Magazine Feature

2015: A Year Of Merger Mania In Semiconductor Manufacturing

2015 set records for merger activity as the China slowdown created global economic headwinds. While some markets contract, new opportunities are poised to strengthen 2016 growth.

2015 was a record-setting year across the semiconductor industry. Merger mania hit new highs, with 18 deals of $100 million or more making headlines.

Mergers closing by October 31st were valued at $110 billion. Yet some major deals did not happen, as was the case with the Tokyo Electron/Applied Materials match-up. Meanwhile, the acquisition of KLA-Tencor by Lam Research Corporation announced in fourth quarter moves forward with the approval of most industry watchers even though regulators have not officially weighed-in.

Some of the biggest headlines came from China, where the country's long-standing expansionist business climate ran into headwinds that shook financial markets this past summer. World markets largely recovered thanks to infusions of capital by the Chinese central bank and the resilience of the United States' economy. Despite China's negative pull, Asia is still on-track to be the world's major producer of semiconductors by 2020.

While technological advances continue to drive product innovation, headlines in 2015 often spoke of incremental advances for many applications. That having been said, new ground was broken in memory, photonics, 5G, IoT and progress towards 450mm technologies.

As 2015 draws to a close, industry analysts remain optimistic that growth"”perhaps at a slower pace"”will continue in the New Year thanks to the ever-inventive minds of the world's best manufacturers, suppliers, researchers and entrepreneurs.

2015 in Review "“ January

Researchers at IC Insights got off to a busy start, forecasting seven percent growth in semiconductor manufacturing. This prediction was within the range of SEMI's forecasts as well. While several researchers foresaw a China slowdown, none were looking for the fall-off that markets would experience by the summer.

Taiwan Semiconductor Manufacturing Company (TSMC) announced record quarterly 2014 profits, but also signaled that a slowdown might be coming. As if they heard the forecast in Taiwan and wanted to exert their own influence, leaders in Beijing signaled that China intended to fund semiconductor expansion to the tune of $10 billion (USD.)  Meanwhile a new report from IC Insights listed the top 50 foundries of 2015; nine were in China.

At the Consumer Electronics Show in Las Vegas (USA), Intel announced a new chip family that included 14 new designs targeting PC and notebook applications. Intel also showcased what it claimed to be the smallest wearable system on a chip (SoC) that was clearly targeting the wearables market.


A week into leading the SEMI trade group, John Neuffer helped celebrate record setting revenues in 2014 of nearly $338 billion, up 9.9 percent over 2013. China was first on his list of stops as the world's number-two economy sought expanded roles in high-tech manufacturing, placing more emphasis on key capabilities that have up to this point typically been located elsewhere across the globe.

As China topped many analysts' must-watch lists, America's Silicon Valley again made news, this time for its continued expansion. Perhaps seeing ahead to the rocky road we'd find by mid-2015, Silicon Valley executives reported continuing expansion of the type not experienced since the "˜bubble' days of the dotcom bubble that burst in 2001, but of a type that they believed was more sustainable compared to the breakneck pace set before the 2000-2001 dotcom bust.

February saw TSMC announcing a $16 billion investment in its plants. Spoiler Alert: That ambitious plan would be trimmed later in 2015, with capital investment falling from $10.5 to $8 billion, reflecting the reality of a shrinking market.

Even though February saw shouting matches over whose semiconductor fabs might grow the fastest, Internet of Things (IoT) technology grabbed headlines as well. Security experts at ARM outlined what they saw as the road ahead for realizing the technology's potential, putting cash into the gambit by acquiring Offspark, a company specializing in Transport Layer Security (TLS), technology already used widely across commerce and communications infrastructure. Elsewhere in the IoT universe, experts meeting at the Boston Embedded Systems Conference said that the competing platforms for realizing IoT secure connectivity were still sorting themselves out and would be for years to come, which could affect how quickly IoT devices are brought to market.


