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New Manufacturing Market Insider (MMI) newsletter: "Inside the 3D IC Integration Market"

Feel free to contact me via e-mail: fklomp@newventureresearch.com
Frank Klomp's insight:
New Venture Research is the publisher of Manufacturing Market Insider (MMI), a newsletter focused on the EMS industry. In recent years, we have seen an evolution in the market that is shifting the landscape with players that include IC foundries, OSATs, IDMs and EMS firms. To track this emerging industry, MMI is pleased to announce the publication of a new newsletter titled, "Inside the 3D IC Integration Market (3DICIM)". A first, complimentary issue is available per your request. Frank Klomp fklomp@newventureresearch.com
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Thin-Film Integrated Passive Devices

Thin-Film Integrated Passive Devices | Electronics Manufacturing | Scoop.it
Driven by application diversification, IPDs (integrated passive devices) continue their promising growth
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SemiWiki.com - Global Semiconductor Market Trends ISS 2018

SemiWiki.com - Global Semiconductor Market Trends ISS 2018 | Electronics Manufacturing | Scoop.it
One of the other blog worthy analyst presentations at ISS 2018 was by Len Jelinek of HIS. Len is my kind of analyst, he spent 28 years in the semiconductor industry before going to the dark side so he knows what he is talking about, absolutely. Len’s presentation on Global Semiconductor Market Trends is action packed so I will be doing a lot of cut and pasting here:

IHS forecasts that total semiconductor industry revenue will grow by 7.4% in 2018
· Overall semiconductor revenue growth in 2017 is estimated to be 21.7%
· In 2018 IHS is forecasting that Memory will grow by 14% and all other semiconductors will grow by 4.5%
· Wireless communication is forecast to benefit from next generation handsets incorporating new features like biometrics, AI capability and increased batty life
·
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Eindhoven wil miljoenen voor talent, maar experts zijn niet overtuigd (FD)

Eindhoven wil miljoenen voor talent, maar experts zijn niet overtuigd

De wensenlijst ter waarde van €170 mln die de regio Eindhoven vrijdag heeft ingediend bij het kabinet, stuit op kritiek. Het plan om technisch talent in de regio te houden bevat veel reclame en mist onderbouwing, zeggen specialisten op het gebied van regionaal economisch beleid.

Volgens Frank van Oort, hoogleraar stedelijke en regionale economie aan de Erasmus Universiteit, en Erik Stam, hoogleraar economie aan de Universiteit Utrecht, ontbreekt het in de plannen aan overtuigende argumenten waarom het kabinet juist in Eindhoven geld moet investeren en niet in andere regio's met vergelijkbare problemen. Stam: 'Het zijn mooie plannen, maar het is niet duidelijk waarom ze in het belang zijn voor Nederland.'


War for talent

Vrijdag overhandigde de regio een investeringsplan aan staatssecretaris Mona Keijzer van Economische Zaken. Doel is de stad ‘internationale allure’ te geven en aantrekkelijker te maken voor hoogopgeleide werknemers. Eindhoven is in deze ‘war for talent’ een concurrent van München, Singapore en andere snelgroeiende hightechregio’s. Het kabinet heeft €950 mln beschikbaar voor 'regionale knelpunten'.

De opstellers van het plan benadrukken dat elke euro Nederland ten goede komt. Toeleveranciers zitten verspreid door heel Nederland en Eindhovense bedrijven zijn een magneet voor nieuw onderzoek van universiteiten. De toepassingen die dat oplevert, zijn ook buiten Eindhoven nuttig.

‘Is Brainport nu wel of niet in staat om op eigen kracht verder te gaan?’

• Erik Stam, hoogleraar economie aan de Universiteit Utrecht

Niettemin ziet hoogleraar Stam in de pitch vooral veel reclame. 'Het is veel pr en weinig analytische diepgang.' Opvallend is ook dat de regio benadrukt de 'eenmalige impuls' nodig te hebben om 'op eigen kracht' verder te gaan, terwijl bestuurders tegelijkertijd pleiten voor een hogere structurele bijdrage van het Rijk. Stam: 'Is Brainport nu wel of niet in staat om op eigen kracht verder te gaan?'


Elitair

Hoogleraar Van Oort, die eerder onderzoek deed naar regio's in Nederland, vindt dat Eindhoven zich te veel richt op de elite. 'Nieuwe banen voor hogeropgeleiden leiden niet automatisch tot banen voor lager en middelbaar opgeleiden in Nederland. Profiteert iedereen in Eindhoven wel van investeringen in topcultuur, de technologie fotonica en de 'quality of life' van expats?'

De twee experts vinden het verbazingwekkend dat het kabinet geld uitdeelt aan regio's zonder dat er een strategie is met duidelijke doelen en objectieve criteria. Want dat Eindhoven geld krijgt, staat vast. De regio is een van de zes 'regionale knelpunten' die in het regeerakkoord zijn bestempeld als prioriteit. De andere vijf zijn Rotterdam-Zuid, de eilanden Bonaire, Sint Eustatius en Saba, ruimtevaartcentrum Estec in Noordwijk, Zeeland en 'nucleaire problematiek', zoals het transport van kernafval.

