Taiwan to allow three chip makers into China
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For China, it could reinvigorate a chip industry that has slowed over the past few years as major chip makers posted a string of money-losing quarters. It also represents a token of goodwill by Taiwan to political enemy China.
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(InfoWorld) - One of Europe's largest chip makers is teaming up with Taiwan's biggest chip packaging and testing company on a joint venture in China, despiteÂ strict regulations regarding chip-related investmentsÂ on the part of Taiwan. NXP Semiconductors, the former chip division of Koninklijke Philips Electronics, and Advanced Semiconductor Engineering (ASE) on Friday said they signed a memorandum of understanding to form a joint chip packaging and testing venture in Suzhou, China. ASE will take a 60 percent stake in the venture, while NXP will hold the remaining 40 percent. The companies said the deal will only go through if it meets regulatory approval, but they indicated that the Chinese and Taiwanese governments have been cooperative. "We're pleased to be able to strengthen our relationship with ASE through the formation of this JV and appreciate the willingness of governments to help in this regard," said Ajit Manocha, chief manufacturing officer at NXP, in a statement. Taiwan and China remain enemies after splitting in 1949 amid civil war. The islandÂ heavily regulates China-bound chip investmentÂ over fears China could use the technology to bolster its military. Chip makers on the island find the rules a hindrance. But despite the strained relationship, China remains the favored destination for Taiwanese investment due to their shared language and culture, as well as China's lower costs and incentives for building factories. Â
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(InfoWorld) - Taiwan Semiconductor Manufacturing Co. Ltd., the world's largest contract chip maker, reported its worst monthly revenue in 20 months on Friday, but analysts applauded the figure as further proof that an industry glut is dissipating. TSMC said its revenue in February hit NT$20.58 billion (US$624.2 million), down 14.3 percent compared to last year and its worst monthly revenue figure since it reported revenue of NT$20.11 billion in June, 2005. Despite the poor showing, analysts said it was a strong figure considering February is a shorter work month, at only 28 days, and that a major holiday, the Lunar New Year, celebrated throughout Taiwan and much of Asia, also slowed work at TSMC factories. Last year, the Lunar New Year, which is usually a week-long holiday in Taiwan, was on Jan. 29. This year, the first day of the Year of the Pig fell on Feb. 18. "I think the February sales figure was fantastic. It was only down about 2 percent from January," said Warren Lau, chip industry analyst at Macquarie Securities Ltd. in Hong Kong. He said TSMC's February revenue was further proof that a chip glut that has hampered the industry for the past several months is nearing an end. But the return to health over the next few months could be specific to TSMC, and not include the wider chip industry. Earlier this week, Advanced Micro Devices Inc. (AMD) said it will miss its revenue goal for the first quarter of 2007, while rival Intel Corp. outlined plans to beat a microprocessor glut and weak corporate demand for PCs by stepping up chip development speeds. The two companies engaged in a price war last year, and continue to suffer as they duke it out in the market, analysts say. Gartner Inc. believes the chip industry won't start to recover from the glut until the second half of this year. Rising inventories in late 2006 caused companies to slow production and ease off on buying new machinery as a drop in orders idled more and more production lines, said David Christensen, a Gartner analyst, in a recent report. "Look for this trend to continue through the first half of 2007, followed by a slow recovery in the second half of the year," he wrote. Last month, the market researcher revised down its revenue growth estimate for the chip industry this year to 6.4 percent, from a previous forecast of 9.2 percent. Gartner estimates chip industry revenue will reach US$259.7 billion this year. Â
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(InfoWorld) - In a sign ofÂ China's growing importanceÂ as a center of semiconductor manufacturing, Chinese chip makers will spend more than ever before on cutting-edge factories over the next two years. Chinese spending on chip plants will top $9.8 billion between 2006 and 2008, with most of these funds going towards the construction of factories that produce chips on 300-millimeter wafers, industry group SEMI said. If realized, this spending forecast will top combined Chinese spending on chip plants over the last five years, which amounted to $8.7 billion, it said. Around 70 percent of the money that will be spent on new Chinese plants will go towards factories that use 300-millimeter wafers, which will result in an annual increase in production capacity of 16 percent by 2008, SEMI said. At least five new 300-millimeter plants are expected to come online by 2008, it said. While the fast growth of China's market presents opportunities for established chip makers as well as new entrants, established players -- especially those with Chinese government backing and overseas funding -- will fare better over the long term, SEMI said. Leading China's charge forward in chip production is Semiconductor Manufacturing International Corp., the country's largest chip maker. Among a string of production plants across China, SMIC has one 300-millimeter plant in production and another two under construction in Beijing. The company has also signed an agreement to manage the operations of other plants, including a 300-millimeter fab to be constructed in Wuhan. That agreement helpedÂ spark a lawsuitÂ by rival Taiwan Semiconductor Manufacturing Corp., which said the deal violated the terms of a 2005 settlement agreement that ended a patent infringement lawsuit brought against SMIC by TSMC. The latest lawsuit is currently pending in a California state court.
