While speaking with the Fabless Semiconductor Association, USA, some time back, I quizzed them on the major movers and shakers (or slips) among the top 25, and what are the reasons for those.
Qualcomm has broken into the top 10 for the first time. It's the first time in the history of semiconductors that such a thing has happened, and is probably a sign of the times ahead.
One reason for this growth has been -- Increasing foundry orders. A Digitimes article reported that Qualcomm will increase orders by 15-20 percent in the September quarter to meet projections of strong 3G handset sales. According to the article, sources at Qualcomm suggest that wafer starts per month in the December quarter could surpass 30,000.
There have also been reports of strong June quarter for 2007. Qualcomm’s $2.32 billion in June quarter sales represents 19 percent year-on-year growth. Record chipset volumes of 65 million were at the high end of 62 million-65 million guidance. UMTS chipset shipments were noted to have increased by 127 percent year-over-year and 79 percent quarter-over-quarter, with the quarter-over-quarter growth rate roughly 4 times the market growth rate.
Finally, chipset ASPs increased by 2 percent year-over-year and quarter-over-quarter, and are likely to remain stable.
Situation in Asia
FSA quoted the Strategic Marketing Association's Quarterly Spot Report - July. While there have been announcements in India by SemIndia, HSMC, Moser Baer, etc., for fabs, there is every likelihood of another fab in the eastern Indian state of West Bengal. The technology ministry announced plans for a yet to be named fab at the India Design Center. Another possibility is a fab in Kochi, South India, by the NeST Group.
In China, Strategic Marketing Association expects that eight new fabs will start construction this year. Two fabs have started construction in the first quarter (Hua Hong NEC and ProMOS), and two more have started construction in the second quarter.
Grace Semiconductor, now headed by former Infineon boss, Dr. Ulrich Schumacher, which opened its first fab in 2003, began moving equipment into the shell of Fab 2, which was built at the same time as Fab 1. The company is installing used equipment and plans to begin production in Q1 0f 2008. The company also plans to begin building a 300mm fab, perhaps as early as next year, although financing is said to remain an issue for such a project.
Also in China, IC Spectrum began building a 200mm fab in Kunshan, about 45km east of Shanghai. Using 0.35micron technology from Toshiba, the new foundry expects to begin volume production by the first quarter of 2009.
TSMC began production in the second phase of its 300mm Fab 14 in Tainan in the south of Taiwan. This $2.4 billion fab will start production at 65nm and move to 45nm in 2008. There are also plans for a 300mm Fab 14, Phase 3 at the same location.
Looking at capex
In 2007, companies with capital spending budgets of $1 billion or more (the Billion Dollar Club) will account for 77 percent of all capital spending. Most of these companies (13 out of 20) are memory companies. Nine of these companies are from Asia Pacific (South Korea, China, Taiwan and Southeast Asia). Together, they plan to spend $23 billion this year, more than half of what the Billion Dollar Club has budgeted for capital spending.
Sunday, September 30, 2007
Tuesday, September 18, 2007
Challenges of selling used equipment in global secondary market
The recently concluded SEMICON TAIWAN had a very interesting session on: The Challenges of Selling Used Equipment in Global Secondary Market, by Michael Mihin, Global Account Manager, Broadway Engineering Services Teams Inc. (BEST).
According to Mihin, there are about 600 IC fabs worldwide in 2007 -- 47 in Taiwan, 42 in China, 35 in Korea, 19 in Southeast Asia, and 28 in rest of world, 182 in Japan, 89 in Europe and 158 in the USA. As a result, the challenges posed by used equipment exists worldwide.
Mihin put down these challenges as -- rebuilding OEM equipment to capabilities equal to OEM specifications; supplier response at factory location instead of single country location; providing capacity at a lower cost with recycled equipment; and project revenue to support local resources in country with fab locations.
As for the benefits meeting these challenges, those are said to be extending life of tools by refurbishing, lowering cost of ownership, local contact for warranty and maintenance, parts support with local partners, out of country tech support within 48 hours, and partnering with local resources to meet fab requirements.
Applications include rebuild company supplies refurbished tool, fab supplies tool and rebuild company refurbishes tool onsite at fab, rebuild company changes chambers on in fab tool to reflect new process requirement, and rebuild company supplies refurbished chambers and fab installs on tool. Time is the issue with 2X the time in fab.
Equipment opportunities exist such as providing refurbished equipment that is capable of meeting new equipment operating specifications, availability of donor tools as market requires, new equipment versus refurbished equipment value analysis, and refurbished parts versus new parts to complete the project.
As for the pricing challenges, these include dealing with refurbished tool that is 30-50 percent less than new, travel costs and expenses without margin adder, software upgrades without margin adder, rebuild field service engineer hourly rate less than OEM, and market price of donor tools influenced by supply and demand.
The 200mm tool supply is increasing, and the refurbish process takes eight to 12 weeks for most tools. Apparently, regional support/alliances are being developed. BEST offers USA phone support Monday to Friday, and parts support in 48 hours from USA.
Concluding, Mihin said that the world was operationally flat. Challenges were being met by alliances and consolidation of service providers. Legacy tool support was moving to certified rebuild companies. Finally, local capabilities were needed to meet language and communication requirements of a fab.
The challenges of selling used equipment could be a challenge in India too, as and when fabs come up, make no mistake.
According to Mihin, there are about 600 IC fabs worldwide in 2007 -- 47 in Taiwan, 42 in China, 35 in Korea, 19 in Southeast Asia, and 28 in rest of world, 182 in Japan, 89 in Europe and 158 in the USA. As a result, the challenges posed by used equipment exists worldwide.
Mihin put down these challenges as -- rebuilding OEM equipment to capabilities equal to OEM specifications; supplier response at factory location instead of single country location; providing capacity at a lower cost with recycled equipment; and project revenue to support local resources in country with fab locations.
As for the benefits meeting these challenges, those are said to be extending life of tools by refurbishing, lowering cost of ownership, local contact for warranty and maintenance, parts support with local partners, out of country tech support within 48 hours, and partnering with local resources to meet fab requirements.
Applications include rebuild company supplies refurbished tool, fab supplies tool and rebuild company refurbishes tool onsite at fab, rebuild company changes chambers on in fab tool to reflect new process requirement, and rebuild company supplies refurbished chambers and fab installs on tool. Time is the issue with 2X the time in fab.
Equipment opportunities exist such as providing refurbished equipment that is capable of meeting new equipment operating specifications, availability of donor tools as market requires, new equipment versus refurbished equipment value analysis, and refurbished parts versus new parts to complete the project.
As for the pricing challenges, these include dealing with refurbished tool that is 30-50 percent less than new, travel costs and expenses without margin adder, software upgrades without margin adder, rebuild field service engineer hourly rate less than OEM, and market price of donor tools influenced by supply and demand.
The 200mm tool supply is increasing, and the refurbish process takes eight to 12 weeks for most tools. Apparently, regional support/alliances are being developed. BEST offers USA phone support Monday to Friday, and parts support in 48 hours from USA.