‘De selectie lijkt arbitrair. Hoe zijn de knelpunten bepaald? Het kabinet lijkt geen visie te hebben’

• Frank van Oort, hoogleraar stedelijke en regionale economie aan de Erasmus Universiteit

Onderbouwing waarom deze initiatieven in aanmerking komen voor nationale steun, is er niet, blijkt uit navraag bij het ministerie van Landbouw, Natuur en Voedselkwaliteit, dat de verdeling van het geld coördineert. Van Oort: 'De selectie lijkt arbitrair. Hoe zijn de knelpunten bepaald? Is er sprake van marktfalen? Kan geld het knelpunt oplossen, of is er meer nodig? En wat is beter voor wie in de BV Nederland? Het kabinet lijkt er geen visie op te hebben.'

Het Planbureau voor de Leefomgeving pleit voor een nationale strategie waarin betrokken ministeries met een antwoord komen op de vraag hoe regio's kunnen floreren op een manier die heel Nederland ten goede komt. ‘Dat betekent dat je per regio de specialisatie in sectoren en technologieën moet identificeren’, zegt onderzoeker Otto Raspe, ‘zodat je weet welke initiatieven een zetje nodig hebben om sneller te groeien. Waar kan het Rijk een verschil maken? En waar kun je massa creëren?'

Stam en Van Oort sluiten zich bij de oproep aan en benadrukken dat het Rijk de verantwoordelijkheid heeft de belangen van alle regio's af te wegen. Van Oort: 'Nu wordt er zomaar een zak geld naar enkele regio's gesluisd in de hoop dat het goed komt.'


Zo kan het ook

Het verdelen van €950 mln voor regio's zonder duidelijk plan, is een gemiste kans, vinden hoogleraren Erik Stam en Frank van Oort. Zij zouden dat anders aanpakken. Vijf tips.

1. Bepaal de doelen die met het geld voor de regio moet worden bereikt. Gaat het om het versterken van regio's die excellent zijn, zoals Eindhoven, of juist om het creëren van kansen voor achterblijvers, zoals Noord-Nederland?

2. Leg uit waarom bepaalde plannen prioriteit krijgen en waarom de plannen in het belang zijn voor Nederland. Waarom is een euro in regio A beter besteed dan in regio B, die met vergelijkbare problemen kampt?

3. Voorkom een schoonheidswedstrijd tussen regio's en breng met objectieve data van bijvoorbeeld het CBS, UWV en Kamer van Koophandel de sterke en zwakke punten van regio's in kaart. Wat gaat er mis en waar is het Rijk nodig?

4. Denk na over de vraag hoe ministeries in Den Haag regio's het beste bestuurlijk en financieel kunnen ondersteunen.

5. Volg de resultaten zodat regio's van elkaar kunnen leren.

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Chipbond to sell stake in China-based subsidiary

Chipbond to sell stake in China-based subsidiary
Julian Ho, Taipei; Adam Hwang, DIGITIMES [Friday 15 December 2017]
LCD driver IC packaging and testing service provider Chipbond Technology will sell a 53.69% stake in Chipmore Technology, its subsidiary based in Suzhou, to a group of investors consisting of an investment fund owned by the Hefei City government, Beijing Kinetic Energy Investment Fund and ESWIN, according to the company.

The sale is part of restructuring of the ownership of Chipmore Technology, Chipbond chairman Wu Fei-jain said. The restructuring will be in three steps, distribution of cumulative earnings at first, sale of Chipbond's stake then and Chipmore's expanding paid-in capital by one-third via issuing new shares, Wu noted. Chibond will not subscribe for any new shares, Wu indicated.

Chipbond is expected to receive disposal income of US$167 million, US$70 million from distribution of Chipmore's cumulative earnings and US$96 million from Chipmore's stake sales, Wu noted. After the sale, Chipbond 's stake in Chipmore Technology will decrease from 85.54% to 31.85%. The deal is expected to be completed in the second quarter of 2018.

The restructure is to make China-based investors hold a majority stake in Chipmore to minimize negative impact arising from the China government's changes in policies concerning foreign enterprises, Wu explained.

In addition, Chipbond on December 14 announced the establishment of a joint-venture carrier tape maker in Hefei City, with Chipbond to invest CNY240 million (US$36.4 million) for a 30% stake. The three China-based new shareholders of Chipmore will be the main shareholders of the joint-venture.

Carrier tape is used in COF (chip on film) packaging of driver ICs used in smartphone panels. Viewing that packaging of smartphone-use driver ICs is shifting from COG (chip on glass) to COF (chip on film), the establishment of the joint venture is to meet increasing demand for COF packaging in 2018.

