Evolution of wireless market and emerging trends: Qualcomm

Matt Grob, SVP, corporate R&D, Qualcomm.

At the ISA CXO Conclave, Matt Grob, SVP, corporate R&D, Qualcomm, said that the company is a world leader in next-generation mobile technologies. It is celebrating 25 years of driving the evolution of wireless communications. It is making wireless more personal, affordable and accessible to people everywhere. Qualcomm is also the world’s largest fabless semiconductor company, #1 in wireless, and #9 in semiconductors.

Qualcomm’s unique business model is to be a technology enabler for the entire mobile value chain. It has continued strategic R&D investments, totalling more than $15.4 billion in 2010.

Industry trends
The 2G to 3G migration is currently taking place, with over 3.1 billion 3G subscriptions likely in 2015.  As for the emerging region growth, China leads with 640 percent, followed by Latin America at 465 percent and India at 168 percent, respectively.

Qualcomm is also said to be enabling the mobile broadband in India with 3G and LTE. Besides growing the LTE TDD ecosystem in region, it is building partnerships for long-term strategy and establishing 3G/LTE as best technology path for operators. Qualcomm is also driving the device evolution and growing the market by creating more choices for operators and consumers. It is developing low-cost 3G handsets for emerging markets using 1+ GHz mobile processors and supporting multiple popular OS.

The smartphone industry momentum has ensured that the ecosystem is benefitting from and driving growth. There has been as much as >25 percent YoY data revenue growth from leading operators. OEMs have launched 100+ new smartphones in the first half of CY 2010. The total mobile apps downloads from developers is likely to move up from 7 billion in 2009 to 50 billion by 2012.

March’s 'one-two-three' calamity! What now for chip industry?

This is a summary by Malcolm Penn, chairman and CEO, Future Horizons. For those who wish to know more, please get in touch with me or Future Horizons.

 

Malcolm Penn, Future Horizons.

It was all going so well at the beginning of March when January’s WSTS results were released. The oil and North African issues were being taken in their stride. Then, less than two weeks later, the earthquake and tsunami disaster struck Japan and by the close of the month, the Gaddafi Libyan regime was under western international airstrike siege.

Given the fragility of industry’s confidence since the Lehman Brothers crisis, the industry has weathered these ‘incidents’ with remarkable sanguinity, with concerns focused purely on supply not demand-side issues. In our view this underlines what we have been saying all along; the 2010 recovery and 2011 outlook were both stronger than most people thought.

The industry’s biggest problems in 2011 were always going to be supply not demand driven; the situation in Japan has simply amplified and accelerated their coming.

The chip industry took March’s one-two-three knocks with remarkable calm, hit first by the spike in oil prices following the politic unrest bordering on civil wars in North Africa, then the dreadful 11 March earthquake and Tsunami in Japan, culminating on 19 March with a multi-state coalition military intervention in Libya to implement United Nations Security Council Resolution 1973.

Last year, any of these events would probably have been enough to deal the industry a knockout blow, as with the September 2008 Lehman Brothers collapse; this time around, despite the still fragile global economic confidence, the industry seems to have taken these events in its stride.

Whilst it is far too early to quantify exactly what the industry impact will be, the oil price and North Africa situation pales into insignificance when compared with the aftermath of the earthquake and tsunami. Japan is too important a cog in the global electronics industry for its impact not to have serious global repercussions. It has also brought to a head the far deeper industry problems that we have long warned of – man-made in the corporate boardrooms – that could (should) have been avoided.

In this aspect, Japan’s disasters do have parallels with the Lehman Brothers collapse and its impact of worldwide finance; we hope that the current disruption to manufacturing worldwide from will force a rethink of how the world manages production.

Aftermath of Japanese earthquake: Implications for global electronics industry!

This is a commentary on industry trends from Malcolm Penn, chairman and CEO, Future Horizons.

Importance of Japan
Japan is a major producer of semiconductor components accounting for around 22 percent of global semiconductor production. The Flash memory market sector – crucially mobile phones, iPads and their derivatives, digital cameras, and portable storage devices, account for approximately 50 percent of the market, almost all of which are produced by one Japanese firm, Toshiba/Sandisk.

