Top 20 semicon rankings Q2-09 -- TSMC climbs up, AMD slips down!

Very interesting, isn't it? And I am not surprised! TSMC deserves to move up the top 20 semiconductor companies rankings!! It seems that AMD especially needs to really get its act together.

First, to the rankings. Recently, IC Insights released the list of the top 20 semiconductor sales leaders during Q2-09.Source: IC Insights

In this list, there are four fabless semiconductor companies -- Qualcomm, Broadcom, MediaTek and Nvidia in the top 20, and one foundry -- TSMC, perhaps, emphasizing the growing influence of TSMC as well as the fabless semiconductor companies.

AMD slips! Again?
I had written a couple of posts some time back on AMD and Intel, where the former had commented on the EC ruling on Intel, and also how both were at each other's throats, and had asked the question -- how will all of this help the market?

Well, one hopes that AMD will come back very much stronger in the next quarter, despite its uninspiring guidance for 3Q09, saying that it expects its sales to be "up slightly" from 2Q09.

TSMC, Hynix, MediaTek shine
Coming back to the table, the clear movers are TSMC, and no surprises there, as well as Hynix and MediaTek. In fact, with a little better Q3 performance, TSMC could well move up to the third position, overtaking both Texas Instruments and Toshiba.

Look at the last column -- the 2Q09/1Q09 percentage change -- TSMC has grown by a whopping 93 percent! One other thing! TSMC is reportedly eyeing business opportunities in solar photovoltaics and LEDs in a bid to diversify its revenue channels. Should these happen, expect TSMC to move up higher!

The closest to TSMC in terms of growth are Hynix at 40 percent and Qualcomm at 36 percent, respectively. MediaTek, another impressive mover, grew by 20 percent. Of course, there is Samsung as well, with 29 percent growth.

ST, Micron, Nvidia and NXP have done well too! According to IC Insights, Nvidia replaced Fujitsu in the Q2-09 top 20 rankings. And that brings us to the shakers or those who fared poorly.

Fujitsu, AMD, Freescale slide!
I've already touched upon AMD. Fujitsu cited flash memory and automotive device sales to have suffered immensely this quarter. However, it hopes Q3 will be better and said that customer demand was picking up. So, it could well be back in the Top 20 during Q3.

Yet another slip was in store for Freescale. It slipped from 16th position in 2008 to 18th position during Q1-09, and slid further to 20th position in Q2-09. Perhaps, overdependance on automotives has been its undoing.

An interesting statistic from IC Insights -- Fujitsu, with -9 percent and Freescale, with -2 percent growth, were the only two top-20 companies from Q1-09 to register a 2Q09/1Q09 sales decline!

Wonderful industry guidance
It is heartening to see 19 of the 20 companies registering positive growth this quarter. It won't be improper here to commend IC Insights on its wonderful industry guidance!

In an IC Insights study from late December 2008, it was very vocal in advising firms to adopt a quarterly outlook! It also forecast a significant rebound in the IC market beginning in the third quarter of the year!

IC Insights also stood out by pointing out in early July that H2-09 is likely to usher in strong seasonal strength for electronic system sales, a period of IC inventory replenishment, which began in 2Q09, and positive worldwide GDP growth.

IC Insights had marked 4Q08 as the beginning of the downturn/collapse and Q1-09 as the bottom of the cycle. This quarter (Q2) has largely been a replenishment phase for the inventories. Going by that count, Q3 could well see a true seasonal increase in demand. IC Insights also said that during Q4-09, market growth will mirror the health of the worldwide economy and electronic system sales.

There is light, after all, at the end of the tunnel! Wonder why are the industry folks continue to tell each other -- we still aren't having a good time! Maybe, it is time for them to shed their pessimism and from holding back on investments, and move on to show steely optimism, and indulge in really aggressive buying and selling! After all, work and progress will happen ONLY if you work!!

Top 20 semiconductor suppliers sales surge 21 percent in 2Q09!