Chipbond has developed carrier tape with super fine pitches specifically for use in COF packaging of smartphone-use driver ICs and has begun small-volume production.
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50% of PV supply chain makers to be forced out in 5 years, says LONGi president

50% of PV supply chain makers to be forced out in 5 years, says LONGi president
Nuying Huang, Taipei; Adam Hwang, DIGITIMES [Thursday 14 December 2017]
Technological innovations hs been changing the PV industry, resulting in inevitable consolidation that will see 50% of its supply chain makers globally forced out of market in five years, according to Li Zhengquo, president for the largest China-based solar-grade mono-Si supplier LONGi Green Energy Technology (formerly Xi'an LONGi Silicon Materials).

Technological innovation has negatively impacted PV makers with relatively old production equipment, Li said. For example, polysilicon equipment with annual production capacity of 10,000 tons entailed investment of CNY10 billion (US$1.5 billion) in 2006-2007, but now such equipment with the same capacity costs only CNY1 billion. Therefore existing makers with old equipment are under strong challenges from newcomers, Li noted.

Solar cell equipment installed by China-based makers during their capacity expansion in China and in Southeast Asia in 2015-2017 is also an example of the impact from technological innovation. Li noted China-based solar-grade poly-Si wafers makers are replacing slurry slicing process with diamond wire cut to increase output, and makers still using slurry slicing are much less competitive, Li indicated.

For PV module vendors/makers and undertakers of PV power generation projects, competitiveness in power generation reflected in cost per kWh of generated electricity rather than brand reputation and sales channels is key to their survival, Li indicated.

As China-based makers will ramp up production at new facilities in 2018, solar-grade mono-Si wafers will be short of demand and increasingly competitive in price along with decreasing production cost, Li noted. China-based solar-grade mono-Si wafer makers' combined annual production capacity will increase from 17GWp in early 2017 to 65GWp at the end of 2018.

The development of the PV industry is not mature yet and still needs to work towards achieving grid parity, independence of government feed-in tariff subsidization and wider use of PV power around the world, Li indicated.
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Waar staat marktonderzoek over tien jaar? De werkelijkheid vormgeven

Over tien jaar is de markt voor marktonderzoek wereldwijd twee keer zo groot als nu. Een positieve voorspelling die onder ander is gebaseerd op he
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Xiaomi, Baidu to jointly develop integrated IoT/AI ecosystem

Xiaomi, Baidu to jointly develop integrated IoT/AI ecosystem
Sammi Huang and Jean Chu, Shenzhen; Steve Shen, DIGITIMES [Wednesday 29 November 2017]
Xiaomi Technology has teamed up with Internet service provider Baidu to jointly develop an integrated IoT+AI ecosystem in China. The hardware-software integrated ecosystem will be established by leveraging Xiaomi's application scenarios, smart hardware devices, big data and Baidu's AI technology, mass data, knowledge maps and information services.

After stepping into the IoT segment in 2014, Xiaomi has seen its IoT platform connected to a total of 85 million IoT-enabled devices, making the company the world's largest smart IoT hardware platform, according to Xiaomi founder and CEO Lei Jun.

Xiaomi's IoT platform now also consists of more than 800 access equipment and 400 collaborating partners, Lei said at the company's recently-held IoT developer conference.

Xiaomi is now ready to launch its second-phase IoT strategic plan: a completely open IoT developer program, which aims to enable third-party smart devices to be connected with Xiaomi's IoT platform and products in a fast manner, Lei said.

Under the program, third-party collaborating partners will be able to access to Xiaomi's apps, retail channels, AI cloud and big data, and also to realize mutual control on the same platform.
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Power components supply to remain tight in 1H18

Power components supply to remain tight in 1H18
Julian Ho, Taipei; Steve Shen, DIGITIMES [Wednesday 29 November 2017]
The supply of power components is expected to remain tight throughout the first half of 2018 as the proliferation of automobile electronics products and IoT devices will keep demand for these components constantly at high levels, according to industry sources.

Demand for ADAS (advanced driver assistance system) devices is expected to take off in 2018 due to the ongoing development of autonomous driving technology, which will serve a growth driver for power components, said the sources.

Taiwan-based suppliers of diodes, bridge rectifiers, power modules, IGBT (insulated gate bipolar transistor) devices will benefit from the ongoing trends, noted the sources, adding the major suppliers in the field include HY Electronic, Panjit International, Taiwan Semiconductor and Lite-On Semiconductor.

Among them, HY Electric will benefit the most as the company has already set up comprehensive sales channels in China, the sources claimed.

Lead frame suppliers including SDI and Jih Lin Technology will also see sales gains thanks to increasing shipments of products to power module and component makers, added the sources.

Lead frame makers are likely to hike their quotes in the first half of 2018 in response to increasing demand.
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Digitimes Research: SiC, GaN power semiconductor markets to grow fast through 2025

SiC, GaN power semiconductor markets to grow fast through 2025
Ricky Tu, DIGITIMES Research, Taipei [Thursday 30 November 2017]
While silicon remains the mainstream power semiconductor material, silicon carbide (SiC) and gallium nitride (GaN) are seen more suitable for power semiconductor devices needed by electric cars and mobile devices, as they can perform much better than Si in reducing on-state resistance and miniaturizing the size of power devices, thus helping the devices achieve fast charging, power consumption and high energy conversion functions. It is expected that the SiC and GaN power semiconductor markets will experience a higher growth than the Si semiconductor market by 2025, Digitimes Research believes.