Concluding, Mihin said that the world was operationally flat. Challenges were being met by alliances and consolidation of service providers. Legacy tool support was moving to certified rebuild companies. Finally, local capabilities were needed to meet language and communication requirements of a fab.
The challenges of selling used equipment could be a challenge in India too, as and when fabs come up, make no mistake.
Broadband hasn't grown as expected in India
Yes, I believe so! The numbers, if one were to contend with those alone, DO NOT meet the expectations. Broadband was and is considered to be the new paradigm of India. However, are we anywhere near whatever growth we have been expecting? Let's see the stats for the various telecom segments.
According to the statistics made available by the Telecom Regulatory Authority of India (TRAI), the total number of telephone subscribers was 232.87 million at the end of July 2007, and the overall teledensity had increased to 20.52!
In the wireless segment, 8.06 million subscribers were added in July 2007 and the total wireless subscribers (GSM, CDMA and WLL (F)) base was 192.98 million. The wireline segment subscriber base stood at 39.89 million, with a decline of 0.20 million in July 2007.
And what about broadband? For broadband (≥256Kbps downloads), the total broadband connections in the country had reached only 2.47 million by the end of July 2007. In fact, during July 2007 there was an addition of 0.05 million connections!
Let's go back a few months! Venkat Kedalya of Convergent Communications had pointed out in an article to CIOL that India was nowhere on course to reach a target of 9 million broadband subscribers by this year! India has a target of achieving 20 million broadband subscribers by 2010, which now seems to be highly ambitious and well, unachievable!
Allocation of frequencies for BWA (broadband wireless access) is the immediate need of the moment. There is a need to look at WiMax and broadband over powerline (BPL) as far as technology is concerned. Some folks have entered the IPTV domain, so hopefully, we will get to see some content over broadband.
Even TRAI has urged the government to boost broadband growth. One of its suggestions has been to ask BSNL and MTNL to adopt a franchisee model so that local players may use their copper cables and offer high-speed Internet services. Decisions need to be taken for allocating spectrum for WiMax as well as making the National Internet Exchange of India more effective.
TRAI said: "Only 0.47 million broadband subscribers have been added in first six months of 2007, which is far below the growth trend required to achieve broadband policy targets. This necessitated an analysis of regulatory and policy frameworks, and to formulate new approach necessary for rapid roll-out of broadband in the country."
TRAI also accepts that while the growth of Internet subscribers was satisfactory, we are seriously lagging behind as far as broadband is concerned. It adds: "The government should ensure availability of more number of Ku-band transponders to roll out broadband services through DTH platform and utilize Universal Service Obligation (USO) fund to provide subsidy for providing broadband services through satellite in remote and hilly areas."
I'm not really sure how all of this will help. You do need at least a PC to access the Internet services. Am not sure how many folks are still willing to invest in home PCs and broadband, given that watching TV is a favorite pastime. Broadband over cable TV has not been a success either. What are we doing about this?
According to the statistics made available by the Telecom Regulatory Authority of India (TRAI), the total number of telephone subscribers was 232.87 million at the end of July 2007, and the overall teledensity had increased to 20.52!
In the wireless segment, 8.06 million subscribers were added in July 2007 and the total wireless subscribers (GSM, CDMA and WLL (F)) base was 192.98 million. The wireline segment subscriber base stood at 39.89 million, with a decline of 0.20 million in July 2007.
And what about broadband? For broadband (≥256Kbps downloads), the total broadband connections in the country had reached only 2.47 million by the end of July 2007. In fact, during July 2007 there was an addition of 0.05 million connections!
Let's go back a few months! Venkat Kedalya of Convergent Communications had pointed out in an article to CIOL that India was nowhere on course to reach a target of 9 million broadband subscribers by this year! India has a target of achieving 20 million broadband subscribers by 2010, which now seems to be highly ambitious and well, unachievable!
Allocation of frequencies for BWA (broadband wireless access) is the immediate need of the moment. There is a need to look at WiMax and broadband over powerline (BPL) as far as technology is concerned. Some folks have entered the IPTV domain, so hopefully, we will get to see some content over broadband.
Even TRAI has urged the government to boost broadband growth. One of its suggestions has been to ask BSNL and MTNL to adopt a franchisee model so that local players may use their copper cables and offer high-speed Internet services. Decisions need to be taken for allocating spectrum for WiMax as well as making the National Internet Exchange of India more effective.
TRAI said: "Only 0.47 million broadband subscribers have been added in first six months of 2007, which is far below the growth trend required to achieve broadband policy targets. This necessitated an analysis of regulatory and policy frameworks, and to formulate new approach necessary for rapid roll-out of broadband in the country."
TRAI also accepts that while the growth of Internet subscribers was satisfactory, we are seriously lagging behind as far as broadband is concerned. It adds: "The government should ensure availability of more number of Ku-band transponders to roll out broadband services through DTH platform and utilize Universal Service Obligation (USO) fund to provide subsidy for providing broadband services through satellite in remote and hilly areas."
I'm not really sure how all of this will help. You do need at least a PC to access the Internet services. Am not sure how many folks are still willing to invest in home PCs and broadband, given that watching TV is a favorite pastime. Broadband over cable TV has not been a success either. What are we doing about this?
Monday, September 17, 2007
Indian government announces policy to woo investments in semicon fabs
Better late than never, as the saying goes. The Department of Information Technology, Ministry of Communication and IT, Government of India, needs to be congratulated for coming up with the Special Incentive Package Scheme (SIPS)to encourage investments for setting up semicon fabs, and other micro and nanotechnology manufacturing industries in India!
The "ecosystem units" have been clearly defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.
Just a week or two back, I was in conversation with some companies from Israel who were looking to develop business in India. Now, they, and others, have clear guidelines to follow. One of the companies, Nova Measuring Instruments Ltd, should feel happy that the definition of "ecosystem" includes assembly and test of products.
Nova develops, produces, and markets advanced monitoring, measurement and process control systems for the semiconductor manufacturing industry. Another well-known player, Tessolve, has been present in India since 2005 and would surely feel glad with the notification. At least, the media and others will take more notice of the company.
In Hong Kong, an ex-colleague and I used to cover OLEDs. When I first read about this technology back in the early 2000, I used to wonder whether India could have such a capability. Seems, it is now in a position to have OLEDs! I hope Lite Array (OLED) HK is watching and reading all of this.
Plasma display panels is another interesting line. The guidelines should interest LG, Matsushita, Sichuan Changhong Electric Co. Ltd, IRICO Group Corp. Panasonic, Asahi, Mitsui Chemicals, Nippon Electric, Samsung etc. Some of these firms are already present in India in one form or the other. It's just a matter of their being keen on developing PDP in India.
LCDs could be another big investment area. Taiwan's AU Optronics (AUO), Chi Mei Optoelectronics (CMO), Sharp, Samsung, as well as other biggies like LG, NEC, etc., need to be wooed.
