weeklyroundup jun 30 jul 07 06

8/14/2019 weeklyroundup jun 30 jul 07 06

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Korea seeks to bolster economic status

With China considered by many the most dynamic Asian economy and India anup-and-comer, South Korea is often overlooked as a global economicpowerhouse.

But at the Korea Investment Forum held here Wednesday (June 28), speakersrepresenting South Korean economic and trade groups said the country, withworld's tenth largest economy, is primed for strong future growth and thus is anattractive investment target.

The speakers pointed out South Korea's already strong position in sectors such aselectronics, information and telecommunications, and parts and materials, andhinted of fledging development in areas such as biotechnology. They also pointedto a strongly educated workforce and progress in solving past problems such aslabor strife.

The Forum was organized by the Ministry of Commerce, Industry and Energy(MOCIE), the Korea Trade-Investment Promotion Agency (KOTRA) and InvestKorea, and supported by numerous Korean trade and economic groups.

Keynote speaker Sye Kyun Chung, minister of MOCIE told a packed audience thatwhile Korea faces challenges such as rising raw material costs and energy prices,its economy should see a double-digit percentage increase in exports this year.

South Korea "ranks sixth in patent applications," said Chung. And "50 percent of Fortune 500 countries do business in Korea."

MOCIE noted that Korea's 2004 gross domestic product (GDP) was $679.9 billion.The country had a trade surplus of $38.2 billion, reflecting growth in exports of wireless communications equipment, semiconductors, and computers.

Chung brushed aside any lingering notion that Korea was leery of foreign capitalcoming into the country, stating, "We welcome all foreign investment. We want tosee Korea be an open economy." He added that the country is now negotiating afree trade agreement with the U.S.

Tami Overby, president of the American Chamber of Commerce in Korea, echoedChung's sentiments, noting that the free trade agreement is the only one beingnegotiated between the U.S. and a Far East country. "If we can complete thedeal, there will be enormous new investment."

Overby added Korea's government has been keen on reforming its economy since1997, when a severe economic crisis hit the country. "Ten years ago, Korea was adifficult place to do business," she conceded.

Improving labor relations

South Korea's past economic problems were partially attributed to uneasyrelations between the government and labor. Labor problems still exist in sectors

ISA Weekly RoundupJune 30-July 7, 2006


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such as pharmaceutical and public service but are being eradicated elsewhere,according to Yong-Deuk Lee, president of the Federation of Korean Trade Union.

Lee is intimately familiar with Korean labor issues, admitting to having been jailedtwice for past participation in labor actions. But improving labor relations haveturned him into a staunch proponent of foreign investment in Korea.

"If you or your colleagues worry about investing in Korea, don't," Lee said.

Investors may not need a strong marketing pitch in sectors like electronics andinformation technology, where Korea already has an established presence.

Data from the Korea Electronics Technology Institute (KETI) noted Korea is fourthin electronics sales behind the U.S., Japan, and China; third in semiconductors;first in displays; and second in mobile phones.

Choon-Ho Kim, president of KETI, pointed out that Korea was the incubator for

WiBro (Wireless Broadband Internet), heavily adopted into the technology profileof the IEEE 802.16e mobile WiMax standard. Korea-based KT Corp. isspearheading efforts to build a global belt for WiBro service.

KETI noted that 60 percent of Korea's population already has broadband Internetaccess, while 80 percent has mobile phone access.

Besides WiBro, Korea is delving into terrestrial digital multimedia broadcasting (T-DMB) and high-speed downlink packet access (HSDPA), said Kim.

But even more advanced technologies will be needed to give Korea an edge overnations with clear labor cost advantages, such as China, according to Kim. He

said Korea will need to develop advanced technologies that cut across multipledisciplines, such as electronics and biotechnology.

Source: EETimes, June 28 2006

EDA returned to double-digit grow th in Q1, EDAC says

EDA revenue was up 10 percent year-to-year during the first quarter, the firsttime EDA posted double-digit growth in more than two years, according to areport issued Thursday (June 29) by the EDA Consortium (EDAC)'s MarketStatistics Service.

Worldwide EDA revenue reached $1.215 billion during the first quarter, up from$1.108 billion in the first quarter 0f 2005, though the difference was attributed inpart to new company participation, according to EDAC. Total product revenue,without services, increased more than 10 percent to $1.136 billion in the firstquarter, EDAC said.

The first quarter marked EDA's highest quarterly year-to-year growth since thefourth quarter of 2003, when EDA revenue was up 13 percent year-to-year. Sincethen, EDA has posted two flat quarters, one quarter of revenue decline, and fivequarters of lukewarm growth of 6 percent or less.

Does 10 percent growth mean that EDA is back to form as a high-growthsegment?


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"It was a good quarter," said Walden Rhines, chairman and CEO of MentorGraphics Corp. and vice-chair of the EDA Consortium. "If the semiconductorindustry continues to expand, EDA is positioned to continue this strong growth."

EDA's largest tool category, computer-aided engineering, generated revenue of $512 million in first quarter, up 10 percent from the same period of 2005, EDACsaid. First quarter IC physical design and verification revenue increased 13percent to $315 million, intellectual property (IP) revenue grew 12 percent toreach $225 million and services revenue increased 3 percent to $79 million, EDACsaid. Printed circuit board and multi-chip module revenue totaled $84 million inthe first quarter, down 4 percent year-to-year, EDAC (San Jose, Calif.) said.

Regionally, North America, EDA's largest region, purchased $569 million of EDAproducts and services during the first quarter, a 14 percent increase comparedwith the first quarter of 2005. First quarter EDA revenue from Japan grew 3percent to reach $291 million, revenue from Western Europe increased 13percent to total $218 million and revenue from the rest of the world was up 4percent, reaching $137 million, EDAC said.

Reporting companies employed 23,128 professionals in the first quarter, up 4percent from the 22,236 reported in the first quarter of 2005, EDAC said.


Ness, Pulsic set up I ndia development center

Global IT solutions provider Ness Technologies Inc. has established an extendeddevelopment center (EDC) with Pulsic Ltd., a supplier of physical design solutionsfor analog, mixed signal and custom digital design. The development center islocated at Ness' facility in Bangalore, India.

The center's establishment is a part of a three-year, multi-million dollar contractbetween Pulsic (Bristol, U.K.) and Ness Technologies (Hackensack, N.J.). Pulsichas established an R&D team in Bangalore, working with Ness Technologies,which will assist Pulsic's R&D efforts in India with the necessary infrastructure andknow-how.

"Ness is an ideal fit for Pulsic. We have aggressive plans to accelerate productdevelopment and increase geographic reach to meet our growth plans," said KenRoberts, CEO, Pulsic, in a statement. "India has an abundance of outstandingengineers, and Ness EDC provides Pulsic with the right mix of processes and

additional senior management capability to build a productive team quickly andhasten product development."


Qualcomm looking for Indian startups

Qualcomm, which outsources services to several Indian software and hardwarefirms, is seeking a startup in India, either through acquisition or an equityinvestment by its Qualcomm Technologies & Ventures division.

Sanjay K. Jha, who headed the investment arm previously and is now president

of Qualcomm CDMA Technologies, the IC and software sales arm, said, "We aredefinitely interested in acquisitions in India." Predicting that India is likely to have


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3G services in the 18 months, he said India, China and the U.S. are the three fastgrowing markets for the company, where it is committed to invest.

On the tussle regarding royalties in India, Jha said Qualcomm will have to addresswhatever issues this market throws up, as "it is a large marketplace with largegrowth potential."


Polysilicon shortages seen curbing semi growth

A polysilicon shortage could cause semiconductor market growth to fall short of 2006 industry estimates and possibly stagnate in 2007, according to an analystwith market researcher J-Star Global Inc.

Yoshihisa Toyosaki, J-Star's president, CEO and former head of iSuppli Japan,said material supply chain conditions were as important as demand in predicting

semiconductor market growth. Though the industry has been growing on theassumption that silicon is inexhaustible, it now needs to focus on how to securepolysilicon, Toyosaki said.

"There are forecasts of about 10 percent growth for semiconductor market thisyear and next year, based mainly on the analysis of demand from electronicsdevices that employ semiconductors. But if semiconductors and solar cells bothcontinue growing, there will be a gap between polysilicon supply and demandfrom them. Polysilicon shortages will be a new impact on the silicon cycle,"warned Toyosaki.

J-Star estimated total polysilicon production was 30,000 tons last year, about

two-thirds of which was allocated to semiconductor production. The remainingthird was used for solar cell production, which has grown 45 percent annuallysince 2001. J-Star estimated that polysilicon production will reach 40,000 tons in2007 thanks to suppliers bolstering capacity. However, polysilicon demand by thesolar-cell industry is slated to double to nearly 20,000 tons over the same period.

One polysilicon supplier is responding by expanding production. Wacker ChemieAG (Munich, Germany) said this week it would expand its polysilicon productioncapacity by an additional 4,500 metric tons to a total of 14,500 metric tons bythe end of 2009.