Merger mania continued in a big way on March 1st with the announcement by NXP and Freescale that they planned to combine resources, creating a $10 billion revenue machine. If finalized the merger would create the world's 9th largest chip maker, and dominate the market for automotive and general purpose microcontroller semiconductors. NXP and Freescale valued the deal at $40 billion.

As if to put an exclamation point on the issue of global fab hot spots, analyst at IC Insights said that Asia would have nearly 70 percent of all fabs by 2019, with the bulk (40 percent,) located in Taiwan and South Korea. China made the list with a forecast of 10.9 percent of global fabs by 2019.

In a move that surprised no one except those with their heads in the sand, exhibitors at Wearable TechCon noted that smart glasses from Epson, Google and Sony were resetting expectations and were turning their attentions to business applications. The appeal of Google Glass and similar products in work environments that challenge staff to maintain constant contact across multiple applications as well as "˜interface' with their human counterparts seems intuitive. One has to wonder why the developers didn't seek those markets at the same time they were promoting smart glasses to mainstream consumers.

Technology news came on several fronts, with researchers at Northeastern University announcing that they had uncovered basic principles that should enable the development of quantum Wigner crystals, predicted as theoretically possible in 1934. The breakthroughs could enable ultra-high-electron mobility several orders of magnitude superior to either silicon or grapheme. On the optical front the University of Washington in Seattle and California's Stanford University announced development of nano-scale lasers that could be ideal for transmitting data optically around semiconductor chips.

March ended with analysts "˜cooling' to the idea of an Intel/Altera combination. Although speculation about Intel acquiring an FPGA leader has persisted for years, that market is tiny compared to Intel's primary computing markets. Analysts wondered why the chip maker would spend $13 billion for a company with perhaps $2 billion in annual revenues.


IoT again made headlines as EuroCPS pledged to fund as many as 30 teams across Europe with up to $25 million to underwrite a three-year initiative in fundamental and practical research. The goal was to enable greater capabilities and market growth for all things wearable tied to Internet of Things applications. The initiative particularly targets smaller research groups that often are challenged when competing against major global enterprises with deep R&D pockets.

At midpoint, engineers commemorated the entry of Gordon Moore's "˜simple' assertion that transistors could double in capacity within the same area of a silicon chip every two years. While the ramifications of this idea are still being argued the impact of Moore's Law is undeniable. The successful pursuit of greater computing capacity led to not just faster and cheaper computers, but also myriad applications from communications and the Internet to smartphones, tablets and now the dawn of IoT.

April saw announcements from the Internet Engineering Task Force (IETF) about new, faster chips and the software to drive them, all tied to software-defined networking (SDN). Meanwhile, the Optical Internetworking Forum (OIF) is leading initiatives to create bonded Ethernet channels. The ultimate goal of both groups is to create 400 Gb/s channels bonded to create pipes as "˜fat' as 1.6 Tb/s.

Analysts also went out on a limb to predict Intel's process technology of choice for its next two generations, driving toward 10nm devices. Analyst David Kanter (based on the contents of papers rleased by the company and and assorted other data,) predicted Intel would rely on quantum well FETs using two new materials"”indium gallium arsenide (InGaAs) for n-type transistors and strained germanium for p-type devices. Only time will tell, but if he is correct Intel could leap frog competitors one more time.

Closing out a busy April was Apple's achievement of yet another sales record: $58 billion in the second quarter compared to the same time in 2014. Although Apple declined at the time to make forecasts on its then-anticipated Watch segment, iPhone and Mac sales dropped. Nevertheless the world's largest electronics company reported a $13.6 billion profit. Not bad for a "˜cooling' market.


We all know how frustrating it can be to find the right component for a new design, and engineer Javier Solorzano responded by co-founding a new company called Elektet that he believes will aid designers, and manufacturers searching for just the right component. This isn't your basic parametric search engine like many chip vendors have built into their websites. His approach is a "˜Google-like' system that could work across the web to help engineers locate parts despite widely varying product IDs and descriptions across the industry.