It really excites me to see all the possibilities in front of India. If this goes on well, India would be in for a great ride in electronics manufacturing, and in the semicon space.
In the same context, the Bangalore Nano 2007, which will be held in December, could not be better timed. There should be a whole lot of companies looking to be present at this show!
India's now on the threshold of major initiatives in the electronics manufacturing space. Some semicon fabs will also come up, and the number of fabless companies should likely increase. Maybe, TSMC and Tower could oblige with some foundries too. Should all of this happen at the right time, we are in for exciting times.
The "ecosystem units" have been clearly defined as units, other than a fab unit, for manufacture of semiconductors, displays including LCDs, OLEDs, PDPs, any other emerging displays; storage devices; solar cells; photovoltaics; other advanced micro and nanotechnology products; and assembly and test of all the above products.
Just a week or two back, I was in conversation with some companies from Israel who were looking to develop business in India. Now, they, and others, have clear guidelines to follow. One of the companies, Nova Measuring Instruments Ltd, should feel happy that the definition of "ecosystem" includes assembly and test of products.
Nova develops, produces, and markets advanced monitoring, measurement and process control systems for the semiconductor manufacturing industry. Another well-known player, Tessolve, has been present in India since 2005 and would surely feel glad with the notification. At least, the media and others will take more notice of the company.
In Hong Kong, an ex-colleague and I used to cover OLEDs. When I first read about this technology back in the early 2000, I used to wonder whether India could have such a capability. Seems, it is now in a position to have OLEDs! I hope Lite Array (OLED) HK is watching and reading all of this.
Plasma display panels is another interesting line. The guidelines should interest LG, Matsushita, Sichuan Changhong Electric Co. Ltd, IRICO Group Corp. Panasonic, Asahi, Mitsui Chemicals, Nippon Electric, Samsung etc. Some of these firms are already present in India in one form or the other. It's just a matter of their being keen on developing PDP in India.
LCDs could be another big investment area. Taiwan's AU Optronics (AUO), Chi Mei Optoelectronics (CMO), Sharp, Samsung, as well as other biggies like LG, NEC, etc., need to be wooed.
It really excites me to see all the possibilities in front of India. If this goes on well, India would be in for a great ride in electronics manufacturing, and in the semicon space.
In the same context, the Bangalore Nano 2007, which will be held in December, could not be better timed. There should be a whole lot of companies looking to be present at this show!
India's now on the threshold of major initiatives in the electronics manufacturing space. Some semicon fabs will also come up, and the number of fabless companies should likely increase. Maybe, TSMC and Tower could oblige with some foundries too. Should all of this happen at the right time, we are in for exciting times.
Saturday, September 15, 2007
Last mile problem -- in transportation!
The last mile problem in telecom is an issue close to the heart of all those part of the telecom industry. What it means is, providing or at least trying to provide some connectivity between two points where no other connectivity is possible. That's how wireless in local loop (WiLL) evolved.
There's another last mile problem -- in commuting from one place to the other -- at least if the distance is hardly anything. Not everyone's blessed with cars, bikes, etc. Some people still have to depend on other means of transport -- such as autorickshaws, buses, etc.
Well, my friend Bhaskar and I got into the "last mile problem in transportation or commuting", while trying to reach The Eros International Hotel in Nehru Place from Panchsheel Enclave in Delhi. Not a single autorickshaw we stopped and asked to be taken to our destination was willing to drive us from Panchsheel to Nehru Place -- which is barely 1-2km away.
We stopped and asked at least half a dozen autorickshaws, all of whom refused and merrily went their ways. Their reasons for not taking the route were: no mood, I'm headed this way; I'm driving on only straight; need to refill gas (maybe true), not interested, if you want to go to Trans Yamuna -- welcome, and so on and so forth!
Finally, the one who agreed, only drove us from the Chirag flyover to Nehru Place -- about a km away -- charging Rs. 30, though he later settled for Rs. 25! This was daylight (evening light) robbery at its best! What could we do? We were getting late for an event!
Am sure there are several like us who've experienced such a plight. Seems all the autorickshaw folks are the same everywhere. It all depends on their mood and distance, and of course, the haggling for more money.
There are no short-distance buses either. Reminds me of all those times when I either took trams in some other cities of the world; and the best of them all -- those 16-seater mini buses in Hong Kong -- which ply point to point. The drivers never grimaced even if there was only one person -- me -- seated in the mini bus -- especially the route from Wong Chuk Hang to Aberdeen!
Wish we had those mini buses here to travel short distances! Otherwise, we will continue to suffer from this last-mile problem in transportation!
There's another last mile problem -- in commuting from one place to the other -- at least if the distance is hardly anything. Not everyone's blessed with cars, bikes, etc. Some people still have to depend on other means of transport -- such as autorickshaws, buses, etc.
Well, my friend Bhaskar and I got into the "last mile problem in transportation or commuting", while trying to reach The Eros International Hotel in Nehru Place from Panchsheel Enclave in Delhi. Not a single autorickshaw we stopped and asked to be taken to our destination was willing to drive us from Panchsheel to Nehru Place -- which is barely 1-2km away.
We stopped and asked at least half a dozen autorickshaws, all of whom refused and merrily went their ways. Their reasons for not taking the route were: no mood, I'm headed this way; I'm driving on only straight; need to refill gas (maybe true), not interested, if you want to go to Trans Yamuna -- welcome, and so on and so forth!
Finally, the one who agreed, only drove us from the Chirag flyover to Nehru Place -- about a km away -- charging Rs. 30, though he later settled for Rs. 25! This was daylight (evening light) robbery at its best! What could we do? We were getting late for an event!
Am sure there are several like us who've experienced such a plight. Seems all the autorickshaw folks are the same everywhere. It all depends on their mood and distance, and of course, the haggling for more money.
There are no short-distance buses either. Reminds me of all those times when I either took trams in some other cities of the world; and the best of them all -- those 16-seater mini buses in Hong Kong -- which ply point to point. The drivers never grimaced even if there was only one person -- me -- seated in the mini bus -- especially the route from Wong Chuk Hang to Aberdeen!
Wish we had those mini buses here to travel short distances! Otherwise, we will continue to suffer from this last-mile problem in transportation!
Saturday, September 8, 2007
Toshiba-Sandisk Fab 4 takeaways for Indian fabs
The recent news regarding the opening of Toshiba-Sandisk Fab 4, the latest 300mm wafer fabrication facility for NAND flash memory at Toshiba’s Yokkaichi Operations, in Mie Prefecture, Japan, may have missed the eyeballs of many of us.
There are lot of takeaways for those looking to set up fabs in India. HSMC and SemIndia are building fabs in FabCity, Hyderabad.
Obviously, funding was never a problem for Toshiba and Sandisk. Toshiba funded the construction of the Fab 4 building, and Flash Alliance, Ltd, a Toshiba-SanDisk venture established in July 2006, 50.1 percent owned by Toshiba and 49.9 percent by SanDisk, is funding the advanced manufacturing equipment now being installed in the fab.