Should the allocation ratio of polysilicon to IC and solar industries remain the

same, J-Star predicted chip market growth of 6.3 percent this year and 8.7percent next yearlower than the World Semiconductor Trade Statistics group's10.1 percent forecast for 2006 and 11 percent in 2007.

If the solar industry absorbs more polysilicon, the percentage of polysilicon itconsumes will increase to 35 percent this year and 40 percent next.

Consequently, semiconductor market growth will slow to 3.6 percent this yearand 0.3 percent in 2007, said Toyosaki.

"I don't foresee the allocation balance changing, and expect 8.7 percent growthfor the semiconductor market next year. But there is a risk that change in

polysilicon allocation brings a worse-case scenario for the semiconductorindustry," he warned.


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He called on chip makers and OEMs to make strategic procurement plans thattake polysilicon shortages into account.

For some time, polysilicon has been a hot topic in recent times. Prices forpolycrystalline materials have soared amid ongoing and severe shortages in themarketplace.

Leading polycrystalline or polysilicon vendors Hemlock, MEMC, MitsubishiMaterials, REC and Wacker cannot keep up with huge OEM demand and arereportedly sold out of these materials for the next two to three years, accordingto industry sources

An investment banking firm recently increased its forecast for solar-cellproduction in 2006 and 2007, but noted that polysilicon material shortages willcontinue to plague the industry.


Synplicity's Synplify Premier Software Wins the SemiconductorIndustry News' LSI of the Year Award; The FPGA PhysicalSynthesis Software Recognized for Its Innovative Graph-BasedPhysical Synthesis Technology

Synplicity, Inc. (NASDAQ:SYNP), a leading supplier of software for the design andverification of semiconductors, today announced its Synplify(R) Premier softwarewith graph-based physical synthesis technology was awarded the prestigious LSIof the Year Award's first-place Grand Prix Award. Winning the award in the DesignEnvironment/Development Tools category, the Synplify Premier software featuresSynplicity's innovative graph-based physical synthesis technology, mergingoptimization, placement and routing to generate a fully placed and physicallyoptimized design. The Graph-based physical synthesis technology within theSynplify Premier software improves timing closure by means of a single-passphysical synthesis flow for 90nm FPGAs. Synplicity received the award during aceremony on June 28 at the 9th Embedded Systems Expo & Conference beingheld at the Tokyo Big Sight in Japan.

The Semiconductor Industry News established the LSI of the Year awards in 1994to promote market development and technology in the semiconductor industry.The award acknowledges the most remarkable LSI products and technology intwo categories -- the Device category, and the Design Environment/DevelopmentTool category. Nearly 250 products were nominated for the 2006 award with theSynplicity Premier software receiving first-place recognition by receiving theGrand Prix Award.

"We are extremely honored to receive the prestigious LSI of the Year Award forour Synplify Premier product," said Gary Meyers, president and CEO of Synplicity,Inc. "The Synplify Premier software represents a breakthrough achievement andthis award demonstrates our continuing leadership position in the FPGA synthesismarket. We remain committed to offering innovative software solutions thatenable the rapid and effective design of complex, high-performancesemiconductors."

"Synplicity holds a dominant share of the FPGA logic synthesis market," said Dr.Eng. Hiroto Yasuura, professor of Kyushu University, Chairman of the review

committee. "Synplicity's unique FPGA physical synthesis technology ensures fast


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timing closure and improves operation speed. The Synplify Premier software ishighly evaluated as an essential method for 90nm FPGA designs."

This award marks the fourth time Synplicity's tools have won an LSI of the Yearaward. Previous products from Synplicity that won the prestigious award include:the Amplify(R) Family of Structured/Platform ASIC synthesis tools (2005 Semi-Grand Prix award winner); Identify(R) RTL Debugger software (2004 third placeLSI of the Year award winner); Amplify(R) FPGA Physical Synthesis software withTOPS(TM) (Total Optimization Physical Synthesis Technology) (2002 Jury'sSpecial award winner).

Source: BusinessWire, June 29 2006

Come, Produc e, Sell, Export : Interview w ith Thiru Dayanidhi Maran

The IT and telecom minister, believes in knocking at doors for selling India.Obviously, his views on FDI wouldn't please the Left. He measures hisperformance, he says, in the billions of dollars he is able to bring into the country.

His Left partners will differ, but Dayanidhi Maran, IT and telecom minister,believes in knocking at doors for selling India. He measures his performance inthe billions of dollars he is able to bring into the country. And his efforts arepaying off.

The issue of FDI in certain sectors is a subject of heated debate. What isyour take on FDI?

IT and telecom are the fastest growing sectors and need huge investments. Wehave allowed FDI in these sectors. In IT we have allowed 100% FDI, in telecommanufacturing 100% and in services 74%. Investors feel comfortable with thisand we have been able to address their fears and give them security from thegovernment. They believe in the first miracle, after which all will happen.

With companies like IBM indicating large investments, are you revisingyour FDI expectations up from the earlier $10.3 billion?

If we look at the last three years, our expectation was that around $9-10 billion inFDI would flow in. Now, I expect to double my target by year end. This month Iam going to Korea to sell India as an investment destination. After that, I amback to Singapore, a nation from which I have high expectations. I always believein knocking at doors for selling India, there is nothing wrong in it. I think my dutyis to explore the possibilities and highlight the advantages of doing business in

India.

What is your sales pitch to prospective investors?

I always start my speech by saying that the PM, who was the Finance Minister in1991, is the father of reforms in our country. I say, take a look at the policies andyoull find the governments attitude has always been encouraging. True, we area democratic country and we argue, we argue very, very loudly, but when wetake a decision we never go back. Consecutive governments, whichever partythey may be, have been quite supportive. Thats one side. The other good thing isthat the opportunity in India is enormous. My big selling point is that I come froma country with 1.2 billion people of which 60% are below the age of 35 years. We

have a market. So manufacture in our country, sell in our country and exportfrom our country.


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Which new segments are you focusing on for FDI?

I feel new areas like LCD and flat screen displays should attract a lot of investment. Its a huge market. Today alone we are selling 150,000 flat screensets in the country. I am looking to attract display manufacturers like LG andSamsung to set up shop in the country.

A policy is being circulated for this and will be adopted soon. Another area we arelooking at is large-scale manufacturing of photo voltaic cells.

The other important area where we are missing is semiconductors. Last year, onJune 7, when I was in Silicon Valley, it struck me that we needed to kick-start thesemiconductor business in India. There is a major initiative being undertaken forthe creation of a semiconductor industry in the country. The ministry is activelyconsidering the draft policy for this. We realise it is important to bring in privateenterprise for creation of such facilities as they not only bring in the technologyand marketing skills, but also make the project viable. Further, this is a capital-intensive industry and every three years you need to reinvest as things change

fastfrom 250 nano metres (nm) we are moving to 90 nm and in a matter of time we will migrate to 45 nm. This is the right time to be in this field and Ibelieve we should target the high value segment of the industry.

People have questioned the viability of setting up semiconductorfacilities in India. Intel has also not committed any investment in thisarea. How do you propose to make this business attractive?

All multinationals have their own reasons and plans. To invest $3 billion just likethat is not an easy decision. AMD has come to India and we are in talks withIntel. The door is not closed for others, but those who come in now will have anearly bird advantage. We want to grow fast in this business and are taking

necessary steps for it. The government is considering viability gap funding tomake the business attractive for prospective investors. This is essential becausethe investment is large. We have seen this in the United States, the UnitedKingdom, Japan and Korea, China, Germany and Taiwan. The government fundsthe industry there. We too have to look at such alternatives. We are looking atequity partnerships. We are very clear that we dont want any second-handequipment coming to India. The technology should be at par with that in otherparts of the world.

This is an industry where the asking investment keeps going up, a firm investing$3 billion today will be investing $6 billion in the next five years and $12 billion inthe following five years. The government has understood that this is a high

growth area.Steps are being taken to establish core component supply to companies such asNokia, Motorola, LG, Flextronics and Solectron, which have set up theirmanufacturing centres in India over the last two years. And there is interest inthe business in India. This despite the fact that we are a late entrant in the field.Semiconductors, today, are largely manufactured in China and Taiwan. A recentstudy by Frost & Sullivan shows that in seven to eight years, the semiconductorbusiness alone would be a $40 billion opportunity offering employment to 9million people.

Talking of handset makers and hardw are companies, how do they reactto your proposals for R s 1,000 handsets or Rs 10,000 PCs?


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All major handset makers have set up shop in India. Nokia is making 2 millionhandsets a month. Motorola, from January 2007, will start producing one millionhandsets a year. They know what sells. They will not manufacture items that willnot sell. At the end of the day it is all demand based. Mobile phones are toopersonal. They are more personal than a wallet or a watch. In fact, we are sellingmore than 30 million handsets each year, more than what was once the largestselling item in India: cycles. Cell phones have become so common, so essential.They are no more a luxury.

