Solarcon India 2012: Solar Industry In Third Wave!

There are three phases of PV industry development, including formation, regional development and globalization, according to Bettina Weiss, VP, Global PV Business Unit, SEMI, USA. She was delivering the opening keynote at the ongoing Solarcon India 2012 event in Bangalore, India. The event runs till September 5.

According to her, in the first stage, discoveries lead to inventions. Inventions find niche and high-value applications. Technology, and not manufacturing is the key driver here. For regional development, new industries seen as source for economic development. Markets develop through government subsidies. Global supply chains and regional clusters of excellence develop as well.

State of global PV industry
The government policy support for PV has been strong till 2011. However, it may fall of during 2012-16. The supply-demand balance was generally stable till 2011, which could likely see structural overcapacity in 2012-16. The demand, which has been over 70 per cent till 2011, will likely see -20 per cent growth from 2012-16.

While there were many ‘saviour’ markets, such as Spain (2008), Italy (2010) and Germany (2009-11), Europe may prove to be not enough to absorb excess capacity in 2012-16. Poly, scale and the learning curve had been competitive till 2011, and are likely to give way to non-poly costs, technology and efficiency during 2015-16. While the gross margin was consistently above 20 per cent till now, the path to profitability remains unclear for the period 2012-16.

As for the cell and module makers performance, sharp price declines since 2011 have stimulated record installations globally. The effect on PV manufacturers have been severe. The entire supply chain has been plagued with collapsing margins.

Revenue to shipment ratio declined for five consecutive quarter since Q1 ’11. The list of insolvencies keeps growing. The outlook for 2012 is that volume/shipment upside is likely, but the path to profitability is still unclear.

Then, there is the ongoing solar trade war!

The US Department of Commerce (DOC) levied anti-dumping tariffs against Chinese solar module imports, with tariffs ranging from 31 per cent to 250 per cent. In response to the US tariffs, China’s Ministry of Commerce, on July 21, 2012, announced that it will start its own AD and CVD investigation on imported solar-grade polysilicon from US, and is initiating an AD investigation on these imports from South Korea. The EU Commission will decide by mid-September whether to accept a similar complaint and launch an investigation.

Electronics For You has a new website!

Electronics For You, India’s leading electronics magazine, has a brand new website. You can click on the link to see!

This is a great effort made by the folks at EFY Enterprises Pvt Ltd. An effort from the EFY Web development team, this site was overdue. This launch also co-incides with Electronics Rocks, an EFY event for design engineers that is taking place today and tomorrow in Bangalore.The top most block is the Editor’s Choice, consisting of nine entry points, for now, to various stories. There is a smattering of choices – from Solar LED lantern to analog wattmeter, and to SMT components.

Folks, there is a block on Circuit Ideas! It is meant for all of those electronics geeks,who spend hours and hours browsing for new electronic designs and circuits!

Next, there is a block on videos, that runs things like How to Solder Waterproof LED Strip Light to World’s first Mixed Domain Oscilloscope. This section should be captivating!

There are several other sections such as Innovators, Test & Measurement, Microcontrollers, Tech Focus, Interviews, etc. Career Trends is one section that is sure to get lot of hits!

A concern could be too many banner ads on the right, especially with the flash, moving parts, which makes for a really busy site. With two ads next to each other, just feels too busy. However, that’s what generates revenues, so maybe, it is fine!

The Electronics For You website is still in beta. The final version will go live on October 1, 2012. Kudos to the entire team at EFY Enterprises Pvt Ltd on a job well done!

Apple wins big vs. Samsung in patent war!

Late yesterday, a nine-member jury at a San Jose, California, USA court awarded Apple approximately $1.05 ($1,051,855,000) billion in damages after finding that Samsung infringed on six patents. This is a huge victory for Apple! The jury has reportedly said that Samsung’s infringement was unlawful. The judge can even triple this amount!

However, it could lead to a situation, at least for the moment, that there would be fewer smartphone (and tablet) options! Here are statements from Apple and Samsung, post the verdict!

Apple
We are grateful to the jury for their service and for investing the time to listen to our story and we were thrilled to be able to finally tell it. The mountain of evidence presented during the trail showed that Samsung’s copying went far deeper than even we knew. The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right.

Samsung
Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims. Samsung will continue to innovate and offer choices for the consumer.

So who is the winner? As of now, no one!

Is the patent system weak? Perhaps, it is!

Who could be the real winner? Possibly, Microsoft, but we wait and see!

The global smartphone and tablet battle continues!

Cowan LRA model’s updated forecast for global semicon sales 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.

Based on the WSTS’s June (posted August 5th, 2012) global semiconductor sales of $26.329 billion, actual sales number, the latest monthly forecast expectation for total global semiconductor sales calculated by the Cowan LRA forecasting model came in at $297 billion.