USA: The 2Q09 results from the top 20 semiconductor producers illustrate why IC Insights has, since the beginning of this downturn, encouraged its clients to think quarterly about 2009! As shown below, the semiconductor industry continues to move through this silicon cycle very quickly on its way to recovery.

4Q08 — The beginning of the downturn/collapse
1Q09 — The bottom of the cycle
2Q09 — Inventory replenishment phase
3Q09 — Seasonal increase in demand
4Q09 and beyond — Market growth will mirror the health of the worldwide economy and electronic system sales

Over the past few years, much has been said regarding the "maturing" of the semiconductor industry and less volatile cycles. However, IC Insights' new Mid-Year Update to The McClean Report shows that the trend toward a less volatile semiconductor market does not apply when looking at the industry on a quarterly basis.

As shown in Fig. 1, the top 20 semiconductor companies, in total, registered a 2Q09/1Q09 sales increase of 21 percent. This was a 37-point swing compared to the 1Q09/4Q08 results when these same top 20 suppliers endured a sales drop of 16 percent!Source: IC Insights

As discussed in detail in IC Insights' Mid-Year Update to The McClean Report, much of the semiconductor sales surge in 2Q09 was due to inventory replenishment after the severe cutbacks of 4Q08 and 1Q09. However, seasonal demand for electronic systems is forecast to drive 3Q09 semiconductor sales up by at least another 8 percent.

IC Insights continues to forecast a 17 percent decline for the full-year 2009 semiconductor market (the same forecast it presented in December of 2008).

Spurred by the bottoming of the worldwide economy from global recession in 1Q09, the semiconductor market is forecast to continue along its recovery path in the second half of this year and gain further momentum in 2010.

Climbers:
TSMC — As forecast by IC Insights, the world's largest IC foundry almost doubled its sales in 2Q09. In fact, all of the four major pure-play foundries (TSMC, UMC, Chartered, and SMIC) registered very strong 2Q09 sales.

TSMC is expecting another 20 percent increase in sales in 3Q09. Moreover, the company raised its 2009 capital spending budget from $1.9 billion to $2.3 billion, which is good news for the struggling semiconductor equipment suppliers. Considering that the company only spent $390 million in the first half of 2009, a huge jump in spending (to $1.9 billion) is scheduled for the second half of this year!

Hynix — One of the world's largest memory suppliers, Hynix displayed a 40 percent sales surge in 2Q09/1Q09 and replaced AMD in the top 10. The company cited rebounding average selling prices (ASPs) for both flash memory and DRAM as a key boost to its sales figures.

IC Insights expects that memory ASPs will continue to rise in the second half of 2009 and beyond as the severe cutbacks in memory capital spending and facility closures further restrict available capacity.

MediaTek — High-flying fabless IC supplier MediaTek joined the top 20 ranking by jumping six positions in 1Q09. As shown, the company moved up another two spots, to number 17, in 2Q09 with a 20 percent jump in sales.

The company continues to attribute much of its success to the "stay-at-home-economy" driving digital TV IC sales as well as continued strength in its core wireless communications business.

Descenders:
AMD — The second-largest MPU supplier in the world has continued to find that it is no fun to be in competition with the giant Intel! As shown, the company fell out of the top 10 in 2Q09 by barely growing (+0.6 percent), while Intel increased its sales by 12 percent. Moreover, AMD's guidance for 3Q09 was uninspiring, saying that it expects its sales to be "up slightly" from 2Q09.

Freescale — Freescale dropped from being ranked 16th in 2008 to 18th in 1Q09 to 20th in 2Q09 and was one of only two top-20 companies (along with Fujitsu) to register a 2Q09/1Q09 sales decline (-2 percent).

The company is in the midst of a major re-organization (eliminating its cellular phone business) and its fortunes are increasingly influenced by the health of the automotive industry.

Fujitsu — Fujitsu dropped from being ranked 17th in 1Q09 to 22nd in 2Q09 (Nvidia replaced Fujitsu in the 2Q09 top 20 ranking) as its 2Q09/1Q09 sales declined by 9 percent. The company stated that its flash memory and automotive device sales suffered the most in 2Q09.