Several of Japan’s major semiconductor companies locate their manufacturing spots in the northeast prefectures, for example Toshiba’s 8-inch wafer fab in lwate, Renesas Electronics’ factories in Aomori, Hoddaido and Yamagata, Elpedia Memory’s backend manufacturing facility in Akita and Fujitsu’s plants in Fukushima.

The effects of the devastating earthquake, which hit Japan on Friday 11th March, are already beginning to take hold on the global electronics industry. Damaged buildings and infrastructure and halts to some semiconductor fabs will without doubt have a knock on affect upon the global semiconductor supply chain, with many of the big names, i.e., Nokia, General Motors and Apple already experiencing supply shortages.

Many manufacturers, not directly hit by the earthquake, have experienced power failures interrupting production; just a microsecond power supply glitch can result in the scrapping of weeks of in-process production, and with manufacturers no longer holding inventory it will impact IC supply availability in Q2. To what extent, still remains to be seen. The impact will be felt both in the long and short term, affecting not only the semiconductor supply chain but nearly every other industry imaginable, as it is very rare these days to find an industry which is not reliant on chips.

Component prices
As in any shortage situation, component price increases are inevitable and this has already happened in memory, although it is not yet clear how much of this is panic profiteering and how much is sustainable. But shortages are inevitable and recovery due to the long production cycle times and already tight capacity – will not happen over night.

Automakers
The automotive semiconductor market grew 37 percent in 2010, clearly leaving the problematic 2009 behind. However the recent earthquake in Japan has once again awoken auto manufacturers concerns about the industry. Even before the earthquake purchasing managers had expressed concern about supply levels; inventories were unusually low, resulting in heightened concern from purchasing executives around the world.

It is difficult to estimate the extent auto manufacturers will be affected, but following an official announcement from Japan that car production will be down 33 percent from its normal monthly production level of 750k cars per month to 500k it looks as though the 2010 market growth may be short lived.

Toyota Motor Co, the worlds largest auto manufacturer, said all 12 Japanese assembly plants would remain closed until at least 26th March and it was not sure when they would re-open. Production lost between 14-26 March would be about 140,000 units.

Disruptions to global electronics supply chain following Japan's quake!

The IHS iSuppli held a seminar to discuss “How Big of a Threat to the Global Recovery and Key Industries Is the Disaster in Japan and the Turmoil in the Middle East and North Africa?”.

One of the participants, Dale Ford, senior VP, IHS iSuppli, presented on the “Disruptions to the electronics supply chain”, following Japan’s quake, where he pointed out that those companies close to the epicenter of the earthquake would need as much as four to six months to return to normalcy!

Ford listed equipment and building damage, infrastructure damage, electricity, water and roads, as well as workforce disruption, and safety, food and gas as the areas mainly impacted.

The time for full shipment restoration ranges from one to two months, on to four to six months for the areas impacted most, especially, equipment and building damage.

Now, it is well known that Japan plays a major role in the global electronics supply chain. Japan offers 20.8 percent of global production. It supplies 60 percent of the worldwide silicon wafers. Its TFT LCD panel capacity equals 12 percent of the world supply. It is also said to be a leader in battery technology and production.

The key component and material production facilities currently closed in Japan include:

Silicon production
a) Kamisu, Ibaraki, Shin-Etsu
b) Nishigo, Fukushima, Shin-Etsu
c) Utsunomiya, Tochigi, MEMC
d) Yonezawa, Yamagata, SUMCO

Display manufacturing
a) Hitachi Displays
b) Panasonic LCD
c) Tohoku Pioneer

Semiconductors
a) Aizu Wakamatsu, Fukushima
On Semiconductor (Logic)
Fujitsu (Analog, Discrete, Memory)
Texas Instruments (Analog, Optical)

b) Atsugi, Kanagawa
Mitsumi (Analog, Logic)

c) Goshogawara, Aomori
Renesas Electronics (Logic)

Maxim well positioned for future success!

A view of Maxim's Analyst Day 2011.

According to Tunç Doluca, CEO, Maxim Integrated Products, the analog market is changing. Maxim is the analog integration pioneer. Integration accelerating in growth markets. The company has been executing its strategy via innovation, integration and balance. It is well positioned for success in the future. Doluca was speaking at the Analyst Day 2011 event held recently.

