By Mark LaPedus
A survey revealed that 41% of U.S. adults who are married or in a relationship and have a computer say that time spent on the PC is a source of stress in their relationship. In fact, 59% cited work-related issues as causing relationship strain and 75% indicated that finances were a cause of stress in their relationship. The survey was conducted online by Harris Interactive on behalf of Crucial.com.

Taiwan’s United Microelectronics Corp. (UMC) continues to fall behind its competitors. UMC recently said it will move directly from 28nm to 14nm finFETs, thereby skipping the 20nm node. The new problem: UMC is having yield issues with 28nm and is behind in ramping up the technology, according to the company.

GlobalFoundries has not committed to build another new fab in upstate New York. However, the company this week filed plans for the possible construction of a new plant with 475,000 square feet of manufacturing space, according to various reports.

At the Common Platform Technology Forum, GlobalFoundries announced results from the industry’s first implementation of a dual-core ARM Cortex-A9 processor using finFET transistors.

GlobalFoundries also disclosed several of its customers at the event, including Adapteva, Cyclos and Rambus.

Also at the Common Platform Technology Forum, IBM confirmed that extreme ultraviolet (EUV) lithography will likely miss the 10nm node. Now, the industry is looking at inserting EUV at 7nm. The delays are not surprising. What’s surprising, and scary, is that many of the problems with EUV are not engineering issues. They’re due to pure physics, namely how to generate enough consistent power for the EUV source. “We’re talking about physics challenges,” said Gary Patton, vice president of IBM’s Semiconductor Research and Development Center. “This is real physics.”

Cadence announced an agreement to acquire Cosmic Circuits, a provider of analog and mixed signal intellectual property (IP) cores.  In addition, GlobalFoundries has certified Cadence’s EDA tools for custom/analog design for its 20nm LPM technology.

Soitec’s SOI wafer shipments for radio-frequency (RF) applications have increased by 400% in the last two years.  In fact, SOI is having a profound impact on RF designs and processes.

Mentor Graphics announced the next-generation of the FloEFD concurrent computational fluid dynamics (CFD) simulation product.

Fujitsu and Panasonic will merge their semiconductor units and form a new company. For some time, the system LSI businesses of Fujitsu Semiconductor and Panasonic have struggled.

Packaging and assembly are key segments of the semiconductor supply chain in China. There are more than 200 companies competing in the packaging and assembly market in China, according to SEMI.

LED bulb prices are expected to drop from $23 per 1,000 lumens in 2012 to $10 per 1,000 lumens in 2015, and then down to $5 per 1,000 lumens by 2020, according to SEMI.

The BioMEMS market is expected to grow from $1.9 billion in 2012 to $6.6 billion in 2018, according to Yole Développement. The BioMEMS market includes pressure sensors, silicon microphones, accelerometers, gyroscopes, optical MEMS and image sensors, microfluidic chips, and microdispensers.

NAND flash revenue was $19.7 billion last year, down from $21.2 billion in 2011. Revenue will pick up this year and will rise to $22.4 billion after last year’s stumble, according to IHS iSuppli.

Facing a relentless onslaught from tablets, smartphones and solid state drives (SSDs), hard disk drive (HDD) market revenue in 2013 will decline by about 12% this year, according to IHS.

Polysilicon suppliers to the solar photovoltaic (PV) industry have reduced their plant utilization rates during the past six months, with average quarterly utilization rates falling below 70%, according to Solarbuzz.

Limited commitments by touch-screen suppliers and ultra-slim panel makers are putting a squeeze on the ultra-slim PC market, according to NPD DisplaySearch.

By Mark LaPedus
Get ready for the 2012 IEEE International Electron Devices Meeting (IEDM) in San Francisco. At the event, slated for today through Wednesday, GlobalFoundries CEO Ajit Manocha will give a keynote, entitled: “Is the Fabless/Foundry Model Dead? We Don’t Think So. Long Live Foundry 2.0!”