So you are saying the market is the final driver. But how do you deal w ithissues such as the Hutch-Essar tangle? Do you leave the companies todecide?

The ministry is very clear. We are not here for resolving internal problems of players. I think they should behave. The ministry is not here to do any policing.The ministry is here to be a catalyst, a facilitator.

Beyond w rangles, for telecom services players the lack of spectrum is

holding up grow th. How is the issue being resolved?

Right now there is more demand for spectrum. We need spectrum for rollout of 3G as well as the present 2G services. The defence forces have occupied a lot of it. A coordination group has been formed with the department of telecommunication (DoT) and defence and has agreed to vacate 45 MHz. By yearend more spectrum should be available to DoT for distributing it equitably. Fornow, the growth has not stopped due to lack of spectrum. All the operators inconsultation with DoT are exploring areas of infrastructure sharing, not only inrural areas but urban areas too. We have started with Delhi and within a monththere will be sharing of towers. If we succeed, it can be done in other places too.

Telcos want spectrum, BPOs w ant low-cost bandwidth. How are w elooking to address this need?

Its a numbers game. The international long-distance plan that I am working onseeks to reduce the bandwidth cost by increasing competition in the internationallong distance area. This will internally help the BPOs because 15% of their totalcost is bandwidth.

If we really derive the cost for India, from here to the United Kingdom is the mostexpensive. From UK to United States is the cheapest because there are manyfibres going down there. From here to Singapore is expensive, but fromSingapore to US it is cheap. Given that 40% of our BPO exports are to the United

States this is an important factor for the industry. The government is trying toprovide a level-playing field, and I am in a hurry. The reason is China, which hasrealised that it needs to look beyond manufacturing where the commodity costkeeps increasing. China is taking up software very seriously. It has startedmaking English a part of the curriculum. And China can work faster than us. Theyalso pump in a lot of resources. So we have to make sure that we give our Indianentrepreneurs an edge. We have to see that they can look beyond big cities, andthat they enjoy a cost advantage in bandwidth.

Is the Chinese threat behind your backing the industrys demand forextending the Software Technology P ark scheme, despite oppositionfrom the finance ministry?

It is evident that one of the successful policies that the government has workedout is giving a single window clearance and now we are talking about $32-billion


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IT-enabled services exports. It is working extremely well and the industry hasbenefited. Today when you see other countries following us they give the sameincentive and if we stop the clock in 2009 then all our companies will start lookingat China, Sri Lanka. So we have to maintain this. We employ so many people,why should we give up? Every state is competing with the other. Today, ITES iswhat everybody wants, they dont want anything else. As the informationtechnology minister, I support it. I think this catalyst should continue.

Source: Outlook India.com, June 29 2006

Taipei tops hotspot survey

The Taipei municipal Wi-Fi network in Taiwan has been crowned the world'sbiggest hotspot by market researchers JiWire.

"Taipei's municipal Wi-Fi network is the most impressive in the world," JiWire CEOKevin McKenzie said Thursday, noting that the network won out from among115,000 hotspots in 128 countries.

Deployed by local ISP Q-Ware for some $30 million and supported by theproject's general consultant Hewlett-Packard, the Taipei hotspot has some 40,000paid subscribers who pony up about $12.50 a month for the service. The hotspotis expected to have 200,000 paid subscribers by the end of the year.

"This is only the beginning of our promise to the people who visit, work, or live(here,)" said Taipei Mayor Ma Ying-jeou in a statement. "More advancedinfrastructure will be deployed and more applications will be developed here."

Reportedly in the works to attract additional subscribers is a service for Sony PSP

portable game machines as well as a Web telephone calling offering.

One reason Taipei's 2.6 million inhabitants haven't signed up in droves for thenew service is the proliferation of free hotspots in the city and its environs. Thecity deployment serves hard-to-reach subway and train stations. The hotspot's134-square-kilometer downtown area covers almost 90 percent of Taipei'spopulation.


University builds microscope for ultra-fast chips

A research team of the Braunschweig university has developed a microscope fortesting semiconductors at operating frequencies of up to 1000 GHz. The devicegenerates images that combine the topology with the electrical activity of thechip.

The research group equipped the cantilevers of an atomic force microscope withsuperconducting Josephson contacts, explained Meinhard Schilling, head of theresearch group and manager at the Institute of electrical measurementtechnology at the university. Thus, the instrument can scan the chip surface froma distance of a few microns. While the atomic force microscope generates animage of the topology of the chip surface, the Josephson contacts detectelectromagnetic fields with frequencies of up to 1000 GHz, Schilling said. Spatial

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The combination of the two images can be used to check for the correct functionsof the chip at transistor level. Thus, the microscope is a prerequisite for thedesign of new, ever-faster chip generations, Schilling explained. But it could beused for production tests as well - as soon as the industry produces such fastdevices, said Schilling. According to the scientist, the new device could replacetoday's production test probers with a typical maximum frequency of about 70GHz.

Chipmaker Infineon was involved in the development of the microscope. Now, thecompany will be able to test and optimize it for industrial adoption, Schilling said.


Mobile Phone I ndustry Looks to 4G

Several mobile players have come together to form an organization that backsthe creation of a 4G mobile phone network standard that they says will coexist

with, and eventually replace, existing standard networks.

The organization, Next Generation Mobile Networks (NGMN), was started by KPNMobile NV, Orange SA, Sprint Nextel Corp., T-Mobile International AG & Co KGand Vodafone Group PLC. The partners say they have extended an invitation toother members of the mobile industry to join the organization.

"The vision of the initiative is to provide a platform for innovation by movingtowards one integrated network for the seamless introduction of mobilebroadband services," according to a statement on the organization's Web site.

"The initial objective of the initiative is the commercial launch of a newexperience in mobile broadband communications by 2010 to ensure a long andsuccessful cycle of investment, innovation and adoption of new and familiarservices that would benefit all members of the mobile ecosystem," the groupadded.

Target mobile technologies for the group include Packet Switched networkarchitecture, HSDPA, HSUPA and EVDO. NGMN further said it addresses otherindustry issues, such as intellectual property rights.

Source: Electronic News, June 30 2006

Micronas Chairman steps dow n

Franz Betschon, Chairman of the Board of Directors of Micronas SemiconductorHolding AG, has decided to step down with effect from end of June 2006.Betschon, aged 65, gave personal reasons for his decision.

The chairmanship will pass to present Vice Cheirman Thomas Lustenberger."During more than eight years in which I have served Micronas Group as BoardChairman, the company has become one of the market leaders for complexsemiconductor systems in its core business areas. It is a fitting moment for me tobow out and make way for fresh blood," commented Franz Betschon on hisretirement.


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During Betschon's time as Chairman, the chip manufacturer, which is listed onthe SWX Swiss Exchange, has more than trebled its consolidated net sales fromCHF 280 million ($227 million) in 1998. Micronas' product spectrum focuses onapplication-specific semiconductors for consumer and automotive electronics.


Spartan recall could cost Xilinx $30 million, analyst says

A recall on Spartan-3 FPGAs could cost programmable logic supplier Xilinx Inc.$20 million to $30 million in revenue, according to Satya Chillara, an analyst withAmerican Technology research.

As reported by EE Times earlier this week, Xilinx issued a recall for Spartan-3, 3Eand 3L devices made between early September 2005 and late April of this year.The recall was issued after one Xilinx customer reported a packaging-relatedtechnical problem on a small percentage of the chips.

In a research note published Friday (June 30), Chillara said the recall could pose"a major risk as customers who have already used these chips in high-endconsumer applications might be very concerned with the quality issue."

According to the research note, American Technology believes that the recall doesnot affect devices that are already consumed by customers. Spartan-3s are beingused in applications such as plasma TVs and digital TVs, according to AmericanTechnology Research.

Chillara said American Technology Research believes it has identified the moldcompound issue that prompted the recall, and that it could take time to fix,

"thereby causing volatility in next quarter's numbers.

Chillara said American Technology Research believes the Spartan-3 recall poses amaterial risk to Xilinx' stock, but the firm maintained its "buy" rating and pricetarget of $25. Xilinx traded at $22.65 in early afternoon Nasdaq trading Friday.


South Korea's RFID market to reach $500M, says report

South Korea's RFID market will exceed $500 million this year, an industry grouppredicted.

In a report to an information technology forum hosted by the Ministry of Information and Communication, the Korea Association of RFID/USN said thecountry's RFID-related equipment and device shipments would reach 524.2 billionwon ($551.8 million) this year, compared with 290 billion won last year and153.5 billion won in 2004.

The association forecast the volume to grow up to 1.2 trillion won by 2010.

Overseas RFID shipments will grow from 33 billion won in 2005 to 52.5 billion thisyear, according to the association.