HSMC and SemIndia would have partners for its fabs. HSMC has roped in Infineon as a technology partner and licensed its 130nm technology, while SemIndia has AMD as a partner, besides having folks such as Flextronics and Broadcom, among others by its side.
Some other learnings from Toshiba-Sandisk's Fab 4 are: it has been designed to minimize any impact on operations from natural disasters. Also, Fab 4 would employ 56nm process technology at start-up, and plans for the gradual transition to 43nm technology, starting from March 2008. Maybe, the proposed Indian fabs would need to look at both aspects. Yes, 130nm is a good area to start, but let's look ahead at what the industry's doing too. By the way, Toshiba-Sandisk Fab 4 was built in about a year's time. So, the fabs coming up in India should perhaps, look at similar timelines.
May I mention here that recently, a member from an Israeli semicon delegation mentioned that it would not be a bad idea for India to have 200mm fabs, which would be able to make products for the aftermarket. However, India does not have a concept of aftermarket yet.
In between, there's news that Hynix signed a contract to sell the equipment in its 200-mm fab in Wuxi, China to China Resources Holdings. Now, should this have any bearing on the idea of a 200mm fab? Or should Indian fabs focus on having 300mm fabs? It's for them to decide!
It's worth adding here that the India Semiconductor Association (ISA) has been doing great work in making lots of things happen, the latest being the MoU with the Taiwan Semiconductor Industry Association (TSIA). The MoU focuses on developing business ties and exchanges between companies in the semiconductor industry in the two countries.
Slow India has already missed the Intel bus. Also, there are TSMC and the others, like Tower, who have an eye on India. Should they choose to open shop here big time, there's every chance that they might steal the thunder from these proposed Indian fabs.
If we are to be a world-class semicon hub, we simply cannot afford to be slow -- in strategy and in its implementation. Decisions should be quick and effective!
There are lot of takeaways for those looking to set up fabs in India. HSMC and SemIndia are building fabs in FabCity, Hyderabad.
Obviously, funding was never a problem for Toshiba and Sandisk. Toshiba funded the construction of the Fab 4 building, and Flash Alliance, Ltd, a Toshiba-SanDisk venture established in July 2006, 50.1 percent owned by Toshiba and 49.9 percent by SanDisk, is funding the advanced manufacturing equipment now being installed in the fab.
HSMC and SemIndia would have partners for its fabs. HSMC has roped in Infineon as a technology partner and licensed its 130nm technology, while SemIndia has AMD as a partner, besides having folks such as Flextronics and Broadcom, among others by its side.
Some other learnings from Toshiba-Sandisk's Fab 4 are: it has been designed to minimize any impact on operations from natural disasters. Also, Fab 4 would employ 56nm process technology at start-up, and plans for the gradual transition to 43nm technology, starting from March 2008. Maybe, the proposed Indian fabs would need to look at both aspects. Yes, 130nm is a good area to start, but let's look ahead at what the industry's doing too. By the way, Toshiba-Sandisk Fab 4 was built in about a year's time. So, the fabs coming up in India should perhaps, look at similar timelines.
May I mention here that recently, a member from an Israeli semicon delegation mentioned that it would not be a bad idea for India to have 200mm fabs, which would be able to make products for the aftermarket. However, India does not have a concept of aftermarket yet.
In between, there's news that Hynix signed a contract to sell the equipment in its 200-mm fab in Wuxi, China to China Resources Holdings. Now, should this have any bearing on the idea of a 200mm fab? Or should Indian fabs focus on having 300mm fabs? It's for them to decide!
It's worth adding here that the India Semiconductor Association (ISA) has been doing great work in making lots of things happen, the latest being the MoU with the Taiwan Semiconductor Industry Association (TSIA). The MoU focuses on developing business ties and exchanges between companies in the semiconductor industry in the two countries.
Slow India has already missed the Intel bus. Also, there are TSMC and the others, like Tower, who have an eye on India. Should they choose to open shop here big time, there's every chance that they might steal the thunder from these proposed Indian fabs.
If we are to be a world-class semicon hub, we simply cannot afford to be slow -- in strategy and in its implementation. Decisions should be quick and effective!
Tuesday, September 4, 2007
Indian semiconductor market growing thrice as fast as global market
As per the India Semiconductor Association (ISA) and Frost & Sullivan (ISA-F&S), India's 2007 annual growth in the semiconductor market is nearly triple the rate at which the global semiconductor market is currently expanding.
The actual total market (TM) was $2.69bn and total available market (TAM) was $1.26bn. By 2009, the TM will likely grow at a CAGR of 26.7 percent to $5.49bn and the TAM will grow at a CAGR of 36 percent to $3.18bn.
Anand Rangachary, managing director, South Asia & Middle East, Frost & Sullivan, said: "The global semiconductor total market is growing at a rate of 8-9 percent CAGR, whereas the India total market is growing at 26.7 percent CAGR till 2009. India, which represented 1.09 percent of the global semiconductor market in 2006 will be 1.62 percent by 2009. As domestic demand for all electronics products is growing India is emerging as one of the fastest growing region in the world."
India is one of the fastest growing regions in the world. TAM growth rate at CAGR 36 percent, compared to 26.7 percent of TM CAGR signifies higher growth in local manufacturing of electronics products. In the industry, the technology change is so dynamic that every year, a new application/product gets launched, which changes the demand forecast by many ways (eg. launch of iPOD or iPhone/ WiMAX/GPON/LCD TV) as well as ASP changes.
The government rules change demand, and therefore ISA captures these changes on a real-time basis. Hence, ISA decided to have an annual update of the India market report. All of these changes are well captured in the current report and India's growth looks almost three times compared to the global growth rate.
According to the report, the top five end-user products that are likely to drive growth are mobile handsets, desktops and notebooks, GSM base stations, set-top boxes and energy meters. Microprocessors, analog, memory and discretes are said to be the top four semiconductor products likely to drive revenues.
While these stats read great, I am wondering exactly how much of these handsets will be made in India. Rather, what percent of silicon going into these handsets will be made in India! Memory is said to be a driver of the revenue. Well, the DRAM market has been acting up.
Now, iSuppli reported in a recent report:
"Following a brief respite, market conditions for DRAM suppliers are set to take a turn for the worse in September, iSuppli Corp. predicts.
iSuppli previously forecasted that DRAM prices would undergo a downward correction in October, following the current period of relative strength that brought an end to a phase of severe erosion in the second quarter. However, iSuppli now believes the DRAM prices will begin to decline one month earlier, in September.
Near-term market conditions remain in a state of flux with a great deal of uncertainty in the supply chain as suppliers and distributors continue to work off a glut of DRAM inventory. Furthermore, sales momentum is waning in the DRAM spot market, as rising prices and falling supply of LCD panels cut into the available budget for memory in some PCs.