Here are some of the papers and events at the IEDM event:

*A team led by IBM will report on the world’s first high-performance hybrid-channel ETSOI CMOS device. Researchers have integrated a PFET having a thin, uniform strained SiGe channel, with an NFET having a Si channel, at 22nm.

*IBM will describe a fully-integrated SOI SRAM at 22nm.

*In a separate paper, CEA-LETI, STMicroelectronics, IBM, GlobalFoundries and Renesas will discuss FD-SOI for the 20nm node and beyond.

*STMicroelectronics will describe the performance of ultra-thin box and body technology. The SOI technology will provide a total power reduction of 30% to 40% at identical speed with respect to bulk thanks to back side gate biasing efficiency.

*National Chiao Tung University will discuss a high-performance Ge CMOS finFETs on a thin SOI wafer.

*Imec, GlobalFoundries and Samsung will talk about stress enhanced mobility for n- and p-FinFETs with both Si and Ge channels for the 14nm node and beyond.

*Applied Materials and Synopsys will present a paper entitled, “Is strain engineering scalable in FinFET era?”

*SuVolta, a developer of low-power CMOS technologies, announced the results that demonstrate the performance and power advantages of its Deeply Depleted Channel (DDC) technology.

*The SOI Industry Consortium has organized a symposium that will address the world of fully depleted SOI. The symposium will be held at the San Francisco Hilton Hotel today, concurrent with the IEDM 2012 Conference.

*The 14nm node is expected to be an inflection point for the chip industry, beyond which the resistivity of copper interconnects will increase exponentially and may become a limiting factor in chip design. Tomorrow, Applied Materials will host a forum in San Francisco to explore the subject.

Intel’s push in the foundry business has the industry talking. Can the chip giant give the traditional foundries a run for their money? Some say no. In a report, Hans Mosesmann, an analyst with Raymond James, said: “The chatter that Intel should become a foundry for Apple/Qualcomm as a positive for the company is amusing to us given that foundries are the low-end of the semiconductor manufacturing totem-pole. Does it make sense for Intel to build $10 billion shiny new fabs for foundry work? We think not for 45-50% gross margins, and ask IBM how the foundry investment turned out. Intel’s fabs are not meant for the fragmented nature of foundries and truth be known, Intel is a laggard in SoC manufacturing anyway (at least today). Regardless, a formalized foundry strategy would be an acknowledgment by Intel that its model isn’t working and a negative for gross margins.”

Thanks to investments from Intel, Samsung and TSMC, ASML is developing a 450mm EUV scanner. But EUV remains delayed. So the industry is hedging its bets. In an announcement at Semicon Japan, Kazuo Ushida, president of Nikon, said that the company plans to ship 450mm, 193nm lithography tools in 2017 through a joint development effort with Intel. Nikon plans to have 450mm-enabled ArF immersion prototype tools in 2015-16.

In a video on SEMI’s site, Paul Farrar, general manager of the Global 450mm Consortium (G450C), discussed the progress and impact of the G450C.

AMD has amended its wafer supply agreement with GlobalFoundries. As part of the plan, AMD will reduce its procurement of wafers from GlobalFoundries.

International Rectifier introduced a series of high-current, ultra-low dropout hybrid linear voltage regulators based on SOI.

A team of ST and CEA-LETI received the 2012 Général Ferrié Award. They were honored for their work on FD-SOI technology.

ST has taken the decision to exit ST-Ericsson after a transition period and is currently in negotiations on exit options. This disengagement process has started, with the transition expected to end during the third quarter of 2013.  ST will continue to support ST-Ericsson as its supply-chain partner, advanced process-technology partner (FD-SOI) and application-processor IP provider.

Soitec will hold a grand opening celebration of its North American solar headquarters and manufacturing facility in San Diego on Dec. 19.

