Micron and Elpida would collectively own 23% of the DRAM market about the same as the No.2 player Hynix, while the No.1 player, Samsung, has 44% market share.

Elpida is producing on 30nm and testing 25nm, says DRAMeXchange, and has an 8.8% share of the mobile DRAM market.

Consolidation will help reduce over-supply in the DRAM industry but is also likely to bring about more robust pricing.

Source: Electronicsweekly

However, the market is expected to recover in 2012, driven by (i)  the sheer volume of the handset market and (ii) consolidation of the LED  industry (balance of capacity).

The GaAs substrate market should hence increase at a compound  annual growth rate (CAGR) of nearly 11% to more than $650m by 2017 (Figure 1),  fuelled primarily by: rising GaAs content in handsets; and rising  penetration of LEDs in general lighting and automotive applications

Figure 1: GaAs wafer market trend.

RF electronics (power amplifiers, switches etc) initially  comprised the main market for GaAs wafers and will continue to fuel the  business in the coming years due to the development of sophisticated  smartphones, the development of 3G/4G networks, and the increased demand for  data communications, says Yole.

But recently the development of new GaAs-based devices is boosting  the market with associated high-volume applications (e.g. LEDs, which are  currently booming due to their advantages over traditional light sources).  Other devices such as solar cells for high-concentration photovoltaics (HCPV) will  also add to the development of the GaAs substrate market, but to a lesser  degree, reckons Yole.

Boosted by LEDs, semiconducting GaAs substrates to lead growth

In 2011, the semi-insulating (SI) GaAs substrate market  represented about 56% of the overall GaAs substrate market by value, versus 44%  for semi-conducting (SC) GaAs. However, this trend is likely to reverse in the  short term, as GaAs substrate demand for LEDs should rapidly surpass demand for  RF electronics devices (Figure 2).

Figure 2: Market share ($m) of SI GaAs and SC GaAs (2011 and 2017).

Globally, the penetration rate of LEDs is increasing in  applications including TVs, signs & displays etc. Also, if fundamental  technology improvements are achieved to improve LED efficiency and increase the  total amount of light generated per package, then general lighting should be  the next ‘killer application’, boost the SC GaAs substrate market in 2012-2013.  Moreover, the automotive industry is also shifting from the use of traditional  light sources to LEDs for products such as headlamps and interior lights.

In that context, SC GaAs substrate volumes are likely to equal SI  GaAs substrate volumes by 2013 due to steady growth in the RF electronics  market compared to booming growth in the optoelectronics market.

Earthquake in 2011 shifted revenue of some Japanese players to  competitors

The Japanese earthquake/tsunami in 2011 damaged several  manufacturing plants and strongly impacted the production capacity of some key  GaAs substrate suppliers, who lost market share to competitors (Figure 3).

Figure 3: GaAs wafer market ($m), split by players (2010 and 2011).

Whether these companies will invest to recover operations, reduce  operations or exit the business is still unclear, says Yole. However, the GaAs  wafer industry is evolving and some players have already announced plant  expansion in order to gain market share and prepare future growth of the  market, the market research firm notes.

At this level, due to its lower labor cost, China seems to be the  new ‘El Dorado’ of GaAs wafer manufacturing: all expansions plans announced  will be localized in the country, Yole reckons.

Source: Semiconductor Today

In the final quarter of 2011,Seagate shipped 46.9 million HDD units worldwide, compared to 28.5 million for arch-rival Western Digital, according to an IHS iSuppli Storage Space Market Brief from information and analytics provider IHS (NYSE: IHS).

Seagate suffered a relatively minimal sequential shipment decline of 8 percent compared to third-quarter figures of 50.8 million units.
Western Digital, in contrast, took a massive blow as shipments fell 51 percent
from 57.8 million units in the earlier quarter.

This reversal catapulted Seagate back to the top of the HDD market – a distinction it hasn’t claimed in at least two years. Offering higher-margin products, Seagate also continues its longstanding status as market revenue leader, a lock on the space that Western Digital has not been able to pry free.

