November 2013 Issue

Your monthly digest which aims to provide you a roundup of the semiconductor headlines with a special focus to the Asian arena - direct to your inbox. Simply click on the relevant links provided to get the details.

Key Take-Away

Local Asia-Pacific News

Industry Headlines

Financial Watch

Mergers, Acquisition, Joint Ventures,

Spin-offs and People

Market Outlook

Views and Opinions

Stock Watch

Hi,

Some snippets from last month…. The last month saw two record profits – and both from companies in Asia. One was from the world’s largest pure play foundry, TSMC. The company generated 32% of its last quarter’s revenue from 28nm chips – a market in which it holds 84% share. It expects the revenue for this year to grow 17-18% - which should surpass the global industry’s forecasted increase of 4%. However TSMC sees a 10% sequential decline this quarter due to slowing demand for certain high-end smartphones and inventory correction. Plus if I may add – a tougher 28nm competition from GlobalFoundries and Samsung. And the other record profit is from the Korean giant, Samsung. Samsung’s Q3 operating profit of $9.6bn is a record – thanks to its smartphones and memory chips. Samsung’s chip unit now accounts for nearly one-fifth of Samsung Electronics’ total operating profit. And before I leave you to read the other headliners, would like to share with you about two of my upcoming public training workshops here in Singapore in December 2013. These are (a) Technical Marketing Essentials - for semiconductor R&D professionals (16-17th Dec 2013)

Here are the Registration details (b) Semiconductor demystified for nontechnical professionals (18th Dec 2013)

Here are the Registration details

Last date to register is 20th Nov ’13. Do share this with your Training department and I look forward to see your relevant staff in these workshops. Have a prosperous read!

Warm Regards Meenu

Ps: If you see a need for

Talent Development: Training for your engineers (pl. visit http://asic-vlsi.com/training.html for a list of offerings) Strategic Planning: Detailed research and an in-depth analysis for your specific market & technology intelligence

requirements, Industry/Domain know-how for your financial/equity analysis do let me know; we can value-add. Visit www.asic-vlsi.com for details or simply drop me an email

LOCAL ASIA-PACIFIC NEWS

Hon Hai opens Chinese research and development centre Source: Lisa Wang, Taipei Times – 28th October 2013 Hon Hai will focus on developing telecom and communications products in the centre, including smart set-top boxes for smart TVs, 4G wireless communications equipment and 5G Wi-Fi products, as well as products that support cloud-computing technology. Vietnam, Japan increase cooperation in semiconductor industry Source: Vietnam Breaking News – 24th October 2013 Kyushu Semiconductor Industries & Electronics Technology Innovation Association (SIIQ), Kyushu Bureau of Economy, Trade and Industry (KETI), Kyushu Economic Research Center (KERC) and a number of Japanese companies had working sessions with leaders of the Saigon High-tech Park (SHTP) and Vietnam National University Integrated Circuit Design Research and Education Center (ICDREC) to promote cooperation and development of semiconductor integrated circuit (SIC) industry in Vietnam. SMIC announces formation of Centre for Vision, Sensors and 3D ICs Source: PRNewswire – 22nd October 2013 SMIC's Centre for Vision, Sensors and 3DIC (CVS3D) consolidates and strengthens SMIC's R&D and manufacturing capabilities for silicon-based sensors, thru-silicon-via (TSV) technology and other middle-end wafer process (MEWP) technologies. Malaysia’s push for more IC design firms Source: Roziana Hamsawi, Business Times – 17th October 2013 The government is committed to increase the number of local IC design firms in the country to 50 in seven years, in line with the National Key Economic Areas (NKEA) initiative to elevate the electrical and electronics (E&E) sector’s value chain.