However, Fujitsu believes that its customers' excess device inventories have now been depleted and that consumer demand is picking up.

Fujitsu's full HD H.264/MPEG-2 transcoder ICs

BANGALORE, INDIA: Fujitsu Microelectronics Asia Pte Ltd (FMAL) announced two new transcoder ICs that can convert between full HD (1920 dots x 1080 lines) MPEG-2 video data and H.264 video data, as well as transcoding between audio formats while featuring a low power consumption of only 1W including the in-package memory.

These new ICs are targeted to support the growing number of electronic equipment that can record digital broadcasts. By employing Fujitsu’s proprietary transcode technology, Fujitsu Microelectronics realized industry-leading low power consumption.

Combined with the small form-factor packaging, these ICs can be used not only for non-mobile fixed electronic equipment -– such as digital video recorders (DVRs) - but also in such mobile products such as notebook PCs. In addition to the transcode function, security functions are included on a single chip to make it easy for customers to create their systems.

Sample shipment of the new transcoder ICs, the MB86H57 and MB86H58, will begin from late July, 2009.

Digital TV broadcasts -- including HD -- are increasing worldwide, while demand for HD video recorders is also increasing. As many broadcasts still use MPEG-2 format, many such HD video recorders have a transcode function to convert the MPEG-2 data to the higher compression H.264 format, so that more data can be recorded onto certain media (hard-disk, DVD disc) and thus offer longer recording times.

At the same time, there are increasing needs to record digital broadcasts on mobile products such as notebook PCs, as well as the increasing demands to create electronic appliances that use less energy. To meet these demands for low power consumption and small form-factors, Fujitsu Microelectronics developed these two transcoder ICs.

These new transcoder products use Fujitsu Microelectronics’ low power consumption technologies that have been used in its previously announced H.264 Full HD CODEC ICs, including utilizing proprietary video algorithms developed by Fujitsu Laboratories that maintain high video quality while reducing the processing load. Thus, when transcoding, an industry-leading low power consumption of 1.0W -- including the power consumption of the in-package memory -- was realized.

These transcoders also include audio transcode functionality, security functions for digital rights management of content, and a demodulator interface all integrated on one chip as well as in-package memory. The MB86H57 trancoder has a small 15mm x 15mm package ideal for adding video recording capability to compact electronic equipment. Therefore, these ICs can be used not only in non-mobile fixed electronic equipment, but they also enable expansion of the new recording functionality to such mobile products such as notebook PCs.

Leveraging Fujitsu’s highly regarded expertise in image and video processing-related technologies and products, Fujitsu Microelectronics will continue to strengthen its video processing ICs for the recorder and set-top-box markets, focusing on video-processing ASSPs.

Fujitsu, TSMC ally on leading-edge process technology

TOKYO, JAPAN & HSIN-CHU, TAIWAN: Fujitsu Microelectronics Ltd and Taiwan Semiconductor Manufacturing Co. Ltd announced that they will collaborate on leading-edge process technology production for the manufacturing of Fujitsu Microelectronics' products.

Under an agreement between the companies, Fujitsu Microelectronics will expand its 40-nanometer generation logic IC business with production at TSMC's fabs.

The collaborative effort will bring together Fujitsu Microelectronics' IC design technologies, leading edge imaging and communication intellectual property (IP), and high-quality technical support to customers, especially in Japan, with TSMC's foundry-leading process technology and capability. This advanced technology engagement should enable both companies to create new business for themselves and for their prospective customers.

The two companies also announced that they intend to initiate discussions on collaborative development of high-performance process technologies for 28-nanometer and below for Fujitsu Microelectronics' product applications.

"From the aspect of its advanced process technologies and large-scale production capacity, TSMC is the most attractive semiconductor foundry partner," said Haruki Okada, president of Fujitsu Microelectronics. "By continuing to create our advantages in fine-pitch process technologies through this partnership, we can further grow our ASIC and ASSP product businesses."

