Monday, March 28, 2011

Identifying growth opportunities in PV materials market

SEMI USA had a session on "Identify Growth Opportunities in the PV Materials Market," presented by Mike Corbett, Linx-AEI Consulting, and moderated by Bettina Weiss of the SEMI PV Group.

More, in a short while! ;) Stay tuned!

Thursday, March 24, 2011

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

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

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

2) Atsugi, Kanagawa
Mitsumi (Analog, Logic)

3) Goshogawara, Aomori
Renesas Electronics (Logic)

Wednesday, March 23, 2011

EmTech India 2011 somewhat of a mixed bag!

Yes, I am compelled to say this! Barring the lecture given by Kent Larson on ubiquitous technologies, which you can read on element14's website, most of the lectures were really nothing to shout about!

When you go to attend a conference, you desire to hear about new things, and not hear about things that you already know. Hence, I am forced to give the headline, nothing else!

Besides, there were only four presentations of note by the famed line-up from the Massachusetts Institute of Technology (MIT). And, two of the keynoters left by the second half of first day itself, which is surprising. Unless, something else came up. Nevertheless, I could not find either Dan Nocera or Jeffery Karp post lunch, so help me!

The only other speaker from day 1 - Moe Win, presented an excellent piece on network localization. However, since it was held immediately after lunch, I felt that most of the audience found his piece a bit technical.

What did I like? Well, the fact that MIT is serious about India is something that goes down very well. I had serious discussions with both Kent Larson and Moe Win regarding this, and both were in the affirmative.

For those interested, the entire coverage of the show is on element14's website.

Monday, March 21, 2011

element14 contracts me to cover EmTech India 2011!

Friends, it is my pleasure to inform all of you that element14 has contracted yours truly to cover the EmTech India 2011 show — to be held at the ITC Royal Gardenia on March 22-23. May I add that my entire coverage — around eight sessions and four interviews — will be available for everyone to access on element 14′s website, exclusively!

element14 is adding and seeding content and threads into the group created at

EmTech India 2011 starts on March 22, at 9am, with the inaugural session on India Innovates. This will be followed by several plenary sessions, the first being the Future of Energy, presented by Daniel G. Nocera.

This will be followed by a plenary on Next Generation Regenerative Medicine by Jeffrey M. Karp, Assistant Prof., Medicine and Health Sciences and Technology and Director, Laboratory for Advanced Biomaterials and Stem-Cell-Based Therapeutics, Harvard Medical School Brigham & Women’s Hospital.

There will be a panel discussion titled ‘Activating the Innovation Gene’, to be moderated by Prof D Balasubramaniam. Participants in the panel discussion include Dr Chetan Chitnis, principal leader, Malaria Group, ICGEB (malaria), Dr Udaykumar Ranga, Prof. JNCASR Bangalore (HIV), Dr Kumaravel Somasundaram, Associate Prof., IISc. (cancer stem cells), Dr Annapurni Rangarajan, Associate Prof., NCBS, TIFR (potential and cancer stem cells).

Post lunch, the sessions continue with a plenary on Location-Aware Wireless Networks by Moe Win, Associate Prof. of Aeronautics and Astronautics Laboratory for Information and Decision Systems, MIT, Department of Aeronautics and Astronautics.

This will be followed by a panel discussion on Global Communications & Collaborations — the Future of Mobile Technology (LTE/4G). Day 1 concludes with the India TR35 awards ceremony.

Day 2 starts with with an EmTech 2011 Roundup on INDIA INNOVATES. This willl be followed by plenary sessions, with the first one on Ubiquitous Technologies by Kent Larson, director of the Changing Places research group at the MIT Media Lab.

This will be followed by a plenary on ‘Fueling the Future’, where biofuel/bio energy innovations shoud come up. Next, there will be a panel discussion on ‘Energy Mix of the Future’, where the panel will look at some of the emerging trends. The panelists include Prof. Ambuj Sagar, Prof. J Srinivasan and Dr Ajay Mathur.

Post lunch, day 2 will feature a plenary on the ‘Future of Computing,’ which will be followed by a panel discussion on the ‘Future of Search.’ The late afternoon will feature an R&D panel on ‘Lab to Market: Success is Not Final, Failure is Not Fatal.’ The concluding keynote will be on Enterprise 2.0 presented by Andrew McAfee.

There is a disclaimer, which advices patrons to please note that all times, topics, and speakers are subject to change. The organizers would also add several new parallel sessions including technology demonstrations.