This represents a 2012 year-on-year sales growth forecast expectation of minus 0.85 percent, which declined from the previous month’s year-over-year sales growth forecast estimate of plus 0.1 percent. It is also lower than the joint WSTS/SIA Spring 2012 sales growth forecast of 0.45 percent, which corresponds to a global sales forecast estimate of $300.9 billion.

Consequently, the latest model’s forecast output is presently (based on June 2012′s actual sales) predicting negative sales growth for 2012 compared to 2011.

It should be pointed out that the model’s previous month’s forecast expectation for June was $27.65 billion. This forecasted sales (published last month) was much higher than the actual June sales result of $26.33 billion (lower by $1.32 billion or down 4.8 percent) resulting in an M.I. (Momentum Indictor) of minus 4.8, implying that the sales growth trend will be ‘mildly’ down over the near term.

Inserting June’s actual sales number into the Cowan LRA forecasting model also yields the latest updated sales forecast expectations for the remaining two quarters of 2012 and the first two quarters of 2013. These results are summarized in the table below. Also included in the table are previous month’s sales and sales growth forecast results for comparative purposes.

As displayed in Table 1, the latest projected full year 2012 global semiconductor sales forecast estimate fell to $297 billion from last month’s sales forecast expectation of $299.8 billion, a decrease of $2.8 billion.Source: Cowan LRA Model, USA.

Correspondingly, the updated 2012 sales growth forecast estimate went negative, dropping to minus 0.85 percent from last month’s slightly positive sales growth forecast estimate of plus 0.11 percent, a decrease of almost a full percentage point.

Also note that July’s actual sales estimate is forecasted to come in at $23.2 billion. Thus, July’s actual sales forecast estimate equates to a July 3MMA sales expectation of $24.15 billion, which is down slightly from June’s 3MMA sales result of $24.4 billion. It should be highlighted that this forecasted July 3MMA sales number assumes no (or very minimal) sales revisions to either May or June’s just published sales results by the WSTS.

Can being fabless and M-SIPS take India to top?

The other day, I was engaged in an interesting discussion regarding the Indian semiconductor industry. The obvious question: can fabless semiconductor take India to the top?

Well, it all depends on the definition of ‘top’! Does it mean the role of India-based semiconductor companies as a percentage of the semiconductor market globally? Or, do we take India as a system/gadget maker and thus, as a percentage of that market??

Fabrication is increasingly expensive, much involved and the actual global fabrication players (i.e. those who (also) own a fabrication plant) are declining and will be about three to four companies, and about 10, if we include all off those Chinese fabs.

And, India continues to slip back in having a ((proper) fab!

Now, India’s contributions to global electronics and semiconductors will continue to increase as the MNC subsidiary companies’ hub, and not quite as India-based companies, who are coming out with something that will shake the world in terms of that chip(s)!

If India has domestically consuming gadgets, that are more India specific, that could need devices available less outside. For that purpose alone, a local fab could be essential. However, such requirements appear less each day!

So, yes! Fabless semiconductor could be the way forward for India, in terms of contribution to its economy. However, in terms of India becoming a global player through such chips conceptualized in India, for India and the world, the chance is lesser, for now!

Well, hasn’t the Indian semiconductor industry been shouting ‘fabless’ from the rooftops for some years now? Let us see how India has progressed so far!

One, in terms of having local fab, the answer is NO! Two, in terms of increasing its percentage of contribution to global semiconductors, electronics from India, YES, an increasing role and value (though these are embedded software too).

In terms of having India-based companies working toward developing chips, YES again, in terms of smaller, analog, components that are crucial (like Cosmic Circuits), and YES, in terms of having IP-based companies (like Innovative Logic India for USB3.0) and, YES in terms of increasing service companies.

Many more companies are coming up, and some started directly here in India, such as Apsconnect, Techvulcan, etc. In terms of the actual solutions, YES again, as we have developed solutions in medical, automation, etc.

However, the answer to the question remains NO in terms of having chips come out of India, as yet!

Now, what happens to the fab-lite strategy? Well, it continues, globally. From an India perspective, it is actually in a way, validation of the earlier belief. There is less direct importance to manufacturing from themselves, but more about the actual value add they do OR can do.

Now, given this situation, let us also look at the key growth drivers in Indian electronics, especially, since we are talking about fabless and fab-lite.

The obvious one is to develop solutions for the India market. It is likely that these can be for outside markets as well. This ability will actually make India develop solutions for global markets. Also, these are not semiconductors per se, but, (embedded) solutions based on them.

The above situation can slowly lead to a fabrication and manufacturing ecosystem in India. India should also try to position itself at the higher end of the solutions, markets, services, etc., so that its value contribution can be much more.

