Taiwan-based IC-Design Houses to see Revenues Decline 15-20% sequentially in 1Q’18 due to Rising Component Inventory Levels at Channels and High Handset Inventories at Smartphone Vendors

Taiwan-based IC-design houses are expected to see their revenues decline 15-20% sequentially in the first quarter of 2018 due to rising component inventory levels at channels as well as high handset inventories at smartphone vendors, according to sources from upstream supply chains.

The current wave of inventory adjustments began recently as most supply chain suppliers believe that the global smartphone market will become even more mature in 2018, further weakening demand in the end market, said the sources.

Vendors of LCD driver ICs and analog ICs, in particular, acknowledged that the current inventory adjustments plus the Lunar New Year holiday in February will undermine their performance for the first quarter of 2018.

IC orders from the first-tier China-based smartphone vendors including Huawei, Xiaomi Technology, Oppo and Vivo are also expected to decline significantly in the first quarter of 2018 due to off-peak seasonal demand, added the sources.

In response to weakening demand from the smartphone sector, the sources continued that Qualcomm and MediaTek both reportedly will continue to fabricate their primary smartphone solutions for 2018 based on the same process nodes they used in 2017, instead of migrating into more advanced processes.

While most of the supply chain makers are facing inventory pressure, the supply of some key components, including silicon wafers, DRAM chips, passive components, and high voltage MOSFET chips, will continue to remain tight in the near term, said the sources.

Source: www.digitimes.com

Top 10 Chip Foundry Company Revenues up 8.1% in 2017

Chart 1 gives 2017 versus 2016 revenues of the major semiconductor chip foundries.

Source: www.trendforce.com

Samsung Electro-Mechanics, Korea Circuit, Daedeok GDS and Ibiden to Mass Produce Substrate-like PCB (SLP) for Samsung Galaxy S9

Samsung Galaxy S9 and Galaxy S9 Plus will be mass-produced beginning January and be unveiled in February and launched in March.

Samsung Electronics is preparing to roll out its next strategic smartphone Galaxy S9 series. The Korean smartphone giant set parts for the Galaxy S9 and Galaxy S9 Plus and started to receive them from suppliers. The new smartphone will be mass-produced beginning January as a finished product.

Then, the new model will be unveiled in February and launched in March.

According to the smartphone industry on December 26, Samsung Electronics began ordering parts for the Galaxy S9 series. As the start of the process, the company began to roll out main boards. Samsung decided to adopt a 'substrate-like PCB (SLP),' a next-generation high density interconnected (HDI) board. 60% of total demand for boards will be filled with SLPs. Samsung Electro-Mechanics, Korea Circuit, Daedeok GDS, and Ibiden took charge of mass producing the first volume. Isu Exaboard was named as a supplier, but the company will be able to produce products in February as the company made slow progress in preparations.

SLPs standing for 'substrate like PCBs' is a combination of the 'modified semi additive process' (MSAP) used for semiconductor substrate manufacturing and HDI technology. The gist is to make microcircuits which were difficult to make with existing methods as MSAP. The purpose is to support high performance while making substrates smaller.

Samsung also began mass production of camera modules for the Galaxy S9.

According to the smartphone industry, Partron and Power Logics are rolling out front camera modules used for selfies. The front camera is composed of an iris recognition camera and a general photographing camera. The Galaxy S9 model with a small display will have an integrated camera module where an iris recognition camera and a general photographing camera are integrated.

The Galaxy S Plus model will have two separate cameras. Partron was chosen as the main vendor of the front camera for the Galaxy S9 while Power Logics will supply the main front camera for the Galaxy S9 Plus model. MCNEX and Cammsys will participate in supplying parts for the Galaxy S9 and S9 Plus models, respectively according to a dual-supplier system. Samsung Electronics divides suppliers into its primary and secondary suppliers based on their development and production capabilities to ensure stable supply of parts.

A dual camera will be loaded into the Galaxy S9 Plus model. This is the first time Samsung loads its Galaxy S series, its flagship smartphone with a dual camera. However, the Galaxy S9 model, like the previous one, will have a single camera. This means that Samsung made the decision after taking into consideration the Galaxy S9's differences with the Galaxy S9 Plus, unit price, and so on.

Samsung Electronics will take the wrap off the Galaxy S9 series in Barcelona, Spain in late February 2018, and launch it in early March. It is expected that Samsung will produce finished products of the Galaxy S9 for about two months from January and release it worldwide at the same time.

Source: businesskorea.co.kr

Yageo Not Accepting New Orders for Thick Film Chip Resistors from Channel Operators due to Tight Capacity

Passive component supplier Yageo has decided to not accept new orders for thick film chip resistors from channel operators effective immediately due to tight capacity, according to company sources.

While there is no timetable as to when it will resume taking new orders, the sources said the suspension will not affect orders from its international clients.

Commodity passive components, including MLCCs and chip resistors, currently account for 70% of Yageo's total production capacity, said the sources, adding that the company will not further expand its capacity for commodity components although there are shortfalls of these products currently in the market.

