Global Conditions Dampen Europa
Much of the focus of last week's SEMICON Europa show was on keeping European companies competitive in the semiconductor, solar, MEMS and related industries. Although the AMD/Abu Dhabi announcement did much to boost this concept, a dark cloud caused by the global economic conditions hung over the show in Stuttgart, Germany.
Laura Peters, Editor-in-Chief -- Semiconductor International, 10/13/2008
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Despite an upbeat attitude on the part of most executives, a dark cloud caused by the global economic conditions hung over SEMICON Europa in Stuttgart, Germany last week. If global finances could be ignored, the semiconductor industry would be poised for a fairly good year in 2009. Unfortunately, conditions have changed significantly, and that growth is likely to be pushed out.
Stan Myers, SEMI president, said that three-month billing levels for semiconductor equipment are very low compared with 2006 and 2007 levels, adding that he expects the economic crisis to definitely impact the fourth quarter semiconductor sales. For 2009, conditions are too unpredictable right now, and Myers said flat to down (-20%) semiconductor sales are possible.
| Equipment billing levels continue to drop, indicating a definite slowdown in fab expansion activity. (Source: SEMI) |
The big news at the show, Abu Dhabi’s massive investment in Advanced Micro Devices (AMD, Sunnyvale, Calif.) to create a leading-edge foundry, demonstrated that manufacturing in Europe is still a viable option. The Advanced Technology Investment Company (ATIC, Abu Dhabi) will invest $2.1B to purchase its stake in The Foundry Company, with $1.2B of that to cover AMD’s existing debt and the rest going directly into the new company that will be 44% owned by AMD and 56% owned by ATIC.
Over the next five years, $3.6B to $6B will be invested in AMD, including upgrade of its Dresden fab to a state-of-the-art facility, construction of a new fab in Saratoga County, N.Y. (and possibly 1400 jobs) and, eventually, device manufacturing in Abu Dhabi. Once operational, the New York fab will be the only independently managed foundry in the United States and, though it is too soon to tell, might well be designed to compete with the likes of Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC, Hsinchu, Taiwan).
Much of the focus of the Europa show is on keeping European companies competitive in the semiconductor, solar, MEMS and related industries. Certainly, the AMD/Abu Dhabi announcement did much to boost this concept. At a panel discussion, industry leaders talked about the need to keep manufacturing in Europe because a strong R&D base is not enough. “If you lose manufacturing, you will lose R&D over time,” said Franz Richter, chairman of SUSS MicroTec (Munich, Germany).
Myers said that repurposing facilities and recognizing opportunities is very important — perhaps more so than something like moving to 450 mm wafers. SEMI released a white paper this month, “Six Recommendations to the EU and National Governments to Increase Europe’s Microelectronic Industry Competitiveness,” that explores the attrition in the manufacturing base in Europe. Despite a 35 billion euro investment in semiconductors over the past decade, Europe is not always successful in quickly transforming R&D results into production commercialization. The recommendations are aimed at maintaining a strong semiconductor industry, which in turn would support Europe’s automotive, aerospace, energy, telecom, medical equipment and other industries. The recommendations include:
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Develop a European vision for the industry.
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Increase funding for R&D and manufacturing.
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Promote the microelectronics supply chain.
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Cultivate education and welcome talent.
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Protect and enforce intellectual property.
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Wisely enforce environment, health and safety (EHS) legislation.
The debate over Europe’s competitiveness is sure to continue. But at the moment, all eyes are on the management of the financial crisis. “We see a slowdown in consumer interest; and given that the financial markets don’t work, companies have to better manage cash flow,” Richter said. “This is not bad in general — it is good business.”
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Abu Dhabi is great! The US exports more jobs and...
doh! - 10/14/2008 1:29:00 AM CDT