KEY TAKE-AWAY

From the Asian arena Expansion: Hon Hai in China, ARM in India, Invensense in Korea Financial Health Up: Samsung Electronics, TSMC, UMC, SK Hynix, Broadcom, MediaTek, ARM, Juniper, Asustek Down: STMicroelectronics, Winbond, Altera Mergers & Acquisitions Qualcomm (Arteris’ assets), Corning (buying out Samsung from LCD JV), Microsemi (Symmetricom), Invensense (ADI’s MEMS microphone unit), Primax (majority stake in Tymphany)

ZTE awarded more than 60% share of China Mobile’s 100G OTN group tender Source: 4G-Portal.com – 17th October 2013 ZTE Corporation today announced the company achieved more than 60% share of the contracts in China Mobile’s group tender for 100G Optical Transport Networking products for 2013, exceeding the combined total of all other vendors Innolux focuses on 4K TV panels to propel sales Source: Lisa Wang, Taipei Times – 17th October 2013 Taiwan’s biggest LCD panel maker shipped 52 percent more ultra-high-definition 4K TV panels last month, supported by strong demand from Chinese TV brands during the holiday shopping season. Panasonic to slash chip making work force by half: Nikkei Source: EE Times – 15th October 2013 The move underlines Panasonic President Kazuhiro Tsuga's determination to weed out weak operations as he focuses on higher-margin products to end years of losses at the consumer electronics conglomerate. ARM opens design centre in Noida, India Source: EFYTimes – 10th October 2013 This new facility will work in sync with the existing team of the company at the Bengaluru Design Centre, which also focuses on Physical IP. Taiwan is world’s no. 4 nanotechnology patent holder Source: Taipei Times – 2nd October 2013 An expert said that the National Program on Nanotechnology has helped Taiwan publish 6,100 nanotech-related articles and win 1,500 patents Invensense expands global engineering presence with Korean design centre Source: Business Wire – 1st October 2013 The design center strengthens InvenSense’s presence with a global expansion of its development team and is a direct extension of the software engineering team based in San Jose, California Back to top

INDUSTRY HEADLINES

Intel makes 14nm ARM for Altera Source: Rick Merritt, EE Times – 29th October 2013

Altera's deal in June to use Intel's 14 nm FinFET process took an interesting twist when the FPGA designer announced today it will pack ARM's 64-bit cores into its chips. That means Intel will fabricate starting in 2014 high-end Altera Stratix 10 parts that use four ARM Cortex-A53 cores. IBM grabs ARM for ASICs Source: Rick Merritt, EE Times – 25th October 2013 IBM has licensed a set of five ARM cores for use in communications ASICs it makes for its semiconductor customers. The move is a milestone in the shift toward the ARM architecture in communications. Advantest logs three orders for F7000 series EB lithography system Source: Reuters – 22nd October 2013 The company announced that it has logged its first three orders for its new EB (electron beam) lithography system. The orders mark a milestone in Advantest’s strategic expansion into new markets where its cutting-edge EB micro fabrication technologies can contribute to further advances in next-generation device research and development Broadcom ventures into 64bit ARM core race Source: EE Times – 21st October 2013 The company has stepped up its efforts to deliver 64bit ARM SoCs for servers and communications infrastructure with plans for a custom core that will be initially be made in a 16nm FinFET process. Microfluidic water sensor to benefit farmers, engineers Source: EE Times – 15th October 2013 Current sensors that can assist civil engineers and farmers in monitoring water levels are usually bulky, expensive and often difficult to utilise since it requires manual reading. A team of researchers from Cornell University has come up with an alternative through a microfluidic water sensor within a fingertip-sized silicon chip that is a hundred times more sensitive than contemporary devices. Automotive market sees influx of mobile SoC companies Source: EE Times – 10th October 2013 Many automotive IC companies, from incumbents like Renesas, STMicroelectronics, Infineon, and Freescale to newcomers Broadcom, Qualcomm, and Nvidia, are racing to dominate the fast-growing segment of in-vehicle infotainment SoCs. Alcatel-Lucent to cut 10,000 jobs: reports Source: Reuters – 7th October 2013 Telecom equipment maker Alcatel-Lucent plans to reduce its staff by 10,000 as part of a cost-cutting drive to save 1 billion euros ($1.4 billion) by 2015, Les Echos and Le Figaro newspapers reported on their websites

