UMS Holdings

(24-07-2012, 02:12 PM)CityFarmer Wrote:

(24-07-2012, 12:24 PM)Zelphon Wrote: I am in the semicon sector..

Give u all a warning..
Semicon sector is in RECESSION now...

No bonus for my company next financial year...
No booking orders from Global Foundries this year..
Activity is very quiet...

Only 1 good news..

450mm fabs will start soon but probably in USA..
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Semiconductor industry set to grow
By Pamela Koh | Posted: 23 April 2012

SINGAPORE: After a number of setbacks last year, the semiconductor industry is starting to look up.

The industry's wafer fabrication capacity is expected to grow by 11 per cent in Southeast Asia this year.

This is more than double that of the global capacity growth rate of five per cent.

Positive demand in the electronics sector, in particular mobile devices, has driven growth in the semiconductor industry.

A report by industry body SEMI said it expects growth to be modest at between three and nine per cent for 2012.

This came after the industry posted slower growth of 1.6 per cent in global revenue for semiconductor in 2011, down from 30 per cent growth in 2010.

... more detail, please go the link ...

http://www.channelnewsasia.com/stories/s...07/1/.html

LOL...

Siltronic Samsung is my customer.
They have stopped ramping for now..


Anyway, just beware...
Semicon is going down another recession...
Intel already revised down their targets...

2 years ago when I was back as an engineer in a wafer fab, the CEO announced to the media in spending some millions in R&D expenses. It was a joke because in the first place we did not even know there was R&D plan existed but it was used to qualify new products, tapeout masks etc which was going to be spent anyway in order to secure more business.

Interesting Zelphon. I always wonder whether Siltronic and Soitec exports the wafers outside of Singapore or are they significantly consumed by the fabs in Singapore?

The article mentioned that we have top 3 assembly and test centres in Singapore and they should be still using ball attach technology and not sure whether they have invested in flip chip capabilities.

UMS is capitalizing on Applied Materials outsourcing trends towards low cost regions ie Singapore. Applied Materials deals with the manufacturing of semiconductor equipment (not manufacturing semiconductor chips). Hence the key metric is semiconductor equipment spending which was guided by Applied Materials (and its peers) to be weaker in 3Q 12 due to lower demand.

In the long run, with new Microsoft 8 OS, more tablets, more smartphones, more electronic items to cater to a growing wired world, it is likely that semiconductor plants will have to invest in new equipment to meet this demand. On the flipside, a sustained recession brought about by the West fiscal crisis and slower growth in China will reduce demand accordingly and the huge over-capacity will kill spending for a few years.

http://www.electroiq.com/articles/sst/20...-2013.html [Article on capex spending in 2H 2012 and 2013]

http://www.siliconsemiconductor.net/arti...sights.php [Article on Big 6 Spending in 2012]

Interestingly, the big 6 semiconductor companies are planning to spend more on capex this year as compared to 2011. Key question - will this trend continue in 2013 ?

UMS is in a volatile industry so it should not be confused as a yield play. It can easily slash/suspend dividend when the cycle turns. It reported a loss in FY 2009 during the semiconductor recession when capex spending plummet.

Industry professionals here - please feel free to correct my misconception of the industry/business

(Vested)

I made one assumpion earlier that Applied Materials Singapore mainly support the Singapore operations but it seems like Applied Materials exports to Asia wide from this article.
http://www.sedb.com/edb/sg/en_uk/index/n...apore.html

In that case, Asia view on the industry will be important in that aspect.

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(24-07-2012, 03:16 PM)Nick Wrote: In the long run, with new Microsoft 8 OS, more tablets, more smartphones, more electronic items to cater to a growing wired world, it is likely that semiconductor plants will have to invest in new equipment to meet this demand. On the flipside, a sustained recession brought about by the West fiscal crisis and slower growth in China will reduce demand accordingly and the huge over-capacity will kill spending for a few years.

This is not exactly true as Kopikat has mentioned earlier that supply has much outstripped the demand. One should not assume that there is a direct correlation with the increase in new electronic products equivalent to more capex spending.

There are 2 types of capex in Semicon industry, equipment capex and maintenance capex. Usually it is the maintenance capex that dominates semicon's cost account as most major equipments are expected to have a long lifetime. The parts of the equipment (maintenance capex) will be replaced quite frequently (chambers, loaders etc) in order to ensure better yield, less customer complaints and downtime.