It was no surprise to discover the industry heavy weights Qualcomm and Broadcom again found something to dispute, this time in how the LTE-Unlicensed (LTE-U) spectrum is being utilized alongside Licensed Assisted Access. The US Federal Communications Commission is interested in whether the two companies are sharing spectrum and not looking into ways that incumbent Wi-Fi technologies might be infringed upon. The inquiry could potentially pit cellular network providers against the "˜cable guys' as well as users of unlicensed spectrum. Stay tuned"¦.

Infineon made additional headlines by announcing that the Munich, Germany based company was looking for a buyer to take over its Newport (Wales) wafer fab that came to the company as part of its acquisition of International Rectifier. Although seen as an eventual blow to the local economy, Infineon stated it expected work to continue in Newport through the end of 2017, indicating that demand is sufficient for a potentially protracted sales process.

News from the wearables market included opinions from the Embedded Systems Conference in California that indicated relatively modest sales figures could be tied to the fact that while devices such as Apple Watch have many capabilities, they haven't achieved the kind of data throughput that medical practitioners would need to use the devices for patient diagnoses or monitoring. One problem lies in the sensor design, which is fine for other systems today but lacks the contextual data that a doctor or other practitioner would need.

Samsung made headline by announcing it would ramp production of its 10nm devices starting in 2016. The process for a 10nm FinFET node was announced a month after Samsung detailed its 14nm process; the new node is expected to be in full production by the end of next year. International Business Strategies CEO Handel Jones said that if Samsung can achieve 10nm at production volumes, the impact could be very disruptive in the market.


The month began with good news for Taiwan Semiconductor Manufacturing Company (TSMC) when MediaTek announced that it would continue using the company as its leading-edge chip foundry. This announcement laid to rest fears that MediaTek might be shifting its business to TSMC rival Samsung.

Defending his company's decision to buy Altera, Intel CEO Brian Krzanich said the combined companies would ship integrated products starting in late 2016 for servers and some still-undetermined embedded systems. His message was met with some skepticism by Linley Gwennap, a principal analyst at The Linley Group and a veteran Intel analyst. Krzanich estimated new business could amount to ""¦quite a bit bigger than a billion dollars"¦" while the analyst maintained that established markets the company might count on for revenue is enough to question the deal's efficacy.

"˜Sanity' became the watchword at an early June conference attended by Internet of Things (IoT) experts who labeled projections of up to 50 billion IoT devices by 2020 as "˜Fantasy.' A more realistic projection is 1.9 billion IoT devices shipping by 2020, according to Linley Gwennap who said he took a bottoms-up look at real world stats, such as the global middle class population (about 2 billion by 2020) and the number of homes expected to have Wi-Fi or other broadband connections (around 600 million.)

Analysts at the Computex Taipei event looking for ways to realize maximum penetration for wearable IoT devices stated that 72 million wearable devices worth $17 million will ship this year, pointing to a compound annual growth rate (CAGR) of 18 percent. They projected up to 156 million units worth $39 billion by 2019. Bruce James, director of mobile solutions for ARM, with chip designs in 90 percent of with world's smartphones, is betting on watch and watch-like wearables as emerging leaders.

By mid-month, reports were surfacing noting that demand for semiconductors was weakening in the second quarter with some assemblers in Asia suggesting double-digit fall offs compared to second quarter in 2014. The iPhone supply chain and automotive markets remained a bright spots in 2015 forecasts.

While current semiconductor shipments were falling compared to 2014, China's top foundry, Semiconductor Manufacturing International Corporation (SMIC), forged a joint venture with Huawei, Qualcomm and the imec research institute to develop its own technology for 14nm process production at a SMIC fab by 2020. Beijing had earlier committed to spending $10 billion for domestic semiconductor production, which could include the 14nm development project analysts said.


