K n S revenue Down 65%

Second-quarter net revenues tumbled about 65 percent and the net loss increased by more than 400 percent at Kulicke & Soffa Industries Inc., the Fort Washington-based manufacturer of equipment used to produce semiconductors.

"The second quarter was one of the most difficult ever for both K&S and our industry," said Scott Kulicke, chairman and chief executive officer. "Weakness in the global economy continued to depress demand throughout the semiconductor industry."

The company, which had already announced 240 layoffs (in a workforce of about 2,500) in November, said it had reduced its staff by 250 more during the quarter, which ended March 28.
The company said it will have $4 million in severance costs, and expects about $21.7 million in annualized savings.

Net revenues were $25.2 million, over $70.9 million in the comparable quarter a year ago. Net loss was $33.1 million (54 cents a share), over a loss a $6.1 million (11 cents a share) a year ago period.

The company had previously announced wage cuts, including for Kulicke himself (20 percent), with lesser cuts for other top executives and reduced hours for workers including factory employees.

"During the quarter, we took the actions required to reduce our cost structure," Scott Kulicke said in a release today.

The company also said that, since November, it had retired $13 million in notes due in 2010, for a net gain of $2.8 million.

Kulicke & Soffa also said it would move some manufacturing operations from Israel to China, at a cost of about $5.7 million over the next three years; the annual savings from that move are projected at $4.6 million a year.

The company projects third-quarter net revenues of $32 million to $37 million.
- Roslyn Rudolph

Source Semiconductor packaging News

Renesas and NEC will merge

Japan's second largest semiconductor maker Renesas Technology Corp. and the third biggest firm in the sector NEC Electronics Corp. have agreed to merge next year.

Renesas, owned jointly by Hitachi Ltd. (55 percent stake) and Mitsubishi Electric Corp. (45 percent stake), and NEC Electronics, in which NEC Corp. holds a 65 percent stake, have reached a basic agreement to merge into a single entity as early as next April. An official announcement on the merger will be made on 27 Apr 09.

Following the agreement, the owner companies will start discussions on realignment plans of their production sites and each company's ratio of capital contribution to the new company, which will focus on the Large Scale Integration (LSI) circuit business.

The new firm will be the largest in the semiconductor industry in Japan, with expected annual sales of over 1.2 trillion yen, overtaking the current leader Toshiba.
The new joint venture is also expected to become the third-largest semiconductor company in the world, following U.S. chipmaker Intel Corp. and South Korea's Samsung Electronics Co.

feverip

450mm Wafer Fab ready to go?

In 2002, 38.2% of equipment purchased by the semiconductor manufacturers was for 300mm production, and 1.4% of silicon wafers processed were 300mm in diameter.
In 2008, 92.1% of equipment purchased was for 300mm production and 37.4% of silicon wafers were 300mm.

From 2002-8, semiconductor revenues increased from about $10bn per month at the start of 2002 to $20+bn in December 2008.

In contrast, semiconductor equipment bookings started off 2002 at $645 million, reached a peak of $1.8 billion in June 2006, and ended 2008 at about $800 million.

No wonder semiconductor manufacturers and Sematech are pushing for 450mm wafers.

Global Chip Sales Drop 31%

Peter ClarkeEE Times Europe (03/04/2009 8:14 AM EST)

LONDON — The global market for semiconductors was $13.15 billion in January, down 31.2 percent from $19.11 billion in January 2008, according to 'actual' data from the World Semiconductor Trade Statistics (WSTS) organization.

January's monthly sales figure was the lowest since July 2003, when sales were recorded by WSTS at $12.31 billion and the lowest January figure since January 2003, which saw sales of $10.94 billion worldwide.

The 31.2 percent year-on-year fall for January contrasts with the fall in averaged sales which was put at 28.6 percent by the Semiconductor Industry Association (SIA) for the fall in three-month averaged sales.

The SIA averaged November, December and January figures to produce its three-month average figure. The fact that the fall in actual sales was steeper than the fall in averaged sales suggests that the situation was continuing to deteriorate in January.

The SIA WSTS numbers as a three-month average. It argues that this smoothes out the data which would otherwise display the effect of in-quarter reporting that tend to treat March, June, September and December as five-week months. However, it is still possible to compare actual sales year-on-year and avoid such problems.

Broadcom and Qualcomm gain amongst 20 IC players

Fabless companies buck economic trend, gain in IC Insights top 20 rankings
Broadcom and Qualcomm lead the way in terms of 2008 year-over-years sales growth, according to IC Insights data.

Even in the worst downturns, some strong companies prevail with double-digit sales increases. According to a new top 20 companies ranking from IC Insights this week, the semiconductor industry suppliers that showed the strongest growth in 2008 were fabless.

Only three of the top 20 companies had double-digit 2008 over 2007 growth rates, two of which were fabless.

In contrast, six companies registered double-digit declines in 2008 semiconductor sales: Freescale and TI both at 10% declines; Sony at an 11% decline; NXP and Renesas both at 12% declines; and Hynix at a 33% decline.

While Intel, Samsung, TI, Toshiba, and TSMC maintained their respective one through five spots based on 2008 sales, by growth two of the top five companies were fabless. Broadcom claimed the largest year-over-year growth rate in 2008 at 20%, followed by Qualcomm at 15% growth.

Ranked by sales, Broadcom climbed from the number 23 slot in 2007 to slot 17 in 2008 and Qualcomm climbed from 13 in 2007 to eight in 2008.

Fabless GPU maker Nvidia also made the ranking, claiming the number 20 spot in 2008.

However, on an 8% sales decline, the company slipped from its 2007 19 slot placement, according to IC Insights data.According to the research house, the total 2008 sales of the top 20 semiconductor suppliers showed a 3% year-over-year decline, matching the total worldwide semiconductor market decline in 2008.

Source: Suzanne Deffree, Managing Editor, News. Electronics New 3 Mar 2009

Small Size Panel Demand increases 20% in Feb

Small-size LCD panel makers, including Wintek, Giantplus Technology, and Prime View International (PVI), are expected to have 10-20% increases in their February revenues due to rush orders, according to market sources.

Rush orders started to emerge in February as handset clients, including white-box vendors from China, began stocking their inventories after the Lunar New Year holidays in January, adding sales were also helped by the fact that there were more working days in February.

Giantplus' February sales are expected to return to almost NT$700 million (US$19.95 million), while Wintek is likely to report sales of NT$1.7-1.8 billion for February, 2009

Feverip

Semiconductor Market will not grow till 2013

The global semiconductor industry will continue to witness a revenue slump until 2013, forecasts research firm Gartner. The firm also said that worldwide semiconductor sales are projected to generate $194.5 billion in 2009.

The primary reasons are the recession and the weakening of DRAM business.

DRAM players have lost more than $13 billion over the past couple of years.

The slump in DRAM business has been a concern for quite some time.

DRAM suppliers have lost more than $13 billion in 2007 and 2008.

Some DRAM companies are starting to go bankrupt and other leading suppliers are substantially reducing their supply. Memory, specifically DRAM, is still a wild card in the semiconductor forecasts for 2009.

Gartner semiconductor projections in December 2008 indicated a decline of 16 per cent throughout 2009.

The industry is expected to return to positive growth in 2010, growing 7.5 per cent, followed by additional growth in 2012.

Even with three years of increased revenue, the semiconductor industry might fail to generate revenue totals of 2008. In 2012, the worldwide semiconductor revenue is projected to reach $253.4 billion, still below 2008 revenue of $256.4 billion.

FI