All told,HDD shipments from the industry’s five major manufacturers retreated sharply in the fourth quarter to 123.3 million units, down 30 percent from 175.2million units the quarter before. Along with Seagate and Western Digital, major players such as Toshiba, Hitachi Global Storage Technologies and Samsung Electronics also posted shipment declines, as shown in the table below.

The new rankings mean that Seagate in the fourth quarter controlled 38 percent of overall HDD shipments, with Western Digital coming in a distant second at 23 percent. Toshiba had 16 percent, followed by Hitachi GST
with 14 percent and Samsung with 9 percent.

“Seagate owes its return to market leadership to a fortuitous accident in geography: Its HDD manufacturing plant inThailand is located on high ground,” observed Fang Zhang, analyst for storage systems at IHS. “As a result, the company was less impacted by the October floods – the most destructive in the last 50 years for the Southeast Asian country. On the other hand, Western Digital’s HDD manufacturing facilities were engulfed by rampaging storm waters, which effectively slashed its fourth-quarter output to half of the manufacturer’s preflood volume.”

Moving forward, the two HDD titans will continue to battle for the No. 1 spot. Both companies also are engaging in mergers – Seagate with Samsung and Western Digital with Hitachi GST – which would have the general effect of intensifying rivalry between the two.

Both Seagate and Western Digital saw their gross margins rise to record highs in the fourth quarter, due to across-the-board price increases in the wake of flood-related HDD shortages.

Seagate, which had a long-term goal to reach gross margins in the 22 to 26 percent range, actually achieved the 32 level in the fourth quarter, thanks to higher average selling prices (ASP) of HDDs. Seagate’s ASP surged from $55 in the third quarter to $68 in the fourth – a strong 24 percent upswing.

Western Digital also attained a company record with gross margins at 32.5 percent during the same period, after its ASP soared to $69, up from $46. Given the expected HDD shortages for the first half of this year and Western Digital’s long road to recovery, Seagate’s gross margin is expected to remain at the 30 percent level throughout 2012.

In general, however, pricing will start to decline at the end of the first quarter this year for some HDD products, with component shortages finally easing and production increases kicking in from plants that had escaped flooding.

Even so, pricing is not expected to return to preflood levels anytime soon, especially because there will be fewer manufacturers left after both Seagate and Western Digital complete their individual buyouts of Samsung and Hitachi GST, respectively. Also, higher pricing can be expected with the relocation of HDD production following the flood, increased component costs from manufacturers impacted by the disaster, and lofty costs in general associated with the continuing development of high-technology drives.

One other factor could impact market values for the rest of the year. If the new, super-thin Ultrabooks promoted by Intel Corp. take off – and there is every indication they will – HDD prices could remain elevated throughout 2012, IHS believes.

Source: EMSNow

Toshiba said Thursday it has shrunk the size of its 128Gbit NAND flash memory chips, in the race to bring more and tinier storage to products like USB storage and memory cards.

Together with partner SanDisk, the company said it is shipping the world’s smallest 128Gbit memory chip, with an area of 170 square millimeters. The chip uses a 19-nanometer technology process, one step smaller than a 20-nanometer chip announced by Intel and Micron in December.

NAND flash memory, which holds data even when not powered, is used for storage in smartphones, music players, and increasingly in super-thin laptops such as Apple’s MacBook Air and Intel-powered ultrabooks. Smaller chip sizes allow for smaller devices, but also drive down overall prices by allowing them to be more efficiently produced and forcing less advanced manufacturers to cut prices.

Toshiba’s newest chip uses a storage method called three bits per cell, which is more efficient but less reliable than two bits per cell, meaning it is likely be used initially in products like memory sticks and cards. A cell is a single unit of storage on a chip.

Toshiba, which is a major supplier to well-known companies like Apple, said it began mass production of the new chip this month.

Toshiba and SanDisk share research and development and jointly invest in manufacturing.

The two companies are in a race with rivals such as Intel, which partners with Micron Technology, and with Samsung to continuously crank out smaller chips, a battle that requires massive spending on production equipment.

Source: Computerworld

Canalys today released its full, detailed Q4 2011 country-level smart phone shipment estimates to clients, so completing the picture for the year. One notable result was that total annual global shipments of smart phones exceeded those of client PCs (including pads) for the first time.