Whenever there are new electronic products, it does not mean there is a new technology inside the chipset. It simply means rearrangement or different components are put together to form the product. This means that a few suppliers will be chosen and qualified for yield, reliability test. Then at most they will need to tapeout masks (similar like moulds, think of it mechanically) if they do not have the particular technology node and they will fabricate the chips using whatever equipments they have. The lead time usually will take at least 6-9 months. A new equipment will be needed only if the substrate, fab or tester are able to forecast sufficient orders and indicate that they will need extra equipment. Otherwise, semicon producers will prefer to focus on yield optimization where they can maximise yield from their processes. There are also secondary markets for old equipments as well.

Usually when new technology are qualified, they will only appear maybe in 2-3 years as products in the future.

(24-07-2012, 05:17 PM)mrEngineer Wrote: I made one assumpion earlier that Applied Materials Singapore mainly support the Singapore operations but it seems like Applied Materials exports to Asia wide from this article.

The 32,000m2 Center, located in the Changi North Industrial Park, will serve as a hub for Applied’s semiconductor equipment manufacturing around the world, as well as support its worldwide supply chain operations and other corporate functions.


Applied Materials Opens Global Hub in Singapore for Manufacturing Semiconductor Equipment
April 13, 2010

SINGAPORE--(BUSINESS WIRE)--Applied Materials, Inc., the world’s leading supplier of equipment to the semiconductor, flat panel display and solar photovoltaic (PV) industries, today opened its new Singapore Operations Center, Applied’s first facility in Asia for manufacturing its advanced semiconductor equipment. The 32,000m2 Center, located in the Changi North Industrial Park, will serve as a hub for Applied’s semiconductor equipment manufacturing around the world, as well as support its worldwide supply chain operations and other corporate functions.
“We are excited by the opportunity to participate in Singapore’s manufacturing ecosystem with its strong talent pool and local suppliers, while working more closely with our customers to advance technology and reduce costs.”

“The opening of our Singapore Operations Center is a significant milestone for Applied, and will be especially important in meeting an expected multi-year increase in demand for our advanced semiconductor production technology,” said Mike Splinter, chairman and chief executive officer of Applied Materials. “With more than 70% of our semiconductor business in Asia, we expect 50% of our global semiconductor equipment supply to flow through this Center in the next few years as we consolidate key parts of our manufacturing and various global and pan-Asian support functions here.

“Singapore is an ideal location for this facility due to its proximity to many of our semiconductor customers and suppliers, solid business infrastructure and strong government support,” added Splinter. “We are excited by the opportunity to participate in Singapore’s manufacturing ecosystem with its strong talent pool and local suppliers, while working more closely with our customers to advance technology and reduce costs.”

Applied plans to double its workforce at the Center in the next few years to 800 employees, including positions for highly skilled workers.

Designed to meet stringent environmental standards, Applied’s Singapore Operations Center was recently awarded Singapore’s highest environmental honor – the Green Mark Platinum award – by the Singapore Building and Construction Authority. The Center features the largest thin film solar system in Singapore, a 400 kilowatt peak system that annually generates 450 megawatt hours of electricity – enough energy to power more than 100 apartments for a year. This system uses 5.7m2 PV solar panels, the most powerful in the world, that have been manufactured on a customer’s Applied SunFab Thin Film Line™. Other fixtures include low-e glass curtain walls and a rainwater recycling system. These and other features are expected to result in energy savings of up to 30%.

Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in Nanomanufacturing Technology™ solutions with a broad portfolio of innovative equipment, services and software products for the fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible electronics and energy efficient glass. At Applied Materials, we apply Nanomanufacturing Technology to improve the way people live. Learn more at www.appliedmaterials.com.

http://www.appliedmaterials.com/newsroom...-equipment

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IDC Forecasts Worldwide Semiconductor Revenues Will Grow 4.6% and Reach $315 Billion in 2012

