer Qimonda plans to set up a development center in Suzhou in China. The center, which will start its activities as early as October 2007, is intended to complement the company's existing development center in Xian.

For the design center, located at Qimonda's existing back end facilities in Suzhou, the company plans to invest $20 million. The additional development capacities will serve the company's target to expand and diversify its product portfolio for computer and consumer memories. Its scope of activities will span the entire product development including product specification, circuit design and application test. Within five years, Qimonda plans to employ 200 engineers, recruited from Chinese universities.

C9 Secured New York State Funds for a New Facility to Support Military Contracts.

C9 Corporation has won $1.75 million funding for facilities to ramp up its 6-inch SiC growth technology, and reach for even larger wafer sizes.

The power semiconductor company will establish its proprietary equipment in a new fab in Malta, New York, in order to enter production for its military contract activities. This expansion, which could cost up to $20 million in total, will also allow C9 to up its headcount from ten to 35, with occupancy targeted in late 2008.

C9 has invested $11 million in its SiC program since starting with an MBE approach in 2005, which it has progressively modified, allowing progress from 2-inch to 6-inch SiC wafers in under 12 months.

Its interest in larger size material comes from working with the US military on large SiC devices, ranging from 1 cm2 to whole wafer size. These are currently made within the confines of semiconductor products company Fala Technologies' manufacturing plant. Initially C9 is producing Schottky diodes aimed at next generation military vehicles, which will be powered by hybrid electric/petrol engines. Such vehicles will be subject to extremes of temperature, and have high power demands.

This military connection could lead to other electronic devices that can work in the harshest environments. Next on Donegan's list is a SiC multi-junction solar cell with bandgaps tailored by carbon content, which C9 is aiming to start work on next year.

V-Caps Plans to Employ 1,500 to Assemble and Test Chip Packages in Vietnam

The newly formed Vietnam-Chipscale Advanced Packaging Services, or V-Caps, will be led by a group of semiconductor executives with valley ties. The announcement was made during the first-ever Vietnamese Strategic Ventures Network (VSVN) conference in Palo Alto, where hundreds of investors, tech executives and entrepreneurs gathered for two days to discuss new opportunities in Vietnam.

The 300,000-square-foot factory would be in the new Hoa Lac High Tech Park and would employ up to 1,500 workers. It would assemble and test chip packages for semiconductor companies for an array of products, from cell phones to personal computers.

V-Caps would consider building two more similar facilities.

Next Asian Giant

VSVN conference speakers agreed that though the risks of investing in any developing country are not to be ignored, Vietnam was increasingly seen as a new destination for tech outsourcing and even some high-end services.

The cost of doing business in Vietnam is about half of that of China, said Sanford Garrett, one of the seed investors in V-Caps.

LSI Announces Global Transition to Contract Manufacturing

LSI Corporation announced a strategic initiative to transition the worldwide assembly and testing of its semiconductor and storage systems products to contract manufacturers. The initiative is expected to achieve greater cost efficiencies through the adoption of a variable cost structure and to provide for scalable capacity without additional capital investment. The initiative is part of a previously announced three-phase business acceleration plan adopted by LSI following its merger with Agere Systems on April 2, 2007.

In connection with this initiative, LSI has signed a definitive agreement to sell its semiconductor assembly and test operations in Pathumthani, Thailand to STATS ChipPAC Ltd. for approximately $100 million. The Thailand facility consists of approximately 440,000 square feet of floor space and employs approximately 1100 people.

Under the terms of the agreement, STATS ChipPAC will offer employment to substantially all of the LSI manufacturing employees based at the site, with the remaining non-manufacturing workforce expected to continue their employment with LSI. STATS ChipPAC and LSI will also enter into additional agreements, including a multi-year wafer assembly and test agreement and a transition services agreement.

The transaction is expected to close within 90 days, subject to the satisfaction of customary closing conditions and regulatory approvals.

LSI has also announced that it will transition semiconductor and storage systems assembly and test operations performed at its facilities in Singapore and Wichita, Kansas to current contract manufacturing partners. The transition of these operations is expected to be completed in the first half of 2008.

As part of the above actions, LSI will eliminate approximately 2100 production positions worldwide. The transition is expected to reduce annual capital expenditures by $20 to $25 million beginning in 2008 and to provide a long term positive effect on gross margins.

LSI is continuing to maintain its interest in Silicon Manufacturing Partners Pte. Ltd. Its integrated circuit wafer manufacturing facility in Singapore is jointly owned with Chartered Semiconductor Manufacturing.

EC Grants Germany's $360 Million Support for AMD

The European Commission (EC) has given a green light on about $360 million in aid from the German government to chipmaker Advanced Micro Devices Inc. (AMD), in support of the latter's wafer fab in Dresden, Germany.

German authorities intend to grant the aid to AMD for the conversion and extension of its existing microprocessor wafer fabs in Dresden. The Commission found that the support package, part of about $3 billion investment in Dresden by AMD, would not distort the market or provide one region with an unfair advantage over another region.

The EC's assessment of regional aid to large investment projects focuses on the market power of the beneficiary and on the production capacity created by the investment on the European market. The commission found that relevant thresholds would not be exceeded. AMD's share of the relevant market is less than 25 percent, both before and after the planned investment. The EC also verified that the capacity increase generated by the projects would be below 5 percent of the apparent consumption of the product concerned in the European Economic Area.

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