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Chinese companies will be welcome to exhibit at Taiwan's annual Computex IT next year, the show's organizers said Saturday. The announcement came as organizers revealed a 10 percent increase in the number of foreign visitors at this year's show compared to last year.
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Chinese authorities on Tuesday approved an Intel project to produce chips on 300-millimeter wafers using a 90-nanometer manufacturing process. But because this is advanced technology, U.S. regulators may not agree.
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Taiwan and China have tentatively reached an agreement to let the 2008 Beijing Olympics torch pass through Taipei, which rejected the emblem in April for political reasons, an official said on Friday.
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IBM has licensed technology for making 45-nanometer chips to Shanghai-based Semiconductor Manufacturing International Corporation.
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French telecoms equipment maker  Alcatel is nearing a deal with a Chinese peer on cooperating to  build third-generation (3G) mobile phone networks using a  Chinese technology standard, a senior executive said.
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(InfoWorld) - Chinese companies will be welcome to exhibit at Taiwan's annual Computex IT next year, the show's organizers said Saturday. The announcement came as organizers revealed a 10 percent increase in the number of foreign visitors at this year's show compared to last year. About 33,000 visitors from overseas attended this year's fair versus 30,275 last year, said Walter Yeh, executive vice president of the Taiwan External Trade Development Council, at a Taipei news conference held as the fair ended its five-day run. Local visitor numbers saw a more modest increase from 100,177 last year to around 103,000 this year, he said. Both figures were a little above organizer targets. The rise in visitor numbers is impressive given the weather that Taipei has been experiencing this week. The usually hot and humid weather seen during early June was replaced this year by day after day of torrential rain that has caused deadly landslides elsewhere on the island. "We will make good arrangements with heaven," Yeh said of Computex 2008. Next year's show will see exhibitors split between the four exhibition halls that currently house the expo and a new center some distance away. Organizers hope to arrange shuttle buses to take people between the sites and estimate it will take 15 minutes -- a possibly optimistic goal given anecdotal journey times this week of around 30 minutes. The organizers are yet to decide how they will split the show but promise the new space will mean next year's show will see around 4,500 booths versus the 2,926 at Computex 2007. Yeh said the show this year had waiting list about 500 companies long, so Computex 2008 should not only mean they are welcome but will also signal the opening of the show's doors to companies from China. Until now, Chinese companies have not been welcome at the Taiwanese show due to space issues, said Yeh. "We don't have enough space, but next year, we will have space," he said. "Some of their best manufacturers can be here, we will welcome them." Yeh added he is confident that Chinese companies will appear at Computex 2008. China and Taiwan separated in 1949 during a civil war between the Nationalist army of Chiang Kai-shek and the Communist forces of Mao Zedong. The two sides never reconciled, and China has repeatedly threatened to attack Taiwan if the island formally declares independence from the mainland.
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(InfoWorld) - Fairchild Semiconductor and Himax TechnologiesÂ both completed steps this week that finalize, or nearly finish, their bids to buy Taiwanese chip makers. Fairchild received regulatory approval from the Taiwan government toÂ buy System General Corp., which specializes in chips that manage power in digital devices. A Fairchild subsidiary will now be allowed to remit $197.2 millionÂ into Taiwan to complete the purchase, according to a report by the Taiwan Investment Commission. Fairchild expects the deal to be completed by the end of the second quarter of this year. Himax, a Taiwanese maker of chips for LCD (liquid crystal display) screens, announced Thursday that it closed its acquisition of rival Wisepal Technologies in an all-stock deal valued at around $50 million. The purchase gives Himax a better position in the small-to-medium sized display market, the company said. The transactions highlight the large number of chip deals made over the past year, and follows closely on the heels of aÂ high profile $5.5 billion offerÂ made for the world's largest chip assembly company, Taiwan's Advanced Semiconductor Engineering (ASE), in November. The biggest chip deals have been made in the U.S. and Europe. Last year, a group of private equity investors agreed to payÂ $17.6 billion for Freescale Semiconductor, while Koninklijke Philips ElectronicsÂ sold a majority stakeÂ in its chip unit to another group for around $10.6 billion. Fairchild, of South Portland, Maine, was born from the ideas and investments of several chip titans, including Gordon Moore and Robert Noyce, both later of IntelÂ fame, and was incorporated in 1957. System General, of Taipei, opened in 1983, focusing on power management chips from the start. Fairchild cited System General's strong power products and sales in China and Taiwan as key reasons for its interest in the company. Himax will gain a few new large customers as part of its deal. Wisepal supplies LCD chips to Taiwan's Compal Electronics, the world's second largest contract laptop manufacturer, as well as handset maker Compal Communications and handset display maker TPO Displays. Compal Electronics and TPO Displays were the two largest shareholders in Wisepal prior to the acquisition by Himax. Â
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Advanced Micro Devices and IBM will work together to devise chip-manufacturing technology for three additional years, a deal that will bring about a quarter of a billion to IBM over four years and give AMD access to cutting-edge chip inventions.
