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KEY TAKEAWAY

From the Asian arena Expansions – Inventec (Philippines), Xiaomi & Foxconn, Ericsson (India), Samsung (Vietnam) SK Hynix starts running world’s largest semiconductor fab, Taiwan may ease chip investment rules in China

Mergers & Acquisitions Diodes (Pericom), Pleasant Lake (offer for MagnaChip), Keysight (Electroservices), Tessera (Ziptronix), Qorvo (Stake in Cavendish), Intel (stake in Yuneec), SK Hynix (stake in Stratio), Intel (Docea Power), TSMC (plans for Omnivision local plants), Qualcomm (Ikanos), ARM (Sansa Security)

September 2015 issue

Hi, With the growth slowing in the smartphone market, companies are racing to up their ante in the IoT space. Qualcomm’s acquisition of Ikanos and ARM of Sansa Security, Apple partnering with Cisco, investments in Stratio by Hynix and Intel’s in Yuneec are just some of the few happenings last month in this direction.

It is another matter that entities are still trying to make sense of how to capture value and monetize in this high potential market. With the growing need of not just high-end technology and burgeoning touting of new products & features but a requirement for shaping business offerings to facilitate client sought business outcomes, look out for some evolving business models here.

Have an interesting read.

Warm Regards Meenu

Local Asia Pacific News

Industry Headlines

Financial Watch

Mergers & Acquisitions, Joint Ventures, Spin-offs

Market Outlook

Views & Opinions

Stock Watch

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INDEX

ASE and TDK sign deal on Kaohsiung technology venture Source: Lisa Wang, Taipei Times – 5th September 2015 The multimillion-dollar alliance of ASE and TDK next year is likely to be of advantage in making wearable devices smaller MediaTek and Micromax Informatics collaborate on mid-premium range smartphones to fuel India LTE market growth Source: PRNewswire – 2nd September 2015 The partnership aims to accelerate 4G accessibility and fuel faster smartphone adoption in India's rapidly growing market Inventec mulling “intelligent” plant Source: Taipei Times – 27th August 2015 The company is thinking of setting up an intelligent manufacturing plant in Indonesia or the Philippines next year as part of its global expansion. SK-Hynix begins to run world’s largest semiconductor factory Source: Michael Herh, Business Korea – 26th August 2015 M14 is a semiconductor factory for 300 mm wafers, and the first new factory built by SK Hynix in Icheon in 18 years. The new factory boasts the world’s largest single clean room building, which has a total floor space of 66,000 square meters and has a monthly production capacity of 200,000 wafers. Chipmakers plague Intel, Qualcomm in share grab Source: Bloomberg via Taipei Times – 20th August 2015 China’s Rockchip Electronics and Allwinner Technology have skyrocketed through chipmaker rankings by taking risks and relying on ARM designs

Ericsson to hire R&D engineers for R&D centre in Bangalore Source: EET India – 20th August 2015 Broadcom announced a series of MOU agreements with several Chinese companies, including H3C, Inspur and StarTimes.

Local Asia Pacific News

Taiwan may ease rules on chip investments in China Source: Alan Patterson, EE Times – 18th August 2015 The draft regulations would let Taiwan chipmakers have sole ownership of any new 12-inch fabs that they establish in China, which some Taiwanese companies see as crucial to protecting their proprietary technology. SMIC launches 28nm mobile phone chips Source: EE Times – 14th August 2015 Semiconductor Manufacturing International Corporation (SMIC) has adopted its 28nm process technology into mainstream smartphones. China's largest semiconductor foundry has successfully manufactured Qualcomm's SnapDragon 410 processors using the said technology Chipmaker struggles to build first plant in Vietnam Source: EET Asia – 12th August 2015 Saigon Industry Corporation (SIC) has put on hold its project, which is part of the city's plan to boost IC technology by 2020, after the People's Committee raised its petition that stemmed from critics who are concerned about product demand and human resources, Thanh Nien News reported Xiaomi ties up with Taiwan’s Foxconn to assemble smartphones in India Source: Mumbai Shah, Reuters – 10th August 2015 The factory, in Andhra Pradesh, is a fillip for Prime Minister Narendra Modi, who has championed a campaign to turn India into a manufacturing powerhouse to boost economic growth and create much-needed employment.