Speaking about the evolution of analog, Doluca touched upon analog integration, system solution and building blocks. Six areas act as market growth drivers — automotive electronics, HD video infrastructure, energy, mobility, security and healtcare.

Key market trends in automotive electronics include electronic content increasing, infotainment now becoming standard, and hybrid and electric vehicles. Maxim’s product investments include lighting and body electronics, infotainment solutions, automotive connectivity and battery management. The analog TAM is said to be $10 billion as per IC Insights. Automotive electronics is likely to grow at 9.2 percent CAGR through 2014, according to DQ 2010.

Key trends in HD infrastructure include infrastructure for HD video, smart TVs – Skype TV, and wireless HD in the home. Maxim’s product investments include the optical transceivers, video SoCs including so]ware and wireless HD 1080p chipset. The Internet traffic is likely to grow 13x times from 2006 to 2014.

Key trends in energy include energy measurement everywhere, which requires communication. Maxim’s product investments include energy metering and measuring, smart grid communications and low-power product focus. As per Frost & Sullivan, 2011 should see 116 million meter installations.

Key trends in mobile devices include richer features and smaller devices, emergence of tablets and touchscreen displays. Maxim’s product investments include Power SoC — analog integration, sensing — proximity and imaging, ModelGauge technology, TacTouch controllers and Flexsound audio. Year 2011 should see 1.6 billion cell phones, including 428 million smartphones, as per Oppenheimer, and also 220 million laptops and 55 million tablets, as per MS Research.

Key trends in security include rise of electronic transactions, stringent security requirements and digital surveillance. Maxim’s product investments include key acquisitions for secure SoCs, H.264 SoCs — IP cameras and DVRs, and end-to-end silicon solutions. Financial terminals should grow 6.3 percent CAGR over the next five years, as per BCC Research.

Key trends in healthcare include diagnostics closer to patients, home-based care and enabling healthier lifestyles. Maxim’s product investments have been in areas such as integration for miniaturization, low-power for portability and high-performance analog. Medical electronics is said to grow at 10 percent CAGR over the next five years, as per Databeans.

Maxim has been executing its strategy based on three key areas — innovation, integration and balance. Maxim is doing innovation in areas: 0.18 micron process on 300mm wafers, 10 touch capacitive touchscreen controllers, mobile power SoCs that integrate analog functions, and energy metering SoCs that are said to replace seven discrete ICs and reduce costs up to 40 percent. The integration trend has been progressing across all markets.

In five years, Maxim should be a leader in integrated analog solutions, have the industry’s fastest growing rate, have high profitability and be one of best companies to work for. A new world headquarters is under construction in San Jose. Relocation is scheduled for 2012.

 

Japanese quake and tsunami — too devastating to watch on TV!

I’m shocked — seeing the devastating images on TV from the Japanese earthquake and tsunami! The images on TV from Japan’s earthquake and tsunami are just too depressing! I am really worried for some of my friends from that part of the world! Shinpai da!!

Japan's earthquake and tsunami: Courtesy: STAR News, India.

It is being reported on TV that the quake has shifted the earth off Japanese coast by 8cm (or is it inches?). There are likely to be severe aftershocks. The official Japanese death toll is currently 801, with thousands missing. There are threats of a nuclear meltdown. Over 200,000 people have so far been evacuated from the area.

The natural disaster is unprecedented, says the Japanese prime minister. The earthquake has knocked out electric power to an estimated over 6 million homes. Sendai is among the worst affected areas.  There is widespread flooding and destruction in Natori city, Miyagi prefecture. There are concerns of fuel and food shortages in Japan as well.

NHK has been showing devastating images of the tsunami that has struck Japan post the earthquakes. Staffers at Fukushima Daichi plant are still working to lower the reactor temperatures. About 9,500 are said to be mising at Minamisanriku. The world is said to be already mobilizing to help victims of Friday’s 8.9-magnitude earthquake that unleashed a devastating tsunami on Japan, reports CNN.