Yageo is utilizing the remaining 30% capacity for the manufacture of niche-type components for automotive, IoT, 5G and other industry uses, which yield higher gross margins and consequentially boost overall performance.

As a result, the company will expand its production capacity for niche-market products by 10-15% in 2018, revealed the sources. Niche-type components for automotive applications currently account for 5-10% of Yageo's total sales with the automobile market in North America and China being the major outlets.

Yageo currently has a production capacity of 90 billion units of passive components a month, accounting for 30% of global market share.

Source: www.digitimes.com

NAND Flash Memory Demand to Increase 25 times if Level 4 Smart Car Penetration reaches 1% by 2020 – Applied Materials VP

Data is like crude oil in new tech era, says Applied Materials VP Erix Yu.

After progressing from the PC and network generation in 2000-2010 to the mobile device and social networking generation during 2010-2020, the ever-advancing tech development will enter a new generation of AI (artificial intelligence) and big data from 2020 on, with economic benefits generated by AI and data applications to grow exponentially, according to Erix Yu, group vice president of Applied Materials and president of Applied Materials Taiwan.

Yu, while speaking to Digitimes in a recent interview, likened data to crude oil. He said data must undergo further processing before they can be utilized to generate tremendous economic values regardless of the sources they are collected from, just like underground oil that has to be exploited, extracted and refined into fuel oil or plastic materials to generate huge rewards.

In the past, semiconductor technologies, as well as hardware and software support, could not handle massive data processing and computing. But constant semiconductor technological advancements have now enabled storage of massive data and boosted computing performance, helping realize previously unachievable concepts.

Such advancements will enable AI, big data and even VR/AR applications to become the next wave of growth drivers, which will combine to bring drastic changes to human life and subvert the development of industries, Yu indicated.

In return, semiconductor technologies will also get a significant boost along with the advent of the AI and big data era, Yu said, reasoning that tremendous demand for data storage will drive rapid growth of the NAND flash market and AI computing will enable the wafer foundry market to sustain significant growth momentum.

Five major growth drivers

Yu disclosed that Applied Materials has identified five major business growth drivers in the AI and big data era.

  • First, demand for 3D NAND memory chips for data storage will increase sharply.
  • Second, AI and high-performance computing (HPC) chips will drive the growth of the wafer foundry sector.
  • Third, patterning technology and material engineering will play an important role in securing semiconductor process development going in line with Moore's Law.
  • Fourth, advanced display technology will lead to growing adoption of OLED panels for small-size mobile devices, while the increasing popularity of large-size TVs will power the development of 10.5G TFT-LCD panels.
  • Fifth, China is fully gearing up to establish new panel and semiconductor fabs, which will greatly fuel related investments.

All these have also been serving to support important developments of Applied Materials in recent years, Yu disclosed.

AI technologies and applications are expected to thoroughly alter the industrial and commercial sectors in the coming years, mainly driven by visual computing and AI, including AR/VR, machine learning, autonomous vehicles, big data, IoT and personalized medicine, according to Yu.

In addition, the semiconductor equipment market is expected to see sustained growth in the coming years, as capital expense intensity will increase along with the growing complexity of chip design and fabrication. For instance, Yu said, in terms of NAND production, advancing from 2D planar NAND to 3D 64-layer NAND will require a 60% increase in equipment investment, compared to a corresponding 40% increase for advancing DRAM production to 14-16nm from 25nm. For wafer foundry, making advanced 7nm chips is twice as expensive as making 28nm chips, and the smaller the nm size, the more challenging and expensive the development.

The same situation is also seen in investment in display panel production equipment. For the same 6G plant, the cost will shoot up 425% if the plant is turned into production of OLED panels from LCD.

Exploring immense business opportunities.

In other words, investment required for developing advanced technologies will be much higher than before. Nevertheless, tech players are still keen on spending, mainly because of the immense business opportunities associated with the application of unimaginably huge data to either IoT or Industry 4.0 operations in the new era of AI and big data, Yu explained.

Citing an example to support his explanation, Yu said that a smart city with a population of one million will generate up to 200 million GB in daily data volume by 2020, including data collected from smart buildings, smart plants, public safety, smart cars, smart airplanes and social networks, among others. How to collect and process these data and where to store them involve extremely huge business opportunities, Yu stressed.

He went on to say that 25 times more of NAND flash memory, compared with the current output, would be demanded if the penetration of Level 4 smart cars reaches 1% by 2020, as the data generation and the requirement to compute and store those data will be incredible under those circumstances, with the daily volume of data to be generated by each car estimated to reach 4TB.

But no companies can afford the huge expenses on building 25 times more NAND flash fabs, and the best alternative is to improve fabrication process to meet demand for future production capacity, Yu opined, adding that innovative computing solutions are badly needed to support the process improvement.

Meanwhile, big data will bring more innovations into cloud and terminal devices, and material engineering innovations will play a crucial role in this aspect. Yu indicated that data will become new oil in the AI era, but this barrel of oil must integrate accurate and brand-new computing solutions before turning into a barrel of gold.