Murata flaunts tiny SMT SMEMS angular acceleration sensor Source: EE Times – 10th August 2015 According to the company, the unit is also believed to be the world's smallest SMD-type angular acceleration sensor, the accelerometer has dimensions of just 5.2mm x 2.5mm typ. x 0.8mm max. It incorporates a detection frequency band of more than 1kHz and an angular acceleration equivalent noise effective value of less than 1rad/s2ms.

Local Asia Pacific News

Samsung Display to invest extra $3 billion to boost Vietnam output Source: Dado Ruvic, Reuters – 6th August 2015 The investment by Samsung Display comes on top of a $1 billion it has earmarked for a new OLED display module assembly plant in Bac Ninh province, which began production in the first quarter. Samsung cuts Intel’s semiconductor sales lead to 16% in 2Q15 Source: Dado Ruvic, Reuters – 6th August 2015 Top 20 semiconductor suppliers’ sales increase by just 1% in 2Q15 as compared to 1Q15. The top-20 supplier list includes three pure-play foundries (TSMC, GlobalFoundries, and UMC) and four fabless companies. Foxconn to invest 5 billion dollars in Maharashtra projects Source: The New Indian Express – 8th August 2015 Taiwanese global electronics contract manufacturer Foxconn Technology will invest $5 billion in Maharashtra over the next three years in manufacturing, research and development facilities, creating 50,000 new jobs Back to Index

Local Asia Pacific News

Qualcomm president says splitting company may not create value Source: Liana Baker, Reuters – 3rd September 2015 Qualcomm’s president Derek Aberle said that investors calling for a split are taking a "sum of the parts" analysis and believe that Qualcomm's two divisions - its highly profitable licensing arm and its chips unit - would be valued more highly as independent companies. QEOS and GlobalFoundries to offer industry’s first CMOS platform for millimeterwave markets Source: Cho Jin-young, Business Korea – 1st September 2015 The co-designed platform will leverage GLOBALFOUNDRIES’ production-proven expertise in advanced silicon RF technologies and QEOS’ next-generation design environment and IP to expand the mmWave wireless technology offerings to enable gigabit interactivity everywhere. Replacing DRAM - Intel shaking global semiconductor market Source: Cho Jin-young, Business Korea – 1st September 2015 Intel will feature Embedded DRAM (eDRAM) in its 6th-generation Skylake CPU to improve graphics processing performance, using its 22-nm class process technology. Back to Index

Industry Headlines

Financial Watch

u-blox posts strong first half for 2015 Source: PRNewswire – 4th September 2015 Consolidated revenues amounted to CHF 161.9 million during the first half of 2015, an increase of 33.1% compared with the same period last year. Microcontroller unit shipments surge but falling prices sap sales growth Source: IC Insights – 19th August 2015 The mid-year forecast shows microcontroller shipments rising 33% in 2015 to 25.4 billion MCUs worldwide as a result of a tremendous upsurge in units for smartcards and 32-bit applications—many of which are aimed at the Internet of Things (IoT) market. Silver Lake invests $1 billion in Motorola Solutions Source: Wireless – 19th August 2015 Motorola will use the investment to boost growth in its public safety solutions and services businesses through new partnerships, investments and acquisitions TSMC and MediaTek shares fall amid pessimistic outlook Source: John Liu, The China Post – 18th August 2015 TSMC was down 1.5 percent to finish at NT$124, a record low since October 2014. MediaTek closed 1.8 percent lower at NT$265, the lowest level since July 2012. Applied Materials sees laggard chip industry Source: Don Clark, Market Watch – 13th August 2015 The big maker of semiconductor manufacturing tools on Thursday reported a 10% rise in its third-quarter revenue and a 17% jump in orders for new equipment.