Back to top

FINANCIAL WATCH

Taiwan’s UMC says Q3 net beats expectations, Q4 demand seen slowing Source: Reuters – 30th October 2013 World No.3 contract chipmaker United Microelectronics Corp reported a better-than-expected third-quarter net profit on Wednesday, as chip demand for mobile devices continued to grow SK Hynix posts record third quarter profit on surging chip prices Source: Reuters – 28th October 2013 The South Korean memory chipmaker posted a record quarterly profit on Tuesday as a rally in computer memory chip prices helped cushion reduced output following a fire at its plant in China. Samsung profit rises 26% on smartphone boost Source: BBC News – 25th October 2013 It made a net profit of 8.24 trillion won ($7.6bn; £4.7bn) in the July-to-September quarter, up from 6.56tn won during the same period a year earlier. Broadcom sheds 1150 workers in race to bundle 4G silicon out the door Source: Bill Ray, The Register – 25th October 2013 Chip maker Broadcom will shed 1,150 jobs as it struggles to keep selling 3G tech while getting its 4G product line out of the door. Winbond profit declined in Q3, upbeat about Q4 Source: Lisa Wang, Taipei Times – 25th October 2013 The memory chip maker reported that its net profit plunged 67 percent sequentially last quarter because of price erosion and slumping demand for PC and handset chips due to high inventories. Teradyne reports third quarter 2013 results Source: Teradyne – 23rd October 2013 The company reported revenue of $433 million for the third quarter of 2013 of which $304 million was in Semiconductor Test, $93 million in Wireless Test and $36 million in System Test Broadcom Q3 adj. earnings beat estimates Source: Yahoo/Zacks Equity Research– 23rd October 2013 In terms of end markets, Broadband Communications revenues were flat sequentially at $567 million. Mobile & Wireless segment revenues increased 5%

sequentially to $1.02 billion due to higher-than-anticipated sales of cellular system-on-chip (SOC) and touch controllers. Revenues from Infrastructure & Networking segment climbed 11% on a sequential basis to $564 million, driven by higher sales of Ethernet switches and physical layer devices (PHYs). Chipmaker STMicro shares drop on weak Q3 Source: Reuters – 23rd October 2013 STMicroelectronics shares fell as much as 7.2 percent on Wednesday after the European chipmaker reported weak third-quarter results dragged down by mobile chips and pushed back a key profit margin target by six months Altera’s Q3 earnings beat, revenues lag Source: Yahoo/Zacks Equity Research – 23rd October 2013 All except the Industrial Automation and Military & Automotive markets declined double-digits and these two markets were relatively consistent with the year-ago quarter. On the other hand, the Telecom & Wireless and Networking, and Computer & Storage segments declined 18% and 12%, respectively. ARM Holdings reports third quarter profit growth Source: StockMarketWire – 22nd October 2013 Profit before tax was £68.3m in Q3, compared to £55.3m in the prior year period. Total dollar revenues in Q3 2013 were $286.7 million, up 26% versus Q3 2012. Q3 sterling revenues of £184.0 million were up 27% year-on-year. Juniper Networks hits all targets on Q3 earnings report Source: Rachel King, ZDNet – 22nd October 2013 Total cash, cash equivalents and investments as of September 30, 2013 were $4.034 billion compared to $4.048 billion as of September 30, 2012. Net revenue increased three percent and non-GAAP net income increased 14 percent, both on a sequential basis. Chipmaker TSMC reports earnings up 5 per cent on record Q3 revenue Source: Michael Lan, IDG News Service – 17th October 2013 TSMC saw net profit for the third quarter rise 5 percent year on year as revenue hit a record, but the chipmaker warned that this could slip later in the year due to a slowdown in demand for high-end smartphones Power management, Industrial analog units post strong gains Source: IC Insights – 17th October 2013 There was a very strong 14% upturn in analog unit shipments in 2Q13. IC Insights believes this was due to general inventory rebuilding and but also from growth of portable mobile devices, which have been a catalyst for power management analog and Consumer analog IC unit growth to date. Walden’s $100 million fund set to fuel semiconductor start-ups