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SPF: All About P ow er, Performance

The official motto of this year's Spring Processor Forum (SPF), held May 15-17 inSan Jose, California, was "power-efficient design", and in his opening keynotespeech Chuck Moore, senior fellow at AMD, outlined the major problems in theprocessor world: "Our industry is driven by elements of balanced systemperformance." Moore believes that the balance between system-level bandwidthand power consumption is currently the industry's biggest challenge, closelyfollowed by the balance between single-thread versus multi-thread performance.When Dan Dobberpuhl, president and CEO of PA Semi, spoke at the event, hereduced the entire dilemma to a single sentence: "Very often SoCs becomelimited by their power dissipation and not by the ability to integrate."Mark Hartman, staff applications engineer at National Semiconductor, presentedwith National's PowerWise technology an adaptive voltage scaling (AVS)technology. "Our angle is to get feedback from the load," Hartmann said. "Wedeveloped IP for a power controller that is located on the microprocessor. Sobasically we are using the silicon to monitor the silicon performance. We are notregulating the performance, just the voltage. The voltage will settle to a valuethat allows the delivery of the performance needed." In order to do so severalHPMs (hardware performance monitors) are "...spread all over the processorchip."

While National Semiconductor's PowerWise technology was the only solutionpresented by a non-processor company, several processor designers also talkedabout this idea in their own presentations, but used different descriptive terms.For example, Ty Garibay, ARM cores program manager, Wireless TerminalBusiness Unit, Texas Instruments, explained how TI optimizes the powerconsumption for the performance required: "AVS is the solution, and the voltagealso adapts with the temperature."Mike Olivarez, principal staff scientist, Freescale Semiconductor, discussedFreescale's Smart Speed technology: "We have several sensors on the core anddepending on these we can start adjusting the voltage. However, temperaturecompensation must be coupled with software and power management companionICs. Without the relevant software we only get minimum benefits from thesystems."

Configurable Processors

Every time the topic comes to configurable processors people talk about onecompany: ARC International. Up to now this company was only known to sell itsconfigurable processor IP for integration into SoCs, but at the Spring ProcessorForum ARC announced that it has also entered the EDA industry to some extent,because ARC and Toshiba Corp have entered into a strategic collaborationintended to grow the semiconductor industry's adoption of configurabletechnology.

Under the terms of the agreement, Toshiba has taken a multiyear license forARC's ARChitect processor configurator, which offers a comprehensive set of design tools and resources using a drag-and-drop graphical user interface. Thecompanies will also collaborate on development of a next-generation version of ARChitect that is more closely suited to Toshiba's Media embedded Processor(MeP), Toshiba's proprietary configurable processor, thereby opening up thebenefits of configurability to a wider range of customers.

"This collaboration with Toshiba is a milestone in ARC's history and an example of things to come," said Carl Schlachte, president and CEO of ARC. "We were just


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taking the capability that we had in-house and expanded it to other companies."Yukata Murao, senior fellow and general manager at Toshiba said: "We arecreating a new world for the development of complex SoCs and we will providethe designers with a possibility to design cost-effective and flexible SoCs for usein consumer electronics devices. In doing so configurability becomes a naturalingredient of the design-flows. By the way: the market potential forconfigurability is huge."

MeP, the core of Toshiba's media-centric processors, offers a 32-bit configurable,asymmetric multiprocessor design that can be customized to support diversemedia applications. Toshiba will leverage a version of the ARChitect processorconfigurator that has been customized to MeP.

Multicore

Several companies presented multicore solutions and according to Moore parallelprocessing "is the holy grail, but it is also a very tricky thing to do". Moore added:"The reason why we have so many single-threaded applications is that we havetaught so many students to think and program this way." But especially in thearea of multimedia and video processing there were many papers on multicoreprocessors.

For example, the T9000 content processor from Tarari of California combines"computing hardware and optimized algorithms to deliver the industry's firstcomprehensive content processing solution". The device contains nine processorcores as well as several interfaces including an integrated system I/O (64-bit PCI-X at 133MHz) for data transfers of up to 8Gbps. It supports operating systemslike FreeBSD, Linux (32- and 64-bit), Windows XP, Solaris and VxWorks. The ICdissipates an estimated power of about 3 to 5W and is intended, for example, forHD-Video encoding.

"Efficiency is derived by working from the algorithms to the architecture and notvice versa," said Dr Hans Volkers, senior system architect of Hannover, Germany-based Sci-Worx. "Architectures are not good or bad but suited or unsuited andsuited means efficient for the desired classes of algorithms." In its MuViStar(multi-standard video decoder and encoder) Sci-Worx uses the Tensilica XtensaLX core and the Xtensa core adaption methodology in order to implement vectorprocessing for efficient video coding in H.264, MPEG4, H.263, etc. "With customextension we achieve a more than tenfold processing power improvement,"Volkers said. The implementation of an H.264 D1 decoder single core needs6mm2 in TSMC's 0.13G process while consuming 60mW.

Charles Moore, CTO of IntellaSys, which is headquartered in California, pointedout that the company's new SEAforth chip (SEA: scalable embedded array)"raises the performance-per-watt bar in embedded applications that need tooperate at high speed and low power". The SEAforth-24 device works with 24identical 18-bit cores (so-called nodes) located in high-densityarrays. The entire operation is asynchronous which means that no central clock isneeded. Each core can operate at 1 billion instructions per second; however, theIC dissipates only 150mW in a typical application.With 24 cores operating independently on the chip, designers can dedicate groupsof them to handle specific tasks. Simultaneously, processors share the computingload by talking to each other, passing data, status signals and even code blocks.Each core automatically communicates with its nearest neighbors throughdedicated registers. A core waiting for data from a neighbor goes to sleep toconserve power, which leads in combination with the asynchronous system


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architecture to the low operating power. Programming of the device is performedby a special dialect of the Forth language.

Handshake Solutions, a subsidiary of Philips, presented a clockless processorversion based on the ARM architecture. The new IP, dubbed ARM996HS, "is theindustry's first licensable clockless processor and directly addresses the needs of design engineers for technology optimized for robust and real-time chip designs,"claimed Arjan Bink, chief design engineer at Handshake Solutions.ARM presented its new Cortex-A8 with the first implementation of the ARMv7instruction-set architecture including the NEON extension. The dual-issue,superscalar microprocessor core is equipped with a 13-stage main integerpipeline, a 10-stage NEON media pipeline as well as integrated L2 cache. A firstimplementation in TSMC's 90G process technology delivers 2,000 DMIPS at clockfrequencies above 1GHz while consuming 0.58mW/MHz including RAMs.

DSP

The outstanding DSP solution presented at the forum was Freescale's MSC8144which delivers a performance of 16 GMACs. It is based on a multicore Starcorearchitecture and contains four DSP cores each running at 1GHz. "It integrates theindustry's largest embedded memory at 10.5 Mbytes in a single package, virtuallyeliminating the need to attach external memories," explained Odi Dahan, chief architect of Freescale's DSP SoC Design Center in Israel.Several fast interfaces like Serial Rapid I/O-Ports (4 x 3.125 Gbaud), SERDES(with two receive and two transmit lanes) as well as LVDS lines, a messaging unitand a DDR-400 capable memory controller establish contacts to the outer world.Since the device's instructions are a superset of the current SC140 instructions,MSC8144 software is fully binary and assembly-code compatible with Freescale'sexisting portfolio of multi- and single-core DSPs based on StarCore technology.

Source: Nikkei Electronics Asia, July 2006

Brazil picks J apan TV standard -- and gains fab?

In return for a possible semiconductor production plant, Brazil has selected ahigh-definition TV standard from Japan over competing technologies from Europeand the United States, according to a report from the Associated Press on Friday(June 30).

Brazil's government chose Japan's ISDB standard over rival U.S. and Europeantechnologies, according to Reuters. Brazil, which boasts an emerging market of 180 million people, is expected to buy nearly 11 million TV sets this year, up from10 million in 2005, according to reports.

Brazil has been evaluating HDTV technologies for months.

In return for the HDTV award for Japan, Brazil will receive technology transfers,investments in semiconductor manufacturing operations and financing of up to$500 million from the Japan Bank for International Cooperation, according to thereport from the AP. No other details were given about the semiconductorproduction plant, however.

Last year, Brazilian authorities announced plans to establish a semiconductor

industry in the state of Minas Gerais, where a technology park spanning 990acres is being dedicated to semiconductor manufacturing and design.


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Called the Minas Gerais Technological Park, the site will be anchored by Braziliansemiconductor manufacturing venture Companhia Brasileira de Semiconductores,which is planning to build an analog and mixed-semiconductor wafer fab therethat will run high-voltage CMOS, bipolar, BiCMOS, and other specializedprocesses. The fab is slated for completion by early 2007.