Financial Watch

Samsung Electronics announces second quarter results Source: Samsung Tomorrow – 30th July 2015 The company registers net profit of KRW 5.75 trillion on sales of KRW 48.54 trillion. The overall QOQ improvement in earnings was largely due to strong sales in the Semiconductor Business, led by memory products and mobile application processors, as well as the Consumer Electronics (CE) Division that benefited from the launch of new TV models. ASE cautious on Q3 prospects Source: Ted Chen, Taipei Times – 30th July 2015 The world’s largest chip packager and tester posted net income of NT$3.7 billion, down 18 percent quarter-on-quarter and 28.5 percent year-on-year. Back to Index

Mergers & Acquisitions, Joint Ventures, Spin-offs

Qualcomm exploring sale of Vuforia Augmented Reality Unit Source: Ina Fried, re/code – 3rd September 2015 Qualcomm said back in July that it was cutting $1.4 billion in costs, laying off 15 percent of staff and scaling back on some of its more far-flung efforts. Chipmaker Diodes to buy Pericom in $400m deal Source: Reuters – 3rd September 2015 Pericom makes connectivity, timing and power management chips used in cars, telecom networks and other devices. Apple partners with Cisco Source: Martha Degrasse, RCR Wireless News – 1st September 2015 For Cisco, the deal solidifies a mobile strategy that has long been a priority for the company. Partnering with Apple extends Cisco’s reach into the device and application arenas. Analog Devices is Sand 9 buyer Source: Peter Clarke, EE Times Europe – 1st September 2015 Piezoelectric MEMS resonator startup Sand 9 was acquired by Analog Devices in June 2015, according to a technology consultant who works for companies on timing circuits. Investment firm Pleasant Lake offers to buy MagnaChip Source: Reuters – 31st August 2015 The $10-per-share offer of Pleasant Lake, which owns 9.9 percent of MagnaChip, is at a premium of 29 percent to MagnaChip's Friday closing price. SPIL rejects ASE takeover bid, announces deal with Hon Hai Source: John Liu, The China Post – 29th August 2015 Hon Hai Precision Industry and Siliconware Precision Industries announced a strategic alliance via share swap in a bid to reject Advanced Semiconductor Engineering hostile takeover of SPIL.

Mergers & Acquisitions, Joint Ventures, Spin-offs

Keysight Technologies announces purchase of Electroservices Enterprises Source: MarketWatch – 28th August 2015 The move further expands calibration, asset management services offering in Europe Tessera to acquire Ziptronix for $30m Source: BusinessWire – 27th August 2015 The acquisition expands on Tessera’s existing advanced packaging capabilities by adding a low temperature wafer bonding technology platform. Qorvo takes strategic stake in MEMS vendor Cavendish Source: Peter Clarke, EE Times Europe – 27th August 2015 RF MEMS switch vendor Cavendish Kinetics Ltd. has raised $36 million in a Series-F round of financing that includes a $25 million stake taken by RF component company Qorvo Inc. through its subsidiary TriQuint Inc. Intel continues drone push with $60m investment into China’s Yuneec Source: Michael De Waal-Montgomery, Venturebeat – 26th August 2015 The news comes the same week that fellow Chinese drone company Ehang raised $42 million, Sony unveiled its own drone prototype due out in early 2016. SK Hynix invests in Silicon Valley start-up Source: Kim Yoo-chul – 18th August 2015 According to industry sources, the SK Group's semiconductor affiliate recently acquired a 9.1 percent stake in Stratio. Stratio has strengths of developing image sensors using short wavelengths to be used in medical and defense equipment. Intel acquires Docea Power Source: Brian Bailey, Semiconductor Engineering – 14th August 2015 Intel has quietly done another EDA acquisition, this time buying Docea Power, a small company based in Moirans, France. Docea had high-level power and thermal estimation tools.

