COMPNAY REPORTS - ChangeWave · Web view2005/01/14 · Applied Materials 33% KLA Tencor 21% Teradyne 12% Varian Semiconductor Equipment 11% Agere 9% Lam Research 9% Nanometrics 9%

COMPNAY REPORTS

ChangeWave Research: Semiconductor Industry – 1st Half 2005

ChangeWave Research: Semiconductor Industry – 1st Half 2005

ChangeWave Research Report:

Semiconductor Industry Report: 1st Half 2005

Slower Overall Growth With Pockets of Strength in RFID and Communication Chips for Cell Phones; Flash Memory Weakens

Overview

The Alliance’s last two Quarterly sales surveys (Dec 2004; Sep 2004) signaled a downturn for the Semiconductor industry. The current report – based upon a Dec 21 - 28, 2004 survey of Alliance semiconductor industry members – looks at where semis are headed for the 1st half of 2005. A total of 66 industry members participated.

(A) Overall Industry Trends

· Slower Growth Projected for 1st Half 2005. Fifteen percent (15%) of industry respondents believe there will be double-digit growth for the semi industry in the 1st half of 2005 – a significant decrease from five months ago (July 2004) when 48% believed there would be double-digit growth for the industry.

· Best Performing Sub-Segments. Communication Chips for Cell Phones (Net Difference Score = +38) and RFID Chips (+37) are seen as the strongest semiconductor sub-segments over the next six months.

· Worst Performing Sub-Segments. Microprocessor Chips (Net Difference Score = -29) and Memory Chips (-27) look to be the weakest performing sub-segments over the next six months.

Importantly, the prospects for Flash Memory (+2) (which was the best performing sub-segment in our July 2004 survey) appear to have declined dramatically since July (Change in Net Difference Score = -30).

· Softer Fab Capacity Utilization. Only 5% of respondents believe fab capacity utilization is “tight” (90% or more), a considerable 34 pt. drop since our July 2004 survey. The percentage reporting “softer than expected” capacity (12%) rose 10 pts.

· Marginal Increase in Capital Spending. While a majority (56%) of respondents see an increase in 2005 capital spending on new fab capacity, that’s 25 pts. less than in our July 2004 survey. New 300mm Fab Construction (44%) is seen as the number one area for capital spending over the next 12 months.

· Inventory Status. Memory Chips (Net Difference Score = +15) and Microprocessor Chips (+12) are reported as showing signs of an inventory buildup. Conversely, RFID Chips (-9) are seen as showing signs of a shortage.

(B) Semiconductor Companies: Best and Worst Performers

· Winning Companies. Texas Instruments (Net Difference Score = +32) topped the list of chip vendors respondents believe will gain market share over the next 6 months. AMD (+26) also looks to gain market share over the next 6 months. We believe this bullishness among respondents for AMD most probably relates to its microprocessorbusiness.

· Losing Companies. IBM (Net Difference Score = -7), Intel (-7) and Zoran (-7) are seen as least likely to gain market share over the next six months.

(C) Semiconductor Equipment Sector

· Best Performing Semi Equipment Sub-Segments. LCD Manufacturing Equipment (Net Difference Score = +24) is seen as the top performing sub-segment over the next six months, with Wafer Processing (+7) second. Also of note, Specialty Equipment (+2) has shown a big improvement since July (Change in Net Diff. Score = +11).

· Worst Performing Semi Equipment Sub-Segments. Lithography (Net Difference Score = -6) and Automation/Materials Handling (-6) are seen as the worst performing sub-segments over the next six months.

· Company Winners. Respondents choose Applied Materials (33%) as the company best positioned to outperform the semiconductor equipment industry over the next 12 months. KLA Tencor (21%) was second.

(D) Other Industry/Technology Trends

· Flash Memory – NAND vs. NOR: In the area of Flash Memory, respondents give NAND chips (23%) a nearly three-to-one edge over NOR (8%) to perform best over the next six months. Another 21% say Both Will Perform Equally Well.

· New Technology Most Likely to Succeed. Nanotube RAM (11%) is seen as the new technology most likely to succeed in the market over the next 12 to 24 months.

· Biggest Impact from “Disruptive Technologies.” Respondents say Light-Emitting Polymers (24%) and Carbon Nanotubes (21%) are the “disruptive technologies” seen as having the biggest impact on the industry over the next 12 to 24 months.

Bottom Line: These survey findings point to slower overall growth in the semi industry for the 1st half of 2005, along with softer than expected fab capacity utilization.

