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ISA WINWire December 2 - 9 2011

Creating value in the semiconductor industry

Source: Stefan Heck, Sri Kaza, and Dickon Pinner, McKinsey & Co., Autumn 2011

Despite its moderate size, the semiconductor industry contributes disproportionately to growth in US labor productivity and delivers tremen¬dous value to consumers. The industry, along with the electronics industry it does so much to power, contributed more than 25 percent of total US productivity growth from 1995 to 1999—more than any other sector. That four-year period outshined overall productivity growth from 1987 to 1995, according to an analysis published by the McKinsey Global Institute. Much of the tremendous growth seen in the electronics industry over the last three decades comes directly from the increasing power and decreasing price of semiconductors, a function of Moore’s Law. This performance improvement enables the electronics industry to continually produce devices and systems that are smaller, more powerful, and richer in features at lower prices. It has famously been noted that if the automotive industry had achieved similar improvements in performance in the last 30 years, a Rolls-Royce would cost only $40 and could circle the globe eight times on one gallon of gas—with a top speed of 2.4 million miles per hour.


Intel reasserts semiconductor market leadership in 2011 in Top 20 rankings, says HIS

Source: Dale Ford, EDA Café News, December 1 2011

After three years of seeing its dominant position in the global semiconductor market whittled away by aggressive competition from Samsung Electronics Co. Ltd., Intel Corp. is set to reverse the trend in 2011, with a combination of strong sales and an acquisition allowing the company to rebuild its margin of market leadership. U.S.-based Intel in 2011 is set to sell $49.7 billion worth of semiconductors, up an impressive 23 percent from $40.4 billion in 2010, according to the IHS iSuppli Semiconductor Value Chain Service at information and analysis provider IHS (NYSE: IHS). This will allow Intel to outgrow the overall semiconductor market and boost its share of the market to 15.9 percent, up from 13.2 percent in 2010. With this strong performance, Intel increased its lead over second-ranked Samsung to 6.5 percentage points. The increase ended a three-year period that saw Samsung of South Korea close the gap with Intel from a 6.5 percentage point margin in 2008 to a 3.9 point difference in 2010.


October global chip sales fell back, says WSTS

Source: Peter Clarke, EETimes, December 4 2011

Actual global chip sales in October, rather than the three month average, were $23.41 billion down 20.5 percent from the preceding month and down 4.1 percent on the $24.40 billion recorded for October 2010, according to figures published by the World Semiconductor Trade Statistics (WSTS). The sales came in below a range predicted by market analyst Mike Cowan and indicate the chip industry is likely to achieve meager or zero growth for the full year after starting with strong annual growth in the first quarter of the year. They are also likely to be seen as a disappointment after a relatively strong September, ended the third quarter. WSTS also published the three-month average sales data which attributes the average of August, September and October sales to October. This is promulgated by the Semiconductor Industry Association in the United States and other regional semiconductor industry bodies because it smoothes out the actual data that usually show troughs at the beginnings of the quarters and peaks at the ends of the quarters.

Broadcom receives IEEE Standards Association Corporate Award for 2011

Source: The Sacremento Bee. December 5 2011

Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today announced it has been awarded the prestigious 2011 Corporate Award from the IEEE Standards Association (IEEE-SA) in recognition for its outstanding contribution and leadership and contribution in IEEE standards innovation. Now in its 10th year, the IEEE-SA annual Corporate Award recognizes members for exceptional contribution to the development and advancement of standards in electrical and electronics engineering. Broadcom employees and engineers hold leadership roles in numerous organizations and industry groups. Since 1996, Broadcom engineers have been active contributors across the wide spectrum of IEEE-SA communication standards. In addition to technical contributions, Broadcom also serves as a board member of the IEEE-SA Corporate Advisory Group (CAG).

Making industries “garage ready” for startups

Source: Chris Dixon, Business Insider, December 5 2011

One of the most important events in the history of modern computing was the advent of “fabless” (“fabrication-less”) semiconductor companies. The story of fabless semis is similar to the recent history of internet startups: various forces led to an order-of-magnitude reduction of startup costs, which then led to a surge of innovation. Before the 1980s, if you wanted to invent a new semiconductor, you had to both design and manufacture it. This meant you had to build a large manufacturing plant, something only large companies like Intel, Motorola, and IBM could afford. Hence, semiconductor design was generally too expensive for venture-backed startups. In the 1979, two computer scientists published a seminal book that argued for the separation semiconductor design and manufacturing. Followed by years of investment by DARPA and others, an industry emerged where chip designers used software (“EDA software”) to design and test semiconductors, and then sent standardized specifications to “foundries” that did the manufacturing (most of which were located in Taiwan – the largest in the world to this day is Taiwan Semiconductor Manufacturing Company).