According to IHS iSuppli, the Japanese DRAM manufacturing accounts for 10 percent of the global supply based on wafer production. The two major DRAM fabs in Japan, operated by US based-Micron and Japan’s Elpida, have not been directly affected, according to preliminary indications from IHS iSuppli contacts. Japanese companies, mainly Toshiba Corp., account for 35 percent of global NAND flash production in terms of revenue.

The more important impact may be on Japan’s production of components for LCD panels. Japan accounts for a very high share of components uses in LCD panels and LCD-based products, including glass, color filters, polarizers, cold cathode fluorescent lamps (CCFLs) and light-emitting diodes (LEDs).

I have contacted the few friends I have in Japan, one, an ex-Global Sources employee, and the rest from the Japanese semiconductor/electronics industry.  Hope all of  them are safe and sound. Hope to be back with more!

PS: I just heard from my friend, Yoshio Washizu. An ex-Global Sources colleague, he lives in southern Japan, in Kyushu Island, and is not affected by the monster earthquake.

He says: “What happened in the eastern Japan is simply unreal. I have to go to Tokyo later this week and stay there until Sunday, I am not so keen on doing so, though. The earthquake badly shook Tokyo as well. And it is forecasted there is a 50 percent chance of us having the aftermath in the next five days. So I’m a little bit uncomfortable.”

Stay safe, my friend!

ST intros STM32L ultra-low-power Cortex‑M3 devices

STM32L ultra-low-power Cortex‑M3 devices.

STMicroelectronics has introduced the STM32L advanced ultra-low-power Cortex-M3 based MCU platform.

Built on cutting-edge proprietary process – robustness, it is part of a wide 32-bit product portfolio. The MCU platform is based on the just-enough energy concept and has an all inclusive package applications.

STM32L 32- to 128-Kbyte products are entering full production in the second half of March 2011. It is part of the industry’s largest ARM Cortex-M 32-bit microcontroller family with six STM32 families. STMicroelectronics is developing the STM32L portfolio up to 384 Kbytes of embedded memory. The STM32L is also Continua ready for its USB peripheral driver.

STM32L’s robustness has been derived from an automotive qualified process. It is all inclusive for ultra-low-power applications, and comes with hardware integrated features and software library packages. STM32L also has a ‘just-enough energy concept’, which includes undervolting, user controlled and an innovative architecture, all of this for less than 1 µA.

ST’s ultra-low-power EnergyLite platform features ST’s 130nm ultra-low-leakage process technology. It makes use of shared technology, architecture and peripherals. The company’s ultra-low-power portfolio for 2011 will be in production second half of March 2011. Many others will also be in production in the second half of April 2011. In fact, there will be over 100 part numbers from 4- to 384-Kbyte flash, and from 20 to 144 pins.

STM32L is based on ultra-low-power architecture, which is all inclusive for ultra low power applications. It also features ultra-low voltage, with power supply down to 1.8 V with BOR and also down to 1.65 V without BOR.The analog functional can be down to 1.8 V and the reprogramming capability can be down to 1.65 V.

STM32L is also flexible and secure, featuring +/- 0.5 percent internal clock accuracy when trimmed by RTC oscillator. It has up to five clock sources and has the MSI to achieve very low power consumption at seven low frequencies.

It also feattures dynamic voltage scaling in Run mode. The voltage scaling optimizes the product efficiency. User selects a mode (voltage scaling) according to external VDD supply, DMIPS performance required and maximum power consumption. It features the energy saving mode as well, down to 171 µA/DMIPS from Flash in Run mode.

Xilinx intros Zynq-7000 family of extensible processing platform (EPP)

Xilinx's Zync-7000 series.

Xilinx Inc. has unveiled the Zynq-7000 family, the industry’s first Extensible Processing Platform (EPP). It is supported by an extensive ecosystem of tools and IP providers.

According to Tim Erjavec, senior director, platform soluutions and service marketing, the Zynq-7000 family tightly integrates a complete ARM Cortex-A9 MPCore processor-based system with 28nm, low-power programmable logic for system architects and embedded software developers to extend, customize, optimize, and differentiate their systems.

Back in April 2010, Xilinx had announced a new class of devices featuring an extensible processing platform and a processor-centric solution. Now, in March 2011, the first Xilinx EPP family and brand has been announced.