Pockets of strength, however, are seen at the sub-segment level – led by RFID Chips and Communication Chips for Cell Phones. On the down side, Flash Memory Chips exhibited surprising weakness. At the company level, respondents see Texas Instruments as being the most likely to gain market share over the next 6 months, followed by AMD. Also, the results for Nvidia have improved significantly since our last survey.

Focusing on new “Disruptive Technologies,” respondents believe Light-Emitting Polymers and Carbon Nanotubes will have the biggest impact on the semi industry over the next 12 to 24 months.

The ChangeWave Alliance is a group of 5,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

Helping You Profit From A Rapidly Changing World ™

www.ChangeWave.com

Table of Contents

Summary of Key Findings4

The Findings5

(A) Overall Semiconductor Industry Trends5

(B) Semiconductor Companies: Best and Worst Performers12

(C) Semiconductor Equipment Sector 16

(D) Other Industry/Technology Trends19

ChangeWave Research Methodology25

About ChangeWave Research26

I. Summary of Key Findings

Introduction

Our previous Semiconductor survey (July 2004) showed signs of a downturn occurring n the industry. The current report looks at where things are heading for semiconductors in the 1st half of 2005 – based upon the findings from a December 21 - 28, 2004 survey of Alliance semiconductor industry members. A total of industry 66 members participated.

The survey results focus on four areas:

(A) Overall Semiconductor Industry Trends




II. The Findings

Total Respondents (n = 66)

(A) Overall Semiconductor Industry Trends

(1) Question Asked: Do you believe there will be double-digit growth for the semiconductor sector in the 1st half of 2005?*

CurrentSurveyDec ‘04

PreviousSurveyJul ‘04

PreviousSurveyApr ‘04

PreviousSurveyNov ‘03

PreviousSurveyAug ‘03


Yes - Double-Digit Growth in 1st half of 2005

15%

48%

78%

63%

28%

15%

Little Possibility of Double-Digit Growth in 1st half of 2005

68%

47%

20%

29%

52%

51%

Absolutely No Possibility of Double-Digit Growth in 1st half of 2005

12%

3%

2%

2%

14%

31%

Don't Know

5%

2%

0%

5%

6%

2%

*Note: In the current survey we are asking about the ‘1st half of 2005’, while in the July ’04 and April ’04 questions we are asking about the ‘2nd half of 2004’. In the other previous survey questions we asked about either the 'current quarter' or 'next quarter'.

Slower Growth Projections for 2005. Fifteen percent (15%) of total respondents believe there will be double-digit growth for the semi industry in the 1st half of 2005. This is a significant decrease from five months ago (July 2004) when 48% believed there would be double-digit growth for the industry.

(2A) Question Asked: Which of the following semiconductor sub-segments do you think will perform the best over the next six months? (Choose No More Than Two)





Communications Chips for Cell Phones

44%

39%

37%

42%

RFID Chips

39%

25%

33%

31%

Graphics/Video Chips

24%

16%

17%

24%

Power Management

23%

NA

NA

NA

Communications Chips for Telecom and Data Networking Gear

18%

17%

17%

13%

Analog Chips

14%

17%

18%

11%

Flash Memory

11%

38%

30%

33%

Logic/Programmable Chips

9%

9%

8%

7%

Memory Chips

3%

6%

17%

7%

Microprocessor Chips

3%

3%

5%

15%

(2B) Question Asked: And which of the following semiconductor sub-segments do you think will perform the worst over the next six months? (Choose No More Than Two)






32%

34%

33%

13%

Memory Chips

30%

20%

22%

16%


21%

31%

20%

35%


20%

14%

10%

20%

Analog Chips

18%

11%

18%

18%


14%

14%

18%

9%

Flash Memory

9%

6%

7%

9%


6%

12%

18%

15%

Power Management

5%

NA

NA

NA

RFID Chips

2%

5%

3%

9%

Net Difference Score – Current Survey (December 2004)

PerformBest

PerformWorst

NetDifferenceScore


44%

6%

+38

RFID Chips

39%

2%

+37

Power Management

23%

5%

+18


24%

14%

+10

Flash Memory

11%

9%

+2


18%

21%

-3

Analog Chips

14%

18%

-4


9%

20%

-11

Memory Chips

3%

30%

-27


3%

32%

-29

Change in Net Difference Score – Current Survey (December 2004) vs. Previous Survey (July 2004)

CurrentSurveyNetDifferenceScoreDec ‘04

PreviousSurveyNetDifferenceScoreJul ‘04

ChangeinNetDifferenceScore

RFID Chips

+37

+20

+17


+38

+27

+11


-3

-14

+11


+10

+2

+8


-29

-31

+2


-11

-5

-6

Analog Chips

-4

+6

-10

Memory Chips

-27

-14

-13

Flash Memory

+2

+32

-30

Best Performing Sub-Segments. Communication Chips for Cell Phones (Net Difference Score = +38) and RFID Chips (+37) are seen as the strongest semiconductor sub-segments over the next six months.