This is bad news for memory suppliers, which had been basking in the present period of relative pricing strength. Weak pricing in September will set the stage for further erosion in the fourth quarter. iSuppli now foresees the possibility of double-digit sequential price declines in the fourth quarter, erasing any increases that aided suppliers in the third quarter. Because of this, DRAM suppliers’ profitability will dwindle in the fourth quarter compared to the third, iSuppli predicts."
I'd be very interested to see how much of these memory predictions turn out to be correct! If they aren't, I wonder how memory is going to figure among the top four revenue drivers in the Indian semicon market, at least in the near and immediate future. Unless, I somehow missed a point somewhere!!
The actual total market (TM) was $2.69bn and total available market (TAM) was $1.26bn. By 2009, the TM will likely grow at a CAGR of 26.7 percent to $5.49bn and the TAM will grow at a CAGR of 36 percent to $3.18bn.
Anand Rangachary, managing director, South Asia & Middle East, Frost & Sullivan, said: "The global semiconductor total market is growing at a rate of 8-9 percent CAGR, whereas the India total market is growing at 26.7 percent CAGR till 2009. India, which represented 1.09 percent of the global semiconductor market in 2006 will be 1.62 percent by 2009. As domestic demand for all electronics products is growing India is emerging as one of the fastest growing region in the world."
India is one of the fastest growing regions in the world. TAM growth rate at CAGR 36 percent, compared to 26.7 percent of TM CAGR signifies higher growth in local manufacturing of electronics products. In the industry, the technology change is so dynamic that every year, a new application/product gets launched, which changes the demand forecast by many ways (eg. launch of iPOD or iPhone/ WiMAX/GPON/LCD TV) as well as ASP changes.
The government rules change demand, and therefore ISA captures these changes on a real-time basis. Hence, ISA decided to have an annual update of the India market report. All of these changes are well captured in the current report and India's growth looks almost three times compared to the global growth rate.
According to the report, the top five end-user products that are likely to drive growth are mobile handsets, desktops and notebooks, GSM base stations, set-top boxes and energy meters. Microprocessors, analog, memory and discretes are said to be the top four semiconductor products likely to drive revenues.
While these stats read great, I am wondering exactly how much of these handsets will be made in India. Rather, what percent of silicon going into these handsets will be made in India! Memory is said to be a driver of the revenue. Well, the DRAM market has been acting up.
Now, iSuppli reported in a recent report:
"Following a brief respite, market conditions for DRAM suppliers are set to take a turn for the worse in September, iSuppli Corp. predicts.
iSuppli previously forecasted that DRAM prices would undergo a downward correction in October, following the current period of relative strength that brought an end to a phase of severe erosion in the second quarter. However, iSuppli now believes the DRAM prices will begin to decline one month earlier, in September.
Near-term market conditions remain in a state of flux with a great deal of uncertainty in the supply chain as suppliers and distributors continue to work off a glut of DRAM inventory. Furthermore, sales momentum is waning in the DRAM spot market, as rising prices and falling supply of LCD panels cut into the available budget for memory in some PCs.
This is bad news for memory suppliers, which had been basking in the present period of relative pricing strength. Weak pricing in September will set the stage for further erosion in the fourth quarter. iSuppli now foresees the possibility of double-digit sequential price declines in the fourth quarter, erasing any increases that aided suppliers in the third quarter. Because of this, DRAM suppliers’ profitability will dwindle in the fourth quarter compared to the third, iSuppli predicts."
I'd be very interested to see how much of these memory predictions turn out to be correct! If they aren't, I wonder how memory is going to figure among the top four revenue drivers in the Indian semicon market, at least in the near and immediate future. Unless, I somehow missed a point somewhere!!
Friday, August 31, 2007
Does India need fabs? Worth a try!
A friend asked me whether India needs a fab. My answer quick and short was no! While it would be enchanting to see India join the global "fab club" or even have Indians comment "real men own fabs" for a change, I just don't see the ecosystem -- as people like to call it -- there. Maybe, once the odd fabs come up, that would develop as well. However, it can be quite some time away.
India, as most of us know, are strong in embedded and SoC related work. We are strong in design services. We are good at playing to our strengths. We should continue to do so. Note that we are not yet a one-stop design shop, though many people seem to see it that way. This is not exactly software and services!
However, to move up the so-called semicon value chain, India needs to do high-end designs and product development. The last one is currently the problem area.
How many Indian firms are involved in product development? Can you name them? Do you have the names on your fingertips? Most importantly, are those aimed for captive consumption (within the country) or are those serving the global markets? What are the product differentiators?
Right! Let's get back to the fab business. I asked in a earlier piece that whether everyone are aware of the kind of investment that is required for a fab. Do people even have an idea how long would it take for a fab to break even?
First, the investment. The fab is not going to be a small building built on some piece of land. If it's going to be a 300mm fab, the expenses are going to be huge. Let's keep this easy. For starters, there is going to be a fixed cost for maintaining the day-to-day running of a fab. That itself is going to be huge.
Two, most of the fab work would be automated. A fab won't exactly be hiring numbers running well over thousands. Even if huge numbers were hired, do we have people in the country with experience of working in green rooms? Let's assume there are!
Next, there are several other processes involved in developing wafer out of silicon. Do we have people with that kind of experience? Let's again assume that there are. Again, the operating costs for maintaining such personnel would be quite high.
Three, let's get down to the equipment required for a fab. That's going to be really expensive. Most importantly, all of it has to be in place, running, before the fab actually goes live. Next, a fab can't survive for long if it rests on using certain technologies. It has to use all possible latest technologies. Again, getting those would be expensive.
Finally, the wafers coming out have to be world-class and the yield, high, rather, very high. Those should be able to serve multiple product needs as well -- niche and vogue. Oh yes, the fab has to serve the global market. So, do add the marketing costs as well.
How long will it take for such a fab to break-even? Maybe, three to five years. Add the fact that technologies and process geometries would have also progressed a lot by that time. Which means, all of those need to be added on to the fab.
Well, it's worth a challenge. India is betting big on semicon. Let's have those fabs along with the fabless folks. We'll know who stands where, and whether India really has the capability to move up the semiconductor value chain.
India, as most of us know, are strong in embedded and SoC related work. We are strong in design services. We are good at playing to our strengths. We should continue to do so. Note that we are not yet a one-stop design shop, though many people seem to see it that way. This is not exactly software and services!
However, to move up the so-called semicon value chain, India needs to do high-end designs and product development. The last one is currently the problem area.
How many Indian firms are involved in product development? Can you name them? Do you have the names on your fingertips? Most importantly, are those aimed for captive consumption (within the country) or are those serving the global markets? What are the product differentiators?
Right! Let's get back to the fab business. I asked in a earlier piece that whether everyone are aware of the kind of investment that is required for a fab. Do people even have an idea how long would it take for a fab to break even?
First, the investment. The fab is not going to be a small building built on some piece of land. If it's going to be a 300mm fab, the expenses are going to be huge. Let's keep this easy. For starters, there is going to be a fixed cost for maintaining the day-to-day running of a fab. That itself is going to be huge.
