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KEY TAKEAWAY

From the Asian arena Intel to move 3D NAND production in China, Applied Materials – A*STAR joint lab in Singapore, Infineon expanding in China, Intel pushing its Galileo kit for IoT application

Mergers & Acquisitions Lam Research (KLA-Tencor), Western Digital (SanDisk), Sony (Toshiba’s sensor biz), Softkinetic Systems), ARM (Carbon), ON Semiconductor (AXSEM AG), Skyworks (PMC-Sierra), Verisilicon (Vivante)

November 2015 issue

Hi, The past month saw more of M&A.

After the Applied Materials and Tokyo Electron M&A fell through, the next piece of action has happened on the equipment maker space - LAM Research acquires KLA-Tencor, with the combined entity commanding a 42% market share of the wafer fab equipment market share.

Another deal was the SanDisk acquisition by Western Digital. The deal value is conditioned on the completion of an investment by China based Unisplendour (a unit of China’s state backed Tsinghua Holdings) in Western Digital.

Have a good read.

Warm Regards Meenu

Local Asia Pacific News

Industry Headlines

Financial Watch

Mergers & Acquisitions, Joint Ventures, Spin-offs

Market Outlook

Views & Opinions

Stock Watch

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INDEX

Intel inks $5.5bn deal to move 3D NAND production into China Source: Chris Mellor, The Register – 22nd October 2015 Intel has dropped a flash bombshell by announcing it's going to make 3D NAND chips in China, implying it will add 3D XPoint chips to the mix later and raising doubts about its Micron partnership. Applied Materials and A*STAR announce new R&D joint lab in Singapore for advanced semiconductor technology Source: Applied Materials – 22nd October 2015 A*STAR's Institute of Microelectronics (IME), Institute of Materials Research and Engineering (IMRE), and Institute of High Performance Computing (IHPC) will contribute to research in low-defect processing, ultra-thin film materials, materials analysis and characterization, and modelling and simulation in many areas. The intention is for products developed by the joint lab to be manufactured by Applied Materials in Singapore. Shanghai opens incubator for More-than-Moore devices Source: EET Asia – 20th October 2015 The Shanghai Industrial Technology Research Institute (SITRI) opened a hardware accelerator in Silicon Valley to drive "More-than-Moore" innovations. AMD drops test, assembly business Source: EET Asia – 19th October 2015 AMD has announced that it sold a majority stake in its test, assembly and packaging facilities in Asia as part of a joint venture with China's Nantong Fujitsu Microelectronics Co. Ltd (NFME). It will retain a 15 per cent ownership in its test and assembly facilities in Penang, Malaysia and Suzhou, China. The 1,700 AMD employees at those facilities will be transferred to the joint venture. Back to Index

Local Asia Pacific News

Intel to set up 100 centers to push IoT adoption in India Source: EET India – 12th October 2015 These centers will receive Galileo boards and RealSense kits to help students, educators and electronics enthusiasts build product prototypes and software. The tech giant aims to push IoT adoption in the country and deploy one trillion connected devices by 2025. Infineon to expand its investment in Wuxi unit Source: Fan Feifei, China Daily – 10th October 2015 Infineon has revealed plans to build a second factory in Wuxi, Jiangsu province, at a cost of nearly $300 million to accelerate its smart-manufacturing capability in China. Cadence sets up R&D facility in Pune Source: EET India – 7th October 2015 Two years ago, Cadence acquired Tensilica, which put up an R&D facility in Pune in 2006. Back to Index

Local Asia Pacific News

12-DOF smart sensor platform enables gesture recognition Source: EET Asia – 21st October 2015 The platform combines Dialog's DA14580 Bluetooth Smart SoC with three low power sensors from Bosch Sensortec: the BMM150 for 3-axis geo-magnetic field measurement, the BME280 pressure, humidity and temperature sensor, and the 6-axis BMI160 (a combination of a 3-axis accelerometer and 3-axis gyroscope in one chip). The resulting unit, built onto a 14mm x 14mm PCB, consumes less than 500µA from a 3V coin cell when updating and transferring all 12 x 16bits of data wirelessly to a smartphone. Semiconductor industry competes to commercialize 10nm class DRAM Source: Cho Jin-young, Business Korea – 13th October 2015-10-28 Three major DRAM makers – Samsung Electronics, SK Hynix, and Micron Technology – are expected to mass-produce 18 nm DRAM starting next year. After 18 nm DRAM, which is thought to be the ultimate limit for micro-processing DRAM, Samsung Electronics and SK Hynix are planning to introduce extreme ultra violet (EUV) exposure equipment made by ASML and to improve the production process of DRAM step by step, like from mid-10 nm class to early 10 nm class, by 2020 Back to Index

Industry Headlines

Financial Watch

Samsung Electronics unveils $9.99 billion buyback Source: Se Young Lee, Reuters – 29th October 2015 Samsung unveiled a 11.3 trillion won ($9.9 billion) share buyback after reporting its first on-year profit growth in two years thanks to strong component sales, pushing its shares sharply higher. It said it would cancel all shares purchased through the buyback, its biggest to date, and planned to give shareholders 30 percent to 50 percent of its free cash flow over the next three years, primarily through dividends. North American semiconductor equipment industry posts September 2015 book-to-bill ratio of 1.07 Source: Reiji Murai, Reuters – 24th October 2015 SEMI reports that the three-month average of worldwide bookings in September 2015 was $1.60 billion. The bookings figure is 4.1 percent lower than the final August 2015 level of $1.67 billion, and is 35.1 percent higher than the September 2014 order level of $1.19 billion. SK Hynix to cut investment in memory chips Source: Kim Yoo-chul, The Korea Times The world's No. 2 memory chipmaker, confirmed its plan to cut investment at chip facilities next year as part of its strategy to respond to an uncertain business outlook. SK Hynix has invested 5.3 trillion won so far, and reported that it spent most of this for the construction of the M14-manufacturing line in Icheon. The company has no plans to build any more new facilities any time soon. TSMC cuts 2015 capex by over 20 pct on weak global demand Source: J.R. Wu, Reuters – 15th October 2015 TSMC said its capex for this year would total about $8 billion, down from the $10.5 billion to $11 billion estimate it made in April. The capex forecast would be the lowest since 2011. Back to Index