Hope to see you there and stay tuned at the elenent14 website for my live posts! ;)

Friday, March 18, 2011

Indian semicon industry poised at very interesting juncture: Dr. Pradip Dutta, Synopsys

I have known Dr. Pradip Dutta, corporate VP of Synopsys Inc. and MD of Synopsys (India), as well as vice chairman, India Semiconductor Association (ISA), and now, chairman designate for 2011, ISA, for close to a decade now. We recently got into an interesting discussion on the Indian semiconductor industry.

Growth of semicon and electronics in India
First, I asked what should be done about the growth of semiconductors and electronics in the Indian eco-system?

Dr. Dutta said: "My view on this subject has been the same for many years now; high-tech electronics has to be a national mission. The defense and the government labs played a major role in promoting this sector in the US; e.g. Sandia National Laboratory, Lawrence Livermore Laboratory, Jet Propulsion Laboratory, NASA etc. DARPA, which is part of US Department of Defense has sponsored phenomenal amount of research in semiconductors and electronics.

"If we now look at countries closer to our part of the world, in Asia, we will see a similar focused effort from the governments. The STARC initiative in Japan, the National SOC program in Taiwan, the 839 program in Korea, the 863 program of Ministry of Science and Technology in China, all catered to a flourishing investment in R&D and innovation in high tech. Our country is poised for it too. We need to encourage start-ups in fabless design, explore manufacturing, foster innovation, create favorable policies for the industry and most certainly develop the talent pool."

Need for domestic manufacturing
There is a need for domestic manufacturing in high tech electronics. Where are the Indian companies going? According to him, domestic manufacturing in high tech electronics has been flagged as a critical area in the ESDM (Electronic Design and Manufacturing) report that was submitted to the government by the industry in 2010. There is a need for initial funding, both in R&D as well as manufacturing. Duty structures need to be rationalized between import of CBU, SKD, CKD and components.

He added: "We have seen that manufacturing prospers in cluster environment and hence there is a recommendation to promote manufacturing clusters for specific product categories. However, it is safe to say that we have long ways to go in this area."

Co-operation with international trade bodies
Now, what is the required policy framework and co-operation with international trade bodies? As per Dr. Dutta, the ISA has been active in forging close working relationships with multiple trade bodies from various parts of the world. "We have signed several MoUs with entities such as HTIA (Israel), ASTSA (Japan), DSP Valley (Belgium), TSIA (Taiwan), Semi (USA), GSA (USA) and UKTI (UK).

"Of course, we need to have a focus and these relationships should be driven by strategy. We have carried several delegations to these countries and hosted bi-lateral visits as well. These visits provide an opportunity for our member companies to have direct B2B opportunities.

"We learn valuable best practices from other entities and try and implement in our environment. For example, Israel does a great job in taking innovative ideas from entrepreneurs to incubation, many times inside of universities, and then spinning them into companies which later become part of the global value chain. In the process, this small country has created at least 150 NASDAQ listed high tech firms. Innovation to incubation to wealth creation – a formula that works very well there. We could certainly learn a lot from that model."

Future of Indian semicon industry
So, how does Dr. Pradip Dutta see the Indian semicon industry, going forward? He said: "The Indian semiconductor industry is now poised at a very interesting juncture. While the MNCs are designing chips at the bleeding edge, we see a lot of high quality work being done by the design service companies and also local start-ups. Incidentally, the start-up scenario is quite active in the system space. This ties in with the ESDM focus of our industry.

"India’s semiconductor industry will no longer be in isolation with respect to its market. Companies are not investing in India for the intellectual capital but also to gain a share of the rapidly evolving domestic market. There are quite a few home grown indigenous products being worked on, as we speak, to challenge the leading smart tablets. This is a very encouraging sign for our industry."

Thursday, March 17, 2011

Maxim well positioned for future success!

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.A view of Maxim's Analyst Day 2011.

Speaking about the evolution of analog, Doluca touched upon analog integration, system solution and building blocks. According to him, there are six areas that 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.

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 said to be doing innovation in areas such as 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.

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.

Wednesday, March 16, 2011

Impact of Japan's quake and tsunami on global semiconductor industry

It has not even been a week since the unwanted happenings in Japan. Already. there are reports of nuclear emergency! One hopes it does not turn out to be that way!!

On the semiconductor front, DRAMeXchange of Taiwan has reported that Japan's earthquake and electrical brownouts could affect silicon wafer supply and global DRAM capacity. WitsView reported that the recovery process of infrastructure in Japan will affect the resurgence of upstream panel supply chain. LEDinside observed that the earthquake generally has not done much damage to the LED industry.