Taking advantage of mature technology and lower cost, Si power semiconductors recorded global market sales of over US$24 billion in 2016, compared to only US$200 million and US$14 million for SiC and GaN power semiconductors, respectively.

Nevertheless, SiC and GaN are gradually replacing Si in specific applications, with SiC power semiconductor devices for applications with high power capacity, and GaN for applications involving medium to low power capacities.

Digitimes Research estimates that the prices of SiC and GaN with high anti-compression strength will gradually decline in 2020, which will drive price cuts on those with medium to low compression resistance along with the refinements in production process and technologies as well as the entry of new players.

Since 2015, both the US and China have seen Si power semiconductor manufacturers foray into the SiC and GaN semiconductor fields, and both Germany and Taiwan wafer foundry houses are also beginning to offer contract fabrication services for SiC and GaN semiconductors, which is expected to help drive down the prices of both semiconductors.

In addition, Ga2O3 is emerging as a new material for power semiconductor, with its price getting close to that of Si but able to better reduce on-state resistance. This new material is expected to be applied for mass production of power semiconductor devices in 2018, and is likely to outgrow the GaN power semiconductor market by 2025, Digitimes Research estimates.
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Tsinghua Unit Buys 30% Stake in Taiwan Semiconductor Subsidiary - Caixin Global

Tsinghua Unigroup pays $155 million for stake in Siliconware’s Suzhou operation
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Digitimes Research: Global smartphone shipments to reach over 1.5 billion units in 2018

Global smartphone shipments to reach over 1.5 billion units in 2018
Luke Lin, DIGITIMES Research, Taipei [Wednesday 22 November 2017]
Global smartphone shipments are expected to grow 5% on year to reach 1.43 billion units in 2017 and expand another 4.8% to over 1.5 billion units in 2018, according to Digitimes Research.

Replacement demand for smartphones from feature phone users in emerging markets in Southeast Asia, South America and Africa will be the main source of sales growth for smartphones from 2018-2022 with shipments to grow at a rate of 60-70 million units a year during the projected period.

With the exception of Apple and HMD Global (Nokia), the rest of the world's top-20 handset brands in 2017 will come from Asia, including 11 from China and two each from Korea, India and Taiwan. China-based Huawei, Oppo and Vivo will take the third, fourth and fifth positions in the global vendors ranking in 2017.
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China IC sector must develop large IDMs, says expert

China IC sector must develop large IDMs, says expert
Jean Chu, Taipei; Willis Ke, DIGITIMES [Tuesday 28 November 2017]
China's semiconductor industry must move to establish major IDM (integrated device manufacture) enterprises with global competitiveness to fill up the deficiency of domestic IDM deployments, while continuing to strengthen its IC design and foundry businesses, according to Ye Tianchun, director of the Institute of Microelectronics of Chinese Academy of Sciences (IMECAS).

Ye made the remarks when speaking on the next stage development of China IC industry at a recent semiconductor forum held in Kunshan, Jiangsu Province of China.

Despite fast growths seen in China's IC design, fabrication, packaging, equipment and materials in recent years, Ye said, the nation's semiconductor industry should be repositioned in its next stage of development. He furthered that China should adopt a strategy to pursue innovations and build its own characteristics in the global semiconductor ecosystems, with the eventual goals of steering the development of the global semiconductor market and reshaping global semiconductor ecosystems.

He said China's high-speed rail networks, power grid networks and smart car production all have the nation's own characteristics, generating good opportunities for the China semiconductor industry to develop large-size IDMs to localize production of major IC products and devices needed by the networks. For instance, he said, IDMs of power semiconductor devices can support the power grid networks.

Low profit margins

Ye said China is now the world's largest manufacturer of electronics and information technology products, generating annual production value of over CNY12 trillion (US$1.8167 trillion), with profits, however, reaching only CNY600 billion for a profit margin of 4-5% as the market for high-end chips with much higher profitability is still dominated by foreign players.

But international semiconductor players are increasingly reluctant to absorb capital injection from China lest their advanced technologies should flow to China, Ye said. He cited statistics compiled by ICwise as indicating that China has commanded only a 6% share of successful international semiconductor acquisitions and mergers. This is because international competitors are now deeply aware that China is actively building its own semiconductor industry ecosystems, covering materials, equipment, manufacturing, design, packaging and testing, and terminal applications, according to Ye.

In fact, Ye disclosed, China's self-sufficiency for semiconductor equipment and materials has neared 30% and its semiconductor firms have accumulated more than 20,000 IPs, making the semiconductor industry increasingly confident of pursuing innovative development on its own.