Broadcom slips into top 5 in smartphone CPUs

Source: EETimes, December 6 2011

Broadcom Corp. slipped into the top five in sales of smartphone applications processors in the third quarter for the first time, surpassing Nvidia Corp., according to market research firm Strategy Analytics Inc. Stuart Robinson, director of the Strategy Analytics handset component technologies service, credited the ramp of Broadcom's Android business for the firm's rise to the No. 5 spot in smartphone processors. "We continue to believe that Broadcom has the potential to be a strong competitor to Qualcomm in the long-term, given the company’s integration capabilities, cellular IP strength and strong emphasis on wireless markets," Robinson said. Overall, the global smartphone applications processor market registered sales of $2.24 billion in the third quarter, a 59 percent increase from the third quarter of 2010, according to the latest report from Strategy Analytics (Boston) said.

Entrepreneur’s rival in China: The State

Source: David Barboza, The New York Times, December 7 2011

It was the kind of entrepreneurial breakthrough that China counts on to make it a global leader in innovation. Cathay Industrial Biotech, a private company here, developed a way to ferment hydrocarbons in industrial vats and turn them into advanced nylon ingredients for use in lubricants, diabetes drugs and other 21st-century marvels. The patents Cathay won prompted Dupont, a leading global producer of nylon, to become one of Cathay’s biggest customers. And the $120 million that Goldman Sachs and other backers have pumped into Cathay in recent years primed investors in China and abroad to eagerly await a public stock offering that had been planned for earlier this year. They’re still waiting. According to Cathay, a factory manager stole its secrets and started a rival company that has begun selling a suspiciously similar ingredient, undermining Cathay’s profits. Instead of planning to go public, Cathay is now struggling to stay in business. In this counterfeit-friendly nation, employees run off with manufacturing designs almost daily. But according to Cathay, this was copying with a special twist: the new competitor, Hilead Biotech, is backed by the Chinese government.

IBM in research tie-up with IIT-Guwahati

Source: The Economic Times, December 7 2011

IBM India is entering into a collaboration with IIT Guwahati for research on solutions for the differently-abled as part of its university connect initiative. Through the partnership, the company will provide grants to work on developing IT solutions for people who face hearing and speech problems. The project will devise software-based solutions that will be able to analyse the sound pronounced by the user, compare it with the target sound, and provide appropriate feedback. The project with IIT Guwahati will be useful for patients who wish to practice improving their speech on their own, says the company. It will augment any other speech improvement therapy they are undergoing and allow them to practice as per their convenience. This will the sixth shared university research project for the company in India in 2011. IBM has entered into partnerships with IIT Delhi, IIT Mumbai and Pune's College of Engineering for a joint project on cloud computing in education. It has also tied up with Coimbatore's PSG College of Technology for creating a tele-medicine network for monitoring of epidemics and YCMOU in Nashik for delivering education through the internet.

India @2020: Roaring Asian Tiger

Source: CIOL, December 7 2011

Oxford dictionary describes optimism as `hopefulness and confidence about future'. That's precisely what we feel when we think of India in 2020. It is poised to be a significant player in the global arena and by the end of this decade, life in the world's second populous country would also change for the better. Yes, the change is possible, though the ongoing journey from a developing nation to a developed nation isn't free of challenges. There is no ambiguity on India's 1.21 billion population overtaking China's 1.34 billion. However, it's not just the population that would see an upward swing. The economy is set to total $5.6 trillion by 2020 from the present $1.7 trillion, achieving a real GDP growth rate of 9.2 per cent. If the Dun & Bradstreet prediction comes true, India's global economy ranking would be 7th from the present 10th. That may sound a bit irrational with the current economic growth rate of 6.9% . But if finance minister Pranab Mukherjee is to be believed, the economic growth will be 7.5 per cent in 2012. And we haven't forgotten how India dealt during the recession and emerged as the least affected economy.

Sony game exec spells out chip needs

Source: George Leopold, EETimes, December 7 2011

Chip makers need to advance image recognition, display and MEMS technologies to deliver the next-generation of immersive gaming applications built around interactivity and augmented reality, the CTO of Playstation developer Sony Computer Entertainment told engineers on Tuesday (December 6). “User interface experiences beyond the five senses are needed,” Masaaki Tsuruta, who also serves as the Sony unit’s executive vice president for technology platforms, told the International Electron Devices Meeting. The delivery of outputs from “super high-resolution displays” rendering 3-D graphics and other immersive features also will require higher and wider bandwidth performance. “The next bottleneck [for gaming] is bandwidth,” Tsuruta predicted. Data rates in the range of 10 Gbit/s will be needed soon, he added. The Sony executive said he expects chip makers to make greater use of design approaches like through-silicon vias and through-chip interfaces to speed connections among image and motion sensors that are becoming increasingly standard features of gaming consoles and augmented reality devices.