Embedded designers are said to be asking for more. There will be a combined market of $12,74 billion by 2014, featuring automotive driver assistance, intelligent video surveillance, industrial control, telemetry and guidance, enterprise femtocell, broadcast cameras, multifunction printers, aerospace avionics, etc.

Zynq-7000 device portfolio includes the 7010, 7020, 7030 and 7040. These have faniliar design environments, familiar software programming model, familiar hardware design flow, besides flexible accelerators and IP such as common AXI-4 interface and a broad ecosystem featuring tools, OSs and IPs.

Zynq-7000 family highlights include a complete ARM processing system, featuring a dual ARM Cortex-A9 and ontegrated memory controllers and peripherals. A tightly integrated programmable logic extends the processing system, scalable density and performance and features over 3000 internal interconnects. There is also a flexible array of I/O, featuring a wide range of external multi standard I/O, high performance integrated serial tranceivers, and ADC inputs.

Built with state-of-the-art 7 series programmable logic featuring 430K to 3.5 million equivalent ASIC gates and 30K-235K logic cells. It also enables massive parallel processing with up to 760 DSP engines delivering over 910 GMACs.

The flexible internal I/O includes 54 processor I/Os, 350 multi-standard and high performance I/Os, flexible memory interfaces and high performance untegrated serial tranceivers.

A wide range of Zync-7000 applications are supported, such as driver assistance, factory automation, broadcast camera, smart surveillance systems, consumer equipment, AVB routers, switches and cameras, and military radios and medical imaging.

The Zync-7000 software development environment includes the ARM development environment. ARM ecosystem support and other, vast off-the-shelf software and libraries. The hardware design environment includes the Xilinx ISE Development Suite, plug and play IP portfolio, hardware abstraction layer, and drivers and APIs.

The Zync program status includes the early access program open with over 200 applicants, with the ISE 13.1 Development Suite and the emulation platform. Initial devices are said to be available by 2H 2011. Some of the publically announced Zynq early access customers include Agilent, iVeia, National Instruments, etc.

Boom turned to bust? Chip industry's future!

Malcolm Penn, Future Horizons.

Malcolm Penn, chairman and CEO, Future Horizons, asked the question at the SEMI ISS2011 Europe event at Grenoble, France, early this week: Whether this is the time to rethink the industry assumptions?

For instance, fabs have no strategic value, until you haven’t got one and lost control of your business. ASPs will keep on falling, just like house prices kept on rising? The semicon industry growth rate has slowed to ‘7 percent per annum, which is only possible if ASPs keep falling 4 percent given an 11 percent unit growth.

Foundry wafers will always be cheap and freely available, just like cheap debt, right? Multiple sources will keep the foundries ‘honest’, since it is assumed that multi-sourcing at 20/22nm is going to be ‘interesting‘. It is also OK to focus on more than Moore competence, as today’s ‘More Moore’ is tomorrow’s ‘More Than Moore’.

Industry fundamental #1 – Economy: This was NOT a recession, someone turned off the lightsPre-Lehman, the chip industry was in very good shape. There was strong unit demand, and no excess inventory.There was limited wafer fab capacity, and no overspend/cutting back. Next, the ASPs were recovering, although, structurally driven. However, the strong global world economy was being deliberately slowed. The money really stopped moving in the post-Lehmann crash!

The economic coupling Is statistically weak. The economy is just one part of the equation. The chip industry marches to its own drum as well.

Industry fundamental #2: Unit demand: The Moore’s Law giveth and taketh away! Long-term average ICs/wafers grow only very slowly. There are more complex ICs counter balance die shrinks (1-2 percent productivity gain). Besides, 9-10 percent new capacity is needed to match the 11 percent average IC unit growth.

Industrial fundamental #3: Fab capacity: Let’s look at the IC manufacturing fundamentals — four quarter minimum lag from decision to impact.
* Total equipment capex = 85 percent of the total capex
* Wafer fab capex = 70 percent total equipment capex
* Order today = Wafer fab capex one quarter later* Wafer fab capex = Additional capacity two quarters later
* Additional capacity = IC units out one quarter later.