Vendors shipped 158.5 million smart phones in Q4 2011, up 57% on the 101.2 million units shipped in Q4 2010. This bumper quarter took total global shipments for the whole of 2011 to 487.7 million units, up 63% on the 299.7 million smart phones shipped throughout 2010. By comparison, the global client PC market grew 15% in 2011 to 414.6 million units, with 274% growth in pad shipments. Pads accounted for 15% of all client PC shipments in 2011.

“In 2011 we saw a fall in demand for netbooks, and slowing demand for notebooks and desktops as a direct result of rising interest in pads,” said Chris Jones, Canalys VP and Principal Analyst. “But pads have had negligible impact on smart phone volumes and markets across the globe have seen persistent and substantial growth through 2011. Smart phone shipments overtaking those of client PCs should be seen as a significant milestone. In the space of a few years, smart phones have grown from being a niche product segment at the high-end of the mobile phone market to becoming a truly mass-market proposition. The greater availability of smart phones at lower price points has helped tremendously, but there has been a driving trend of increasing consumer appetite for Internet browsing, content consumption and engaging with apps and services on mobile devices.”

However, Canalys expects to see smart phone market growth slow in 2012 as vendors exercise greater cost control and discipline, and put more focus on profitability. Notably, even vendors who have focused on conquering the low-end of the market with aggressive pricing, such as Huawei, ZTE and LG, are now placing greater attention on the higher tiers. Flagship models aimed at raising selling prices and improving margins will feature more heavily this year.

Apple’s impressive end to the year resulted in it becoming the leading smart phone and client PC vendor in Q4 2011, with shipments of 37.0 million iPhones, 15.4 million iPads and 5.2 million Macs. It also smashed the record for the most smart phones shipped globally by any single vendor in one quarter, beating Nokia’s previous record of 28.3 million shipped in Q4 2010. Moreover, Apple’s performance meant that it displaced Nokia, for the first time, as the leading smart phone vendor by annual shipments. Apple shipped 93.1 million iPhones in 2011, representing growth of 96% over 2010. The iPhone 4S benefitted from pent-up demand resulting from the launch coming in October rather than June, but Apple’s overall volume was also buoyed by continued shipments of the now more aggressively priced iPhone 4 and 3GS models.

Samsung also finished 2011 with a flourish. It shipped 35.3 million smart phones in Q4 2011 under its own brand, bringing its total to 91.9 million for the year, compared to just 24.9 million in 2010. This excludes shipments of rebranded products, such as the Nexus S and Galaxy Nexus, which Canalys counts under the Google brand. Samsung continued to spend big on marketing activities, and its strong product portfolio – particularly the Android-based Galaxy S II – performed well.

Despite a disappointing set of financial results, Nokia’s smart phone performance in the fourth quarter gave cause for optimism. It shipped 19.6 million smart phones, down 31% from the record high of a year earlier, but up 17% on Q3 2011. The total was helped by 1.2 million and 0.6 million shipments of its Windows Phone and MeeGo-based products respectively, as well as improved Symbian Belle volumes from competitively priced devices such as the Nokia 500, 700 and 701. Its total smart phone shipments for the year came in at 77.3 million globally.

“Its first Windows Phone products, the Lumia 800 and 710, along with the recently announced Lumia 900 through AT&T in the US, have improved the outlook for Nokia,” said Canalys Senior Analyst, Tim Shepherd. “They are well-designed, competitive devices that demonstrate innovation is still alive within Nokia. But the battle is not over and it has huge challenges ahead. Nokia must continue to build out its Lumia portfolio with devices tailored to address all price points and all the markets in which it aims to compete. It must hasten its transition from Symbian to Windows Phone around the world and, with Microsoft, promote and generate excitement for the platform and new products. And it must succeed in attracting more developers to build high quality, locally relevant apps.”

RIM’s demise in 2011 has been over played by some, with the company ending the year as the fourth largest smart phone vendor and delivering annual unit growth of 5%. “There is no denying that RIM has had a tough year,” said Canalys Principal Analyst, Pete Cunningham. “But when you consider that it is transitioning to a new platform it has done well to increase volume while remaining profitable; the latter point being something that many other vendors struggle with. The appointment of Thorsten Heins as CEO will bring new energy to the company while ensuring that it does not radically deviate from its overall strategy in this transitional year. However, 2012 will become even more competitive and RIM needs BlackBerry 10 devices out there to ensure it retains its status as a major player.”

