Samsung, Apple in DRAM, NAND, SSD Marketplace

Samsung benefits a lot in its relationships with Apple from the consolidation of  DRAM memory fabs. The consolidation keeps DRAM prices high, while limiting the choice of Apple of vendors for its products. While Samsung and Apple compete on cell phones, Apple still needs Samsung for its processors and memory chips.

The article below discusses Samsung's semiconductor production investments and it shows the preference of investing more in DRAM than NAND -

"we invested around ..$9.36 billion in memory...We have set DRAM and NAND production ratio to 7 to 3"

The article also shows the path Samsung is taking this year in its transition from 2D to 3D on SSD, while mobile will use 2D NAND this year.

More about the consolidation of DRAM in February 2015 Samsung, Apple's iPhone, and Fabs Consolidation and in February 2014 IBM Selling Foundry Fabs and other blog posting from 2013 and 2012.

More about 3D semiconductors in February 2015 3D Flash NAND, SSD Challenges and in May 2014 3D NAND Race is On

Ron
Insightful, timely, and accurate semiconductor consulting.

Semiconductor information and news at - http://www.maltiel-consulting.com/

Samsung to inject $10 billion into semiconductor businessin 2015

Summary: Samsung plans to pump up to $10 billion into its semiconductor business, which drives the South Korean tech giant's best-performing business division.

By Cho Mu-hyun | April 30, 2015 -- 00:08 GMT (17:08 PDT)

Samsung plans to inject as much as $10 billion during 2015 into its semiconductor business, as unprecedented demand continues to fuel growth in the company's best-performing division.

"Last year, we invested around 10 trillion won [$9.36 billion] in memory semiconductors," said Jeeho Baek, senior vice president of Samsung's semiconductor division, during a conference call with analysts. "We plan to maintain similar volume this year. We have set DRAM and NAND production ratio to 7 to 3, but will manage this flexibly depending on demand, going forward."

Samsung is increasing its production capacity for memory chips. An additional line that will produce DRAMs is being built at Hwaseong, its main hub for memory chip production in South Korea, which will be completed by the end of the year.

The South Korean tech giant is planning to start construction of a new plant in Pyeongtaek, South Korea, next month. It plans to invest 15.6 trillion won in the new factory by 2017, the same year that it is tentatively set to start production.

The world's second-largest semiconductor vendor also plans to increase offerings that use 3D V-NAND. Only Samsung and Japan's Toshiba have commercialised 3D V-NAND, which stacks cells vertically within a chip to increase storage capacity in the same space.

Baek said the company will offer new 3D V-NAND solid state drives (SSDs) aimed at consumers by the second half of the year, as well as next-generation offers for enterprise-aimed goods.

Samsung cemented its leadership in SSDs last year. According to market research firm IHS, Samsung Electronics held 34 percent market share for 2014, with revenues of $3.996 billion -- double that of runner-up Intel, which posted $1.99 billion in the segment.

Last year, Samsung launched a variety of 3D V-NAND SSDs for the enterprise. The senior vice president said talks with clients were going smoothly, and he expected a surge in orders in the second half of the year.

Samsung insiders said the firm has clinched supply deals with Google and Amazon to supply SSDs for the latter's datacentres. Samsung SDS, the IT service arm of Samsung Group, will also use Samsung-made NANDs when building servers for clients.

Rival makers Toshiba, SK Hynix, and Micron have just begun ramping up efforts to commercialise 3D V-NANDs, but are yet to join the fray, which will likely contribute to prices being stable, allowing Samsung to continue to reap high margins in the area.

For mobile clients, however, supply will still be 2D NANDs. Samsung believes 2D NANDs are still more appropriate for mobile set products, said Lee Myung-jin, head of IR, during the conference call.

"For high-integration, high-reliability NAND flashes, we will use V-NANDs, and for mobile and consumer products, we will use 2D NANDs and secure competence in both product lines,” said Lee.

According to Gartner, the worldwide semiconductor market grew 7.9 percent last year to $339.811 billion. Memory segment grew 16.9 percent and led the growth, it said.

Samsung's contract chip business, called System LSI, will likely enjoy a surge in profit as well. Its migration to 14-nanometer FinFet process ahead of rivals has helped it clinch new clients.

Samsung will produce chips for Apple, Qualcomm, and Nvidia, both in 14-nanometer and 20-nanometer processes, for the latter's next-generation chips, insiders have said.

Samsung, Apple's iPhone, and Fabs Consolidation

The increasing cost of semiconductor fabrication has led to consolidation of fabs over the last few years (see March 2012 Moore's Law End? (Next semiconductors gen. cost $10 billion). 

At the same time Apple was facing the risk of depending on a single semiconductor fabrication source ( Foundry Rankings (Including Samsungs' iPad, iPhone Breakdown).

It makes sense for Apple to diversify its chip production as discussed below.

"KGI Research predicted that Samsung would end up producing around 75 percent of the A9 chips with Global Foundry manufacturing the rest...

Another report from BusinessKorea .. Apple would be using Samsung almost exclusively for manufacturing NAND flash storage, RAM and batteries for the upcoming iPhone 6s and the Apple Watch."

See also report of Apple's A9 production using Samsung's 14nm FinFET made by both Samsung and GlobalFoundaries (Samsung-GlobalFoundries deal gives Apple’s chip production greater flexibility

Another benefit for Apple is control of its chips price supplied by using more than one vendor.

Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

iPhone 7, iPad 2015 Specs News: Apple Seen Picking Samsung To Manufacture Most A9 Chips For New iPhones, iPads

Virginia D'Cruz29 JANUARY, 2015

YOUTUBE/APPLE

The A8 chip.

