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    SemiWEEK: Can an IDM safely become Fab-lite or Fabless? Evolution of the American Semiconductor Crisis; Stocks soared

      Andrea Lati
     9th-Nov-2020
    Description:

    Semiconductor WEEK: An overview of results and conclusions from recent reports at VLSI.

    Chip Market Research Services
    Moving sideways
    • Order activity for semiconductor equipment was relatively flat in the last week of October
    • Memory, DAO, and Subcon/Adv. Packaging edged higher but their increase was offset by declines in SOC Mobile and Compute
    • Equipment suppliers have posted very strong results in Q3, exceeding our lofty expectations
    • VLSI’s Chip Price Performance Index turned lower

    Semiconductor Analytics
    Last Week in the Semiconductor Market:
    Semiconductor sales continued to set seasonal records. But, the IC weather cooled significantly, with OSAT, IoT, Auto, and Analog & Power dropping a notch. Focusing on the Logic picture this week: Sales have slumped in what is a normal seasonal dip. Semiconductor Supply/Demand held in a Tight seller’s market.
    Semi Market results from last week:
    • Semiconductor Sales Nowcast: The 4Q20 Nowcast rose
    • Semiconductor Weather1 Report: Warm, cooler
    • IC Supply-Demand2 Metrics: Tight
    • Electronics Pricing Trend: Electronics Prices rose with strength in Mobile …

    Chip History Center
    The Chip History Hall of Fame – Check out the CHC’s Semiconductor Hall-of-Fame Section.

    The Chip Insider
    Strategy and Tactics: Can an IDM safely become Fab-lite or Fabless? Evolution of the American Semiconductor Crisis.
    Can an IDM safely become Fab-lite or Fabless? An appropriate question, given the controversy that emerged from Intel’s last earnings call. The path from IDM to a Fab-lite or Fabless business model is the hardest tactical move to execute in the semiconductor business. Here are some successful examples.
    Evolution of the American Semiconductor Crisis: This year’s CHIPS for America Act (Creating Helpful Incentives to Produce Semiconductors) is the first time the United States has seriously considered having an industrial policy. If passed, it would infuse $22B into the industry. The hollowing out of America’s semiconductor manufacturing industry is not new. As an issue, it goes as far back as the late seventies when CEOs of U.S. companies warned of Japan’s threat. In those days, the U.S. accounted for more than two-thirds of the world’s IC manufacturing and Silicon Valley was half of that.
    Looking back, the number of U.S. companies doing semiconductor process R&D at or near the leading edge was just over 70. By 2000, only 15 U.S. semiconductor companies manufacturing would be left. By 2010, only 4 and then only 2 going on 1 as 2020 came to a close.
    Unlike the Chicxulub impactor that struck the earth and killed off dinosaurs, there were multiple environmental changes – along with strategic repositioning – that killed off the semiconductor manufacturing base of the United States. The U.S. industrial policy of … did nothing to stave off the addition of the American semiconductor manufacturer to the endangered species list. The biggest factor is the financial fractal that Moore’s Law drove. As transistors got smaller the scale needed soared. In 1980 when the node was 3 microns, the corporate scale needed was no more than $50M. Today’s minimal scale needed for an IDM to be sustainable is … This trend was, in effect, the Chicxulub impactor to America’s Semiconductor manufacturing industry…
    Semiconductor Stocks
    VLSI's Semiconductor Stock Indices soared to new yearly highs this week as the wait for the U.S. election results continues.
    • Semiconductors +9%
    • Equipment +12%
    • EDA +14%
    • Electronic Materials +7%

    VLSI’s Semiconductor Stock Index surged 8.7%, Qualcomm came out on top following their strong outlook
    IDM +7.3%
    Foundry & OSAT +6.5%
    Fabless & Fablite +10.0%
    VLSI’s Semiconductor Equipment Stock Index soared 12.3%, claiming five of the top six stocks. Lam Research was this week’s biggest winner.
    WFE +14.7%
    Test +13.0%
    Assembly +7.0%

    VLSI’s EDA Stock Index rocketed 13.9%.
    VLSI’s Electronics Materials Stock Index was led up 6.9% by Cabot Mircoelectronics
    Hottest Stocks: Lam Research, FormFactor, Applied Materials, Veeco Instruments, Qualcomm, and KLA

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    Domain: Electronics
    Category: Semiconductors