India's P atni Acquires ZAiQ Technologies

Patni noted ZAiQ's strengths in ASIC design and IP, in addition to its expertise inFPGA and SoC technologies.Patni Computer Systems, an India-based outsourcing firm, said Thursday it hasacquired ZAiQ Technologies of Woburn, Mass, in a move by Patni to boost itssemiconductor business.

Patni noted ZAiQ's strengths in ASIC design and IP in addition to ZAiQ's expertise

in FPGA and SoC technologies.

"The addition of (ZAiQ's) expertise and customer base will enable us to meet thegrowing demand we have been experiencing for ASIC-based services in verticalmarkets such as consumer electronics, telecom, computing and wireless," saidAjay Chamania, Patni's head of product engineering services, in a statement.

Patni's founders pioneered the offshore outsourcing phenomenon and initiallyfocused the efforts of the firm on IT services particularly in insurance andfinancial services segments. The ZAiQ acquisition will beef up its effort in thedevelopment of complex, high-performance systems and integrated circuits.

Jim Pena, ZAiQ vice president, said his firm has nearly 500 design and verificationprojects underway.

Panti said that Indian IT export revenues from engineering, R&D, and offshoreproduct development have jumped ten times from $300 million in 2001-2002 to aprojected $3.9 billion by the end of fiscal year 2005-2006. The company said itsproduct engineering unit accounted for 7.5 percent of its 2005 revenue.

Source: Techweb.com, June 30 2006

Second-half foreca st: hang on to you r hat

We've dusted off our crystal ball again to provide some insight into where theindustry's headed for the remainder of what is shaping up as a turbulent year.Chip industry forecasts are retooled on a seemingly weekly basis as the list of unknowns grow. Rising interest rates, still-high energy costs, materials shortagesand unrelenting globalization continue to baffle industry watchers. Here's our takeon where things stand and where we see the industry heading in the second half of 2006.

Semiconductor roller coaster

This is the time of the year when chip industry watchers agree to disagree.

Some forecasters have recently raised their chip predictions for 2006, whileothers have lowered their numbers amid lackluster growth in the PC and


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consumer sectors. "There are also inventory concerns in the market," warnedMark Bachman, an analyst with Pacific Crest Securities Inc. (Portland, Ore.).

Current IC growth forecasts among analysts range from 6-11 percent for 2006over 2005. Two mavericks Future Horizons (Sevenoaks, England) and SemicoResearch Corp. (Phoenix)remain at the high end of the scale with bullishpredictions of around 20 percent and 17 percent growth, respectively.

As usual, there is plenty of uncertainty in the market. The problem is that theindustry analysts rarely get their forecasts right and are always changing theirpredictions based on current market conditions.

One of the more sobering and realistic predictions, is from iSuppli Corp.. It hasincreased its IC forecast by a half-percentage point, going to 7.9 percent, up from7.4 percent. Worldwide IC revenue is expected to rise to $255.7 billion in 2006,up from $237 billion in 2005, according to iSuppli (El Segundo, Calif.).

Despite decent demand for equipment, the semiconductor market outlook isn't allrosy, iSuppli warned. The higher-than-expected growth seen in the first quarterwill be followed by some sluggishness in the second half. Second-half growth of 5percent is less than the normal seasonal expectations for the industry. Ordersappear to be weakening as inventories rise, it warned.

Another concern is reported delays with Apple's next-generation iPod productsakey driver for NAND flash, MP3 processors and other devices.

But even before the reported iPod delays, analysts were already jumping on thebear bandwagon following at least one red flag in the market: sluggish chip salesin April.

April's dismal numbers prompted Wedbush Morgan Securities Inc. (Los Angeles)to lower its 2006 semiconductor growth forecast one point to 10 percent. For2007, Wedbush projects the IC market will slow, growing by only 6 percent over2006.

In a new report, Handelsbanken Capital Markets projects that the semiconductormarket will now grow 5 percent in 2006 over 2005, down from 6 percent in itsprevious forecast. The investment banker blamed the lowered forecast on theworldwide PC slowdown.

Handelsbanken also expects lackluster sales in May. The three-month average of

May chip sales is projected to hit $19.37 billion, compared to $19.6 billion inApril, according to the firm.

Not all are in the bear camp. Industry cheerleader, the Semiconductor IndustryAssociation (SIA), recently boosted its projected worldwide chip sales forecast for2006, and now projects growth of 9.8 percent to $249 billion, up from itsprevious estimate of 7.9 percent growth to $245 billion. SIA (San Jose, Calif.)said the correction is mainly due to better than anticipated demand for chips bythe mobile phone sector.

The revised forecast also includes more optimistic projections for industry salesfrom 2006 through 2009. SIA said the industry will grow by 11 percent in 2007,

12 percent in 2008 and 4 percent in 2009.


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The World Semiconductor Trade Statistics (WSTS) organization also raised itssemiconductor forecast. The global IC market is expected to grow 10.1 percenton an annualized basis to $250 billion in 2006, according to WSTS's springforecast. Projected growth worldwide will accelerate to 11 percent in 2007 and12.8 percent in 2008, according to the organization.

EDA's surprising strength

EDA may be as healthy as its been in years heading into the second half of 2006.The industry returned to double-digit growth earlier this year and is now gearingup for its premier event, the Design Automation Conference in July.

Yield issues continue to pain chip makers, and there is a good deal of money atstake for vendors who can provide the oft-discussed but elusive design-for-manufacturing (DFM) solutions. The industry has recently witnessed abreakthrough in what had been considered one of the most pressing DFMlogjams: silicon foundry giants Taiwan Semiconductor Manufacturing Co. Ltd.(TSMC) and United Microelectronics Corp. (UMC) offering fab data modelsdesigned to give fabless customers information about manufacturing processes.The move could level the playing field between fabless companies and IDMs onDFM issues.

Dennis Wassung, an analyst and vice president with Canaccord Adams, recentlysaid the market for DFM tools is currently worth $350 million to $400 millionannually, and is poised for substantial growth.

Precise definitions of the market for DFM tools differ, and executives like AprioTechnologies President and CEO Mike Gianfagna have noted that if EDA vendorscan find a way to sell into chip makers' manufacturing budgetswhich aresignificantly larger than design budgetsit could mean a windfall for the EDAindustry, providing a much needed new source of revenue.

There are indications that DFM tools are starting to come into their own afteryears of development. DFM has been little more than a marketing push, but nowat least some DFM tools have entered production. Deepchip.com moderator JohnCooley recently published the results of a census that included, among manyother things, what he believes to be the first published user review of a DFMtoolUMC's Chien Kuo Wang reviewing ClearShape Technology's InShape tool.

Elsewhere, electronic-system level (ESL) tools, supposedly EDA's other bigtechnology driver, have yet to catch on, at least in the U.S., according to an

analysis of available data. But ESL vendors and some observers, notably Gartneranalyst Gary Smith, said the ESL tool flow is finally robust. Most observers agreethat designers will move to ESL eventually. The question is when.

For now, evidence suggests that ESL use is still primarily concentrated in Japanand, to a lesser degree, in other markets outside the U.S.

So how will EDA fare in the second half of 2006? As Mentor Graphics Chairmanand CEO Walden Rhines told EE Times this week, EDA could maintain a pace setwith its 10 percent year-to-year growth in the first quarter. This depends onwhether the IC market continues to expand. With most analyst predicting chipgrowth ranging from 6 to 20 percent. Hence, 2006 could be a strong year for

EDA.


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On top of rising interest rates that will increase the cost of capital, steadily risingenergy prices and shortages of key materials like polysilicon, add to the second-half industry outlook the specter of a full-blown stock-option backdating scandal.This past week, the scandal reached as high as industry stalwart AppleComputer.. There is growing unease that the practice is widespread in an industrybuilt on stock option incentives, attracting unwanted scrutiny from regulators..

Responding to pressure, the U.S. Securities and Exchange Commission isexpected to hit the industry with new guidance on the backdating of stock optionsany day now. Either way, a lot of industry earnings reports will likely have to berestated.

Another financial issue is emerging that could affect the way capital flows withinthe global industry. An industry analyst is arguing that U.S. financial disclosurerules approved by Congress in the aftermath of the Enron debacle may sharplycurtail U.S. high-technology IPOs. According to Charley Lax, managing generalpartner of GrandBanks Capital, provisions of the Sarbanes-Oxley Act may beforcing high-tech startups to list instead on the London exchange.

Energy costs continue to exact a price on company earnings, but have alsoprompted some suppliers to shift their focus to new markets beyondsemiconductors and consumer electronics. Case in point: Germany's WackerChemie AG said this week it will expand polysilicon production to meet growingdemand by the solar cell industry. The Munich-based manufacturer said it hopesto boost capacity to 14,500 metric tons by the end of 2009 to meet soaringdemand from the energy sector as well as from traditional semiconductorcustomers.

The announcement could foreshadow a fundamental industry shift to newmarkets as semiconductors increasingly become commodity items.


