6. Intel and NAND
In case you missed this prediction, here's a repeat of what I said last month: Intel will bail out of NAND production. Intel will continue to sell solid-state drives (SSDs), but it will slowly exit from the commodity NAND business.
In the NAND rankings in Q3 2009, Samsung was first, Toshiba was second, Hynix was third, followed by Micron, Intel and Numonyx, according to iSuppli.
Intel and Micron have a joint NAND venture, dubbed IM Flash Technologies LLC. Intel continues to lag in the rankings. That doesn't make sense for the chip giant to be No. 6. As I said earlier, I see Intel brokering a merger between Micron and Numonyx. Micron and Numonyx will control IM Flash--with backing from Intel.
7. Samsung to turn upside down
Here's the most obvious prediction of 2010: Samsung Electronics Co. Ltd. will continue to dominant in memories. Here's the least obvious prediction in 2010: Samsung will start to divest its poor performing units, including its PC business, foundry unit and pieces of its logic IC group.
Late last year, Samsung tipped its hand. It announced a major restructuring for the second time in 11 months, appointing a new CEO and changing its reporting structure to give business units greater autonomy. As a result, the poor performing units will be under pressure. Samsung has rolled out some interesting netbooks, but overall, the company has never succeeded in the PC business. I don't see that changing.
The other unit on the hot seat is Samsung's semiconductor unit. The memory groups are safe. But besides a big application processor design win at Apple Computer Inc., Samsung has seen mixed results for its logic unit.
Samsung's foundry efforts have bore little or no fruit thus far. The future of Samsung could rest in the hands of Jay Y. Lee, the new chief operating officer. In 2010, Lee will become CEO of Samsung Electronics. Lee is the only son of Lee Kun Hee, the former Samsung chairman who was found guilty of a breach of trust over fraudulent bond deals in 2008. Lee Kun Hee was recently pardoned by the South Korean government.
8. Toshiba exits foundry biz
Samsung is not the only company struggling in the foundry business. Toshiba Corp. appears to be falling behind the curve. First, one of its key foundry customers--Xilinx Inc.--switched to Samsung. Last year, there were also reports that Toshiba would outsource leading-edge chip production to GlobalFoundries Inc. In other words, over time, Toshiba will back away from the leading-edge foundry business and focus on NAND flash and logic.
9. Foundry fools
Speaking of the foundry business, we are entering into a new era of delays and setbacks. I see more delays in the 45-/40-nm node. And look for foundries to delay their 28-nm processes in 2010.
Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has already had yield issues with its 40-nm technology. The problems are supposed to be fixed in early 2010. Don't bet on it. Rival United Microelectronics Corp. (UMC) claims that it has been shipping 40-nm technology -- without any yield problems. Yet I'm told one of its main 40-nm foundry customers, Xilinx, is not shipping in mass volumes.
GlobalFoundries and Chartered Semiconductor Manufacturing Pte. Ltd. will also see 40-nm delays.
What does this mean? 40-nm will be a work in progress throughout 2010. And the next foundry node, 32- and 28-nm, will get pushed out to 2011.
I0. China's foundry industry flops
I see a major collapse within China's foundry industry. Once upon a time, China was supposed to take over the world. So far, they can barely keep their heads above water. The struggling Chinese foundries are losing money and remain in limbo.
Consolidation is in the air. Shanghai Hua Hong NEC Electronics Co. Ltd. (HHNEC) and Grace Semiconductor Manufacturing Corp. (GSMC) will finally merge in 2010. Another firm, Advanced Semiconductor Manufacturing Corp., also might get swallowed up, possibly by HHNEC. TowerJazz may buy them as well.
The big question is what will happen to Semiconductor International Manufacturing Corp. (SMIC). As reported, SMIC lost a major suit against TSMC. As a result, TSMC garnered a small stake in SMIC. Over time, TSMC will gain control over SMIC.
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