IBM and GlobalFoundries got the month off to a busy start, announcing that they had closed the deal transferring IBM's Burlington, Vermont (USA) foundry to GF. The deal was worth $1.5 billion and as a condition IBM agreed to make GlobalFoundries its supplier for the next 10 years while Global also obtained ownership of 10,000 IBM semiconductor patents.

5G took another step towards becoming the next cellular communications standard when it was announced that demonstration projects, trials and specifications work would begin within months of the July announcement. 5G is expected to deliver a number of benefits compared to 4G technologies, including maximum data rates of 10- to 20 Gb/s, likely confined to dense urban areas.

Analysts at Credit Suisse in Taipei said MediaTek (the world's third largest chip designer,) is expected to continue making market share gains in the LTE market at the expense of top-rated Qualcomm because of its position in the fast-growing Chinese smartphone market. MediaTek's market share in LTE is likely to double (up to 45 percent of the China market) by December 31st.

In other news from Asia, the Tsinghua Unigroup (China) bid $23 billion to buy Micron Technology. While the deal would fill one of the biggest strategic holes in China's chip industry it was expected to raise political issues all the way to the US White House. Micron is the second largest chip maker in the US (behind Intel) with revenue of $16.8 billion in 2014.

By mid-July analysts were reporting that semiconductor sales were in a two-year slump due primarily to weak demand for PCs and some smartphones. Gartner Group reported that chip sales rose a mere 2.2 percent by the middle of 2015, with growth of just 1.3 percent predicted by year's end. At the same time, Gartner predicted that growth would return to a more typical 4-5 percent range starting in 2017, thanks to expected growth in IoT, the expansion of smartphone sales in growing markets such as India and China, and more positive momentum in other markets including Europe and the Americas.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest chip foundry, said the outlook for the rest of 2015 is worse than the company previously expected because customers were digesting an inventory glut built earlier this year. While the company expected an increase in demand for computer, consumer and industrial segment devices, it expected smartphones and other handset device markets to decline.

The impact of declining growth in China was fully felt across global financial markets starting in July. Even though the official reports coming from Beijing reported 7 percent annual growth, outside economists and analysts pointed to the government's widely observed miscalculation of "˜deflator' factors that are a broad measure of prices affecting a country's economy. Economists stated that Chinese gross domestic product (GPD) figures were wrong by up to 2 percentage points.

The vulnerability of devices linked to the internet hit home in July as car maker Jeep and its parent, Fiat Chrysler Automotive (FCA), admitted that Jeep vehicles were vulnerable to hacker attacks. Blame for the vulnerability was shared with Sprint, FCA's system integrator, and Harmon Kardon, designer of in-vehicle infotainment systems. The revelation came at the end of the month when a hacker team succeeded in taking over vehicle functions by exploiting software weaknesses. A sweeping recall of 1.4 million vehicles resulted to proactively address the problem; no driver injuries were reported at the time.

NXP celebrated strong financial performance as the month drew to a close. The company reported $1.506 billion in revenue, a 12 percent increase compared to 2014. High performance mixed signal products for security, connectivity and mobility made the second quarter the 12th consecutive double-digit growth period for the company.


At a meeting of IoT professionals at the Embedded Systems Conference (ESC), the group conceded that Internet of Things technology will not take off until two lynchpin requirements are met: development of wide area networks and lower costs for hardware crucial to seamless connectivity. While hardware costs typically decline as deployment accelerates, the lack of networks hinders overall market development. While the group referenced good network development efforts by the LoRa Allience led by Semtech, and SigFox (France), the group foresaw that IoT devices would slowly enter the market since cellular networks appear to be, "˜"¦the only viable option for that kind of coverage for the next ten years"¦.'

At the Flash Memory Summit Samsung announced solid-state drives (SSDs) and systems geared to drive 3-D NAND into mass markets. But analysts and even other vendors suggested that it may take most of 2016 before the technology is ready for mainstream implementation.