Worst Performing Sub-Segments. Microprocessor Chips (Net Difference Score = -29) and Memory Chips (-27) once again look to be the weakest performing sub-segments over the next six months.

Importantly, the prospects for Flash Memory (+2) (which was the best performing sub-segment in our July ’04 survey) are seen to have declined dramatically since our July survey (Change in Net Difference Score = -30).

(3A) Question Asked: Some analysts claim many fabs are running at 90% of capacity or more. Others question these numbers. Which of the following statements best reflects what you are seeing and/or hearing in terms of fab capacity utilization?





Fab Capacity utilization is tight (90% or more) overall

5%

39%

57%

13%

Fab Capacity utilization is firm (75% to 89%) overall

70%

45%

25%

65%

Fab Capacity utilization is softer than expected (less than 75%) overall

12%

2%

3%

7%

Don't Know

14%

12%

12%

7%

Other

0%

2%

3%

7%

Softer Fab Capacity Utilization. Only 5% of respondents believe fab capacity utilization is “tight” (90% or more), a considerable 34 point decline since our July 2004 survey. The percentage reporting “softer than expected” fab capacity (12%) rose 10 points.

(3B) Question Asked: Which of the following statements best reflects what you think will occur regarding capital spending on new fab capacity over the next 12 months?



Spending will increase significantly over the next 12 months

3%

17%

Spending will increase marginally over the next 12 months

53%

64%

Spending will not increase over the next 12 months

23%

16%

Spending will fall over the next 12 months

9%

3%

Don't Know

12%

0%

Marginal Increase in Capital Spending. While a majority (56%) of respondents see an increase in 2005 capital spending on new fab capacity, that’s 25 points less than in our July 2004 survey.

(3C) Question Asked: And which one of the following four categories do you see as the number one area for capital spending by chip companies over the next 12 months?




PreviousSurveyAug ‘03

PreviousSurveyJan ‘03


PreviousSurveyMay ‘02

New 300mm Fab Construction

44%

39%

35%

12%

32%

33%

22%

New 200mm Fab Construction

3%

2%

3%

NA

NA

NA

NA

Fab Upgrades for Shrinking to .18 Micron or Less

23%

30%

30%

58%

37%

42%

50%

Fab Upgrades to Support Increased Shipment Volume

9%

12%

22%

8%

8%

9%

13%

Don't Know / No Answer

21%

18%

10%

20%

16%

7%

6%

Where will Spending Occur? New 300mm Fab Construction (44%) is seen as the number one area for capital spending over the next 12 months, a 5 point increase over the July 2004 survey. Fab Upgrades to .18 Micron or Less (23%) is still second, but it dropped 7 points from the last survey.

(3D) Question Asked: Which of the following semiconductor sub-segments - if any - are currently exhibiting signs of an inventory buildup (i.e., oversupply)?

Memory Chips

15%


14%


9%

Analog Chips

9%

Flash Memory

6%


5%


5%


2%

RFID Chips

0%

Power Management

0%

None of the Above

3%

Don't Know

33%

(3E) Question Asked: And which of the following semiconductor sub-segments - if any - are currently exhibiting signs of a shortage (i.e., in short supply)?

RFID Chips

9%


6%


6%

Flash Memory

6%

Analog Chips

3%


2%


2%


2%

Power Management

2%

Memory Chips

0%

None of the Above

21%

Don't Know

42%


Inventory Oversupply

Inventory Shortage

NetDifferenceScore

Memory Chips

15%

0%

+15


14%

2%

+12

Analog Chips

9%

3%

+6


9%

6%

+3


5%

2%

+3


5%

2%

+3

Flash Memory

6%

6%

0

Power Management

0%

2%

-2


2%

6%

-4

RFID Chips

0%

9%

-9

Inventory Status. Memory Chips (Net Difference Score = +15) and Microprocessor Chips (+12) are the sub-segments seen as showing signs of an inventory buildup. Conversely, RFID Chips (-9) are seen as showing signs of a shortage.