The VLSI chapter of the China Semiconductor Industry Association estimated China's IC design market scale to reach CNY200 billion in 2017, with half of which relying on contract fabrication in China. In addition, China has announced a total investment of US$65 billion in building 12-inch wafer fabs, with total monthly capacity estimated to reach 1.25 million pieces, a figure still not sufficient to replace imports of high-end chips, according to Ye.
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.:. More Lithography/Mask Challenges

.:. More Lithography/Mask Challenges | Electronics Manufacturing | Scoop.it
More Lithography/Mask Challenges Experts at the Table, part 1: EUV ramps up, but high-volume manufacturing isn't likely to begin until at least the end of the year, maybe later.
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Lenovo, Huawei and BBK Electronics now among Top-10 in Semiconductor Consumption Ranking | EE Times

Lenovo, Huawei and BBK Electronics now among Top-10 in Semiconductor Consumption Ranking  | EE Times | Electronics Manufacturing | Scoop.it
Electronics powerhouses top list of semiconductor buyers for the seventh straight year, adding more than $20 billion combined to the total they spent on chips in 2016.
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.:. Giant Auto Industry Disruption Ahead

.:. Giant Auto Industry Disruption Ahead | Electronics Manufacturing | Scoop.it
Giant Auto Industry Disruption Ahead Autonomous vehicles will cause fundamental shifts across a number of established industry segments tied to automotive, opening big opportunities for chips and tools.
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Lite-On and Tsinghua Unigroup Create $100 Million Joint Venture for SSD Operations in China

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Lite-On, Tsinghua Unigroup team up to tap China storage market

Lite-On, Tsinghua Unigroup team up to tap China storage market
Siu Han, Taipei; Willis Ke, DIGITIMES [Wednesday 13 December 2017]
Taiwan-based Lite-On Technology will team up with China's Tsinghua Unigroup to jointly develop the China market for storage products such as solid state drives (SSD), with the latter to invest US$55 million in the former's new subsidiary in Suzhou in a cooperative capital expansion pact signed December 12, according to a statement issued by Lite-On.

The statement came less than three months after Lite-On announced on September 28 that it would invest US$45 million to set up a wholly-owned subsidiary and build a storage manufacturing plant in Suzhou, Jiangsu province of China. Tsinghua Unigroup and Lite-On had held talks on jointly setting up a storage business for more than six months before Lite-On's September announcement.

Under the cooperation pact, the registered capital of Lite-On's Suzhou subsidiary will be expanded to US$100 million, and Tsinghua Unigroup will hold a 55% stake in the joint venture with three seats on its board of directors, compared to Lite-On's 45% and two board seats. The new venture will be managed under a co-CEO mechanism, with both sides each proposing a candidate.

The pact will remain valid for 20 years starting after the Suzhou subsidiary gets an official operating license. During the period, Tsinghua Unigroup will handle marketing and customer relations by utilizing its connections in China, while Lie-On is to take charge of supply chains and contract manufacturing.

Construction of the new plant will kick off in early 2018, and official run is slated for fourth-quarter 2018. Lite-On expects the new Suzhou venture to start contributing to its revenues in 2019 at the earliest.

Lite-On has been engaged in the development and sales of storage devices for PCs, enterprise servers and datacenters for 10 years, with Lenovo, HPI and Dell among its global customers. The company is confident that its cooperation with Tsinghua Unigroup will create significant synergies and better cash in on the growing storage market demand in China.

Industry sources said this is Tsinghua Unigroup's second investment involving Taiwan companies in the past two months. Taiwan-based IC packager Siliconware Precision Industries (SPIL) announced on November 24 that it has sold a 30% stake of its subsidiary, also in Suzhou, to Tsinghua Unigroup for CNY 1.02 billion (US$154 million) to facilitate its development in the China market.
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Apple’s Strategy behind Developing Its Semiconductor Capabilities - Market Realist

Apple’s Strategy behind Developing Its Semiconductor Capabilities - Market Realist | Electronics Manufacturing | Scoop.it
Apple hired Qualcomm (QCOM) modem chip engineer Esin Terzioglu to head its wireless SoC project.
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SMIC announces private placement

SMIC announces private placement
Rodney Chan, DIGITIMES, Taipei [Monday 4 December 2017]
Semiconductor Manufacturing International Corporation (SMIC) has announced it has entered into an agreement with investors, including Dtang and the China IC Fund, for the placing of more than 241 million shares at a price of HK$10.65 (US$1.36) per unit.

The China-based foundry house said that assuming all shares are successfully placed, the placing shares represent about 5.17% of the existing issued share capital of the company, and about 4.92% of the issued share capital of the company as enlarged by the issue of the placing shares.

The placing price represents a discount of about 4.91% to the closing price of HK$11.20 per unit as quoted on the stock market on 28 November 2017, SMIC said.

The gross proceeds of the placing will be about HK$2.57 billion and the net proceeds of the placing (after deduction of fees, commissions and expenses) will amount to approximately HK$2.55 billion, the company said.
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Sharp resumes TV production in Thailand after 10-year hiatus

Latest financial, market and economic news from Thailand and Asean.
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Downstream players scrambling to build up inventories amid tight wafer supply

Downstream players scrambling to build up inventories amid tight wafer supply
Cage Chao, Taipei; Willis Ke, DIGITIMES [Wednesday 29 November 2017]
The semiconductor supply chain - especially chip vendors - as well as downstream distribution channels and end-market customers, are rushing to pile up inventories by the end of 2017, seeking to secure better sales performance in 2018 amid lingering tight supply of upstream materials, parts and components, although market prospects for end-market devices remain unclear for next year, according to industry sources.