The Consumer Electronics Association, also presenting at the Flash Memory Summit, said that while wearables constitute the fastest growing segment they are also the smallest and most fragmented. This led other analysts to conclude that fitness trackers and smart watches both show signs of gaining traction with consumers, yet they have penetrated just 11 percent of US households, nowhere near the 60% penetration of smartphones in the US.

Altera executives seemed edgy about prospects of life under the Intel umbrella. Analysts, speaking with current senior executives and those who have already departed the company, cited fears of how well Intel integrates acquired companies given its PC-oriented leadership. Despite Intel's long-standing attempts to shed its dependence on personal computing, they cited what happened to past acquisition targets including Level One, DSP Communications, Sialogis Corporation, Giga A/S as cause for concern over how well Altera might fare.

Smart meters are driving the IC market supporting IoT in utility markets. Global revenues for semiconductors used in water, gas and electric meters reached $1.2 billion in 2014, with growth standing at 11 percent according to IHS researchers. Growth opportunities remain as more public utilities change over to the technology, which better tracks customer utilization. The future points toward integrated ICs to do the work now being done by individual components; manufacturers with integration expertise are best positioned to take advantage of this growing market.

MediaTek's rapid growth in 4G smartphones is likely to be undermined by handset makers in China who are designing their own chips, according to Hong Kong based Bernstein Research. Spreadtrum Communications and Huawei are eroding MediaTek's position because the maturing market is favoring Chinese players that are backed and subsidized by the government. At the same time MediaTek is gaining market share from Qualcomm in the 4G and high-end segment.


Chinese upstart Phytium Technology made headlines with is aggressive "˜Mars' design that was released at the Hot Chips event. The Mars architecture is designed for ARM-based servers and utilized advanced SoCs not seen before in mass market applications. But despite the fact that Phytium is only three years old, the company has deep roots in Chinese electronics"”it is a subsidiary of China Electronics Corporation, one of the oldest state-run enterprises.

Gartner researchers reported that chip sales in September continued to slow largely due to stagnant sales of semiconductors headed into PCs, tablets and smartphones. They forecast that growth could dip to a fraction of one percent, but might rebound once third quarter sales figures were finalized.

TSMC announced that it expected to begin early production utilizing a 10nm process later in 2015, and planned to achieve 7nm production capability by 2017. The road map that the company unveiled in Silicon Valley meetings also pointed towards a reduced cost version of its 16nm process in 2016 and a broad portfolio of specialty processes for IoT, automotive and sensor applications.

Perhaps leaping ahead of consumer acceptance and comfort, analysts at the Linley Group announced their research points to the availability of fully autonomous, self-driving cars by 2022. This new technology will help double the size of today's $10 billion automotive semiconductor market by 2025. Feedback from automotive industry insiders suggest that today's driver assistance and automation systems are mere "˜appetizers' for the main course of self-driving cars. The technology is already there and being tested, remarked Linley Gwennap, principal of the Linley Group. The researcher did not elaborate on how willing consumers will be to hand steering wheels over to microprocessors. Anyone for a replay of "˜I Robot'?


Google's' Nest Labs announced it planned to release its Weave protocol in 2016 and will involve partners that will use it to connect smart home products such as locks, light switches and cameras. The advancement is seen by industry observers as another way that IoT devices are moving into more mainstream applications visible to a wider range of consumers.

The slump in PC market semiconductor sales was reflected in Micron Technology's report of declining sales revenue for a third straight quarter. Even though PC sales remain sluggish, the company reported healthy demand for memory chips in other end markets, pointing to the continued shift away from traditional computing and towards other small form factor computing options such as tablets and smartphones.