(4A) Question Asked: Let's focus on the chip companies themselves. Based on your own knowledge and what you are seeing in the industry, which of the following chip vendors are most likely to pick-up market share over the next six months? (Check All That Apply)





AMD

35%

17%

15%

15%

Texas Instruments

35%

31%

50%

45%

Intel

17%

20%

23%

40%

Broadcom

15%

19%

15%

11%

Taiwan Semi

14%

19%

NA

NA

ATI Technologies

12%

11%

5%

15%

National Semiconductor

12%

14%

15%

11%

Nvidia

12%

5%

15%

16%

Sandisk

12%

23%

18%

29%

Analog Devices

11%

14%

22%

15%

Silicon Images

11%

11%

22%

NA

Xilinx

11%

22%

17%

16%

Linear Technology

9%

11%

NA

NA

LSI Logic

9%

6%

7%

7%

IBM

8%

NA

NA

NA

Applied Micro

6%

9%

NA

NA

Micron

6%

8%

NA

NA

Genesis Microchip

5%

3%

7%

9%

Intersil

5%

2%

5%

4%

Maxim Integrated Circuits

5%

11%

12%

13%

Pixelworks

5%

3%

5%

0%

Semiconductor Manufacturing International

5%

NA

NA

NA

Sigma Designs

3%

NA

NA

NA

ST Micro

3%

3%

12%

NA

Vitesse Semiconductor

3%

2%

2%

0%

Cirrus Logic

2%

11%

0%

7%

Zoran

2%

8%

13%

22%

Altera

0%

6%

8%

11%

Catalyst Semiconductor

0%

NA

NA

NA

ESS Technology

0%

2%

NA

NA

PMC-Sierra

0%

2%

NA

NA

United Micro

0%

5%

NA

NA

Other

3%

6%

10%

NA

(4B) Question Asked: And which of the following chip vendors are most likely to lose market share over the next six months? (Check All That Apply)





Intel

24%

25%

15%

7%

IBM

15%

NA

NA

NA

Broadcom

12%

6%

7%

11%

Micron

12%

11%

NA

NA


12%

9%

15%

15%

AMD

9%

16%

27%

24%

Zoran

9%

3%

5%

7%

Analog Devices

8%

3%

10%

7%

Intersil

6%

5%

7%

13%

LSI Logic

6%

12%

12%

11%


6%

3%

3%

5%

United Micro

6%

5%

NA

NA


6%

6%

5%

7%

Altera

5%

9%

7%

4%

Sandisk

5%

6%

8%

2%

Cirrus Logic

3%

5%

8%

11%

ESS Technology

3%

5%

10%

2%

Nvidia

3%

9%

8%

24%

Sigma Designs

3%

NA

NA

NA

ST Micro

3%

8%

10%

NA

Taiwan Semi

3%

2%

NA

NA

Texas Instruments

3%

6%

8%

2%

Xilinx

3%

11%

3%

2%

Applied Micro

2%

8%

NA

NA

ATI Technologies

2%

2%

2%

5%


2%

NA

NA

NA

Genesis Microchip

2%

3%

5%

5%

Linear Technology

2%

5%

NA

NA

Pixelworks

2%

3%

2%

5%

PMC-Sierra

2%

9%

NA

NA


2%

NA

NA

NA

Silicon Images

0%

0%

2%

NA

Other

0%

3%

2%

NA


Pick-up Market Share

Lose Market Share

Net Difference Score

Texas Instruments

35%

3%

+32

AMD

35%

9%

+26

Silicon Images

11%

0%

+11

Taiwan Semi

14%

3%

+11

ATI Technologies

12%

2%

+10

Nvidia

12%

3%

+9

Xilinx

11%

3%

+8

Linear Technology

9%

2%

+7

Sandisk

12%

5%

+7

Applied Micro

6%

2%

+4

Analog Devices

11%

8%

+3

Broadcom

15%

12%

+3

Genesis Microchip

5%

2%

+3

LSI Logic

9%

6%

+3

Pixelworks

5%

2%

+3


5%

2%

+3


12%

12%

0

Sigma Designs

3%

3%

0

ST Micro

3%

3%

0

Cirrus Logic

2%

3%

-1

Intersil

5%

6%

-1


5%

6%

-1


0%

2%

-2

PMC-Sierra

0%

2%

-2

ESS Technology

0%

3%

-3


3%

6%

-3

Altera

0%

5%

-5

Micron

6%

12%

-6

United Micro

0%

6%

-6

IBM

8%

15%

-7

Intel

17%

24%

-7

Zoran

2%

9%

-7

Change in Net Difference Score – Current Survey (December 2004) vs. Previous Survey (July 2004)