Source: Harsimran Julka & Akanksha Prasad, The Economic Times – 16th October 2013 The global venture fund is launching a specialized fund to invest in Indian startups developing software for semiconductors. The $100-million (Rs 610 crore) fund will begin investing later this year and has already identified four startups, two each in Bangalore and Hyderabad. EDA Consortium reports revenue increase for Q2 2013 Source: Business Wire – 16th October 2013 The EDA Consortium announced that the EDA revenue increased 3.8 percent for Q2 2013 to $1653.4 million, compared to $1593.0 million in Q2 2012. Intel reports mixed quarter, delays cutting edge chip Source: Noel Randewich, Reuters – 15th October 2013 Intel’s third-quarter results modestly beat expectations on Tuesday, but its current-quarter revenue outlook fell short and it warned that production of its upcoming Broadwell processors was delayed. Asustek reports increase in Q3 sales Source: Helen Ku, Taipei Times – 10th October 2013 The world’s fifth largest PC brand reported that consolidated sales last quarter expanded 19.23 percent quarter-on-quarter to NT$118.79 billion (US$4.04 billion), beating the company’s guidance of a 15 percent increase. Micron Technology reports results for fourth quarter of fiscal 2013 Source: Micron – 10th October 2013 For the fourth quarter, the company had net income attributable to Micron shareholders of $1.71 billion, or $1.51 per diluted share, on net sales of $2.8 billion. AMOLED panel shipments surge in Q2, thanks to Samsung’s smartphone and display business Source: Vinita Jakhanwal, iSuppli – 9th October 2013 Global AMOLED display shipments during the period from April through June amounted to 53.1 million units, up from 45.6 million in the first quarter. Shipments were up by an even more impressive 41 percent from 37.6 million in the second quarter of 2012 MediaTek reports record third-quarter revenue Source: Kevin Chen, Taipei Times – 8th October 2013 In the three-month period ending last month, MediaTek said its revenue totalled NT$39 billion, up 17.2 percent from NT$33.28 billion in the previous quarter, surpassing the upper end of its revenue guidance.

Global semiconductor sales increase for sixth straight month in August Source: Dan Rosso, SIA – 4th October 2013 SIA announced that worldwide sales of semiconductors reached $25.87 billion for the month of August 2013, an increase of 6.4 percent compared to August 2012, marking the industry’s largest year-over-year growth since March 2011.

Back to top

MERGERS, ACQUISITIONS, JOINT VENTURES, SPIN OFFS AND PEOPLE

Qualcomm acquires Arteris assets, targets STB business Source: Dawinderpal Sahota, telecoms.com – 1st November 2013 Chip maker Qualcomm has acquired certain technology assets from network-on-chip (NoC) interconnect IP specialist Arteris for an undisclosed sum. The firm has also hired personnel formerly employed by Arteris. Peregrine and GlobalFoundries collaborate to advance RF SOI technology Source: Reuters – 29th October 2013 The two are sampling the first RF Switches built on Peregrine’s new UltraCMOS 10 RF SOI technologies. Corning to buy out Samsung from LCD JV signs 10 year supply deal Source: PRNewswire – 21st October 2013 The deal includes a new 10-year LCD display glass supply agreement between Corning and Samsung Display - which makes LCD panels for tablets and televisions - that will add about $2 billion to Corning's annual sales. Microsemi to acquire Symmetricom Source: PRNewswire – 21st October 2013 This strengthens Microsemi's position in high-value communications timing markets and creates the industry's largest and most complete end-to-end timing portfolio. The total transaction value is approximately $230 million, net of Symmetricom's projected cash balance at closing. Invensense spends $100m for ADI’s MEMS microphone unit Source: EE Times – 18th October 2013 Invensense, known for its inertial sensors with on-chip motion processing algorithms, claims to have already had MEMS audio microphones under development. By acquiring ADI's microphone business line, Invensense aims to fast-track progress, which it hopes will also open doors to new markets. Primax to buy majority stake in Tymphany

Source: Business Wire – 16th October 2013 Taiwan-based Primax is the world’s largest PC peripheral equipment manufacturer. With the acquisition, Primax also gets a majority stake in several factories and R&D centers in South China as well as the productivity of 2,500 Tymphany employees spread throughout China, Europe and the U.S.A.

Back to top

MARKET OUTLOOK

China telecom maker ZTE says to swing into profit in 2013 Source: Gartner – 22nd October 2013 The world's fifth-largest telecom equipment and smartphone maker in terms of sales did not give a guidance figure for the full-year profit. ZTE did say its net profit for the first nine months reached 551.6 million Yuan ($90.54 million), in line with the lower end of its expectations. Gartner says worldwide PC, tablet and mobile phone shipments to grow 4.5 percent in 2013 as lower priced devices drive growth Source: Gartner – 21st October 2013 Tablet shipments are expected to grow 53.4 percent this year, with shipments reaching 184 million units. The mobile phone market will continue to experience steady growth, but the opportunity for high average selling price (ASP) smartphones is now ending. Growth is expected to come from mid-tier smartphones in mature markets and low-end Android smartphones in emerging markets. Small cell backhaul equipment market reaches $5b in 2018 Source: ABI Research – 17th October 2013 Sub 6GHz technology will capture over 47% of small cell backhaul equipment revenue, or $2.4 billion with 31% of last mile links in 2018, while millimetre wave technology becomes the fastest growing technology over the forecast period, growing at 113% CAGR to reach a value of $668 million. Mobile smart wearable devices to be worth $19 billion by 2018, Juniper Research finds Source: Gartner – 15th October 2013 As per Juniper Research, the retail revenue from smart wearable devices, including smart watches and glasses, will reach $19 billion by 2018 compared with $1.4 billion this year. Revenues will be driven by high price points for these devices allied to their anticipated strong market demand. Gartner says worldwide shipments of 3D printers to grow 49 percent in 2013 Source: Gartner – 2nd October 2013