He concluded that as semiconductor process is advancing to 7nm, Applied Materials is ready to apply its cobalt material evolutions to help significantly refine metal deposition process, making it possible to achieve high-performance computing at low power consumption in the future.

Global Tablet Shipments expected to have reached 37.19 million units in 4Q’17

Global tablet shipments are expected to reach 37.19 million units in fourth-quarter 2017, up from 36.05 million units for 3Q’17.

Source: www.digitimes.com

Top 10 PCB Manufacturers in India

After the government of India decided to hike the Basic Customs Duty on several electronic items and components, the electronic industry of India applauded the move. The Indian electronics industry believes that by discouraging imports of electronic items, local manufacturers can be provided with a breeding ground to produce electronic items that are competitive on the global stage.

Rajoo Goel, General Secretary of ELCINA (Electronic Industries Association of India) told ELE Times that the increase in BCD was a welcome move. However, he drew our attention to a rather compelling proposition. Goel called the government to subject populated PCB's (Printed Circuit Boards) imported from overseas to the same BCD as other electronic items. If the government does listen to Goel's recommendation, it would mean that Indian manufacturers of PCB's will heave a sigh of relief.

Genus Electrotech Ltd.

Genus Electrotech is one of the leading PCB manufacturers in India with more than 150 high turnover distributors. Its products are available with more than 4000 distributors. The company boasts of total backward integration from PCB's to EPS manufacturing of all types of products. Its state of the art PCB manufacturing plant encompasses an area of about 72000 square meters.

Ascent Circuits Pvt. Ltd.

The company had net revenue of more than USD 1000 a few years back. Ascent Circuits deals in the manufacture of both single and double/multi-layer PCB's. In fact, the firm is equipped with a cutting edge reverse pulse plating line that can see over the manufacturing of about 7,000,000 sq. m of PCB's. Ascent Circuits is also one of the leading exporters of PCB's, with more than 50% of its produce shipped to the US.

Circuit Systems India Ltd.

Circuit Systems is not only a manufacturer of PCB's but also a holistic solutions provider to its clients. So, the company deals with the complete supply chain of PCB's. The company can see through more than hundred orders in a day. Its headquarters are in Gandhinagar, Gujarat.

AT&S India Pvt. Ltd.

Its parent company, AT&S AG is one of the most prominent PCB manufacturers in the world. And AT&S India has brought the expertise of its parent company with itself to the subcontinent. AT&S India is involved in the production of high volume PCB's mostly for automobile manufacturers. Due to the scale of the company on the global stage, AT&S India is home to some of the most sophisticated machinery and assembly lines for manufacturing PCB's. Apart from India, the company has its stations in five countries around the globe.

Shogini Technoarts Pvt. Ltd.

The company's headquarters in Pune is spread across a vast 33,000 sq. m. As a result, Shogini Technoarts is capable of manufacturing PCB's starting from single-sided up to those with eight layers. Apart from the manufacture of traditional PCB's, the firm also engages in the production of metal clad PCB's for automotive and lighting applications. Since 1979, when the company was established, Shogini Technoarts has firmly made its place among the top PCB manufacturers in India.

CIPSA-TEC India Pvt. Ltd.

This Indian PCB Manufacturer has the backing of some top PCB companies from Italy and Spain. Naturally, the company is one of the biggest names in the PCB industry. Currently, CIPSA-TEC has the capacity to manufacture more than 10,000 sq. m of PCB's every month. The company started back in 1987, and its headquarter in Karnataka is spread across 62,000 sq. m.

Epitome Components Ltd.

As the name suggests, the company is the epitome and very much the benchmark of PCB manufacturing in India. Its annual revenue of more than USD 1000 million supports the fact aptly. Epitome Components began humbly by producing single layered PCB's in 1997. But today, the company can produce every kind of PCB including single, double and multi-layered variants.

Anand Electronics

For more than three decades, Anand Electronics has been manufacturing reliable PCB's for its customers. The company has overseas partners that assist it in manufacturing top class printed circuit boards. Anand electronics can manufacture PCB's with up to 24 layers. The company today produces PCB's for a wide variety of clients.

Meena Circuits Pvt. Ltd.

Meena Circuit has a tie-up with US-based Amitron Corporation. As a result, the company has access to the most sophisticated technologies used in the manufacturing of PCB's. Despite being the youngest company on this list, Meena Circuits has been successful in cementing its place as one of the top PCB manufacturers in India.

Fine-Line Circuits Ltd.

Fine-Line Circuits is a unique Indian PCB manufacturer in that it manufactures PCB's entirely for export purposes. The company has several clients in the UK, US, Germany, and Switzerland among other countries. Established in 1991, Fine-Line Circuits has quickly become one of the top PCB manufacturers in India.

Source: ELE Times

Walt D. Custer

Walt Custer

Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.

Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.

He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.

View other posts from Walt D. Custer. View other posts from Walt D. Custer.
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