CurrentSurveyNetDifferenceScoreDec ’04

PreviousSurveyNetDifferenceScoreJul ’04


AMD

+26

+1

+25

Nvidia

+9

-4

+13

LSI Logic

+3

-6

+9

Texas Instruments

+32

+25

+7

PMC-Sierra

-2

-7

+5

ST Micro

0

-5

+5

Applied Micro

+4

+1

+3

Genesis Microchip

+3

0

+3

Pixelworks

+3

0

+3

Intersil

-1

-3

+2

ATI Technologies

+10

+9

+1

Linear Technology

+7

+6

+1


-3

-4

+1

ESS Technology

-3

-3

0

Silicon Images

+11

+11

0

Altera

-5

-3

-2

Intel

-7

-5

-2

Micron

-6

-3

-3

Xilinx

+8

+11

-3


0

+5

-5

Taiwan Semi

+11

+17

-6

United Micro

-6

0

-6

Cirrus Logic

-1

+6

-7

Analog Devices

+3

+11

-8


-1

+8

-9

Broadcom

+3

+13

-10

Sandisk

+7

+17

-10

Zoran

-7

+5

-12

Winning Companies. Texas Instruments (Net Difference Score = +32) topped the list of chip vendors respondents believe will gain market share over the next 6 months. AMD (+26) also looks to gain market share over the next 6 months. We believe this bullishness among respondents for AMD most probably relates to its microprocessor business. Nvidia also improved from our previous survey (Change in Net DifferenceScore = +13).

Losing Companies. IBM (Net Difference Score = -7), Intel (-7) and Zoran (-7) are seen as least likely to gain market share over the next six months.


(5A) Question Asked: Turning to Semi Equipment, which one of the following Semi Equipment sub-segments do you think will perform the best over the next six months? (Please Choose Only One)



LCD Manufacturing Equipment

29%

NA

Wafer Processing

15%

20%

Specialty

11%

8%

ATE/Packaging

8%

12%

Automation/Materials Handling and Software

8%

14%

Lithography

5%

20%

Don't Know

26%

25%

(5B) Question Asked: And which one of the following Semi Equipment sub-segments do you think will perform the worst over the next six months? (Please Choose Only One)




14%

16%

ATE/Packaging

12%

8%

Lithography

11%

9%

Specialty

9%

17%

Wafer Processing

8%

11%


5%

NA

Don't Know

42%

39%


PerformBest

PerformWorst

NetDifferenceScore


29%

5%

+24

Wafer Processing

15%

8%

+7

Specialty

11%

9%

+2

ATE/Packaging

8%

12%

-4


8%

14%

-6

Lithography

5%

11%

-6

Change in Net Difference Score – Current Survey (December 2004) vs. Previous Survey (July 2004)*

CurrentSurveyNetDifferenceScoreDec ’04

PreviousSurveyNetDifferenceScoreJul ’04


Specialty

+2

-9

+11

Wafer Processing

+7

+9

-2


-6

-2

-4

ATE/Packaging

-4

+4

-8

Lithography

-6

+11

-17

*Note: No Change in Net Difference Score is calculated for LCD Manufacturing Equipment, because it was not included as a semi equipment sub-segment in the previous survey.

Best Performing Semi Equipment Sub-Segments. LCD Manufacturing Equipment (Net Difference Score = +24) is seen as the top performing sub-segment over the next six months, with Wafer Processing (+7) second. Specialty Equipment (+2) showed a big improvement over our July survey (Change in Net Difference Score = +11).

Worst Performing Semi Equipment Sub-Segments. Lithography (Net Difference Score = -6) and Automation/Materials Handling (-6) are seen as the worst performing sub-segments over the next six months

(6) Question Asked: Which company would you choose as best-positioned to outperform the semiconductor equipment industry over the next 12 months? (Choose No More Than Three)

Applied Materials

33%

KLA Tencor

21%

Teradyne

12%

Varian Semiconductor Equipment

11%

Agere

9%

Lam Research

9%

Nanometrics

9%

ASM Lithography

8%

Amkor

6%

Credence

6%

Kulicke & Soffa

5%

Novellus Systems

5%

Advanced Energy Industries

3%

Advantes

3%

ASM International NV

3%

Veeco Instruments

3%

ATMI

2%

Cymer

2%

Photon Dynamics

2%

RVSI

2%

Semitool

2%

Tegal

2%

Axcelis Technologies

0%

Brooks Automation

0%

Mattson

0%

Rudolph Technologies

0%

Other

3%

Company Winners. Respondents choose Applied Materials (33%) as the company best positioned to outperform the semiconductor equipment industry over the next 12 months. KLA Tencor (21%) was second.