Gartner said that shipments will increase further in 2014, growing 75 percent to 98,065 units, followed by a near doubling of unit shipments in 2015. Semiconductor materials market to approach $50 billion in 2014 Source: Lara Chamness, SEMI – 1st October 2013 SEMI believes that the semiconductor materials market will trend with the device market, resulting in an increase of one percent this year and a seven percent increase in 2014, resulting in a materials market approaching $50 billion in 2014. Back to top

VIEWS AND OPINIONS

OEMs skipping design firms, licensing chip IP themselves Source: EE Times – 11th October 2013 Traditional semiconductor companies must respond to the rapidly changing industry dynamic or risk being on the losing end. Current market competition involves OEMs taking the driver's seat in chip design, not content on letting design firms call the shots, says Arteris VP Kurt Shuler in this piece for EE Times. Experts roundtable: More than Moore – manufacturing challenges for MEMS Source: Sara Verbruggen, Semiconductor Manufacturing & Design community – 27th September 2013 Semiconductor Design & Manufacturing discussed ‘More than Moore‘(MtM) standardization topics and challenges with Peter Himes, VP of marketing and strategic alliances at Silex Microsystems, Dr Eric Mounier, senior analyst, MEMS devices and technologies at Yole Développement, Tom Morrow, chief marketing officer at SEMI and Mike Rosa, senior global product strategic marketing manager – emerging technologies, 200mm components and systems group at Applied Materials. Back to top

STOCK WATCH

Source: NASDAQ

1 month chart for Intel, TSMC, TI, Broadcom, STM, Xilinx, KLA-Tencor, Qualcomm, LSI, UMC, Applied Materials, Teradyne, ARM

Holdings and Altera

INTEL

TSMC

TI

BROADCOM

STM

XILINX

KLA-TENCOR

QUALCOMM

LSI

UMC

APPLIED MATERIALS

TERADYNE

ARM HOLDINGS

ALTERA

Back to top

If you see a need for detailed research and an in-depth analysis for your specific market intelligence requirements, we can help.

Call us at +65 98629814 or email at enquiries@asic-vlsi.com

For sponsorship and advertising opportunities in this e-newsletter, email at sales@asic-vlsi.com

VLSI Consultancy Providing techno-commercial value-addition to the semiconductor industry 23 Limau Rise, Singapore 465848 Tel: +65 98629814, Email: meenu@asic-vlsi.com Web: www.asic-vlsi.com, Blog: www.asic-vlsi.com/blog LinkedIn: http://sg.linkedin.com/in/meenusarin

Twitter: @meenusarin, Facebook: VLSI Consultancy Registration No. 53023009K

SUBSCRIBE/FORWARD TO A COLLEAGUE

Please tell your colleagues about Semiconductor Biz Insight, your 5 minute monthly e-link Digest brought to you by VLSI Consultancy -

forward this email to a colleague so that they can Subscribe today

UNSUBSCRIBE

If you no longer wish to receive Semiconductor Biz Insight, please reply to this email with UNSUBSCRIBE in the Subject line.

DISCLAIMER

The Semiconductor Biz Insight is compiled by VLSI Consultancy. The newsletter includes a compilation of news-stories that appeared on the

internet in leading company and news sites. We provide the links for your ease and urge and encourage you to read the original story at the

respective website following the URL/Link of the news-item. All information provided in this document is of a general nature and is not

provided with any warranty as to its suitability to the circumstances of each individual business. Readers and users are entirely and

individually responsible for taking appropriate action with regard to the setting up of such services and for the consequences of such

actions.