Marvell announced that it is sampling the first products based upon its MoChi approach to building modular SoCs. One of the company's two new 64-bit ARM processors is the first to implement final-level cache (FLC) technology, which aims to shrink external DRAM requirements. The MoChi design concept is Marvell's approach to creating products that operate like SoCs when interacting with application software, but may actually be composed of multiple die in one or more packages. The concept enables chips made in different processes to work together as closely as if they were grouped together on the same die.

Extreme Ultra Violet (EUV) technology got a boost from imec researchers in Belgium working with Cadence Design Systems. The two organizations partnered to create two 5nm test chips using a mix of 193i and EUV techniques. The researchers believe this approach represents the best alternative to breach the barrier limits of Moore's Law in transistor evolution.

Dell bid $67 billion to buy storage giant EMC in a mid-October acquisition proposal. The deal was billed as the largest high-tech purchase to date, but received mixed reviews from industry watchers. The analysts were unenthusiastic largely because both companies"”though large and successful"”are seeing flat or declining sales in their segments. Industry insiders wondered how the company would deliver growth to investors given little prospect for innovation beyond the company's existing portfolios.

The town of Bristol, England took innovation to a new height by turning itself into a "˜petri dish' for experiments in communications and the Internet of Things (IoT.) Bristol received grants and gifts totally 75 million (GBP) to create wired and wireless infrastructure for a smart city. It aims to build applications ranging from assisted living programs for seniors to driverless cars and solar energy.

Taiwanese semiconductor giant TSMC reduced early-2015 planned capital expenditures of $10.5 billion to $8 billion, a 25% cut. The move came on the heels of slowing global demand for semiconductors.

Lam Research Corporation announced its intention to purchase KLA-Tencor, marking the start of the industry's largest merger of high performance process tool makers. The $10.6 billion deal was observed by some analysts as an effort to put the new company ahead of its archrival, Applied Materials. The merger was approved by both boards, but comes at a time of increasing regulatory scrutiny of M&A activity. In April Applied Materials and Tokyo Electron cancelled a planned $29 billion mega merger, citing opposition from antitrust interests at the US Department of Justice. Yet most analysts approve of the Lam/KLA deal, saying it will give the combined entity a decisive edge in global competition through pricing power it likely would not enjoy as separate companies.


Fears about automobiles being vulnerable to hacking led to more media coverage of the dilemmas facing car makers. While manufacturers have quietly sought to patch firmware and software holes, evidence remains that many newer car infotainment and computing systems are vulnerable to attacks that gain access through radio or cellular frequencies, or piggybacking on the short range signals from a consumer's key fob. According to the US Federal Bureau of Investigation (FBI), between April 2014 and June 2015, there were 992 "˜ransomeware' related complaints, with victims reporting losses totaling more than $18 million.

The Semiconductor Industry Association (SIA) reported that global chips sales declined 3 percent to $85.2 billion in third quarter. The decline followed trends from earlier reports, with declines in traditional PC sales and smartphones as leading indicators. At the same time sales picked up in September, leading some analysts to hope for a better year-end tally.

Qualcomm reported to shareholders that it believed smartphone growth would continue to slow in 2016, and that prices for chips going into handsets will continue to fall, though less sharply than they did in 2015. Qualcomm also expects China OEMs will command a growing share of the market.

While Qualcomm fretted over its future with Samsung and with other key handset makers, its prospects may be looking up when it comes to printed electronics. Raghu Das, CEO or IDTechEx, hosted an industry forum on the subject in Silicon Valley, saying that the technology had matured to a point that engineers need to "˜get printed electronics out of the lab and utilize their capabilities.' Those poised to take advantage of these possibilities include Qualcomm and a handful of other companies. Qualcomm later presented new products at the forum, including a label that can gather data from a golf club and feed info to the player's smartphone. A thin-film battery maker, Blue Spark Technologies, displayeda bandage that can deliver temperature information to a handset.

The strengthening US dollar compared to the position of other world currencies has taken a toll on the semiconductor industry, among many, and is forecast to lead to contraction in worldwide chips sales in 2015.

