Kulicke & Soffa Changes Strategy to Focus on Wire Bonder Products Willow Grove, Pa.-Racked by losses of $274 million for FY02, and a recession that has dragged on for two years, Kulicke & Soffa says it has changed its strategy of two years ago to be the "dominant supplier of assembly solutions." The wire bonding operation, K&S's historical bread-and-butter, was to fuel the proposed growth which included both a substrate and a flip-chip division. The substrate operation has been closed and the flip-chip division is on the block. Speaking at a March Webcast, Michael Sheaffer, the company's director of investor relations, said, "In view of the severity and longevity of the down cycle, we've been forced to abandon our earlier strategy. "Today, our strategy is to stabilize and strengthen the balance sheet, drive cost reductions and to reduce our product focus. Like everyone in the equipment business, we've had significant reductions in force."
Sheaffer declared that K&S will now focus on wire bonders and the interdependent products around them-the tools, the wire and the test products. Things are picking up, Sheaffer said, with increased demand for ball bonders. This demand is being driven by feature size reductions. As the feature sizes become smaller, they put pressure on the backend, particularly on wire bonder pad pitch, Sheaffer noted. He noted that today's pad pitch of about 45 microns continues to decline, "and the majority of business is for wire bonders at the leading edge." The "sweet spot" for K&S, he said, is for bonders that operate between 60-100 microns. During the first half of 2002, K&S reached a 50 percent share of the wire bonder market. That has declined to 43-44 percent now. "We're taking steps to improve that," Sheaffer said. Maxµm, Nu-Tek Take Center Stage The Maxµm is the leader in high I/O fine pitch applications, while the Nu-Tek is aimed at the low-end market, a market from which K&S has been largely absent in the past. Subcontractors are a growing part of K&S' business, Sheaffer said, lead by ASE of Taiwan, K&S' largest customer last year. Other important customers were Intel, STMicroelectronics and TI. [kns.com] Fabless Trade Group Paints Upbeat Picture for Wafer, Package Demand Dallas-The Fabless Semiconductor Association (FSA) estimates that annual average wafer demand will grow 38 percent this year over 2002. That figure is based on responses from 152 fabless companies and IDMs. The FSA, however, predicted a short-term 3 percent decrease from Q4 2002 to Q1 of this year. "Looking into the future, the survey indicates continued, compounded growth for 2003 and 2004," FSA noted. "The findings show a trend toward a sequential increase in wafer demand per quarter during 2003." The FSA also noted that due to attrition of older fabs and the delay in 300mm ramps, worldwide foundry capacity shrunk by 6.6 percent last year, down from 2001's production high of 13.9 million 200mm wafer equivalents. As part of its tenth annual Wafer Supply & Demand and Packaging Survey, the FSA also queried members about their estimated package demand. According to the FSA survey, total package demand for 2003 will increase 69 percent over last year. Additionally, the forecast for 2004 predicts a 77 percent rise over 2003.
Overly Optimistic? The FSA cautions in its survey that "this (the 2003 and 2004 packaging forecasts) to be overly optimistic in light of current industry conditions." However, FSA adds, last year's forecast predicted 2.33 billion unit outs. This year's survey indicates that actual 2002 unit outs were, in fact, 2.9 billion. "Is the forecast for 2003/2004 real?" FSA concludes that under the current economic conditions, "it could be questionable. However, we can assume that fabless companies tend to make leading-edge products. Many experience very fast ramp-up rates, which generally contribute to an overly optimistic forecast..." The FSA numbers are based on responses from less than 20 percent of total possible respondents to the survey-the total number of FSA members. Package Types For the first time in its survey, the FSA included newer leadless packages in the plastic leadless package category, which includes MLF, QFN and SON. These packages, according to the FSA, appear to be replacing SOIC and lower I/O PQFP/TQFP. The demand for plastic leadless packages is forecast to increase at the fastest rate of any package type. This category, predicts the FSA, will make up almost one-sixth of total package demand of fabless companies by next year. The survey further indicates a continued shift away from traditional leaded through-hole (DIP, TO) and leaded surface mount (QFP, SOIC) packages. "...This is further evidence that the industry's transition to the third wave of packaging technology is fully underway," the FSA believes. [fsa.org] Intel Corp. Readies Arizona Plant for 300mm Wafer Technology Santa Clara, Calif.-Intel Corp. plans to convert Fab 12, a 200mm facility in Chandler, Ariz., to a 300mm fab at a cost of $2 billion. The microprocessor leader recently announced that the project will begin in the first half of next year. Production is scheduled to start in late 2005. The converted fab will begin production employing 65nm process technology. After completion, the converted fab will become Intel's fifth 300mm fab. Currently, Intel operates 300mm fabs in Hillsboro, Ore., and Rio Rancho, N.M. Two additional 300mm sites are under construction. A second 300mm facility will begin operations later this year. A facility under construction in Ireland is slated to begin producing wafers in the first half of next year. According to the company, five 300mm fabs offer the same manufacturing capacity as 10 200mm sites. [intel.com]
Fairchild Semiconductor's China Assembly Plant Nearly Complete South Portland, Maine-Fairchild Semiconductor has reported that its 800,000 square foot assembly, test and warehouse facility in Suzhou, China, is on schedule to be completed by the end of this quarter. Fairchild says that qual runs are now underway and some 250 employees are being trained "to bring the plant into production quickly." Reduction in Outsourced Assembly The chip maker says it will save as much as 30 percent on assembly and test costs with the new facility. When finished, Fairchild says it will reduce the amount of outsourced assembly and test production and "balance the company's dependence on outside contractors." The plant in Suzhou is key to the company's global sales strategy. Last year, Fairchild announced that it wanted to double sales in China by 2004, and "the company is on track to meet this accomplishment." IC consumption in China is expected to reach $28.7 billion by 2005, representing a compound annual growth rate of $25.5 percent, according to World Semiconductor Trade Statistics, cited by Fairchild. |
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