At a platform level, Android accounted for 52% of global smart phones shipments in Q4 2011, with iOS representing 23% and Symbian 12%. Android was also the leading smart phone platform by volume for the whole year, accounting for 49% of all devices shipped in 2011 and ahead of iOS with 19% share and Symbian with 16%. Collectively, Android smart phone shipments grew 149% year on year in Q4 2011 to 81.9 million units, resulting in a total of 237.8 million for the full year, up 244% on 2010. Samsung’s success and focus on Android have contributed substantially to the growth of the platform, but other vendors, such as Sony Ericsson, Huawei, Motorola, LG and particularly HTC, have also seen significant growth in their Android volumes over the course of 2011.

Source: Canalys

However IHS qualifies its prediction by adding that ‘the overall picture could brighten considerably if theUnited Statesand the rest of the world recover in 2013.’

Recovery in the macro economy would result in growth from 2013 to 2015 averaging  6.6 to 7.9 % with the industry growing to nearly $400bn by 2015.

‘A deliberate decrease in manufacturing run rates by companies in the third quarter of 2011 proved unable to bring inventory down to levels that would have fired up additional orders and increased factory run rates,’ says HIS, ‘as a result, semiconductor demand for manufacturers will remain depressed until the second quarter of 2012.’

IHS reckons because factory utilisation will not recover until the middle of 2012, with having difficulty  maintaining the viability of underperforming factories. With current manufacturing capacity deemed acceptable for meeting demand, most capital expenditures to boost efficiency within the industry likely will be pushed out to 2013.

DRAM revenues are expected to decline 16.1% in 2012 on top of a 26.8% fall in 2011.

Foundries will continue to outperform the industry, while IDMs will have lower growth, especially as they have abdicated manufacturing in leading-edge technology — where the high margins are —t o the foundries.

IDMs which allow fabless or foundry companies to control leading-edge design or production risk consolidation, says IHS, which would have the unintended effect of providing rival foundries with even more opportunities for additional growth.

Source: ElectronicsWeekly – IHS

Competitors Intel and Advanced Micro Devices also reported that they were affected by the floods, as HDD manufacturers like Western Digital start to bring their operations back to normal in Thailand.

Research firm Gartner however warned earlier this month that the major impact of the HDD shortage after the floods will be felt in the first half of this year, and even potentially continue through the year. The shortage had a limited impact on fourth quarter PC shipments and prices, but PC shipment growth could be temporarily affected during 2012, it said.

Western Digital, which saw its factories in Thailand inundated in the floods, said on Monday that it expects its hard disk drive production capacity to be restored to pre-flood levels only by the third quarter of this year.

The disk drive shortage caused by the flooding in Thailand had more impact on the mainstream GPU (graphics processing unit) segment than anticipated, Nvidia said. Revenue for the company’s fiscal fourth quarter is now expected to be $950 million, plus or minus 1 percent, compared with original expectations of $1.0 billion, plus or minus 2 percent, provided on Nov. 10, it said. Shipments by some PC makers were reduced, and some were not able to include a GPU in their systems because of the higher prices of disk drives, Nvidia said.

Revenue from AMD’s graphics segment decreased 10 percent to $382 million in the quarter ended Dec. 31, the company said on Tuesday. The decline was partly caused by the hard-drive shortage, it said.

Western Digital said it has continued to ramp HDD production in Thailand and on Sunday resumed slider production which had been suspended since Oct. 10.

The company said, while announcing its results for the quarter ended Dec. 30, that it had incurred charges and expenses of $199 million related to the flooding during the quarter. The company shipped 28.5 million drives in the quarter, in contrast to 57.8 million in the previous quarter.

The shortage of HDDs has affected Intel as well. The shortages did not affect PC sales as computer makers tried to clear out existing inventory, but there was a reduction in orders for new microprocessors, which hurt Intel, the company said earlier this month during its fourth-quarter earnings call. The shortage of hard drives will continue to affect the company in its first fiscal quarter, it said.

Source:Computerworld