(7) Question Asked: Looking specifically at Flash Memory, which type of flash memory chip do you think will perform the best over the next six months - NAND or NOR?

Flash Memory (NAND)

23%

Flash Memory (NOR)

8%

Both Will Perform Equally Well

21%

Neither Will Perform Well

5%

Don't Know

44%

Flash Memory – NAND vs. NOR: In the area of Flash Memory, respondents give NAND chips (23%) a nearly three-to-one edge over NOR (8%) to perform best over the next six months. Another 21% say Both Will Perform Equally Well.

(8) Question Asked: The latest ChangeWave Alliance surveys also show strength in consumer electronics sales. Based on what you are seeing for 1Q 2005, is the semi industry building components on the assumption of strong consumer electronics sales growth, moderate growth, or no Consumer Electronics sales growth for 1Q 2005?

The industry is assuming strong (double digit) sales growth in Consumer Electronics for 1Q 2005

20%

The industry is assuming modest growth (single digit) sales growth in Consumer Electronics for 1Q 2005

61%

The industry is assuming little to no growth in Consumer Electronics for 1Q 2005

8%

Don't Know

12%

Consumer Electronics Sales Growth Assumptions. Twenty percent (20%) of respondents say the semi industry is assuming double-digit sales growth in Consumer Electronics for 1Q 2005, while 8% say the industry is assuming little to no growth.

(8A) Question Asked: Which components company(s) will benefit most if Consumer Electronics sales are strong (double digit) in 1Q 2005? (n = 13)

Texas Instruments

38%

Samsung

23%

Analog Devices

15%

Sandisk

15%

Other

54%

Texas Instruments (38%) is the component company that respondents say will benefit most if Consumer Electronic sales are strong in 1Q 2005. Samsung (23%) is second.

Sample of Alliance Member Responses:

· KDP6740 writes, "TI."

· AWC7045 writes, "TI."

· GEN8705 writes, "TI."

· KJO9758 writes, "TI, Analog Devices, Broadcom, Intersil."

· BEC2885 writes, "Sony, TI, TSMC."

· DEN7210 writes, "Samsung."

· KIM2800 writes, "Samsung electronic."

· CBI9651 writes, "Samsung & LG for LCD manufacturing...in Asian market."

· HFC8959 writes, "Analog Device."

· SIM3624 writes, "Sandisk."

· NEU3562 writes, "Nvidia, Sandisk."

· KSO3194 writes, "Cirrus Logic."

(9) Question Asked: Intel had a decent mid-quarter report and our latest IT Spending survey shows increased demand for desktop PCs in the 1st quarter of 2005. Based on what you are seeing for 1Q 2005, is the semi industry building components on the assumption of strong PC sales growth, moderate growth, or little to no PC sales growth for 1Q 2005?

The industry is assuming strong (double digit) sales growth in desktop PCs for 1Q 2005

5%

The industry is assuming modest growth (single digit) sales growth in desktop PCs for 1Q 2005

67%

The industry is assuming little to no growth in desktop PCs for 1Q 2005

14%

Don't Know

15%

PC Sales Growth Assumptions. Only 5% of respondents say the semi industry is assuming double-digit sales growth in desktop PCs for 1Q 2005 – but 14% say the industry is assuming little to no growth.

(9A) Question Asked: Which components company(s) will benefit most if desktop PC sales are strong (double digit) in 1Q 2005? (n = 15)

Intel

60%

Advanced Micro Devices (AMD)

20%

ATI Technologies

20%

Micron

13%

Samsung

13%

Nvidia

13%

Other

46%

Intel (60%) is the components company that respondents believe will benefit most if desktop PC sales are strong in 1Q 2005, winning by a three-to-one margin over Advanced Micro Devices (AMD; 20%) and ATI Technologies (20%).


· AWC7045 writes, "Intel."

· KIM2800 writes, "Intel."

· CLA8139 writes, "Intel."

· GEN8705 writes, "Intel."

· KJO9758 writes, "Intel, AMD, Micron, SMSC, ATI/Nvidia (it's always a toss-up)."

· HFC8959 writes, "Intel, Broadcom."