Mobile TV Demand Driving Dow n Chipset Prices

"As video and images go digital, it's a billion-dollar opportunity in the next fiveyears," Greg Delagi, general manager for digital signal processors at TexasInstruments said. Yet, smaller companies, like DiBcom, Frontier Silicon,Imagination Technologies, Newport Media, and Siano Mobile, as well as otherstart-ups, have the advantage that mobile TV is their primary focus, saidVarghese.

A new study by ABI Research indicates that an array of semiconductor developershave designed US$10 chipsets for receiving and displaying TV on mobile phones -- a price point that marks the first important benchmark for the growth of mobilephone-based TV and video applications.

"This ramp-up in market penetration will begin to happen by early 2007," saidAlan Varghese, principal analyst for wireless semiconductor research at ABI. "At a$10 price tag for chipsets, mobile TV will start to gain serious traction in high-tierhandsets and smartphones."


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A ff o r d a b l e f o r Co n s u m e r s

The research consultancy predicts that the price of these chipsets will fall to $5within just a few years. "The $5 price point is important: that is when a functionmigrates from the high-end to the mid-tier handset, and hits the 'hockey stick'inflection in its take-rate," said Varghese. "At that stage, large numbers of consumers will join the early adopters in choosing mobile TV handsets."

The electronic "ecosystem" of frequency allocations, technology choices, operatorstrategies, and partnerships with content creators is still evolving, so price is notthe only factor that will determine the success or failure of mobile TV, saidVarghese.

A number of broadcast frequencies and technologies -- VHF, L band, DVB-H, T-DMB, ISDB-T and MediaFLO -- are already in use around the globe, as developershope to address every potential market. Some integrated circuit (IC) vendors areeven demonstrating solutions that support multi-band and multi-standard mobileTV.

"The mobile TV marketplace means different things to different chipset vendors,"said Varghese.

H u g e O p p or t u n i t y

For example, pioneering semiconductor vendors, including Analog Devices (NYSE:ADI), Freescale, Philips (NYSE: PHG), ST Micro and TI have a decided advantage:they already understand the workings of the cell phone. What is more, they knowhow the mobile TV section has to operate with the existing RF, baseband,applications, power management and display sections for optimized performance

and low cost.

"As video and images go digital, it's a billion-dollar opportunity in the next fiveyears," Greg Delagi, general manager for digital signal processors at TexasInstruments (NYSE: TXN) said.

Yet, smaller companies, like DiBcom, Frontier Silicon, Imagination Technologies,Newport Media, and Siano Mobile, as well as other start-ups, have the advantagethat mobile TV is their primary focus, said Varghese.

Ex c e s s I n v e n t o r i e s?

Although excess semiconductor inventories in the electronics supply chain areexpected to swell by 11 percent on quarter to $1.3 billion by the end of thesecond quarter, research firm iSuppli believes that stockpiles aren't large enoughto raise alarms.

Semiconductor companies are reporting that their inventories remain withinexpectations, generated by all these new applications and demand for processingpower, and remain manageable according to the research firm, iSuppli.

The current expansion in surplus stockpiles appears to be restricted to the PCsupply chain, not to the mobile phone market, and unmanageable excessinventory levels are not expected in the third quarter.


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Semiconductor suppliers remain optimistic as the second quarter of 2006 comesto a close, this month, despite the major gains in inventory.

The consensus opinion among chip companies, iSuppli reports, is that the Junequarter will end as expected, with no surprising surges in inventory. Channelsources tell iSuppli that inventory levels throughout the supply chain are healthy.

Figures from the trade group, the Semiconductor Industry Association (SIA),mirror comments from suppliers that iSuppi is speaking with, and indicate thatthe sales of analog devices, DSPs and certain memories are faring quite well. Thecommunications and industrial sectors exceeded expectations, while mobilephones met expectations.

Gl o b a l Gr o w t h

This growth in demand for chips is global, not just domestic. Digital signalprocessors (DSPs) will top the Indian semiconductor market by revenue in 2006,

accounting for some $863 million of the country's total market of $3.62 billion,according to a study conducted by the India Semiconductor Association.

Microprocessors with a market of $583 million will be the second biggestcategory, followed closely by microcontrollers at $469 million and memoryproducts with $444 million.

"DSPs and microprocessors have emerged as the leading semiconductor productcategories, as the Indian market for mobile phones is expanding at a faster rate,"the study said. It was carried out by Frost & Sullivan for the India SemiconductorAssociation.

Source: Ecommerce Times, June 30 2006

ArchP ro launches new R and D centre

EDA (Electronic Design Automation) startup ArchPro Design Automation todayannounced the opening of its new R and D Centre here.

Headquartered in San Jose, California, the company was formed in March 2004and has top tier semiconductor customers across the US and Japan, it said in astatement.

Puneet Jethalia, Managing Director of ArchPro India said the new facility can

house almost 75 engineers.

"We started with a small team to begin with and have grown since. We now planto grow very rapidly in the next 12 months and are building a world class productdevelopment and product engineering and support team to be effective with ourcustomers across the globe," Jethalia said.

Source: tmc.net, June 30 2006

German industry, science community close ranks

Five German companies and research institutes have announced to bundle theirR&D activities in information and communication technologies. The initiative isintended to strengthen the competitiveness of the members.


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Deutsche Telekom, Siemens, DaimlerChrysler, Fraunhofer Gesellschaft and theTechnical University of Berlin have jointly founded an institution to coordinatetheir R&D activities. The scope of the European Center for Information andCommunication Technologies (EICT) will be to bundle the members' R&Dactivities in information and communication technologies and create well-definedprojects in these areas.

With the EICT foundation, the members are targeting to strengthen theircompetitiveness in the respective technology segments. By bringing togetherpartners from industry, research and science communities, EICT will have thetask to improve innovation transfer and speed up the implementation of realworld products, the organization informed. Also, with the move the membersintend to offer attractive, practical jobs to scientists within their institutions.

Facing the persistent leading role of the USA in information and communicationtechnology and increasing competition from Asia, we need to bundle our R&Dcompetencies and create an European platform", described ChristopherSchlaeffer, Corporate Development Officer for Deutsche Telekom, the EICT scope.

EICT founding members have defined seven cooperation areas as the basis fortheir joint application and research projects. These are multimedia andmultimodal communications, services and platforms, security, ambientintelligence, machine-to-machine communication, terabit data networks, andaccess technologies. "EICT will develop best-in-class products, solutions andservices and bring them to the public in an optimized way", explained ThorstenHeins, CTO and member of the board for the Siemens communications division.

Initially, the EICT partners started research works for three of these cooperationareas. The development of these first projects is focused on applications andservices in an ageing society, broadband networking technologies, and sensornetworks with applications for vehicles and mobile users.

The projects will be coordinated and funded from early research phases throughmarket launch, the organization said. "We are convinced that the closecooperation of research institutions and industry within the EICT we will be ableto identify relevant issues faster, speed up innovation cycles and transformfundamental research results faster to applications", explained Stefan Jaehnichen,manager of the Fraunhofer institute for computing architectures and softwaretechnology.

The EICT is open for further interested parties. For the time being, it remainsunclear if the initiative is meant to be a purely German one, since despite itsEuropean ambition, so far there is no non-German member on board.

The institution is headquartered on the campus of the Technical University of Berlin.


Life after DFM

Could DFM mean the death of custom "in-silicon" chip design?

For the past couple of years, the Design Automation Conference (DAC) has beenawash in vendors touting their software as design for manufacturing (DFM) tools.


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Although Gary Smith, Gartner's EDA analyst, says most of the brouhaha is just"design for marketing," the fact that so many vendors are leaping into the frayemphasizes that their customers take the DFM concept very seriously indeed.

And well they should. According to some analysts, DFM could be a harbinger of atime when it will no longer be practical for any but the largest firms to custom-design their chips directly into silicon. Instead, in the post-DFM world, it may bemore economical for many electronics firms to employ standard chips withprogrammable logic for any application that can't drive huge chip volumes. If so,DFM could ultimately mean the end of custom chip design work targeting state-of-the-art manufacturing processes.

In its broadest sense, DFM implies merging the design and manufacturingprocess. This has enormous implications for chip makers, according to MikeFazeli, manager of EDA strategies at Texas Instruments. "We see a lot of challenges connected with DFM, including different interfaces and protocols andentirely new kinds of tools," Fazeli says.

Meeting these challenges will not come cheap. DFM will force design teams toaddress the peculiarities of the target manufacturing process and drawmanufacturing engineers into increasingly arcane design issues. What was, beforeDFM, a simple series of logical steps will become, post-DFM, a complex iterativeprocess of communication between groups with different skill sets and disciplines.

"With DFM the design rules will number in the thousands, or tens of thousands,rather than in today's hundreds," says Franklin Kalk, research fellow at DuPontPhotomasks.

