Thursday, February 16, 2012

Top 10 semiconductor growth drivers: Intersil

Intersil is a strong company with long heritage, according to David Bell, president, CEO and director, Intersil Corp. It is currently building intelligent, innovative leadership products, and targeting fast growing markets. India is key to Intersil's success. He was speaking on the occasion of Intersil announcing expansion plans in India.

The company is a leader in high perfornance analog and mixed-signal ICs, and has 35 global locations, including 17 design centers, and had a revenue of $761 million in 2011. It offers a broad range of analog and mixed-signal products for power management, analog and mixed-signal and consumer products.

Intersil's 'asset-lite' manufacturing benefits include access to advanced technologies, speciallized technologies that are retained in-house, flexible capacity and reduced risk. It is developing more integrated and intelligent products that simplify customers' design process.

Top 10 growth drivers
According to Bell, the top 10 growth drivers today are: active cables, audio, automotive, dense power conversion, digital power management, digital power modules, PC power management, pico projectors, optical sensors and security surveillance.

Wednesday, February 8, 2012

Latest Cowan LRA model’s forecast for global semicon sales in 2012

This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.

The latest Cowan LRA model parameter update incorporates 2011′s monthly sales results, thereby incorporating 28 years of historical, global actual monthly semiconductor sales as gathered, tracked and published by the WSTS.

Cowan has carried out the necessary mathematical computations in order to update the complete set of linear regression parameters embedded in the Cowan LRA forecast model. This update to the model’s parameters thus reflects 28 years (1984 to 2011) of historical global semiconductor sales numbers.

Therefore, the table given here has provided summarizes the latest model’s 2012 sales and sales growth expectations as a function of the model’s range (low, expected and high) for January 2012′s sales forecast estimates as put out by the updated model.

Note that the Cowan LRA Model’s expected 2012 sales growth (of 3.3 percent) relative to 2011 sales is slightly less bullish than the WSTS’s adjusted autumn 2011 sales growth forecast of 3.6 percent versus WSTS’s autumn 2011′s forecasted sales growth of 2.6 percent.Source: Cowan LRA model, USA.

Tuesday, February 7, 2012

Ingredients for successful fabless Indian semiconductor industry: Dr. Wally Rhines

According to Dr. Walden (Wally) C. Rhines, chairman and CEO, Mentor Graphics Corp., while fabless startups have declined substantially in the West during the past decade, they are growing in India.

Given the time required to grow large fabless companies in the past, India should not be discouraged by current progress. India has key capabilities to stimulate growth of fabless companies, such as:
* Design services companies.
* Design engineering expertise and innovation.
* Returning entrepreneurs.
* Educational system.

Semiconductor frustrations abound! I recall a discussion in mid-2005 where an industry expert mentioned that fabless was the way forward for the Indian industry! Between then and now, fabs were supposed to come up, but they failed. Nevertheless, one must not give up hope!

As of now, there seems to be too much focus on services, multinational company dominance, perceived lack of progress, perceived lag compared to China, lack of foundry infrastructure, and no clear dominant indigenous Indian company.

Of the top 50 semiconductor companies in 2011, 12 are fabless and four are foundries. Fabless IC revenue has been growing at 17 percent CAGR since 1997 and will continue to grow. Even the fabless market has been gaining in the overall market.

However, the fabless revenue is said to be highly concentrated. He added that the leading fabless companies specialize and average ~23 years since formation. Also, the VC funding for fabless semiconductor companies has been declining in the West. As for the number of fabless companies, the GSA put it at 1,200 companies, globally, at the end of 2010.

According to Dr. Rhines, the semiconductor IP market would grow to about $3,707 million by 2015, at a CAGR of 14 percent. The leading semicon IP players specialize and average 22 years in business (similar to fabless).

India is said to be among the top five semiconductor design locations worldwide (SIP + fabless + design services). India is a leading source of semicon IP, accounting for 5.3 percent globally. From the looks of it, India seems to have built a foundation for a fabless future. India can well become the next great fabless incubator.

Monday, February 6, 2012

Global semicon sales worth $299.5 billion in 2011!

The Semiconductor Industry Association (SIA) announced that the worldwide semiconductor sales for 2011 reached a record $299.5 billion, a year-on-year increase of 0.4 percent from the $298.3 billion recorded in 2010. While this is a very small increase over 2010, the SIA has said this is a record! Perhaps, it is, as the $300 billion mark is about to be breached!!Source: Semiconductor Industry Association (SIA), USA.

The SIA, in its release, has talked about the challenges that the global industry has had to face in 2011, notably, the tsunami in Japan, and the floods in Thailand. That the global semiconductor industry has still managed to reach nearly $300 billion is a feat in itself! And, as usual, Asia does continue to play a relatively large role.

According to the SIA, the optoelectronic, sensor and actuator, and microprocessor markets have showed solid year over year growth. In fact, sensors and actuators are said to have showed the highest year over year growth at 15.5 percent to $8 billion in 2011. Likewise, MOS microprocessors have also shown commendable growth.

So, what does 2012 hold for the global semiconductor industry?

Last November, IC Insights had said that although low single-digit growth is forecast for the total semiconductor market in 2011, several companies are likely to register results that are quite different. There have already been some forecasts since then. IHS iSuppli has said that the semiconductor industry revenue is likely to reach $323.2 billion in 2012. As of now, the global semiconductor sales has been forecast at $329.4 billion for 2012 by Mike Cowan, while the Singapore Semiconductor Industry Association (SSIA) has a figure of $313 billion for 2012. Keep your eyes wide open!