Rumors swirling around Apple's new devices in its iPhone and iPad ranges continue, with the latest concerning what type of chip will be used. All recent rumors pointed towards Samsung winning the contract to manufacture the bulk of the new A9 chips, which will be at the heart of the new iPhones and iPads.

Initially, it was reported that Taiwan Semiconductor Manufacturing Company had won the contract and would be manufacturing most of the A9 chips. However, soon after another report stated that instead of the Taiwan company, Samsung had been contracted to supply most of the A9 and A9X chips that would be used on the new iPhones and iPads.

With no official confirmation on the subject, speculations have increased on the company that would eventually produce the new Apple chip. In a recent statement, Samsung declined to provide any information, saying that "it does not comment on market speculation"

A report by KGI Research predicted that Samsung would end up producing around 75 percent of the A9 chips with Global Foundry manufacturing the rest. This report followed an earlier note by KGI Research that pointed towards Apple spreading out the production of the chip among the Taiwan semiconductor company, Samsung, Qualcomm, Global Foundry and Intel. It also hinted that Apple had tapped Samsung for manufacturing the S1 chips which will be featured in the upcoming Apple Watch. As for the Taiwan company, it will be more involved in producing the S2 chip which will be used in future versions of the Apple Watch.

Another report from BusinessKorea last month stated that Apple would be using Samsung almost exclusively for manufacturing NAND flash storage, RAM and batteries for the upcoming iPhone 6s and the Apple Watch.

While all these reports are speculations at this point, several research houses have noted that Apple is looking to engage many suppliers to produce the A9 chip in order to minimize any risks involved.

IBM Selling Foundry Fabs

The article below discuss IBM announcement that it is selling its manufacturing operations. It will impact SOI (Silicon on Insulator), a process  that IBM specialized in.

It is not likely that Intel will buy an existing fab. Intel always duplicates an existing process in a current fab when they build a new fab 

It is just another example of consolidation chip manufacturing see in March 2012 Moore's Law End? (Next semiconductors gen. cost $10 billion

" chip industry without IBM will be a diminished industry."

IBM has been number 10 in foundry ranking for several years ( Top Semiconductor Ranking 2012 (Sales, Growth) 

More recent IBM dropped to number 11 in ranking (Top 13 Foundries Account for 91% of Total Foundry Sales in 2013)

Ron
Insightful, timely, and accurate semiconductor consulting.
Semiconductor information and news at - http://www.maltiel-consulting.com/

IBM fabs for sale – the semiconductor shockwave

 

david manners

 

10th February 2014

Following the semiconductor shock of IBM pulling out of chip manufacturing, David Manners considers who could buy and run the IBM fabs, whose processes include SOI and SiGe, and which supply manufacturing process technology to half the world’s major companies: Samsung, GloFo, UMC, ST, Renesas, NEC, Freescale, Toshiba and Infineon.

The biggest shockwave the semiconductor industry has had for years is the IBM announcement that it is pulling out of chip manufacturing.

IBM CEO Ginni Rometty has decided that IBM’s future is in software and services and chip manufacturing clearly doesn’t fall in either of these categories .

Moreover IBM’s chip manufacturing business lost $130 million last year and is slated to lose another $130 million this year while the capital costs to stay in the game are $5 billion a factory and rising.

That’s one way of looking at it.

The other way of looking at it is that IBM has been a stalwart of the world semiconductor industry, inventing the DRAM, mastering SiGe, SOI and much more besides and supplies manufacturing process technology to half the world’s major companies: Samsung, GloFo, UMC, ST, Renesas, NEC, Freescale, Toshiba and Infineon.

It is shocking to think IBM’s legendary R&D operation may be curtailed but, without the justification of a business outlet for its innovations, it may be.

One rather assumes that the obvious candidates for buying IBM’s fabs have already been tapped and that the announcement that Goldman Sachs has been appointed to look for a buyer for the fabs is to find an unobvious candidate.

The obvious candidates are Intel, TSMC, GloFo and Samsung.

However, Intel has net cash of only $7 billion and makes only CMOS chips, while IBM’s capacity includes processes like SOI and SiGe which Intel won’t need and the IBM fabs are not as advanced as Intel’s.

TSMC says it doesn’t want to operate foreign fabs; GloFo’s owners are said to be getting fed up with their capital-greedy chip investment and may not want to expose themselves further to the chip industry; Samsung already has as much operational and planned capacity in the USA as it needs.

So how about the non-obvious candidates?

Suggestions have been that Apple could enter into a jv with IBM to run the fabs. This would involve Apple putting a lot of money in to upgrade the fabs to the latest processes, but Apple has lots of money and IBM has the latest processes.

TowerJazz is another suggestion. The company has just formed a jv with Panasonic in which TowerJazz has a 51% share and which will own three Panasonic fabs in Japan.

The Panasonic deal gives TowerJazz’s already impressive array of specialty processes the addition of Panasonic’s specialty flows such as High Definition FSI for sensors and high voltage SOI power management technologies.

If TowerJazz now added IBM’s specialty processes like SiGe and SOI to its stable, it would become the world’s No.1 specialty fab.

Another suggestion is China. China has been trying, unsuccessfully, to build an indigenous chip industry for 30 years. Following the successful integration of IBM’s PC business into Lenovo, followed by the recent sale of IBM’s x86 server business to Lenovo, it would seem quite logical that a sale of IBM’s chip manufacturing would be to China.

Of course the European authorities, wedded to the idea of gaining 20% world market share in IC manufacturing, may see the opportunity to acquire IBM’s world-class process development capabilities as a sufficient reason to buy the fabs. IBM’s proficiency in SOI would give a boost to the European-developed FD-SOI process.

Then, of course, there are other emerging national tech players like Brazil and India who could see this as a once in a lifetime opportunity to acquire the basis for a chip industry.

Whatever the outcome of this, a chip industry without IBM will be a diminished industry.