July 19, 2012 08:00 AM Eastern Daylight Time
FRAMINGHAM, Mass.--(BUSINESS WIRE)--Semiconductor revenues worldwide will grow 4.6% in 2012 to $315 billion according to the mid-year 2012 update of the Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC). The SAF also forecasts that semiconductor revenues will grow 6.2% to $335 billion in 2013 and grow at a compound annual growth rate (CAGR) of 4.8% from 2011-2016, reaching $380 billion in 2016.
“As we forecasted earlier this year, the cyclical semiconductor downturn that started in the middle of last year reached bottom in the second quarter of 2012”
.Despite the ongoing global macroeconomic uncertainties, such as the Eurozone crisis, lower global GDP growth, and economic slowing in the BRIC countries, current demand remains strong for semiconductors in applications such as smartphones, media tablets, and automotive electronics. Further, there are high expectations for the launch of Microsoft's Windows 8 operating system and next-generation smartphones later this year, which will accelerate semiconductor revenue growth in 2013 and beyond.
"As we forecasted earlier this year, the cyclical semiconductor downturn that started in the middle of last year reached bottom in the second quarter of 2012," said Mali Venkatesan, research manager for Semiconductors at IDC. "Supply constraints on semiconductor products, such as smartphone applications processors and PC discrete graphics processors, based on the most advanced process technologies are easing as foundries are bringing more capacity online. Also, the semiconductor industry has recovered from the flooding in Thailand that held back the supply of hard drives and PCs. Leading-edge 22nm at Intel is ramping fast now, while foundries and memory companies are getting ready to move to 20nm technology node." While all these point to strong semiconductor growth, Venkatesan notes that near term growth will be slower than that of past semiconductor cycles due to macroeconomic weakness.

Regionally, Europe continues to be weak across the board. In the U.S., consumer and automotive markets are showing strong semiconductor demand. Although GDP growth has slowed in China, India, and Brazil, demand for smartphones, tablets, and notebooks remains strong. IDC expects that semiconductor market growth will resume in the fourth quarter of 2012 and into the first quarter of 2013. This next wave of semiconductor demand will be spurred by the launch of Windows 8 for tablets, increased enterprise IT spending, and next-generation smartphones, tablets, and gaming platforms, as well as improved global macroeconomic conditions. The recovery will accelerate into the second half of 2013 and beyond.

Other key findings from IDC's Semiconductor Application Forecaster include:

•Semiconductor revenues for the Computing industry segment will log year-over-year growth of 1.5% for 2012 and a compound annual growth rate (CAGR) of 3.7% for the 2011-2016 forecast period. Within that, semiconductor revenues for mobile PCs will register 5.9% year-over-year growth and a 2011-2016 CAGR of 9.6%.
•Semiconductor revenues for the Communications industry segment will grow 7.2% year over year in 2012 with a five-year CAGR of 4.7%. Semiconductor revenues for 4G phones will experience year-over-year growth of 579% in 2012 and a CAGR of 97% for 2011-2016.
•Media tablets, e-Readers, HD receivers, and LED/LCD TV sets, will continue to see above average growth, like 2011. Sales of traditional devices such as DVD players, DVD recorders, portable media players, and game consoles will continue to erode. Overall, semiconductor revenues for the Consumer industry segment will record year-over-year growth of 4.4% in 2012 and a 2011-2016 CAGR of 5%.
•Driven by strong global demand for automobiles and increased semi/electronics content in autos (for applications such as in-vehicle infotainment, automobile body electronics, and driver safety systems), semiconductor revenues for the Automotive industry segment are expected to grow with 9.7% year over year in 2012 and 7.2% (CAGR) for the five-year forecast period.
•Among semiconductor devices, microprocessors, ASSPs, and microcontrollers will register higher revenue growth than overall semiconductor revenues, but memory (especially DRAM) will continue to show negative growth as the memory industry recovers from the DRAM slump of last year.
•Regionally, Asia/Pacific will continue to grow its share of semiconductor revenues, with year-over-year growth of 7% in 2012 and a five-year CAGR of 6.4%.
IDC's Worldwide Semiconductor Applications Forecaster database serves as the basis for all IDC semiconductor supply-side documents, including market forecasts and consulting projects. This database contains revenue data collected from the top 100 semiconductor companies for 2006-2011 and market history and forecasts for 2006-2016. Revenue for over twelve semiconductor device areas, four geographic regions, six industries, and more than 80 end-device applications are also included in the database.