Mergers & Acquisitions, Joint Ventures, Spin-offs

TSMC plans purchase of local Omnivision units Source: Lisa Wang, Taipei Times – 12th August 2015 The acquisition would open the door for investors from China to buy the US-based firm, as the assets would not be under Chinese control Qualcomm to buy broadband chip firm Ikanos Source: Mike Freeman, The San Diego Union Tribune – 6th August 2015 The $47 million deal expands footprint in connected home gateways. ARM expands IoT security capability with acquisition of Sansa Security Source: Business Wire – 30th July 2015 Acquisition will offer hardware and software-based security features, boosting protection for sensitive data and content on any connected device Back to Index

Market Outlook

Philippines sees lower electronics export growth at 0-4% Source: EE Times – 3rd September 2015 The Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) cut anew its export growth forecast for 2015 from the 3-5 per cent estimate announced in July to anywhere between 0 per cent and 4 per cent, citing weak global economy led by China. Also, both the United States and Japan have not recovered yet. Market for thermal interface materials to grow to $3B in 2025 Source: EE Times – 20th August 2015 According to the latest data from IDTechEx Research, the increasing need for faster, thinner and lighter electronics is opening up opportunities for thermal interface materials (TIMs) that can manage heat generation better. GlobalWafers forecasts weaker growth Source: Lisa Wang, Taipei Times – 20th August 2015 The world’s No. 6 wafer supplier expects short-term inventory correction and macroeconomic uncertainty to curtail customers’ orders and weaken its revenue growth in the second half of this year. 150 million smart meter semiconductors to be shipped by 2019 Source: IHS Electronics360 - 19thAugust 2015 The global market for semiconductors used in smart meters is expected to rise in the next few years as demand for precise energy measurement and communications increases from utility vendors. Samsung to release 16TB SSD next year Source: Cho Jin-young, Business Korea - 18thAugust 2015 The largest current HDD can store 10 TB of data. But thanks to an advance in NAND flash-making technology, the storage capacity of SSDs has increased rapidly. Once this 16 TB SSD is commercialized, the capacity of SSDs will surpass that of HDDs for the first time.

Market Outlook

CMOS Image sensors see higher growth from greater diversity of uses Source: IC Insights – 12th August 2015 Dependency on camera phones lessens as imaging technology moves into a wider range of systems—from automotive and machine vision to surveillance and sensors for Internet of Things. SiC market to treble and GaN to explode – if challenges are overcome Source: Semiconductor Today – 3rd August 2015 In 2014 the silicon carbide (SiC) chip business was worth more than $133m, with power factor correction (PFC) and photovoltaics (PV) still the leading applications (as in previous years). More than 80% of this market consists of SiC diodes, which in 2020 will remain the main contributor across various applications, including electric vehicles and hybrid electric vehicles (EV/HEV), PV, PFC, wind, uninterruptible power supplies (UPS) and motor drives, reckons Yole. MediaTek slashes annual targets Source: Lisa Wang, Taipei Times – 1st August 2015 MediaTek expects revenue this year to shrink by between 5 percent and 10 percent from last year’s NT$213.06 billion (US$6.72 billion) Back to Index

Views & Opinions

IIoT comes to chip manufacturing Source: Ed Sperling, Semiconductor Engineering – 18th August 2015 Nicholas Ward, director of marketing for the services group at Applied Materials, sat down with Semiconductor Engineering to talk about how data needs to be shared in semiconductor manufacturing and why it’s so slow to happen in this industry. Executive Insight: Aart De Geus Source: Ed Sperling, Semiconductor Engineering – 10th August 2015 Synopsys’ chairman sounds off on why the company is pushing heavily into software, the need for security, and R&D costs in the wake of fewer acquisition targets Back to Index

Stock Watch

Source: NASDAQ

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

INTEL TI

TSMC

BROADCOM STMICROELECTRONICS XILINX

KLA_TENCOR QUALCOMM

AVAGO

UMC APPLIED MATERIALS TERADYNE

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