"Fujitsu Microelectronics is clearly a world-class leader in advanced high-speed and low-power technologies, design engineering, and differentiated IP. Given TSMC's long-standing commitment to Japan's semiconductor market, and our on-going investment and dedication to advanced process technology, our collaboration with Fujitsu Microelectronics represents a new best-in-class solution for many system companies," said Dr. Rick Tsai, president & CEO of TSMC.

Fujitsu unveils world’s first 1394 automotive IC for HD video

BANGALORE, INDIA: Fujitsu Microelectronics Asia Pte Ltd (FMAL) announced the world’s first “1394 Automotive” (IDB-1394) controller IC that realizes high-definition (HD) (1,280 dots x 720 lines) video transmission over the IDB-1394 in-vehicle multimedia network protocol. The new IC, the MB88395, can simultaneously transmit multiple streams around the vehicle, such as HD video from Blu-Ray DVDs, digital TV, audio and car navigation images.

The new IC realizes this by utilizing a high-speed 800Mbps physical layer, as well as Fujitsu’s proprietary SmartCODEC that provides high compression and which can transmit HD video without perceptible lag. This not only brings the rich HD experience to rear-seat entertainment, but reduces the system cost of in-vehicle multimedia networks by a maximum of 30 percent, while reducing the number of wire harnesses (cables) by a maximum of 70 percent to reduce vehicle weight and improve fuel efficiency. Sample shipment of the new MB88395 will begin from April 22, 2009.

There is increasing attention being paid to 1394 Automotive for in-vehicle multimedia networking, and it is expected to become common in the automotive market. The reason for this includes the gradual shift to digital TV in each country, the increased availability of HD content, as well as the analog output from Blu-Ray players to be stopped from 2013, making 1394 Automotive necessary for the upcoming flood of digital transmissions through in-car networks.

Anticipating the future needs for rear-seat entertainment systems, Fujitsu Microelectronics lead other vendors in introducing 1394 Automotive controllers in 2005, and with this new 1394 controller co-developed with Fujitsu VLSI Limited, allows more HD video content to be easily and flexibility viewed throughout the vehicle.

This was emphasized by Yuji Kawaguchi, Operating Officer of Honda R&D Co. Ltd. in saying: “Honda R&D welcomes the MB88395, the first IC to provide the 800Mbps speeds of the 1394 Automotive spec. The importance of high-speed digital transmissions will increase further in the future to handle in-vehicle multimedia as well as to reduce weight. 1394 Automotive is an in-vehicle network that can enrich entertainment and comfort. We plan to promptly evaluate the MB88395.”

The key to the capabilities of the new controller are the physical layer compliant with the 800Mbps specification of 1394 Automotive -- double the 400Mbps of the previous product -- as well the a version of the SmartCODEC compression codec for video that has an even higher compression ratio, compressing video to one-fourth (1/4) it’s original size, compared to one-third (1/3) that of the previous product.

The SmartCODEC, which was developed by Fujitsu Laboratories and is used in the BT.601 Transport Over IEEE-1394 standard, can compress and decompress high resolution video in 2 to 3 milliseconds(2-3ms) without any perceptible annoying time lag or out of sync contents, which can be a problem when watching the same contents on the front and rear monitors.

This results in the ability to transmit HD video from Blu-Ray DVDs and digital TV, as well as high-resolution navigation images, within the vehicle without any perceptible time lag, making this the first IC in the world to allow multiple streams of HD video and navigation images over 1394 Automotive.

For example, a HD video stream (1,280 dots x 720 lines) from a Blu-Ray DVD that has been decompressed has a rate of 885Mbps. With subsequent compression to one-fourth (1/4) with SmartCODEC, the rate becomes 249Mbps, so two channels can be transmitted in the 800Mbps bandwidth that was not possible over 400Mbps products.

Going forward, Fujitsu Microelectronics plans to expand its lineup of 1394 Automotive ICs to handle the increasing information streams in automobiles, such as video content and peripheral cameras on the vehicle, as well as to drive further reductions in system costs. These in-vehicle networking chips complement Fujitsu Microelectronics’ strong presence in automotive ICs for processing graphics and video.