Two, most of the fab work would be automated. A fab won't exactly be hiring numbers running well over thousands. Even if huge numbers were hired, do we have people in the country with experience of working in green rooms? Let's assume there are!
Next, there are several other processes involved in developing wafer out of silicon. Do we have people with that kind of experience? Let's again assume that there are. Again, the operating costs for maintaining such personnel would be quite high.
Three, let's get down to the equipment required for a fab. That's going to be really expensive. Most importantly, all of it has to be in place, running, before the fab actually goes live. Next, a fab can't survive for long if it rests on using certain technologies. It has to use all possible latest technologies. Again, getting those would be expensive.
Finally, the wafers coming out have to be world-class and the yield, high, rather, very high. Those should be able to serve multiple product needs as well -- niche and vogue. Oh yes, the fab has to serve the global market. So, do add the marketing costs as well.
How long will it take for such a fab to break-even? Maybe, three to five years. Add the fact that technologies and process geometries would have also progressed a lot by that time. Which means, all of those need to be added on to the fab.
Well, it's worth a challenge. India is betting big on semicon. Let's have those fabs along with the fabless folks. We'll know who stands where, and whether India really has the capability to move up the semiconductor value chain.
Tuesday, August 28, 2007
Qualcomm rocks top 10! Is fabless the way ahead?
For the first time in semiconductors, a fabless company has cracked the Top 10! This honor has gone to Qualcomm, which broke into the Top-10 ranks of the global chip industry in the second quarter of 2007, according to iSuppli!
The list is consumed by the usual suspects, the giants -- Intel, Samsung, Texas Instruments, Toshiba, STMicroelectronics, Renesas, Hynix, NXP -- from no. 1 to no. 8, and then, Qualcomm -- the surprise entrant at no. 9, and finally, Infineon Technologies.
This leads to a question: is fabless the way ahead for the future? Maybe, there is! After all, iSuppli reports of an "Asian flu" -- read: all leading Asian semicon suppliers witnessing declines in revenues, even as Qualcomm moved up!
Here's what Future Horizons has to say in its monthly semiconductor forecast:
If May’s WSTS results were "disappointing", June's were a real proverbial kick in the pants, with 2Q07 down 2 percent on the 1Q07. Whilst we had anticipated in last month’s Report that the quarter would be down "at least 1 percent versus 1Q07", we had expected it to be closer to 1 percent, not 2. This year is turning out to be even more of a white-knuckle ride than normal, testing the industry’s vision and faith to new limits. With short-term industry momentum still refusing to rebound, all bets are still on for the second-half of the year. ASPs remain the underlying cause of the industry’s problem, given June’s IC units were up 11.8 percent on the same period last year. With first-half year units up a respectable -- and sustainable -- 7.7 percent year-on-year, the value growth limped in at only 2.6 percent, due to a 4.6 percent decline in IC ASPs.
While Qualcomm surged in the second quarter, Asian biggies such as Samsung, Toshiba, Hynix, Sony and NEC saw semiconductor revenues decline. iSuppli reported Hynix and Toshiba as taking the biggest hits among the Top-10 suppliers.
What about India then, where you often hear cries for fabs? Does everyone know what kind of investment is required for a fab? And well, do people even have an idea how long would it take for a fab to break even?
Let's try something easier! Even if India currently has close to 200mn mobile phones and is growing, how many of those chips for mobile phones are currently being made in fabs located in India? Would a fab located in India only cater to the domestic market or should it cater to the overseas market as well? How many Indian companies are making those chips and how much is it all adding to India's GDP? Most importantly, are those fabs run by home-grown Indian companies? Are there any chances?
There are several fabless companies in India, especially in Bangalore. It won't take long to find them! There has been an endless debate on fabs vs. fabless. There's a reason why India has been stronger in semicon design!
However, to move up the value chain, India is being pushed hard to join the fab community. Given the current market dynamics, it may a long while before we get to see real success, should, as and when a fab or multiple fabs come up. Success may come, but it won't be easily achieved.
The list is consumed by the usual suspects, the giants -- Intel, Samsung, Texas Instruments, Toshiba, STMicroelectronics, Renesas, Hynix, NXP -- from no. 1 to no. 8, and then, Qualcomm -- the surprise entrant at no. 9, and finally, Infineon Technologies.
This leads to a question: is fabless the way ahead for the future? Maybe, there is! After all, iSuppli reports of an "Asian flu" -- read: all leading Asian semicon suppliers witnessing declines in revenues, even as Qualcomm moved up!
Here's what Future Horizons has to say in its monthly semiconductor forecast:
If May’s WSTS results were "disappointing", June's were a real proverbial kick in the pants, with 2Q07 down 2 percent on the 1Q07. Whilst we had anticipated in last month’s Report that the quarter would be down "at least 1 percent versus 1Q07", we had expected it to be closer to 1 percent, not 2. This year is turning out to be even more of a white-knuckle ride than normal, testing the industry’s vision and faith to new limits. With short-term industry momentum still refusing to rebound, all bets are still on for the second-half of the year. ASPs remain the underlying cause of the industry’s problem, given June’s IC units were up 11.8 percent on the same period last year. With first-half year units up a respectable -- and sustainable -- 7.7 percent year-on-year, the value growth limped in at only 2.6 percent, due to a 4.6 percent decline in IC ASPs.
While Qualcomm surged in the second quarter, Asian biggies such as Samsung, Toshiba, Hynix, Sony and NEC saw semiconductor revenues decline. iSuppli reported Hynix and Toshiba as taking the biggest hits among the Top-10 suppliers.
What about India then, where you often hear cries for fabs? Does everyone know what kind of investment is required for a fab? And well, do people even have an idea how long would it take for a fab to break even?
Let's try something easier! Even if India currently has close to 200mn mobile phones and is growing, how many of those chips for mobile phones are currently being made in fabs located in India? Would a fab located in India only cater to the domestic market or should it cater to the overseas market as well? How many Indian companies are making those chips and how much is it all adding to India's GDP? Most importantly, are those fabs run by home-grown Indian companies? Are there any chances?
There are several fabless companies in India, especially in Bangalore. It won't take long to find them! There has been an endless debate on fabs vs. fabless. There's a reason why India has been stronger in semicon design!
However, to move up the value chain, India is being pushed hard to join the fab community. Given the current market dynamics, it may a long while before we get to see real success, should, as and when a fab or multiple fabs come up. Success may come, but it won't be easily achieved.
Thursday, August 23, 2007
Bangalore Nano puts Indian firmly on world nanotechnology map
India is now firmly on the global nanotechnology map, following the announcement of the first Bangalore Nano 2007 Convention, which will be held this December.
The nanotechnology industry is heralding a new world order. It has been estimated that the market will grow to over US $1 trillion by 2015. In the US, nanotechnology projects have attracted more than US$800 million in public funds making it the largest research project since the Apollo moon landing.