Pig cycles and cobwebs will keep happening due to long supply-side lead times (4 Months – production / 2 Years – fabs / 5+ years – design).

The fab capacity is still seriously tight. The Q4-10 status is still down 7.5 percent vs. Q3-08 peak. Also, the first relief happened in Q4-10 (from Q3/Q4-09’s spend) following six flat quarters.

The IC wafer fab capacity for Q3/Q4-09 spend, was equal to +80k ws/w In Q4-10. The 2010 spend was equal to ~400k ws/w additional by Q4-11? The wafer fab capex is still running ‘fab tight!’ Here are some more pointers:
* Not yet overheating, despite 140 percent 2010 growth.
* 2010 spend same as 2006; 10 percent lower than 2007 and 80 percent of 2000’s all time peak.
* Q1-11 book to bill <1; slowing Q2-11 sales.
* 2011 up between 5-15 percent, still within ‘safe haven’ region.
* TSMC thunders on with capex up 30 percent sales up 22 percent; the leadership gap up.

It’s Q1 seasonal slowdown, and yearly time for denial!

This is a summary by Malcolm Penn, CEO, Future Horizons. For those who wish to know more, please get in touch with me or Future Horizons.

Malcolm Penn, CEO, Future Horizons.

December’s WSTS results were as boring as they were predictable, with no serious data revisions (thankfully) and the results right where we expected. December’s year-on-year IC unit growth was 8.9 percent that, with the 3.5 percent growth (yes GROWTH) in ASPs, yielded a respectable double-digit value growthof 12.8 percent. And this, on the back of a weak Q4 memory market that saw ASPs fall 13.1 percent vs Q3-10!

The yearly growth vs 2009 weighed in at 31.8 percent, hitting $298.3 billion, just shy of the elusive $300 billion threshold. The market is right where we said it would be at our recent 2011 Forecast seminar; we reiterate our position that 2011 will be a good year for the industry. Choppy first-half waters for sure, but watch out for a whopping 2H-11 ricochet.

Connectors are up as well
It is not just semiconductors that are off to a good start. The connector industry is tight as a drum too. Orders in December 2010 were up 13.3 percent versus December 2009, with full year orders up 29.3 percent on 2009, down sequentially 11.1 percent from November 2010. The comparable data for sales was plus 18.7percent, plus 28.4 and minus 13.7 percent.

The December connector book-to-bill ratio was 1.01, unchanged from November. This industry still publishes orders and book-to-bill data by the way, unlike the chip industry which very foolishly stopped publishing this several years ago. All this in the seasonally slow first quarter of the month, yet few people believe there is a supply problem in prospect. Just as this time last year, industry denial is rampant, way beyond reasonable caution and ignoring the underlying trends.

Strong demand for mobile, server and graphics DRAM
We estimate that the worldwide growth rate for PCs in 2011 will be a healthy 10 percent, with 3.9GB the average DRAM content per box. New capacity and die shrinks are putting near-term pressure on over-supply and pricing but there are now move afoot from Elpida and others to start raising prices.

Where they can, to gain a price advantage, DRAM vendors are actively adjusting their supply in favour of mobile from commodity DRAM, given the current strong demand in the smartphone and tablet PC markets, with a 1GB per box average DRAM content.

Server demand continues to be the other star segment, not just in unit demand but in content per box as well, estimated to average around 30GB in 2011. This will drive a 50 to 60 percent increase in server DRAM demand. Finally in graphics demand for specialty DRAM is also very strong, driven by the rapid take off of3D-TV and continuing strong growth in Blue-Ray DVD.

The overall DRAM industry is thus gradually diversifying from manufacturing mainly commodity DRAM to diversified products such as mobile DRAM, serverbasis DRAM, specialty DRAM and graphic memory.DRAM vendors however are faring mixed fortunes, with Elpida and Hynix having the worst net cash positions with barely enough cash to cover their short-term debt.

The Taiwanese vendors find themselves stuck in a technology trap, unable to invest in the immersion technology needed to break through the 5*nm node, meaning that in the absence of a good market uptick to improve cash flow and profits, a shake out in the DRAM supply base seems unavoidable.