NEWS & TECHNOLOGY PROCESSES
TSMC takes market from Samsung, GloFo, but Covid-19 impact to come
By Peter Clarke Foundry revenues are up 30 percent year-on-year in the
first quarter of 2020 but the Covid-19 pandemic could
hinder future market demand, according to TrendForce.
The biggest success in the top ten foundries was market
leader TSMC which continued to take market share from its
closest competitors Samsung and Globalfoundries.
Other successful companies
included Powerchip Semiconductor
Manufacturing Corp. (PSMC) and United
Microelectronics Corp. both also of Hsinchu
in Taiwan.
TrendForce reckons the foundry industry
overall benefited from clients stockpiling
chips. Poor performers year-on-year
included Tower Semiconductor Ltd. and
Hua Hong.
Now the whole of the foundry market
will face a challenge, as the Covid-19
pandemic has caused a reduction in the
demand for end products. The impact on
foundries is expected to come in 2Q20,
the market research firm said.
TrendForce said that strong demand for TSMC’s 7nm manufacturing
Ranking of top ten foundry suppliers by
estimated revenue for 1Q20 in millions of
dollars. Source: TrendForce.
process will keep production full utilized even after
slow down in orders. Even at 12nm/16nm TrendForce expects
TSMC to maintain about 90 percent level of 12/16nm capacity
utilization going forward. On the other hand, TSMC’s production
capacities of mature process nodes and special technology
are currently fulfilling the demands for 5G, IoT, and automotive
products, which contribute to its steady revenue stream.
Samsung is attempting to raise revenue from 8nm extreme
ultraviolet process technology but domestic market demand is
likely to fall due to the coronavirus pandemic. This is projected
to affect Samsung’s 1Q20 revenue.
Globalfoundries divestment of its Singapore
fab to VIS is expected to have a
direct impact on its 1Q20 revenue. Meanwhile
UMC is expected to see quarterly
gains in its capacity utilization rate, in turn
registering a minor QoQ increase in 1Q20
revenue due to gains in capacity utilization
rate and new clients for its Japanese
wafer fab.
SMIC is benefitting from increasing demand
in the domestic Chinese market for
CMOS image sensors, power management
ICs, fingerprint sensors, TrendForce
said.
PSMC and VIS both profited from the
increased demand for CMOS image senses
and display driver ICSs and from clients’ increased stocking.
VIS’ revenues will include those generated from its Singaporebased
Fab 3E, purchased from GlobalFoundries.
However, as the pandemic rolls across Europe and the
United States it will dent the economy and diminish the global
market’s purchasing and this is expected to be impact 2Q20.
Intel, Micron update phase-change memory agreement
IBy Peter Clarke ntel and Micron have renegotiated
their 3D Xpoint
non-volatile memory manufacturing
agreement, although
one analyst has speculated it is a
loss-making proposition for both
companies at present.
Both Intel and Micron are producing
solid-state drives (SSDs)
based on 3D XPoint chips, chips
that are believed to be an embodiment of chalcogenide phasechange
memory technology.
Disclosure of the update was made by way of filing to the
Securities & Exchange Commission by Micron on March 12. The
two companies announced in July 2018 that would work independently
after completing development of a second generation
of 3D XPoint. That development was meant to conclude in 2019.
Having ended both its NAND flash and 3D XPoint partnerships
with Micron Intel sold its stake in the Intel-Micron Flash Technology
wafer fab in Lehi, Utah, to Micron. But Intel has yet to start its own
production of 3D XPoint chips and so had a product supply agreement
with Micron with pre-agreed prices.
Intel’s reluctance to turn on its own non-volatile memory production
is likely to be the main reason for continued engagement
between Intel and Micron but that is also related to the cost of producing
3D-Xpoint chips. Back in October 2019 analyst Jim Handy
observed that Micron had been writing off $100 million in expenses
for each of the previous four quarters stemming from
under-utilization of 3D Xpoint production. That write off
was set to rise to $150 million in 4Q19, Handy said.
Similarly Intel’s Non-Volatile Solutions Group (NSG)
was loss-making or marginally profitable for several
previous quarters while other flash memory makers
were highly profitable. This suggested to Handy that
profits Intel was making on flash memory were being
offset by losses on 3D XPoint. Handy was reported
saying more recently: “By my estimate Intel lost about
$2 billion on 3D XPoint in each of 2017 and 2018, and $1.5 billion
in 2019.” The Micron 8K filing effectively updated the product
supply agreement between it and Intel. The filling said: “On March
9, 2020, Micron Technology Inc. (“Micron”) and Intel Corporation
(“Intel”) agreed to terminate, effective March 6, 2020, the Product
Supply Agreement, dated April 6, 2012, among Micron, Intel, and
Micron Semiconductor Asia Pte. Ltd. (the “PSA”). The PSA set
forth the terms under which Micron agreed to supply 3D XPoint
wafers to Intel at prices determined under a defined formula and in
accordance with a negotiated forecast. Contemporaneous with the
PSA’s termination, Micron and Intel entered into a new 3D XPoint
wafer supply agreement with changes to pricing and forecast
terms. The new agreement is not material to Micron and does not
change Micron’s previously-communicated outlook that under-utilization
charges associated with Micron’s Lehi, Utah fab will average
approximately $150 million on a quarterly basis in fiscal year 2020.
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