The European Union is also committed to ensuring a balanced approach in developing nanotechnology. Japan has been investing in nanoscience since the 1980s and is now behind only to the USA in terms of government investment. South Korea and China have revised and improved their national initiatives over the past year, and Australia and India have announced significant new national investments in nanoscience and nanotechnology.
The first ever such Convention, a two-day event on nanoscience and technology, will be held on December 6-7, in association with Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR). It would focus on the integrated roles of technologies, applications and market for the successful commercialization of nanotechnology. The theme of the event is: ‘Bridging the research-industry gap in Nanotechnology’.
My colleague, Radhika, has actually written about Bangalore Nano 2007, and I'm merely borrowing that page link from CIOL Semicon home page.
Bangalore Nano 2007 is the first major event of its kind in the country and is likely to host renowned global scientists and industry veterans in the field of nanotechnology.
C.N.R. Rao, honorary president, Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR) and the Chief Mentor of Bangalore Nano 2007, said: “Nanotechnology, which has a global business potential of nearly $1 trillion, has many valuable societal application for the unprivileged in the country, including the creation of a more efficient filtering systems for producing clean drinking water and the provision of cheap and clean energy."
This will surely be an event worth the wait
The nanotechnology industry is heralding a new world order. It has been estimated that the market will grow to over US $1 trillion by 2015. In the US, nanotechnology projects have attracted more than US$800 million in public funds making it the largest research project since the Apollo moon landing.
The European Union is also committed to ensuring a balanced approach in developing nanotechnology. Japan has been investing in nanoscience since the 1980s and is now behind only to the USA in terms of government investment. South Korea and China have revised and improved their national initiatives over the past year, and Australia and India have announced significant new national investments in nanoscience and nanotechnology.
The first ever such Convention, a two-day event on nanoscience and technology, will be held on December 6-7, in association with Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR). It would focus on the integrated roles of technologies, applications and market for the successful commercialization of nanotechnology. The theme of the event is: ‘Bridging the research-industry gap in Nanotechnology’.
My colleague, Radhika, has actually written about Bangalore Nano 2007, and I'm merely borrowing that page link from CIOL Semicon home page.
Bangalore Nano 2007 is the first major event of its kind in the country and is likely to host renowned global scientists and industry veterans in the field of nanotechnology.
C.N.R. Rao, honorary president, Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR) and the Chief Mentor of Bangalore Nano 2007, said: “Nanotechnology, which has a global business potential of nearly $1 trillion, has many valuable societal application for the unprivileged in the country, including the creation of a more efficient filtering systems for producing clean drinking water and the provision of cheap and clean energy."
This will surely be an event worth the wait
IDC's semicon predictions and top 10 vendors
Looks like a season of predictions in semiconductors. Just a few weeks back, I was looking at IC Insights' top 20 global semicon rankings by sales. And now, we have IDC's list of the top 10 vendors by revenue, along with predictions of its own. Let's look at the table.
According to IDC's table, Intel, Samsung and Texas Instruments held on to the number 1, 2 and 3 positions respectively, with TI showing the highest growth percentage in revenue among the top three leaders.
With the exception of Intel, Renesas, and NXP, all other vendors in IDC's 2006 top 10 ranking showed positive growth. Hynix grew at an amazing rate of 43 percent over the same period thanks to the company's growing position in DRAM and NAND.
Now, if we look back at IC Insights' ranking from a few weeks ago, I find some differences. First, the similarity -- The top three -- Intel, Samsung and TI, retain their positions in both tables!
However, in IC Insights' table, ST and Toshiba exchanged the next two positions, as did Hynix and TSMC, while Renesas was at no. 8! Freescale dropped from no. 9 to no. 16, while Sony, NXP and NEC gained one place each. Infineon climbed back up to no. 12, from no. 16, while Qualcomm occupied the no. 13 position, up from no. 17. AMD dropped two positions, from no. 13 to no. 15.
In IDC's table (by semicon revenue), STMicroelectronics, Toshiba, Renesas, Hynix, AMD, Freescale and NXP occupied positions 4th to 10th, respectively. IDC has made some predictions as well. These include:
Outlook for 2007
* Demand for semiconductors is centered on the big three segments: PC and mobile phone unit volume is steady, led by emerging regions and low-end products. Consumer demand is lackluster, but excess inventory has subsided and IDC expects the design momentum to lead to healthy volume growth during the holiday season.
* DRAM and NAND are experiencing much lower revenue outlook this year following the severe price correction in the first half of 2007.
* Microprocessor market remains flat this year.
Long-term trends
* Emerging regions will boost semiconductor volume growth.
* Multimedia-rich mobile phones continue to drive semiconductor content and demand for processing, memory consumption, and power management.
* Personal computing further migrates toward mobility and low-priced form factors.
* Video processing proliferates across multiple consumer electronic segments, resulting in strong growth for semiconductor suppliers.
* Semiconductor connectivity technologies drive new usage models across device segments.
* Growth in personal content implies increasing need for storage, including NAND.
By the way, IDC's Worldwide Semiconductor Market Forecaster predicts that the 2007 revenue slowdown in the worldwide semiconductor market will make way to a healthier 2008!
The worldwide semiconductor market will grow at a conservative rate of 4.8 percent in 2007, compared to 8.8 percent in 2006. IDC expects growth to resume at 8.1 percent in 2008 based on the current outlook. Interesting days ahead in semicon!
According to IDC's table, Intel, Samsung and Texas Instruments held on to the number 1, 2 and 3 positions respectively, with TI showing the highest growth percentage in revenue among the top three leaders.
With the exception of Intel, Renesas, and NXP, all other vendors in IDC's 2006 top 10 ranking showed positive growth. Hynix grew at an amazing rate of 43 percent over the same period thanks to the company's growing position in DRAM and NAND.
Now, if we look back at IC Insights' ranking from a few weeks ago, I find some differences. First, the similarity -- The top three -- Intel, Samsung and TI, retain their positions in both tables!
However, in IC Insights' table, ST and Toshiba exchanged the next two positions, as did Hynix and TSMC, while Renesas was at no. 8! Freescale dropped from no. 9 to no. 16, while Sony, NXP and NEC gained one place each. Infineon climbed back up to no. 12, from no. 16, while Qualcomm occupied the no. 13 position, up from no. 17. AMD dropped two positions, from no. 13 to no. 15.
In IDC's table (by semicon revenue), STMicroelectronics, Toshiba, Renesas, Hynix, AMD, Freescale and NXP occupied positions 4th to 10th, respectively. IDC has made some predictions as well. These include:
Outlook for 2007
* Demand for semiconductors is centered on the big three segments: PC and mobile phone unit volume is steady, led by emerging regions and low-end products. Consumer demand is lackluster, but excess inventory has subsided and IDC expects the design momentum to lead to healthy volume growth during the holiday season.
* DRAM and NAND are experiencing much lower revenue outlook this year following the severe price correction in the first half of 2007.
* Microprocessor market remains flat this year.
Long-term trends
* Emerging regions will boost semiconductor volume growth.