Although the net effect of DFM may be "better, faster, cheaper" chips down theline, it will add complexity and expense to all stages of the process of preparing achip to be manufactured. "We're moving into an era in which there will need to bea great deal of interaction between designers and manufacturers at all levels,meaning a huge collaboration effort to implement a realistic DFM strategy," saysChuck Byers, director of brand management at TSMC.

Because the need for collaboration between design and manufacturing willincrease with each successive node, the high cost of bringing a chip intoproduction will continue to increase as well. And that's a tad ominous, consideringthat custom chip design is becoming a beleaguered business model without thehelp of DFM, according to Jim Tully, vice president and chief of research at themarket research firm Gartner.

Costs going out of reach

"The cost of designing a custom chip at the smaller geometries has slippedoutside the financial reach of smaller electronics firms," Tully says. As that trendcontinues, the cost of designing a state-of-the-art chip could balloon to as high as$100 million by 2010a sum far beyond the means of many established medium-size firms, let alone a startup (see the "Cost of design for an 8-million-gate PDASoC" graphic). Given the up-front expense, such chips are economical only whenthey're to be manufactured in huge volumes. "As a result, we expect far fewerdesigns at those nodes," Tully says.

The need for each design to drive big numbers complicates another importantfinancial trend: the increasing cost of building a fab. By 2010 chip makers willneed to recover capital investment costs approaching $5 billion. With ballooning


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design costs reducing the overall number of designs, each design that actuallygoes into production will need to achieve even higher volumes than mightotherwise be the case.

This overwhelming incentive for greater volumes will force designers andmanufacturers in the post-DFM world to make chips that are usable for multipleapplications. "The ideal business model will be to make general-purpose chipsthat can be reconfigured as needed," says Tully.

Although Tully says he believes that there will still be some fully-custom single-application work at the newest nodes, he sees the bulk of chips made at thesmaller geometries including programmable logic to extend their useful lifetimeand thereby increase overall manufacturing volumes.

"Fewer companies will look to custom design of 'hardwired' circuitry to create acompetitive advantage," Tully says. "Instead, they'll figure out how to reconfigureand reuse a fairly standard set of chips to do new and innovative things."

That's a scenario that the programmable logic chip firms are expecting todevelop, according to Ronnie Vasishta, vice president of technology marketing forLSI Logic.

"What we've tried to do is build automation into our products so designers don'thave to worry about the complexities of manufacturing, such as RET and, in thefuture, DFM," Vasishta says.

What emerges is a semiconductor industry that's very different from that of today. Rather than numerous fabs manufacturing numerous designs at thenewest nodes, there will be far fewer fabsperhaps only two or three

manufacturing a very small number of designs but in enormous volumes. Andrather than designing innovation directly into the silicon, the design firms of thefuture will work at a higher level.

"The emphasis will shift to system design tools that allow designers to add valueat either the software level or at the programmable logic level of the chip," Tullysays. "Designers will need to be more concerned with reconfiguration than justwith optimizing silicon."

Demographic reality

This post-DFM scenario is reinforced by the demographics of the design

engineering community, according to Wally Rhines, chairman and CEO of MentorGraphics. "There isn't likely to be sharp growth in the number of trained designengineers, so the industry will need FPGA technology simply to increase engineerproductivity enough to cope with the added complexity of electronics products infuture years," he says. "There will be fewer fabs making digital chips, and thosefabs will be more commodity-like, with more designs utilizing FPGA circuitry."

Not everyone agrees that the future lies in general-purpose chips. Gary Smith,the Gartner analyst who covers EDA, points out that the issue isn't so much theneed for greater volume but the need for greater value.


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"The thinking is that consumers will drive most of the ICspending in the future and that they will spend $5 for anIC," he says. "But with the introduction of the SoC, the ICis almost all of the system, so you must compare systemcost with SoC cost, rather than comparing a $5'component' with an SoCan apples-and-orangescomparison." In other words, it may still be economical tocustom-design specialized chips in smaller volumes,providing that those chips perform enough valuablefunctions to command a high price. "The Intelmicroprocessor has been an SoC for a while now, and itdoes not sell for $5," Smith points out.

However, Ted Vucurevich, chief technology officer atCadence Design Systems, points out that SoC designs are

themselves a vehicle for chip reusability. "SoCs needn't be designed for a singleapplication use," he says. "SoC programmability at the software level will make itpossible to spread the payback for a chip design over a longer period of years."Some analysts even envision "universal" SoCs that have multiple copies of manydifferent types of IP, which software and firmware programmers can choose toactivate (or leave quiescent) at will. "If current trends continue and the cost of design becomes staggeringly high, we may eventually get to a stage where itmakes more sense to make one large batch of chips where you don't use all thefunctionality that's inside," says Klaus Rinnen, a semiconductor analyst atGartner.

Others question whether state-of-the-art fabs will be as rare as Tully seems tothink. Industry analyst Boris Petrov, of the Petrov Group, for example, believesthat alliances and consortia will allow smaller players to participate in the buildingof newer fabs, citing the successful example of IBM, AMD and Chartered, all of which have been involved in partnerships to share fab-building expenses. "Insuch alliances, each partner has a very different agenda and its own needs, yettheir cooperation is genuine and very substantial," he says. Having more fabs atthe newer nodes would presumably create more competition, driving the cost of manufacturing down and making it more economical for smaller firms to continueto do custom design work.

Similarly, 50-year industry veteran Fred Zieber, of Pathfinder Research, believesthat the semiconductor industry will figure out a way to make the smallergeometries more efficient and hence more cost-effective.

Ec o n o m i c i n c e n t i v e n e e d e d

"I have to believe that a $250 billion industry will figure out some way aroundthese problems," Zieber says. He admits, however, that high design costs mayeventually scuttle the economic incentive to do custom design work at thesmallest nodes: "There's going to be some point where smaller dimensions don'tpay off any longer."

Vucurevich says he thinks foundries may still be able to attract custom designsfrom smaller firms by combining designs from multiple companies onto a singlewafer. "The foundries need to start thinking of a manufacturing run as beingmore like a shuttle bus than a passenger car," he says. "Getting multiplecompanies to coordinate their designs to take advantage of economies of scale isa relatively simply supply chain problem."


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Breakthroughs in process technology could also make custom design more viableat the newest nodes, according to Rich Wawrzyniak, an analyst at SemicoResearch. "Employing nanotech in chip manufacturing might makenonphotographic processes more efficient," he says, "making it easier to designchips at an acceptable yield without the extra overhead of DFM."

However, some analysts are even more pessimistic than Tully when it comes tothe long-term future. Dr. Robert Castellano, of The Information Network, forexample, believes that the increasing expense of design could be a harbinger of the collapse of Moore's Law as the economic basis of the semiconductor industry.

"We may just really reach a point where its more cost-effective to stop makingchip components smaller but instead make them a bit bigger but cheaper tomanufacture," he says.

Similarly Risto Puhakka, president of VLSI Research, sees a future in which theindustry may need to move beyond the silicon-based product model. "What's veryclear is that the classical CMOS is starting to see its end of life," he says.

Although the DFM-driven doomsday may still be years away, the mere fact thatDFM remains on the agenda argues that the fundamental relationship betweendesign and manufacturing is changing. And if that change greatly increases thecost of preparing a chip to be manufactured, then it's inevitable that electronics

firms will be looking for ways to save money, even if that means throwing theconcept of custom design work onto the scrap heap of high-tech history.

Source: Electronic Business, July 1 2006

Semiconductor International Announces 2006 Editors' Choice BestProduct Award W inners

Semiconductor International bestowed its 2006 Editors' Choice Awards on 20commercially proven industry products for excellence in semiconductormanufacturing. These awards will be presented at a ceremony during SEMICONWest, to be held in San Francisco on Wednesday, July 12. The 2006 entrants

exemplified state-of-the-art equipment and materials installed and used innumerous fabs around the world.


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The 2006 Editors' Choice Best Product Award winners are:

Advantest T2000 Open Architecture SoCTest Platform

Applied Materials Producer HARP SystemApplied Materials Uvision Inspection SystemApplied MicroStructures MVD100ASM Technology Singapore OSPREYAsymtek Axiom X-1000 SeriesAviza Technology Sigma fxPBrion Technologies Tachyon RDI SystemCascade Microtech eVUECimetrix CIMPortalKeithley Model 4200-SCS Characterization SystemKLA-Tencor Puma 9000 SeriesKulicke & Soffa Maxum UltraLam Research 2300 Versys Kiyo Etch SystemMKS Instruments TOOLweb Sensor Integration Platform

Novellus Systems ALTUS PNL Tungsten Deposition SystemPalomar Technologies Model 3500-II Automatic Component

Placement CellParticle Measuring Systems AirSentry-IMS SystemPhilips AMS IR3000 MBIRRicor MicroStar Water Vapor Pump

"Advances in semiconductor technology are only possible because of the kinds of products being honored in this year's Editors' Choice Best Product Awardsprogram," said Pete Singer, editor-in-chief of Semiconductor International."Chipmakers rely on these products to create electronics that are smarter,smaller, faster, less expensive and more reliable. We congratulate the people and

the companies that have had the insight and fortitude to bring these products tothe market."