EnergyTrend reported that the earthquake in Japan has relatively slight impact on the global solar industry compared to the other industries. The supply chain sectors influenced are mainly mono silicon and poly silicon suppliers. However, it has sent out a warning: the nuclear crisis in Fukushima continues to appear unsettling. If the radiation leakage widens to Kanzai of Japan, where many solar cell manufacturers are located, the global supply of solar cells may be affected.

The more important impact may be on Japan’s production of components for LCD panels, says IHS iSuppli.

The Japanese earthquake and tsunami has also stunned the global semiconductor industry, given that Japan has been a pioneer and leader in the global chip industry.

The preliminary assessment of Texas Instruments' manufacturing sites in Japan revealed that the fab in Miho suffered substantial damage during the earthquake. Teams are working to reinstate production in stages, reaching full production in mid-July. TI's fab in Aizu-wakamatsu was also damaged, but already is being re-started with full production estimated by mid-April. TI's third fab in Hiji is undamaged and running at normal capacity.

Sony Group's operations are said to have been affected by the Pacific coast of Tohoku earthquake, tsunami and related power outages. For Elpida, the Hiroshima Plant suffered little impact as it is located in Hiroshima in the southwest of Japan, However, the Akita Elpida memory plant is not in operation as of the time of the announcement due to power shut down caused by the earthquake, and it is hoped that normal business will resume when the power returns.

Iwate Toshiba Electronics did not report any casualties, but as of March 15, there was power lost, with limited partial recovery to start from March 13. One hopes, some power has been restored. And, as of March 15, 12:00pm, seven factories out of 22 of the Renesas Group's factories in Japan have temporarily shutt down production.

The Shin-Etsu group reported that as of 1pm,, March 15 (Japan Time), necessary inspections were being carried out at Shin-Etsu Chemical Kashima Plant (Kamisu, Ibaraki Pref.) and Shin-Etsu Handotai Shirakawa Plant (Nishigo Village, Fukushima Pref.), both of which were out of operation.

It is implementing inspections of the facilities and equipments at the both plants putting the utmost priority on safety. However, damages were founded at some production equipment at the both plants until now. At present, it is still unclear how long it will take to restore such damaged equipments and facilities at the both plants.

Mitsui Chemicals Group reports the following effects of the Kanto-Tohoku earthquake on its operations. Operations at the Kashima Works (Kamisu City, Ibaraki Prefecture), has been suspended since the earthquake. Operations will be resumed after assessment of damage by the earthquake and tsunami.

At its Ichihara Works (Ichihara, Chiba Prefecture), production at ethylene plants is according to schedule. However, the operations at Mitsui DuPont Polychemicals and Chiba Phenol plants have been suspended since the earthquake. After assessing effect of scheduled “rolling” blackout, operations will be resumed.

At the Mobara Branch Factory (Mobara City, Chiba Prefecture), operations at acrylamide and paint toner binder resin plants have been suspended since the earthquake. After assessing effect of scheduled “rolling” blackout, operations will be resumed. All other facilities are operating according to schedule.

Japan has the track record of bouncing back from adversity. Let's hope and pray for an encore!

Sunday, March 13, 2011

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!!

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, also an ex-Global Sources. 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!

Friday, March 11, 2011

SFO - India's leading ODM player!

Thanks to Soni Saran Singh, executive director, NMTronics India Pvt Ltd, I was able to attend a 'Global Supplier Meet' at The NeST Group, Kochi, who's flagship company, SFO Technologies is India's number 1 ODM player.

I first heard of the NeST group when I was last in Kochi, covering the Photonics event organized by Cochin University of Science & Technology. Today, I had a full introduction! The NeST group started operations in 1991. Now, it is a $220 million dollar company, and well, India's premier ODM player!

More later ;)

Thursday, March 3, 2011

ST intros 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.

Wednesday, March 2, 2011

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

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.

Tuesday, March 1, 2011

Boom turned to bust?: Chip industry's future

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.

Industry fundamental #4: ASPs: The perceived industry wisdom all along has been that ASPs will keep on falling forever. Also, it is believed that the industry growth days are over with future CAGR ~7 percent pa — 11 percent units and -4 percent ASPs.

The reality is different. Rule one, ASPs can’t keep falling forever, They eventually self correct! The second rule — when in doubt, Rule #1 will apply, Now, the fact is: ASPs stopped falling In Q4-2009! Still no one believes it!