Thursday, February 2, 2012

Tariffs to slow growth in domestic demand for PV systems: The Brattle Group

Recently, The Brattle Group came out with its report titled "The Employment Impacts of Proposed Tariffs on Chinese Manufactured Photovoltaic Cells and Modules". Here are excerpts from the report.

At the request of the Coalition for Affordable Solar Energy (CASE), The Brattle Group has studied the employment impacts of a proposed trade restriction on Chinese-manufactured crystalline photovoltaic cells and modules.

This topic is timely, because the US Department of Commerce (DOC) is currently reviewing a petition that would lead to substantial tariffs on Chinese-produced photovoltaic cells and modules. Petitioners have requested tariffs up to 250 percent on Chinese-manufactured products in response to alleged government subsidies and below cost pricing.

In brief, we estimate that tariffs will slow the growth in domestic demand for photovoltaic systems by homeowners, commercial establishments and utilities, resulting in substantial job losses. We estimate jobs at risk under two tariff levels – 50 percent or 100 percent.

We find that a 50 percent tariff will shut the vast majority of Chinese imports out of the US market, and a 100 percent tariff will effectively block them altogether. We also estimate employment impacts accounting for two scenarios, a low scenario which assumes low demand elasticity and high supply elasticity, and a high scenario which reflects a high demand elasticity and a low supply elasticity.

* We expect that on average module prices would be higher than currently projected over the next three years by roughly 25-30 percent. Price increases of this magnitude may provide some assistance to domestic producers facing a highly competitive market, but at the same time will harm consumers, resulting in a drop in overall domestic demand.

* A tariff of 50 percent will result in between 14,877 and 43,178 fewer jobs in 2014, even accounting for production job increases.

* A tariff of 100 percent will result in between 16,917 and 49,589 fewer jobs in 2014, even accounting for production job increases.

* In addition, the Chinese government may retaliate if a tariff is imposed on its cells and modules by imposing a tariff on US products, polysilicon a key photovoltaic (PV) material. In 2010 the US exported approximately $863 million of polysilicon products to China. A reduction in demand of this magnitude could result in additional job losses of 10,881, bringing the total job losses up to as many as 60,000. Losses would be even greater if exports continue to grow as expected. Additionally, we have not accounted for retaliation on US export of PV capital equipment, which could lead to even further job losses.

* These estimates reflect the assumption that PV costs will continue to fall as technologies improve, further efficiency gains are made in production and installation, and existing incentives and targets remain in place. Should the rate of these improvements slow or fail to materialize or existing incentives run out of funds, the negative impacts of the tariff on employment would be significantly greater.

* Finally, the economic basis for evaluating an import tariff is whether there is a gain to both consumers and producers. We estimate that consumers lose more than producers gain, resulting in a net revenue loss of between $621 million and $2.6 billion.

Wednesday, February 1, 2012

Wireless leads in global semicon spends!

Interesting, but not surprising! Wireless is now leading in the global semiconductor spends!! In fact, I was having a chat with a Frost & Sullivan executive this morning, and he mentioned telecom. Of course, that's the key driver!!

According to IHS iSuppli, wireless has now displaced computers as the top semiconductor spending area for OEMs in 2011. And, this trend may continue in 2012, going by early indications. Noteworthy in the wireless march has been the tremendous success of Apple's iPhone and iPad.

As per IHS iSuppli, the global spending by the world’s top OEMs on microchips for wireless products was $58.6 billion in 2011, up 14.5 percent from $51.2 billion in 2010. This has led to wireless leading computers as the world’s largest OEM semiconductor spending segment in 2011.

Notably, tablets and mobile handsets have led the way! With many more companies developing smartphones and tablets, this trend does not appear to buck any time soon. It is further expected that the wireless segment will continue to generate the highest growth over the next two years. Smartphones are definitely a part of this, as are tablets.

Back in late 2000, at the ITU World Telecom in Hong Kong, the first mobile phones with Internet browsing were being touted. As were 3G and Bluetooth! Those were the days when 'WAP is CRAP' made more headlines and bore the brunt of many 'telecom jokes'. Why, in early 2002, I even wrote an article for Electronics Business Manufacturing Asia (EBN Asia), on Bluetooth, which was still trying to find its bearings. I can't locate that article anymore, but some of the comments in that article are worth remembering. One comment was whether Bluetooth and WiFi could co-exist!

One magazine had said, "The future of Bluetooth wireless technology is becoming decidedly mixed as proponents and analysts continue to question not only how soon the short-range technology will take off, but also whether the technology is fundamentally sound."

Thankfully, all of those days are behind us! Today, Bluetooth is firmly entrentched, as is WiFi. And, on the mobile phone!!

In 2003, the Bluetooth Special Interest Group (SIG) unveiled a new 'five-minute ready' program created to challenge and guide Bluetooth product developers and manufacturers in the Asia Pacific region to deliver devices that give consumers a "five-minute out-of-the-box experience." I had met up with Anders Edlund, marketing director for Bluetooth SIG in Singapore, and had a clear understanding of the technology. Today, I believe, the Bluetooth SIG is advancing standardization of active 3D glasses using Bluetooth!