Samsung is set to make inroads into Intel's position as the world's largest chip maker in 2015, according to market forecasts compiled by researchers at IC Insights. The researchers say that Intel continues to suffer from its dependence on the weakening personal computer market and its limited success breaking into mobile phone applications. IC Insights expects Intel sales to contract 2 percent in 2015 compared to Samsung growing its chip revenue 10 percent, which should bring them in at $6 billion behind Intel's forecast of $50 billion in chip sales.

Merger mania continued in November as Renesas Electronics became an investment target attractive to a number of suitors outside Japan, including China's Tsinghua Unigroup and Germany's Infineon Technologies. Tsinghua's ambitions in the memory chip business are well established since it is seeking a foothold in the logic business, especially in automotive and MCU segments. Infineon is said to regard Renesas as an ideal fit, based on the Japanese chip vendor's strength in infotainment, head unit and digital cockpit technologies and other areas of automotive electronics where Infineon lags. It's also important that Renesas has a strong position both among Japanese and European automakers.


T.J. Rodgers, outspoken CEO and President of Cypress Semiconductor, said this month that he expects "˜merger mania' now driving consolidation across the industry may continue for another two years. The CEO cited a causal relationship between what executives see in the market and fears that not merging with a like-minded company could mean they are losing out on potential market share gains. Chip companies executed more than 18 M&A transactions worth more than $100 million in the last year; M&A activity totaling $110 billion was reported as of October 31st.

A rocky 2015 did not deter Taiwanese semiconductor giant TSMC from predicting this month that it will achieve double-digit growth during the coming year and that its 10nm process is on schedule for production in 2016. The company's CEO also predicted similar results for 2015 at the end of 2014, so it remains to be seen how well the company will fare against headwinds now buffeting the industry. TSMC also announced that its 7nm process was on track; the company could see 10nm as a transitional node leading directly into 7nm.

For only the second time in the last 25 years, business growth for the top chip manufacturers in 2015 is expected to beat the growth of top fabless companies, according to researchers at IC Insights. The change in fortunes is largely credited to Samsung's decision to use its own Exynos application processor in smartphones at the expense of Qualcomm. This growth notwithstanding, IC Insights said they also expect 2015 will be rather flat overall for the top 10 integrated device manufacturers (IDMs), while the top 10 fabless companies are expected to slip into slightly negative figures this year.

The International Electron Devices Meeting (IEDM) in Washington, DC was the setting for word from senior ARM researchers that even though it is getting harder and more costly to make chips smaller and faster, there is hope to be found in advancing Moore's Law. To combat an increasing set of design limitations, engineers will need to employ a host of remedies that could fragment and possibly dilute economies of scale. This may result in significant sacrifices in density for the sake of schedules, combined with balancing the need for cost effectiveness with market timing. The researchers see hope in what is already being done and will be done to increase productivity and cut costs, noting as an example that multiple passes through lithography will increase costs while new steppers coming online for 7nm will be 50 percent faster than those used at 28nm.

United Microelectronics Corporation (UMC), the world's third largest foundry, said it expects to open a joint venture 300mm fab in China about two months earlier than expected. Production should begin in the third quarter of 2015. A spokesperson credited the aggressive readiness posture to faster than expected construction in China. Meanwhile, UMC archrival, Taiwan's TSMC, also announced plans to open its first wholly owned 300mm fab in china, slated to begin production in the second half of 2018.

A Chinese government-backed firm has initiated a bidding war for chip maker Fairchild Semiconductor International. In November Fairchild accepted an acquisition offer from ON Semiconductor Corporation. The offer it accepted was for $2.4 billion, while the offer from the unsolicited bidder was for $2.6 billion. While Fairchild said it will review the new offer, its board has already accepted the ON Semiconductor bid, so it is unclear whether the Chinese company has a chance to acquire Fairchild.


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