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

http://www.businesswire.com/news/home/20...s-Grow-4.6

If we were to focus on their largest customer, Applied Materials, then we should be looking at the Semiconductor Equipment growth potential. If I read correctly, their equipments are meant for Wafer Fabs. If that's the case, then 2 areas that'll drive new orders are (1) New Fabs and (2) Replacements / Refurbishments.

For New Fabs, this will likely be driven by a change in technology eg. 28 nm to 20 nm. But, this may not even mean a 100% change of all equipments.

So, what I think that's mainly driving their biz may be like what 'mrEngineer' posted, more on Replacements / Refurbishments?

Also, even tho' we may get excited by Semicoductor Revenue growth forecast, let's not forget about Wafer Fab Utilisation. In recent times, it's rare to hear of any Wafer Fabs (unless it's during he transition to new technologies of lower nm where Yield is still very low) running at full utilisation or even in the 90s.

So, a growth in Semiconductor Revenue may only increase the Utilisation Rate (not orders for new equipments). Even then, not all Wafer Fabs will be enjoying. For eg., if you'd been following CSM when it was listed, I don't see them enjoying very high Utilisation Rate, even as UMC and TSMC was running at their high 90s...

A news article on Wafer Fab Equipment spending forecast,

Wafer fab equipment spending to drop 8.9 percent in 2012

The decline in equipment investment means less new semiconductor capacity will be added

06/28/2012

Semiconductor suppliers this year will decrease their spending on wafer fab equipment (WFE) by about 9 percent compared to 2011, according to researcher Gartner Inc.

WFE spending will total $33 billion in 2012, down 8.9 percent from 2011 when spending amounted to $36.2 billion, according to Gartner. WFE spending will return to growth in 2013 with spending will surpass $35.4 billion, a 7.4 percent increase from 2012.

"In 2012, WFE started off the year strong, as foundries and other logic manufacturers ramped up sub-30 nm production," said Bob Johnson, research vice president at Gartner. He added that the need for new equipment was stronger than originally anticipated, because “strengthening demand for leading-edge devices required higher production volumes as yields had yet to reach mature levels.”

However, demand for new logic production equipment will soften as yields improve, leading to declining shipment volume for the rest of the year, according to Johnson.

Wafer fab manufacturing capacity utilization will decline into the mid 80 percent range by the middle of 2012 before slowly increasing to about 87 percent by the end of 2012, according to Gartner. Leading-edge utilization will return to the high 80 percent range by the second half of 2012, and move into the low-90 percent range through 2013, providing for a positive capital investment environment.

Capital spending restraints through the second half of 2012 means less new capacity will be added and overall fab utilization rates will return to normal levels at the start of 2013. Leading-edge utilization will stay in the low 90 percent range through most of 2013, providing continued impetus for capital investment.

The industry will continue transitioning to different technology nodes. Foundries are ramping up to 28 nm, leading-edge logic has transitioned to 20 nm, NAND flash will ramp up the 1X node, and DRAM will be ramping up 4X and 3X nodes.

(24-07-2012, 03:06 PM)mrEngineer Wrote: 2 years ago when I was back as an engineer in a wafer fab, the CEO announced to the media in spending some millions in R&D expenses. It was a joke because in the first place we did not even know there was R&D plan existed but it was used to qualify new products, tapeout masks etc which was going to be spent anyway in order to secure more business.

Interesting Zelphon. I always wonder whether Siltronic and Soitec exports the wafers outside of Singapore or are they significantly consumed by the fabs in Singapore?

The article mentioned that we have top 3 assembly and test centres in Singapore and they should be still using ball attach technology and not sure whether they have invested in flip chip capabilities.

Forget abt Soitec..
Their main customer is AMD and it is a HOPELESS fab..

Siltronic Samsung is pretty busy as 80% of their wafers goes to Samsung..
U keep hearing abt Samsung making record revenues from smartphones..
Go figure..
However, Samsung make money doesn't mean the local wafer fab make money ah... It is a joint venture where Siltronic supplies the technology and Samsung supplies CASH for the machines..
And both are apprehensive in this fragile JV...

Anyway, do not read too much into the hype of semicon in local newspaper...
RECESSION IS HERE..

Beware...