Financial Watch

TSMC revenue rise 3.4% to meet forecast Source: Lisa Wang, Taipei Times – 9th October 2015 The company’s third-quarter revenue reached NT$212.5 billion (US$6.47 billion), up 3.44 percent from the second quarter and matching the firm’s forecast of between NT$211 billion and NT$213 billion. The rise came thanks partly to a weak NT dollar, and despite inventory adjustments, to be resolved this quarter. Samsung Electronics tips better than expected third quarter profit, shares surge Source: Se Young Lee, Reuters – 7th October 2015 Samsung Electronics estimated July-September operating profit would leap 80 percent from a year earlier to 7.3 trillion won ($6.3 billion), higher than a 6.7 trillion won profit Back to Index

Mergers & Acquisitions, Joint Ventures, Spin-offs

Toshiba to sell sensor business to Sony for around $165 million Source: Reiji Murai, Reuters – 24th October 2015 Image sensors, which are used in digital cameras and smartphones, are part of Toshiba's system LSI semiconductor business. Toshiba plans to sell its image sensor manufacturing plant in Oita, southern Japan, and pull out of the sensor business altogether Western Digital to buy SanDisk in $19 billion deal Source: Devika Krishna Kumar and Abhirup Roy – 21st October 2015 Hard-disk drive maker Western Digital agreed to buy SanDisk in a $19 billion deal that will increase its ability to make flash memory storage chips used in smartphones and tablets. Lam Research buys KLA-Tencor for $10.6 billion Source: Pete Carey, Siliconbeat – 21st October 2015 The two Silicon Valley semiconductor process equipment makers are combining at a time when mergers and acquisitions are reshaping the entire industry ARM acquires virtual prototyping outfit Carbon to boost SoC production Source: Carly Page, The Inquirer – 20th October 2015 ARM has scooped up the product portfolio and other business assets of Carbon Design Systems, a supplier of cycle-accurate virtual prototyping solutions. AXSEM AG is now a part of ON Semiconductor Source: Design & Reuse – 20th October 2015 AXSEM portfolio enables worldwide wireless connectivity and supports advanced functionality in the Internet of Things (IoT), automatic meter reading, home automation, sensor networks and satellite communication markets. Back to Index

Mergers & Acquisitions, Joint Ventures, Spin-offs

VeriSilicon to acquire Vivante in all-stock transaction Source: Business Wire – 12th October 2015 With the addition of Vivante’s leading GPU and vision image processing solutions, VeriSilicon continues to build out its Silicon Platform as a Service (SiPaaSTM) offering Sony acquires Belgian innovator of range image sensor technology, Softkinetic Systems Source: Sony – 8th October 2015 With this acquisition, Softkinetic - which possesses time-of-flight ("ToF") range image sensor technology, as well as related systems and software - has become a wholly-owned subsidiary of Sony. Skyworks to acquire PMC-Sierra Source: Pete Carey/Silicon Beat – 6th October 2015 PMC employs about 1,440 and designs and markets high-speed semiconductor networking chips. Sony to spin off image sensor business Source: Sam Byford, The Verge – 6th October 2015 The devices segment is mainly comprised of Sony's storage, battery, and semiconductor businesses, but the latter of those — which is primarily focused on image sensors — is being spun off into a new company called Sony Semiconductor Solutions. Back to Index

Market Outlook

ASE predicts slow fourth quarter Source: Lisa Wang, Taipei Times – 30th October 2015 To cope with sagging demand, ASE said it plans to reduce its capital spending by 18.75 percent to about US$650 million this year from the US$800 million it had previously planned. Price erosion in sensors, volatility in discrete slows total O-S-D growth Source: IC Insights – 28th October 2015 Combined revenues for O-S-D products are expected to grow 3% in 2015 to a new record-high $66.4 billion from the current peak of $64.4 billion set in 2014, when sales increased by 9% Emerging 802/.11ah low power Wi-Fi standard to face difficult path to adoption in crowded IoT connectivity space Source: ABI Research – 21st October 2015 As per ABI Research, annual IC shipments are set to reach just 11 million units by 2020, four years after the appearance of the first chipsets expected in 2016. TSMC: Fabless inventory may be back to seasonal level in this year Source: Korbin Lan, CTimes– 20th October 2015 Under the influence of the excessive inventory, TSMC lowered the global semiconductor growth rate forecast to 0%.. Although the 2015 global semiconductor market outlook is not optimistic, TSMC today announced double-digit revenue growth at approximately 11%-12%.

Back to Index

Views & Opinions

Executive Insight: Lip-Bu Tan Source: Ed Sperling, Semiconductor Engineering – 1st October 2015 Lip-Bu Tan, president and CEO of Cadence, sat down with Semiconductor Engineering to talk about consolidation, Moore’s Law, and where the opportunities are in the IoT and automotive markets. Back to Index

Stock Watch

Source: NASDAQ

1 month chart for Intel, TSMC, TI, Broadcom, STM, Xilinx, KLA-Tencor, Qualcomm, Avago, UMC, Applied Materials, Teradyne

INTEL TI

TSMC

BROADCOM STMICROELECTRONICS XILINX

KLA_TENCOR QUALCOMM

AVAGO

UMC APPLIED MATERIALS TERADYNE

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