Source: BusinessWire, July 1 2006

Europe continues to lag in chip sales, says SIA

Sales of semiconductors in Europe are continuing to underperform other regions,according to the Semiconductor Industry Association.

The SIA said Monday (July 3) that year to year sales in Europe grew by just 0.5percent, from $3.19 billion in May 2005 to $3.21 billion last month. Thiscompares with a 9.6 percent growth in the North American market to $3.52million for May 2006, an impressive 15 percent for Asia Pacific, to $9.23 billion,and 4.6 percent in Japan to $3.78 billion.

Worldwide sales of semiconductors of $19.7 billion in May grew by 9.4 percentover the May 2005 sales of $18.1 billion according to the Association.

Month on month sales on a geographical basis show a drop of 0.7 percent inEurope, compared with a larger decline of 2.1 percent in the U.S. The Japaneseand Asia Pacific markets both grew over last month, Japan by 0.9 percent andAsia Pacific by 2.2 percent. Total sales rose by 0.7 percent from April 2006, whensales were $19.6 billion.


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Sales of cell phones and other consumer electronics products were again theprincipal contributors to growth, according to George Scalise, SIA president."Sales of analog chips grew by 21.5 percent from May of 2005, while digital signalprocessor (DSP) sales grew by 13.7 percent," said Scalise.

Source: EETimes, July 3 2006

Consumers drove chips in May, says Scalise

A generally bullish global economy and the ups of mobile phones and digitalconsumer equipment outweighing the downs of the personal computer businessdrove chip sales in May, according to George Scalise, president of the U.S.Semiconductor Industry Association.

The three-month average of worldwide sales of semiconductors in May came in at$19.75 billion, up 9.4 percent over May 2005 equivalent sales of $18.05 billion,according to WSTS numbers from the SIA.

This was because electronic equipment is now so dominated by consumerapplications that the ups and downs of the global economy are the biggestdeterminant of equipment sales and therefore of components sales. This workedto the benefit of the semiconductor industry in May, Scalise said.

"As consumer products drive an increasing proportion of microchip sales, thegrowth of the semiconductor industry more closely reflects overall economicgrowth," Scalise said in a commentary, which accompanied the numbers.

"Sales of cell phones and other consumer electronics products once again werethe principal contributors to growth in semiconductor sales. Sales of analog chips

grew by 21.5 percent from May of 2005, while digital signal processor sales grewby 13.7 percent," he added.

"Strong growth in sales of NOR flash memory products and optoelectronic devicesare indicators of continued growth in sales of digital cameras and cell phones.Unit sales of personal computers have continued to run ahead of expectations,contributing to 13.7 percent year-on-year growth in sales of DRAMs. Sales of PCmicroprocessors declined by 2 percent from May of 2005, reflecting both robustcompetition and some inventory corrections in this major market segment.Consumers continue to benefit from this competition, as the average selling pricefor a notebook computer has fallen below $1,000 for the first time ever," Scalisesaid.

"We expect to see global semiconductor sales running 9 to 10 percent ahead of last year's pace for the next several months. End market demand, inventorylevels, and capacity utilization all indicate generally favorable conditions for theindustry," Scalise concluded.

Source: EETimes Europe, July 3 2006

New Europes quiet fabs are flourishing

High wages, taxes and stringent labor laws in Europe are part of the reason fordiminished wafer fab investment, which has been a concern for the EuropeanSemiconductor Industry Association in Brussels. But perhaps central and easternEurope, sometimes called New Europe, offers a partial solution.


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In Roznov, in the northeast corner of the Czech Republic, On SemiconductorCorp. has been quietly running a profitable fab operation that designs, fabricatesand exports analog bipolar ICs worldwide.

In June, On earmarked funding for an upgrade from running 4-inch diameterwafers to 6-inch. By next year, the company expects to be capable of 1,000 6-inch wafer starts per week on top of the existing 19,000 4-inch wafer starts perweek. Business has been strong, explained Michael Mandracchia, Ons vicepresident and general manager of Czech Republic and Slovakia. The biggestchallenge here is trying to get enough product out. On runs another 6-inch waferfab producing analog BICMOS devices in Piestany, Slovakia, a two-hour driveacross the border. The combined manufacturing operations employ about 1700people.

The Roznov and Piestany facilities were formerly part of Tesla, a huge state-owned electronics enterprise during Soviet times. In the 1990s, Motorola usedRoznov for foundry work and then began transferring lines from the US andEurope. It also purchased the Slovakia fab. On Semi inherited the plants afterspinning off from Motorola in 1999.

On puts a combined total of $20 million on average annually into the Czech andSlovak operations for upgrades, Mandracchia said. He estimates $220 million hasbeen invested in the operations since Motorola acquired them.

In line with Eastern European traditions of self-sufficiency On Semiconductorsplants there are capable of many early-stage processes. As well as making ICsthe Roznov site supplies raw silicon wafers and one-fourth of Ons epitaxial siliconwafer needs. Thats a tremendous cost advantage compared to buying that stuff outside, Mandracchia said.

Mandracchia, who has been in semiconductor manufacturing for 22 years, said hesees no significant barriers if a company wanted to run a Czech-based state-of-the-art chip plant. The Roznov fab is in all respects world class, he added.

Having seen Motorola and On Semiconductor make a success of the old Teslaplants the Czech government wants to encourage more advanced chipmanufacturing. Although subsidy competition and a business pre-occupation withlocations further east may make that difficult.

According to CzechInvest, the state investment promotion agency, the CzechRepublic provides up to 50 percent of eligible costs for business activity and up to

35 percent for training costs. Manufacturing investment could also receive a 10-year tax break, building, land and infrastructure subsidies and job creationgrants.

Europe in the past permitted subsidies worth hundreds of millions of dollars thatattracted advanced fabs to Ireland and Germany, for example. The EuropeanUnion now sets funding caps.

Tomas Hruda, CzechInvests chief executive officer, said his office did a feasibilitystudy on semiconductor-related investment and concluded the country is highlysuitable for microelectronics industry growth.

We will not be competitive with China in mass production, but for specific design,manufacturing and testing facilities we are in a very good position, Hruda said.


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The Czech Republic turns out 1500 graduates in electronics and related fieldsannually, he added.

Mandracchia said staffing operations with local engineers is not a problem. Thelegacy of Soviet Tesla is an education system with strong electronics and relateddisciplines. On also has established links with universities in Brno, which is newEuropes top R&D center, and in Bratislava, Slovakias capital. Skilled labor in newEurope can be up to five times cheaper than in Western Europe. The wagedifferential makes the factory hugely competitive, Mandracchia said, adding thatthe workforce in new Europe is different from their Western counterparts.

People here have been hungry, he said. They want the opportunity and willwork very hard because its a way to a better life.

Source: EETimes Europe, July 3 2006

India's Small Biz Sees IT Grow th

India's SMBs will spend some $1.2 billion on Internet infrastructure this year.

Almost one-sixth of all IT spending this year will come from small and midsizebusinesses in India that are investing in their Internet infrastructure, a recentstudy by AMI-Partners notes. Those SMBs will spend some $1.2 billion (U.S.);total IT spending is forecast at $7.7 billion.

A government policy, "Broadband Policy 2004," was specifically created to assistin accelerating the growth of broadband services in India. It offers tax incentivesto companies offering Internet services, broadband networks, and other telecomservices, and it encourages multinational corporations to take advantage of the

policy.

The study found that the biggest spenders on Internet technologies among smallbusinesses are those in the retail sector; among midsize businesses are those inmanufacturing. India's economy grew by slightly more than 8 percent in 2005.SMB spending on Internet access is forecasted to amount to nearly $830 millionthis year, a 24 percent increase from last year.

Almost all midsize businesses and more than half of PC-using small businessesalready have access to the Internet, but much of that is through dial-up ratherthan broadband access; the study found there is a growing demand for fasterconnectivity. Because Internet access provides a cost-effective communication

link between firms, Internet demand is expected to grow further as Indian SMBsexpand and increase their locations/branches.

Source: InformationWeek, July 3 2006

Avnet Electronics Marketing Wins Texas Instruments GoldRegional Resale Aw ard

Avnet Electronics Marketing Asia, an operating group of Avnet, Inc. (NYSE: AVT),has added another award to its list of industry accolades. The organizationreceived the Gold Regional Resale Award for 2005 from Texas Instruments (TI),the world leader in digital signal processing and analog semiconductor solutions.


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The award, presented at the TI Asia Distribution Conference, signifies that AvnetAsia has surpassed a significant TI sales milestone by growing TI sales more than50 percent to exceed US$100M in 2005.

"Avnet Electronics Marketing Asia has played a significant role in boosting salesand taking a greater share

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