Wow. Thanks to all the industry experts for their knowledge on the industry.
I'm a little confused about how the industry work.. as in the supply chain.. anybody know a place where i can find some understanding on how the industry works? I have problems trying to figure out what UMS makes actually, and how are they different from other 'precision engineering' firms such as Hi-P, Venture Corp., etc... (i guess i shouldnt be investing in things i dont understand).

My miserable knowledge only tells me that Intel hasnt slashed capex estimates, and Qualcomm and Nvidia are still short of chips.

Thanks! Help?

But i did notice that the Phlx semiconductor sector index has been on a downtrend since March...
https://www.google.com/finance?client=ob...NASDAQ:SOX

(25-07-2012, 12:04 AM)l0nEr Wrote: Wow. Thanks to all the industry experts for their knowledge on the industry.
I'm a little confused about how the industry work.. as in the supply chain.. anybody know a place where i can find some understanding on how the industry works? I have problems trying to figure out what UMS makes actually, and how are they different from other 'precision engineering' firms such as Hi-P, Venture Corp., etc... (i guess i shouldnt be investing in things i dont understand).

My miserable knowledge only tells me that Intel hasnt slashed capex estimates, and Qualcomm and Nvidia are still short of chips.

Thanks! Help?

But i did notice that the Phlx semiconductor sector index has been on a downtrend since March...
https://www.google.com/finance?client=ob...NASDAQ:SOX

Hi-P and Venture are contract manufacturers which assembles the components and create a microcontroller and put the microcontroller into the plastic cover that was created using the injection moulds.

You can find more information from Kopikat's previous posting somewhere in the forum.

One more point on why replacement or maintenance capex is large in Semicon is because on top of monthly or annual prevent maintenance, the equipments parts have to be replaced to ensure that there are less particles generated after wear and tear. 1 dust particle can be the typical size of 1-2um while the nmos or pmos gate size is minimum now 22nm. So you can imagine the damage a particle can do to 1 chip. That is also why yields are so difficult to achieve as technology gets smaller.

On the contrary, it was 'mrEngineer' who posted a good summary of the Electronics Industry in another thread.

Although I ought to place more focus on analysing Electronics related stocks as I do have a bit of core competence here, I find it more worthwhile to spend my time with other less complex industries (where I started with zero competence) like REITs (most times, inreasing rentals thereby raising DPU) or even SPH or Popular Hldgs. Why? Electronics biz is very cyclical (more downs than ups) and most times, highly competitive (especially on price). It's either you try to catch the cycles (buy at low cycle and sell at peak) or you have to figure out those in a successful niche or look for the leaders (the best, the strongest). I find it difficult as it keeps changing and I need to put in lots of time and efforts just to keep abreast of what's happening...

As for UMS, when I was looking at it briefly, their core competence is in Precision Engineering, with focus on Metal parts ie. machining, welding, anodising, plating,... and predominantly on Semicon Eqpt Makers, mainly on one key customer cum shareholder. Altho' their expertise can be easily ported over to other Industries like Aerospace, which uses metal parts, I don't see them as being very successful here...yet(?). I don't really know why, perhaps 'Nick' will know better. So, yes, in theory, UMS need not be too dependent on the highly cyclical semicon biz but in practice, they seem to be not succeeding in diversifying out. Perhaps the CEO is too busy developing his own biz...

I didn't follow Venture or Hi-P. But, from their websites and what I vaguely remembered, yes, 'mrEngineer' is right, they are more in the CEM biz.

Venture started out focussing on CEM biz. But, today, I see from their website, they have become more vertically integrated ie. they can do ODM and even ASIC design (highly margins here, I believe). Not sure if they had also integrated the Precision Engineering part, but not unlikely.

As for Hi-P, IIRC, the 'P' stood for 'Precision' ie. they started out as a Precision Engineering biz focussing on 'moulds' which are used to produce plastic parts eg. chassis. But, today, when I looked at their website, they have also become a more integrated co., which includes CEM. Still, I believe their core competence remains in Precision Engineering.

IMO, that's how both cos. had reacted to this declining profit margin kind of biz of the Electronics Industry ie. Vertical / Horizontal Integration.

So, you see, how much work it takes just to try to understand these biz? In comparison, it's less time consuming and more rewarding for me to pick up new knowledge in sunset industries (less exciting but not much changes) like book stores or even publishing... I hope..