The ongoing round of supply shortfall was mainly triggered by tight silicon wafer supply. As China will fully gear up to bolster its wafer foundry sector in 2018, global silicon wafer supply is expected to stay short of demand in the coming 2-3 years. This is why wafer suppliers, chipmakers, and downstream customers are actively stocking up more products, lest the shortage of silicon wafers and even chips should affect their sales performance in the coming year, the sources said.

In fact, many types of chips are already in tight supply, including DRAM, NOR flash, MOSFET, MCU and LCD driver chips, and even suppliers of LED chips, sapphire substrates, and passive components are reportedly raising their sales prices. Facing tight supply of upstream materials, parts and components, downstream customers might be forced to offer higher prices to secure stable upstream supply sources.

The sources continued that the strong demand for upstream supplies, which is expected to last into the first quarter of 2018, has been keeping foundry houses running at high capacity to meet tight chip delivery schedules. The delivery lead time for six-inch and eight-inch wafer plants of Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics (UMC) Vanguard International Semiconductor (VIS) has extended to over 12 weeks - a lead time that is usually seen at 12-inch fabs.

The end-device markets are still expecting shopping sprees during the Christmas shopping season in the US and Europe, and the Chinese New Year holidays. But industry sources said that once chip suppliers, distributors and end-market customers have each increased their inventory by 10%, the terminal market demand will have to increase by 30% to digest the upstream inventories.

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Coopetition and coexistence in IC industry: Q&A with ASE COO Wu Tien-yu

Coopetition and coexistence in IC industry: Q&A with ASE COO Wu Tien-yu
Julian Ho, Taipei; Willis Ke, DIGITIMES [Thursday 30 November 2017]
The global semiconductor industry is experiencing faster quantitative and qualitative changes along with the increasingly fierce coopetition among wafer foundry, IDM (integrated advanced manufacture) and OSAT (outsourced semiconductor assembly and test) players as well as the arrival of multiple new technologies and applications such as AI (artificial intelligence), big data, datacenters, autonomous vehicles and automotive electronics. Nevertheless, the symbiotic coexistence of the entire semiconductor supply chain has never changed, Wu Tien-yu, COO of Taiwan IC packaging and testing specialist Advanced Semiconductor Engineering (ASE), told Digitimes in a recent interview.

Wu said that Taiwan's semiconductor industry boasts a complete upstream and downstream supply chain and great agility in response to market changes, but it has to carefully weigh how to adjust its position in the global semiconductor scene now that China is at full throtle developing its semiconductor industry. He also talked about Singapore's economic development and ASE's deployments in Singapore and Malaysia.

Q: How do you see the economic and industrial developments in Singapore?

A: With very high economic prosperity, Singapore has developed into one of the global high-tech and financial centers, due mainly to its government endeavoring systematically to upgrade the city state as an Asia-Pacific operation hub for multinational businesses.

Despite the nation's small geographic area and low birth rate, the Singapore government has introduced good policies to stimulate its population growth, and enforced long-term plans to better infrastructures and service quality of the country. It is really a typical planned economy in Asia, now with high per capita national income and high commodity prices.

Singapore had a population of some 3.6 million when I moved to live there in 1996, and the figure has expanded to 5.6 million in 2017 and is expected to exceed six million in the short term. This has indicated that Singapore's efforts to attract global talent have paid off, and the ensuing demographic dividend has helped to drive the nation's economic development and growth over the past 20 years.

Generally speaking, people are deeply impressed by Singapore's image as a country with strict law enforcement. But in fact, the Singapore government shows high regard for education, and it usually selects the best talent of the nation and sends them abroad for advanced studies before they are employed to work in the government sector. In addition, the salaries for government officials are on a par with executives of private enterprises.

ASE's Singapore plant has high-quality engineers, though the personnel cost is comparatively higher. In fact, many large IDMs, system suppliers, and electronics manufacturing services (EMS) providers have set up their Asia-Pacific and even global operation centers in Singapore due partly to the availability of sufficient talent.

Q: What about ASE's deployments in Singapore and Malaysia?

A: The predecessor of our Singapore plant was a branch office of US-based ISE Labs dedicated to front-end IC engineering test accreditation, and was acquired by ASE in 1999 and renamed ASE Singapore in 2003. In 2010, ASE acquired EEMS Singapore and incorporated it into the Singapore plant to intensify its semiconductor testing operations. Now the plant has a total workforce of 850, with annual revenues of US$137 million in 2016.

Our Singapore plant mainly engages in wafer probing, final test of chip products, backend wafer packaging, and shipment. Its packaging business focuses on the WLCSP (wafer level chip scale package) operation of mobile communication chips, with a monthly production capacity of 70 million chips, which will be soon expanded to 100 million pieces to meet customer demand. And the plant's testing business also has been expanded to cover tests on radio frequency and automotive electronics chip products.