* Multimedia-rich mobile phones continue to drive semiconductor content and demand for processing, memory consumption, and power management.
* Personal computing further migrates toward mobility and low-priced form factors.
* Video processing proliferates across multiple consumer electronic segments, resulting in strong growth for semiconductor suppliers.
* Semiconductor connectivity technologies drive new usage models across device segments.
* Growth in personal content implies increasing need for storage, including NAND.
By the way, IDC's Worldwide Semiconductor Market Forecaster predicts that the 2007 revenue slowdown in the worldwide semiconductor market will make way to a healthier 2008!
The worldwide semiconductor market will grow at a conservative rate of 4.8 percent in 2007, compared to 8.8 percent in 2006. IDC expects growth to resume at 8.1 percent in 2008 based on the current outlook. Interesting days ahead in semicon!
Friday, August 17, 2007
Will Z-RAM lead DRAM rebound?
Most of us have and use swanky mobile phones with enough memory to store videos, songs, clips, images, etc. And we certainly love playing with those wonderful devices. However, have we ever wondered where is all that memory coming from? There's DRAM, and then, there's Z-RAM.
Another news! It was reported recently that record sales of NAND-based iPhones and iPods were using up serious flash memory. Apple's two biggest hits are likely to consume 25 percent of the global flash output! This could drive up prices of memory in the not too distant future. Now this is good news for memory makers.
Now let's start with DRAM, which just got over a very difficult first half of the year. Evidence now suggests that the market, and free-falling ASPs, turned the corner in July and will begin an upward climb resulting in increases in quarterly growth through the balance of 2007, according to IC Insights. It reports that second-half optimism can be linked to the typical back-to-school and seasonal holiday demand, but other specific reasons include:
PC shipments are forecast to increase 12 percent in 2007, with the average PC forecast to contain 1.4GB of DRAM, an increase of 75 percent over 2006, when memory per PC averaged 800MB. The average system memory per PC is expected to grow from 1.3GB in 2Q07, to 1.4GB in 3Q07 and 1.6GB in 4Q07. Some DRAM vendors believe as many as 45 percent of PCs shipped in 4Q07 will contain 2GB of DRAM, the amount required for optimal performance using the Vista OS.
Strong specialty DRAM demand driven by handsets and game consoles will also help boost DRAM demand in H2-07. The Xbox 360 (512MB GDDR3 DRAM), PlayStation 3 (256MB XDR DRAM), and the Nintendo Wii (64MB GDDR3 DRAM) -- require significant amount of memory. Meanwhile, increased DRAM content in new-generation handsets and other personal mobile products will generate more growth opportunities for DRAM suppliers. IC Insights forecasts an average 28MB of DRAM per cellular phone handset in 2007.
On the other side, a significant piece of news hit headlines recently. Hynix Semiconductor Inc. agreed to license Innovative Silicon Inc.'s (ISi), Z-RAM high-density memory intellectual property (IP) for use in its DRAM chips.
According to a release, Z-RAM-based DRAMs will use a singletransistor bitcell -- rather than a combination of transistors and capacitor elements -- representing the first fundamental DRAM bitcell change since the invention of the DRAM in the early 1970s. Hynix has received the first-mover opportunity to bring Z-RAM to the DRAM market. To ensure this advantage,the two companies have committed considerable engineering resources to work side-by-side on the program.
Z-RAM was initially developed as the world’s lowest-cost embedded memory technology for logic-based ICs such as mobile chipsets, microprocessors, networking and other consumer applications The technology was first licensed, in December 2005, by AMD for upcoming microprocessor designs. Now, the engagement with Hynix positions Z-RAM to become the lowest-cost memory technology in the greater than $30bn memory market. This is surely good news for the memory segment.
So, is supply-demand balance appears to be returning to the DRAM market in the second half of the year? And will Z-RAM lead a rebound? Time will tell!
End note: Recently, there was this power outage in Seoul, Korea, which knocked off quite a few chip production lines at Samsung. As I press this blog, I've come across the news that Samsung will likely deliver only 85 percent of promised NAND flash to its major customers. Is the pain going to extend?
Another news! It was reported recently that record sales of NAND-based iPhones and iPods were using up serious flash memory. Apple's two biggest hits are likely to consume 25 percent of the global flash output! This could drive up prices of memory in the not too distant future. Now this is good news for memory makers.
Now let's start with DRAM, which just got over a very difficult first half of the year. Evidence now suggests that the market, and free-falling ASPs, turned the corner in July and will begin an upward climb resulting in increases in quarterly growth through the balance of 2007, according to IC Insights. It reports that second-half optimism can be linked to the typical back-to-school and seasonal holiday demand, but other specific reasons include:
PC shipments are forecast to increase 12 percent in 2007, with the average PC forecast to contain 1.4GB of DRAM, an increase of 75 percent over 2006, when memory per PC averaged 800MB. The average system memory per PC is expected to grow from 1.3GB in 2Q07, to 1.4GB in 3Q07 and 1.6GB in 4Q07. Some DRAM vendors believe as many as 45 percent of PCs shipped in 4Q07 will contain 2GB of DRAM, the amount required for optimal performance using the Vista OS.
Strong specialty DRAM demand driven by handsets and game consoles will also help boost DRAM demand in H2-07. The Xbox 360 (512MB GDDR3 DRAM), PlayStation 3 (256MB XDR DRAM), and the Nintendo Wii (64MB GDDR3 DRAM) -- require significant amount of memory. Meanwhile, increased DRAM content in new-generation handsets and other personal mobile products will generate more growth opportunities for DRAM suppliers. IC Insights forecasts an average 28MB of DRAM per cellular phone handset in 2007.
On the other side, a significant piece of news hit headlines recently. Hynix Semiconductor Inc. agreed to license Innovative Silicon Inc.'s (ISi), Z-RAM high-density memory intellectual property (IP) for use in its DRAM chips.
According to a release, Z-RAM-based DRAMs will use a singletransistor bitcell -- rather than a combination of transistors and capacitor elements -- representing the first fundamental DRAM bitcell change since the invention of the DRAM in the early 1970s. Hynix has received the first-mover opportunity to bring Z-RAM to the DRAM market. To ensure this advantage,the two companies have committed considerable engineering resources to work side-by-side on the program.
Z-RAM was initially developed as the world’s lowest-cost embedded memory technology for logic-based ICs such as mobile chipsets, microprocessors, networking and other consumer applications The technology was first licensed, in December 2005, by AMD for upcoming microprocessor designs. Now, the engagement with Hynix positions Z-RAM to become the lowest-cost memory technology in the greater than $30bn memory market. This is surely good news for the memory segment.
So, is supply-demand balance appears to be returning to the DRAM market in the second half of the year? And will Z-RAM lead a rebound? Time will tell!
End note: Recently, there was this power outage in Seoul, Korea, which knocked off quite a few chip production lines at Samsung. As I press this blog, I've come across the news that Samsung will likely deliver only 85 percent of promised NAND flash to its major customers. Is the pain going to extend?
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