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SUZHOU, CHINA -- Taiwanese companies make most of the IT hardware produced in China for the global market, while most Chinese hardware companies are focused on making products for domestic consumption. But that will change in coming years as Chinese companies look to produce more of the world's IT hardware, according to the chief executive of Taiwanese electronics maker BenQ Corp.
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(InfoWorld) - The head of Japanese memory chip maker Elpida Memory held talks with Taiwanese officials last week about incentives for building a chip factory on the island. Yukio Sakamoto, Elpida's chief executive officer met with the company's foundry partner in Taiwan, Powerchip Semiconductor, as part of his visit to the island, but Elpida says it has made no decisions yet, a spokeswoman for the company said Tuesday. Elpida is considering an investment in either China, Japan, Singapore, or Taiwan, and could work with a partner in a joint venture or go it alone, said Tomoko Kobayashi a spokeswoman at Elpida. Powerchip declined to comment. Such a deal would be huge for the winning location, because modern DRAM (dynamic RAM) factories cost around $3 billion and employ thousands of workers. China and Taiwan both have advantages because Elpida already works with partners in both places, Semiconductor Manufacturing International Corp. of Shanghai and Powerchip. Singapore would also rate highly since it's been labeled one of the best locations in the world for a chip plant investment due to its tax breaks and other incentives. Japan would have home field advantage. The DRAM industry is also ripe for new factories. Most companies in the business have invested in non-DRAM production lines in recent years, mainly NAND flash memory, popular in digital cameras, mobile phones, and iPods. But DRAM prices have surged recently due to strong PC sales, and prices are expected to remain strong over the next several months onÂ anticipated PC demandÂ from the launch of Microsoft Windows Vista. In fact, the spot price of the most popular chips, DDR2 (double data rate, second generation) chips, hasÂ surged 15 percentÂ over the past three days, according to DRAMeXchange Technology Inc., an online clearinghouse for the chips.
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LONDON - According to a correspondent in Taiwan Morris Chang, chairman of Taiwan Semiconductor Manufacturing Co. Ltd. had some interesting things to say about the outlook following on from the company&#39;s third quarter results.
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(InfoWorld) - Taiwan issued a warning to local companies not to export electronics components and other items that could be used to make military equipment to Iran or North Korea, promising penalties for failure to comply. "We have had a few cases recently where customs officials have caught sensitive products that were to be exported, and told the companies that they needed to gain permission to export such items to these countries. None of those items got past customs," said James Wu, deputy director general of Taiwan's Bureau of Foreign Trade. It's an important reminder for Taiwanese companies because the island is one of the world's largest suppliers of high tech components such as semiconductors and PC parts, including DRAM (dynamic RAM) and motherboards, as well as precision tools. Taiwanese companies also engage in trade with North Korea, Iran, and other countries deemed high risk for the export of certain items that can be used to make military hardware. The government sent out a statement to companies and posted a notice on its Web site as a reminder that certain electronic components, chemicals, and machine tools can be used to make weapons, and therefore cannot be exported to North Korea and Iran. The list of controlled items includes consumer electronics devices such as computers, laser printers, optical disc drives, digital mobile phones and digital cameras, as well as industrial products such as silicon wafers and manufacturing robots and more unusual items such as heavy water or mushroom spawn containing narcotics. Last year, the government increased the number of sensitive products to 542 items, from about 300 previously. The change was partly the result of talks with the U.S., according to the statement released Tuesday. Violators of the policy can face jail time if officials believe they intentionally tried to export sensitive items, or for repeat attempts. But in most cases, companies have unknowingly boxed up sensitive items to ship overseas, and were given warnings, Wu said. The government can also cancel or suspend a company's export license for failure to comply with the ban.
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Taiwanese chip assembler Advanced Semiconductor EngineeringÂ (ASE) plans to invest $60 million in a low-end chip assembly company based in China.