As to our plant in Pengang, Malaysia, it was ASE's first plant outside Taiwan, long dedicated to traditional IC packaging operations. But since 2013, our Pengang plant has installed 10 highest-level clean rooms at strong request of ASE's European customers, and our traditional IC packaging has undergone qualitative changes along with the booming development of automotive electronics. For instance, copper clips were not mass used in traditional BGA (ball grid array) and flip chip packing processes, but massive such clips are now required in the process of packaging the chips for use in automotive electronics and datacenters, thus generating a qualitative change in IC packaging.

At the moment, automotive electronics-related testing business contributes 20-25% of the annual revenues of ASE's Malaysian plant, with the business posting an annual growth of 8-10% and focusing on high-current copper clips process. The entire ASE group now sees 3-5% of its revenues come from the automotive electronics sector. The group is planning to set up a new plant in Malaysia.

The combined annual revenues of ASE's Singapore and Malaysia plants have soared past US$300 million for 2017, surging more than 10% on year, and another 10% growth is expected for 2018. We see main growth momentum in the packaging and testing of high-end chips for automotive electronics, datacenter chips, and mobile chips.

Q: Amid the continued coopetition among global semiconductor players, do you see any possible change in the industry's future development?

A: The coopetition among global semiconductor players has never ended over the past 20 years. Taiwan Semiconductor Manufacturing Company (TSMC) has underlined four major platforms - mobile computing, high-performance computing, automotive electronics, and IoT (Internet of Things) - to serve as major growth drivers for the future global semiconductor industry, and it has also forayed into advanced packaging technologies. But ASE will not change its cooperation relationship with TSMC just because of its presence in a certain packaging field.

In my opinion, from the initial bumping packaging to the current advanced packaging, the coopetition and the symbiotic coexistence of Taiwan's semiconductor supply chains have never changed.

In addition, the quality and quantity of the semiconductor industry will surely change along with ever-growing terminal applications of semiconductors. Singapore is a very important player on the global semiconductor stage, and many other players such as Japan, South Korea, Taiwan and Europe have never given up semiconductor; nor will China.

ASE is one of a few Taiwan enterprises with global deployments, now with 18 production bases around the world. And we are actively vying for orders from IDMs, because global IDMs will dominate the semiconductor supply for the automotive electronics, FinTech and other daily life sectors, and also they can more easily gain approvals from the governments of the countries where they are based, to facilitate semiconductor applications in these sectors.

ASE has to weigh how to promote its own talent, quality and fabs to customers to survive increasing competition from South Korea, Japan and China; I think these are also the issues the Taiwan semiconductor industry has to address.

Along with the advent of the AI era, the backend IC packaging and testing sector will experience quantitative increases and qualitative changes, as well as an integration trend, and I am quite confident about the agility of Taiwan's semiconductor supply chains in dealing with the changing scenarios.

Nevertheless, the coopetition from multiple areas of talent, markets, funds, information and IPs will impose much greater impact on semiconductor players than the coopetition from within the semiconductor industry. Accordingly, the Taiwan semiconductor industry must carefully mull over how to take the high ground in securing a sustainable development.

Q: What about ASE's deployments in smart manufacturing?

A: ASE has been developing smart manufacturing for years, with its Kaohsiung plant complex in southern Taiwan moving faster than any other plants in this aspect. Smart manufacturing is likely to appear in our plants in Japan, South Korea, Penang and Singapore. Over the past 10 years, ASE has moved forward step by step in pursuing smart manufacturing, and our engineers have sorted out big data and written software programs needed for machine learning on their own, in accordance with the actual requirements of our plants, such as automatically switching off lights after business hours.

The IC packaging and testing sector is plagued by increasing difficulty in seeking talent, but OSAT players have to boost their smart production by making more investments in advanced R&D, to eventually achieve massive and profitable smart production.

Along with the changing business models of the global semiconductor sector, we must make the best use of the entire semiconductor industrial chains, global smart production talent, and global tech development trends to compete with global competitors rather than Taiwan players.
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Digitimes Research: Worldwide tablet shipments to reach 128 million units in 2018

Worldwide tablet shipments to reach 128 million units in 2018
Summer Kuo, DIGITIMES Research, Taipei [Tuesday 21 November 2017]
Seeing all-screen smartphones continue eroding tablet demand, tablet vendors, to differentiate the two product lines, are turning aggressively to promote 10-inch and above models with consumer-friendly prices, hoping to trigger a replacement trend. Digitimes Research expects worldwide tablet shipments to reach 128 million units in 2018 with on-year decline shrinking to around 10%.

Digitimes Research expects all-screen smartphone's impact on tablet demand to weaken after 2019 and worldwide tablet shipments will remain at above 120 million units each year with a CAGR of negative 1.4% from 2018-2022.

Apple, Samsung Electronics and Amazon will be the top-3 tablet vendors worldwide in 2017, while Huawei will move to fourth place, surpassing Lenovo thanks to a strategy to push product differentiation. The gap between Huawei and Lenovo gap is expected to further extend in 2018.