· BEC2885 writes, "Intel, Samsung, TSMC."

· KDP6740 writes, "Seagate, Marvel, Intel."

· KTE7744 writes, "AMD, Intel."

· ESH4187 writes, "AMD, Samsung, Micron."

· SIM3624 writes, "AMD."

· KSO3194 writes, "AMD"

· RUS0368 writes, "AMAT"

· DJE9527 writes, "Dell."

· NEU3562 writes, "Nvidia and ATI Technology."

· DEN7210 writes, "ATI Technologies."

These next two questions were on the next-generation, non-volatile memory marketplace.

(10) Question Asked: The market for next-generation, non-volatile memory is expected to explode over the next several years. Among the following new technologies, which one do you believe is most likely to succeed in the marketplace over the next 12 to 24 months?

Nanotube RAM

11%

FRAM

6%

MRAM

6%

Holographic Memory

3%

MEMS-Based Memory

2%

Molecular Memory

2%

Ovonic Unified Memory

2%

Polymer Memory

0%

None of the Above

6%

Don't Know

64%

New Technology Most Likely to Succeed. Nanotube RAM (11%) is seen as the new technology most likely to succeed in the marketplace over the next 12 to 24 months. FRAM (6%) and MRAM (6%) also received significant mention.

(11) Question Asked: Which semiconductor firm and/or equipment supplier do you think is best positioned to capture market share during the build-up phase of the non-volatile memory market? Why?


· SHU6149 writes, "Motorola has demonstrated progress on both MRAM and nanocrystal memory for embedded markets. It is difficult to make the memory modules based on novel non-volatile memory work currently. It seems less challenging for the embedded markets."

· BEC2885 writes, "Freescale, Cypress, Honeywell. These companies are furthest along in the development of MRAM technologies. My company provides the nickel-iron chemistry that is used in making the magnetic cells in MRAM devices, and these two companies are furthest along in developing the technology. Freescale has licensed their technology to Honeywell. I believe that Intel, Infineon, and IBM are also developing the technology, but they are a little behind."

· KDP6740 writes, "Intel because it has the resources and the technical competence in process and manufacturing."

· ESH4187 writes, "I don't think these technologies are ready for mass production. The traditional memory will prevail for 12 - 24 months."

(12) Question Asked: A "disruptive technology" can be thought of as a low-performance, less expensive technology that gains a foothold, improves, and then pushes aside an older, once-better technology. Which of the following potentially "disruptive technologies" do you believe will have the biggest impact on the semiconductor industry over the next 12 to 24 months?

Light-Emitting Polymers

24%

Carbon Nanotubes

21%

Inkjet Processes

11%

Molecular Transistors

5%

Protein-DNA Logic

2%

Don't Know

38%

Biggest Impact from “Disruptive Technologies.” Respondents say Light-Emitting Polymers (24%) and Carbon Nanotubes (21%) are the “disruptive technologies” seen as having the biggest impact on the industry over the next 12 to 24 months.

(13) Question Asked: Is your company primarily focused on the communications marketplace (telecom and data networking), business marketplace (computer and data storage hardware) or consumer marketplace (electronics)? (Check All That Apply)




Communications Marketplace (Telecom and Data Networking)

27%

27%

18%

Business Marketplace (Computer and Data Storage Hardware)

26%

15%

31%

Consumer Marketplace (Electronics)

26%

22%

22%

All of the Above

23%

38%

42%

Twenty-seven percent (27%) of respondents say their company is primarily focused on the Communications Marketplace. Respondents are equally split between a primary focus on the Business Marketplace (26%) and the Consumer Marketplace (26%). Twenty-three percent (23%) are focused in all three marketplaces.

(14) Question Asked: R&D efforts in the semiconductor industry often foreshadow major new product trends. Within your own company, what shifts (if any) do you see in R&D activity for 2005?

· TEL2904 writes, "Digital data processing."

· KJO9758 writes, "SIP - Systems in a Package, usually one die and components. PIP - IC package stacking using Flip Chip, wire bond and a combination of components. 3-D - multiple stacked die; now up to 6 die in the space that used to fit one die. 90nm is coming in small volume; 65nm not expected until 2006 in any volume. Low-k in 90nm is the next development followed by SOI 65nm in the advanced segment of the market. For most, 130nm and above still works and the prices are falling."

· PET4431 writes, "Low-k interconnect support. Copper wirebonding process."

· NEU3562 writes, "Low cost multi processors chipset."