Friends, is there a way out of the current situation that India finds itself?

Actually, this is normal process of growth in the chosen path. India continues to think about low end, less (or no) risk options of services. There is only so much growth, revenue, profit possible in those areas unless one goes up the market.

India has not done that as it could be, as an ecosystem in all. India should focus on its own internal requirements. That could mean growth and an increasing role for India, globally, as well!

Besides manufacturing, the big issue lies in marketing of such products. A senior statesman from a leading Indian electronics firm once asked me, “How will India compete in marketing of these products compared to the Chinese or Taiwanese manufacturers, who have more than 30 years of experience in these industries?”

How one wishes that India had at least two wafer fabs by now, what with the technology nodes constantly upping their ante. Even if someone does decide to put up a fab, it will be extremely expensive and has to be cutting-edge. However, as I said, one should never give up hope!

And then, there is the Modified Special Incentive Package Scheme (M-SIPS).

The newly announced M-SIPS is long awaited and much needed. The key is to now turn this ‘gazette notification’ into implementation, by the regulators, and utilisation by the industry.

It is understandable that the government can only do so much, particularly, under the given circumstances. With that kept in mind, this is a yet another good start! Hopefully, instead of just commenting on this policy, the industry sincerely works to benefit from it by properly utilizing it.

Why just think of digitalization of TV! The number of set-top boxes required across the country will be huge! Or, think of electrification of roads all over India. The number of LEDs required are likely to be massive. These are just two examples of the many possible. The Indian electronics industry needs to move fast, and now!

Hasn’t all of this been very easy to say, difficult to manage! ;)

Is Europe ready for 450mm fabs?

Friends, it has been extremely difficult for me to stay away from my blog! ;) Not to speak of the thousands of requests! ;)

Well, I've been chatting up with Malcolm Penn, chairman and CEO, Future Horizons, lately, on the 450mm fab! In fact, at the IFS2012-MT mid-term semiconductor industry forecast seminar, he proclaimed that 450mm presented a unique opportunity for Europe!

First, 450mm will allow Europe's indigenous chip firms to catch up their lost leadership position in advanced CMOS manufacturing, and place them at the forefront of technology in 'More Moore' (MM) and 'More Than Moore' (MtM). Embracing 450mm will ensure a clear migration path for all future silicon-based chip processing into the foreseeable future. Should Europe's indigenous chip firms choose to ignore the 450mm paradigm shift, focusing instead on just MtM, and not MM, they will end up in a technology dead end!

Europe's MtM expertise will get slowly cannibalised by more advanced technology-based firms looking to re-use their depreciated (n-1) MM platforms and shrinking remaining markets squeezed by ever-increasing over-crowding amongst their similar technology peers. Embracing MtM without MM will undermine Europe's long-term KET aspirations and advanced manufacturing needs by 2025. By the way, a 450mm fab is already in TSMC's roadmap!

The chip industry's growth is driven by the economy, which is currently weak due to complete loss of confidence, as well as unit demand, fab capacity, which is very tight at the leading technology edge, and ASPs.

At IFS2012 in January, Future Horizons had said that +8 per cent is a safe bet for the global semiconductor industry. The updated outlook for 2012, from Future Horizons, for the global semiconductor industry is +4 per cent! As we all know, the chip fundamentals wait for no man or crisis! The year 2012 has been one of the unresolved Euro crisis. The chip market will likely rebound once business confidence returns!

As SEMI puts it: the key to the implementation of 450mm wafer production will be the ability of key subsystem and component suppliers to support leading tool makers with critical enabling products and technologies vital to 450 pilot lines and high volume production. The role of the the Global 450 Consortium (G450C) will be watched and followed with great interest.

The key question: Should Europe make a move for 450mm fabs? What happens to the existing 300mm fabs? Do let me know your thoughts, friends!

P.S.: By the way, what is the Indian semiconductor industry doing?

Please keep reading my blog! ;)

Friends, I am really touched by the love and the concern that all of you have shown! Yes, I am very well aware that my blog has not been updated!! The fact is: one of my former employees has offered me a job!!!

So, what do you say, dear friends? Should I continue blogging? Actually, the new job that I’ve got into does not allow me to post. Thought, I’d mention this right here! ;) Besides, my job profile covers the entire world, and there are quite a few folks working with me. I need to do some hand holding as well, as there are several newbies in the team. All of that will take away a lot of my time! I also have had to change cities, moving from South to North, and travelling from West to South every morning!

No matter! I shall continue to write on electronics, semiconductors, telecom, solar and components, and the like, in my new role as well. Since it will be for a leading publication of India, I am sure you all can track me down very, very easily! ;)

In the meantime, please do keep reading this blog, my dear friends, do post your comments, as well, and I shall do my very best to reply.! Take care!! ;)