With some vendors already adopting over 6-inch displays for their all-screen smartphones, shipments of 7.x- to 8.x-inch tablets will see increasing competition. To minimize the impact, Digitimes Research believes, tablet brands will turn to focus on promoting their 9-inch and above models, causing worldwide shipments of 9-inch and above tablets to account for over 60% of worldwide volumes in 2018.

Although China-based makers together have seen increased share of worldwide 8-inch tablet shipments, their rapidly dropping 7-inch orders will benefit Taiwan's share of worldwide shipments, boosting the percentage to above 50% in 2018 as most large-size tablets will be delivered by Taiwan makers.
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Osram starts operation at new LED chip plant in Kulim, Malaysia

Osram starts operation at new LED chip plant in Kulim, Malaysia
Rodney Chan, DIGITIMES, Taipei [Friday 24 November 2017]
Osram's new LED chip factory in Kulim, Malaysia, has kicked off operation, as the lighting vendor continues to expand its production capacity.

"We are both on schedule and within budget," Olaf Berlien, CEO of OSRAM Licht AG, was cited in a company press release as saying during an opening ceremony in Kulim on Thursday. He was referring to the construction of the new Malaysia plant.

"Given our enormous recent growth rates of 19% in the LED business, we are pleased to have the new production capacities. Our investment in Kulim also attests to the technology shift and our transition to becoming a high-tech corporation: At the beginning of this decade, conventional lighting still accounted for 80% of Osram's business. Today, two-thirds of our sales are based on optical semiconductors."

In November 2015, as part of its Diamond innovation and growth initiative, Osram announced plans to build the new LED chip factory in Kulim and to have it up and running by the end of 2017. According to Osram, the modular, expandable factory has now been put into operation just two years after the announcement. A total of EUR70 million were invested in the first stage of completion. Osram can expand the factory in two additional stages, entailing total investment costs of up to EUR1 billion, including expansion of the LED assembly capacities in Osram's global factory alliance.

Energy savings of up to 80%, compared to conventional street lights, can be achieved with LED lighting, Osram said. In addition, LED has better light color stability and can be more quickly dimmed and adjusted, so that empty streets or sidewalks do not always have to be illuminated with full brightness.

The Osram factory in Kulim will produce blue LED chips which, by means of a converter layer, can generate white light. They are produced for general lighting purposes, such as the public street lighting, and also for facade lighting, private and commercial interior and exterior lighting, or for billboards, as well as for special applications such as horticulture lights.

The global LED market for general lighting is estimated to be EUR6 billion in 2018, roughly 6% of which is for street lighting, Osram said. An average growth rate in the market of 7% per year is foreseen through 2020. The overall market for optoelectronic components - including general lighting - will be EUR17.5 billion in 2018.

The plan is to also produce LED chips in Kulim in the medium term for premium applications, such as automotive lighting and video projection, Osram said. In comparison with the 4-inch technology, the production systems for 6-inch wafers produce 125% more LED chips per wafer in a single cycle.

Osram is currently investing worldwide in the expansion of the existing six sites in its LED production network. Osram said it is also expanding its plant in Regensburg, which currently has about 2,500 employees, and will additionally hire up to 1,000 employees. Premium LED chips and laser diodes, which are used, for example, in high-quality car headlights, will be manufactured there as well as infrared diodes for sensors that can be used in applications including facial recognition in mobile phones, or in cars for intelligent assistance systems (such as proximity control).

Osram said it will be expanding its site in Schwabmunchen. In the future, Osram will manufacture LED primary materials in clean rooms there. In addition, Osram also has another plant for LED primary products in the US city of Exeter. In Wuxi, China, Osram is expanding its capacity for assembling LED chips into complete LEDs with a housing and partly with primary optics too. In Penang, Malaysia, located near Kulim, LED chips are also manufactured and assembled.
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Tsinghua Unigroup secures financial support to facilitate memory chip plant

Tsinghua Unigroup secures financial support to facilitate memory chip plant
Jean Chu, Taipei; Steve Shen, DIGITIMES [Monday 27 November 2017]
Tsinghua Unigroup has signed a strategic cooperation agreement with Bank of Nanjing to facilitate the kickoff of the construction of a US$30 billion memory chip factory to be built by the chipmaker in Nanjing.

The memory chip factory is targeting a monthly capacity of 100,000 wafers in phase one of the development which will be used to produce DRAM and 3D-NAND flash chips. The plant's capacity will be doubled to 200,000 wafers when its second-phase expansion project is completed.

Meanwhile, Tsinghua Unigroup also targets an annual chip production value of US$4.8 billion during the phase-one development and raises the amount to US$10 billion in phase two.

As a business partner of Tsignhua Unigroup, the Bank of Nanjing is obligated to provide high-quality, efficient and comprehensive financial services to the chipmaker so as to push the development of financial technology and the upgrade of overall economy, according to the bank.

In addition to the memory chip plant, Tsinghua Unigroup also announced earlier it would invest roughly another CNY30 billion in building an "international city" including commercial buildings, apartments, R&D facilities and international schools for foreign employees.
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