IEEE elects three Texas Instruments' engineers to Fellow

Source: EDA Café News, December 7 2011

Texas Instruments Incorporated (TI) (NYSE: TXN) today announced the election of three of its engineers to IEEE Fellow, a distinction reserved for select IEEE members whose extraordinary accomplishments are deemed fitting of this prestigious honor. TI's Ajith Amerasekera, director of Kilby Labs, Ahmad Bahai, Analog Chief Technology Officer, and Luigi Colombo, TI Fellow in the External Development and Manufacturing (EDM) group, received the IEEE's highest level of membership for their innovative contributions in the semiconductor industry. They join 19 other TI engineers who hold the prestigious title of IEEE Fellow. "Innovation is the foundation upon which TI's 80-plus year history is built," saidRich Templeton, chairman, president and CEO of Texas Instruments. "The election to IEEE Fellow is an extraordinary accomplishment, recognizing those who have driven significant innovations impacting our industry and the world we live in. We're fortunate to have some of the brightest minds working at TI." Each of these individuals is being recognized for his unique contributions to the electrical engineering community.

Medtech startups hear dour diagnosis

Source: Rick Merritt, EETimes, December 7 2011

Medical device startups heard a bleak diagnosis from a panel of executives at the annual BiomedDevice conference here. Funding is tight, regulations are complex and global markets can be difficult to navigate, they said. "Funding has dried up over the last three years, especially for early stage companies--even later stage companies are getting hammered," said Mir Imran, a serial entrepreneur and chief executive of Modulus Inc. (San Jose), a contract medical design and manufacturing company. "Meanwhile, the regulatory process has become so convoluted it requires more funds to get products through it, so many of us have gone to Europe," he added. As many as 40 percent of venture capitalists in medtech have been unable to raise new funds since the 2008 recession and are now holding money to keep their existing portfolio companies alive, said Imran who has started or funded dozens of medical electronics companies. Meanwhile deals are available to invest in late-stage companies at early-stage prices, he added.

Rambus co-founder exits board, takes leave

Source: Dylan McGrath, EETimes, December 7 2011

Mark Horowitz, co-founder of technology licensor Rambus Inc., will step down from the company's board of directors effective Dec. 31 and take a two-year leave of absence from his role as the company's chief scientist, Rambus said Wednesday (Dec. 7). Horowitz cited "personal reasons and other obligations" for his decision to leave the company's board, Rambus (Sunnyvale, Calif.) said. “While I will miss being involved with Rambus, it is time for me to focus on my personal obligations," Horowitz said. He added that he has full confidence in the company's management team and board about would be available to them for consultation as time permits. Horowitz has been involved with Rambus said its founding in 1990. He has been one of the company's directors since it was incorporated and served as chief scientist since 2005. He has taught at Stanford University since 1984 and is currently a professor and chair of the school's Electrical Engineering Department. "As a founder, inventor, executive and board member, Mark’s leadership, technical expertise and dedication have been invaluable to the growth and success of the company," said Harold Hughes, Rambus president and CEO.

I.B.M. to buy DemandTec for $440 million

Source: Evelyn M. Rusli, The New York Times, December 8 2011

I.B.M. said on Thursday that it had agreed to buy DemandTec, a Web-based enterprise software company, for $440 million in cash. DemandTec, a provider of analytics software for retailers, is at the intersection of two trends in enterprise technology: the growth of cloud-based services and data analytics. The rise of these markets has spurred deal-making in recent months. On Saturday, SAP of Germany announced plans to buy SuccessFactors, a human resource management service, for $3.4 billion. And less than two months ago, Oracle agreed to buy RightNow Technologies for $1.43 billion. In each case, the buyers offered big premiums to shareholders. I.B.M. is paying $13.20 a share, 56.6 percent above DemandTec’s closing price on Wednesday. SAP agreed to pay 52 percent above SuccessFactors’ closing price on Friday. “The combination of DemandTec and I.B.M. will help marketing and sales executives in retail and other industries drive more revenue and increase profitability,” Craig Hayman, an I.B.M. general manager, said in a statement on Thursday.

Gartner cuts 2012 chip market forecast

Source: Dylan McGrath, EETimes, December 8 2011

Market research firm Gartner Inc. Thursday (Dec. 8) reduced its forecast for the 2012 global semiconductor market, saying it now expects the market to reach $309 billion, a 2.2 percent increase from the projected total this year. Gartner (Stamford, Conn.) had earlier forecast that the semiconductor market would grow by 4.6 percent in 2012. Bryan Lewis, research vice president at Gartner, said through a statement that uncertainty over spending by both consumers and enterprises in light of the European financial crisis appears set to continue, bringing significant implications for the semiconductor industry. "The near-term forecast is being shaped not only by economic forces but by an inventory correction, manufacturing oversupply and natural disasters," Lewis said. Gartner also lowered its PC production forecast for 2012, saying it now expects PC unit growth of 5.1 percent for the year down from an earlier forecast of 10.1 percent. Gartner cited not only a weak economic backdrop, but also lingering supply chain effects from the Thai floods, for the PC production forecast cut.


Compiled by ISA Research

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