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What lies ahead for semis?

Posted: 05 Jan 2009     Print Version  Bookmark and Share

Keywords:semiconductor  IC-equipment  EDA  solar 

8. Abu Dhabi vs. Intel

By a major miracle in 2008, AMD was saved by the Abu Dhabi government. In 2009, Abu Dhabi will continue to pour a ton of cash into AMD. The question is who has better designs, more resources, and, more importantly, mindshare in the processor race. Easy prediction: Intel will continue to own 85-to-90 per cent of the x86-based processor business in 2009. AMD, or Abu Dhabi Inc., will see red ink. I'm not convinced that Abu Dhabi Inc.'s 45-nm processor, codenamed Shanghai, is a winner.

9. Foundry fools

That leaves me to wonder what will happen to AMD's foundry spin-off, which is named The Foundry Company. Another easy prediction: They will struggle and will eventually merge with IBM Microelectronics. AMD and IBM Micro have close technology ties.

In fact, look for more consolidation on the foundry front. Struggling Chartered appears to be looking for a partner or new buyer. Not sure if Chartered is really happy being in IBM's ''fab club.'' In 2008, Chartered and SMIC were talking about a merger. I'm sure those talks will resurface. But I see a UMC-Chartered merger as a better fit.

In 2009, I also see Samsung emerging as a foundry powerhouse, eventually pitting TSMC vs. Samsung as the leader in the arena. The rest of the leading-edge foundries, including UMC, Chartered and SMIC, must find niches and not chase after Moore's Law. It's getting too expensive to fund next-generation processes.

As for the rest, I see more consolidation, especially in China. I see SMIC making it, but scaling back its fab efforts. ASMC and Shanghai Belling will merge. Grace is a goner if it can't find a buyer. The same with He Jian. Maybe UMC will buy them. Maybe UMC already owns them. HHNEC will survive.

There are also too many analogue/mixed-signal foundries. TSMC will eventually buy Vanguard. Tower will survive, but will shut down its Jazz unit. X-Fab will buy L Foundry. Dongbu will quietly thrive.

10. Analogue ailments

For years, the analogue community has been a proud group—if not a bit smug. They have seen decent growth and been somewhat insulated from the down cycles. Not this time around! We are seeing unprecedented declines in analogue. So the first victims in the possible wave of a shakeout are the fabless guys (i.e. Analogic Technologies).

The big question is what will happen to the IDMs? I see the smaller players like Intersil looking for a buyer. Crazy prediction: Freescale CEO Rich Beyer sees the light at the end of the analogue tunnel. He (Freescale) makes a bid for his former company, Intersil. This is a make or break year for Freescale. More about that later. ADI, Linear, Maxim, and, to a lesser degree, National, will weather the storm. What about TI? I see TI going on an acquisition spree again and looking for analogue design houses. Then, eventually, TI will look at a possible tie-up with National.

11. FPGA vs. ASICs

I keeping hearing that FPGAs are running out of gas from the ASIC camp and ASICs are running out of gas in the FPGA camp. The truth is in the middle. In ASICs and FPGAs, I see a definite slowdown in scaling. Customers are pushing out the need for next-generation designs. I also wonder how Achronix, Lattice and Silicon Blue will survive the downturn. Look for Altera to buy Achronix. Xilinx will buy Silicon Blue. That leaves poor Lattice. Wild idea: How about an Actel-Lattice merger?

In ASICs, IBM Micro will scale back its efforts to few accounts. The same with TI. The big ASIC houses—NEC, Toshiba, and others—will spill more red ink. And the fabless guys—eASIC, eSilicon, Open-Silicon and others—will need to consolidate.

12. Who's on hot seat?

2009 is a make or break year for many companies. Freescale is at the top of my list. It's losing huge sums of money. It got rid of the wireless group. That's a good start, but what's next? Maybe a play for Intersil. In the distant future, I still see a mega-merger with Infineon and/or ST.

Europe's big IDMs are on the hot seat. Infineon must rid itself of Qimonda and get its house in order. I see a bailout coming for Infineon. NXP and ST are also on the hot seat. Is there an eventual merger in the works?

Renesas and NEC Electronics are on the hot seat. Can NEC Electronics weather the downturn? Look for more cutbacks and layoffs at NEC, which is still losing money. Ditto for Renesas. Customers love Renesas' solutions, but the MCU market is horrible. Will we see NEC Electronics and Toshiba merge? Or how about Renesas and Panasonic? It's interesting to think about.

Others on the hot seat: AMD, Atmel, Chartered, Cypress, Hynix, Micron, NXP, SMIC, UMC.

13. Who will not make it?

Every day, we are seeing mass layoffs and losses in the semiconductor equipment market. The question is who will survive the downturn—and who will get acquired or go under? Here's my wild predictions: Aviza (bought by Applied or TEL); Axcelis (acquired by Sumitomo); ASM Pacific (good fit for K&S?); Credence-LTX (acquired by Teradye or Verigy); Electroglas (acquired by Verigy); FSI (Applied or DNS); Mattson (maybe Applied is interested); Lam (Is TEL interested?); Nanometrics (acquired by KLA); Nova (KLA again); Novellus (Is this the year for the Lam deal?); Photronics (looking for buyer—DNP?); Tegal (will get bought by Aixtron); Ulvac (TEL to the rescue?); Yokogawa's ATE unit (good fit for Advantest).

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