· CHD7303 writes, "Outsourcing. 300MM fab. Integration (RF+DSP+CPU+Analog) to low cost."

· SHU6149 writes, "Outsourcing R&D has gained a lot of momentum in 2004. I expect more and more new products will come out of Asia."

· SIM3624 writes, "Increase spending in R&D."

· LYU7626 writes, "Strong uptick as usual."

· DJE9527 writes, "Steady R & D for our company."

· GEN8705 writes, "Single digit increase in R&D funding."

· ESH4187 writes, "Evolution rather than revolution."

· COS2687 writes, "R&D is more focused on the core products rather than new segments."

III. ChangeWave Research Methodology

This report presents the findings from a December 21 – 28, 2004 survey of ChangeWave Alliance semiconductor industry members on the outlook for the 1st half of 2005. A total of 66 Alliance members who work within the semiconductor industry participated.

The Alliance’s proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members.

ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, interprets and reconciles the information in a cohesive manner and converts the information into valuable quantitative and qualitative reports.

The Alliance has assembled its membership team from senior technology and business executives in leading companies of select industries. Nearly 3 out of every 5 members (58%) have advanced degrees (e.g., Master’s or Ph.D.) and 94% have at least a four-year bachelor’s degree.

The business and investment intelligence provided by the Alliance provides a real-time view of companies, technologies and business trends in key market sectors, along with an in-depth perspective of the macro economy – well in advance of other available sources.

IV. About ChangeWave Research

ChangeWave Research, a subsidiary of Phillips Investment Resources, LLC, identifies and quantifies "change" in industries and companies through surveying a network of thousands of business executives and professionals working in more than 20 industries.

ChangeWave has a very unique asset in its 5,000-member Alliance. We have assembled our membership team from a broad cross section of more than 20 vertical markets such as telecom, semiconductors, data storage, and biotechnology, along with a wide range of professional disciplines including CIOs, IT managers and programmers, executive management, scientists, engineers and sales personnel.

The ChangeWave Alliance is composed of senior technology and business executives in leading companies - credentialed professionals who spend their everyday lives working on the frontline of technological change.

This proprietary research and business intelligence gathering system provides a real-time view of companies, technologies and business trends in key market sectors along with an in-depth perspective of the macro economy - well in advance of other available sources. ChangeWave surveys its 5,000 Alliance members on a wide range of investment research topics and converts the findings into valuable investment and business intelligence reports. ChangeWave delivers its products and services on the Web at www.ChangeWave.com.

ChangeWave Research does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.

For More Information:

ChangeWave ResearchTelephone: 301-279-4200

9420 Key West AvenueFax: 301-610-5206

Rockville, MD 20850www.ChangeWave.com

[email protected]

Helping You Profit From A Rapidly Changing World ™

www.ChangeWave.com

January 14, 2005

Semi Industry

Sub-segments

Best Performers:

Communication Chips for Cell Phones (Net Difference Score = +38)

RFID Chips (+37)

Weakest Performers:

Microprocessor Chips (Net Difference Score = -29)

Memory Chips (-27)

Flash Memory also Weakens

Flash Memory has declined dramatically since July (Change�in Net Difference�Score = -30)

Winning Companies:

Texas Instruments (Net Difference Score = +32)

Slower Growth Expected for Semi Industry in 2005

15% of total respondents believe there will be double-digit growth for the semi industry in the 1st half of 2005, a significant decrease from five months ago (July 2004) when 48% believed there would be double-digit growth for the industry

Softer Fab Capacity Utilization: Only 5% see fab capacity utilization as “tight” (90% or more), a considerable 34 pt. decline since our July 2004 survey; the percentage reporting “softer than expected” fab capacity (12%) jumped 10 points.

Semi Equipment Sub-segments

Best Performers:

LCD Manufacturing Equipment (Net Difference Score = +24)

Wafer Processing (+17)

Most Improvement:

Specialty Equipment (+2) showed a big improvement over our July survey (Chg in Net Difference Score = +11)

Weakest Performers:

Lithography (Net Difference Score = -6)

Automation/Materials Handling (-6)

Company Winners:

Applied Materials (33%)

KLA Tencor (21%)

Copyright ©2005 ChangeWave Research

All rights reserved.

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Copyright ©2005 ChangeWave Research

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Documents

COMPNAY REPORTS - ChangeWave · Web view2005/01/14 · Applied Materials 33% KLA Tencor 21% Teradyne 12% Varian Semiconductor Equipment 11% Agere 9% Lam Research 9% Nanometrics 9%