The Center for Science Teaching and Learning (CSTL) and Applied Materials announced a new clean tech competition challenge that addresses the global problem of access to clean water. The program, which now includes students from Singapore, as well as Xi’an, China, and California’s San Francisco Bay Area, was created last year to inspire the next generation of leaders and innovators in clean technology.

As a result of an equity investment, Qualcomm will become a minority shareholder in Sharp.

Axcelis will exit the dry-strip business to focus on the ion implanter market. Axcelis will sell its dry-strip business to Lam Research.

CyberOptics announced the completion of a restructuring and staff reduction totaling approximately 10% of its global workforce.

Signetics will double its capacity for flip chip package assembly within its factory in Paju, South Korea.

For most of the last two decades personal computers have accounted for a third or more of annual IC sales, but standard PCs are now on the brink of being replaced as the largest end-use product category for integrated circuits, according to IC Insights.

Amid weak economic conditions, IHS is downgrading its forecast for the global semiconductor market in 2012, with revenue now expected to decline by 2.3% for the year.

Sony next year is expected to purchase $8.4 billion worth of semiconductors, up nearly 5% from $8.0 billion in 2012, according to HIS. Meanwhile, Toshiba’s spending will increase 2.0% to $6.1 billion in 2013, up from $6.0 billion in 2012. In contrast, spending at the other major Japanese consumer electronics OEMs, Panasonic and Sharp, will decline in 2013 and 2014.

Research firm devises phase-change transistor
Japan’s Riken Advanced Science Institute has created a new phase-change transistor type using vanadium dioxide materials. Demonstrated at about 1 volt in room temperature, the technology could provide a building block for low power devices, non-volatile memory and optical switches, according to Riken. The mission of Riken is to conduct comprehensive research in science and technology.

Riken has devised what it calls a metal–insulator–semiconductor field-effect transistor. The device uses the electrostatic accumulation of electrical charge on the surface of a strongly-correlated material. Riken made use of a fast phase-change material called vanadium dioxide. Vanadium dioxide transforms the material from a metal to an insulator. The phase change takes place at about 68 degrees Celsius.

Vanadium-dioxide double-layer transistor in off and on states. Source: Riken.

Riken discovered that electrostatic charging at a surface drives all the previously localized charge carriers in the bulk material into motion. This leads to the emergence of a three-dimensional metallic ground state, according to researchers.

This non-local switching of the electronic state is achieved by applying a voltage of only about 1 Volt. The results were reported in Nature.

Panasonic devises artificial photosynthesis system
Japan’s Panasonic has developed an artificial photosynthesis system that converts carbon dioxide to organic materials by illuminating it with sunlight at an efficiency of 0.2%.

The key enabler to this system is a nitride semiconductor technology. The development could be a foundation for a system capturing and converting wasted carbon dioxide from incinerators, power plants and industrial activities.

Carbon dioxide is one of the substances responsible for the greenhouse effect. Current artificial photosynthesis systems use structures such as organic complexes or plural photo-electrodes.

Panasonic’s artificial photosynthesis system has a simple structure. The company discovered that nitride semiconductor has the capability to excite the electrons with enough high energy for the carbon dioxide reduction reaction. In this case, nitride semiconductors can be used as a photo-electrode for carbon dioxide reduction.

The reduction process itself takes place on a metal catalyst at the opposite side of a nitride semiconductor photo-electrode. The metal catalyst plays a role in selecting and accelerating the reaction. The system with a nitride semiconductor and a metal catalyst generates mainly formic acid from carbon dioxide and water with light at a world’s top efficiency of 0.2%.

This development was presented at the 19th International Conference on the Conversion and Storage of Solar Energy held in Pasadena, California on July 30, 2012.

—Mark LaPedus

Synthetic diamond process enables quantum computing
There is a growing interest in the area of quantum computing. A quantum computer works by storing the 0s and 1s of information in quantum superposition states. They could one day solve problems that are impossible for even the fastest conventional supercomputers.

In one of the latest efforts, Element Six, Harvard University, the California Institute of Technology and Max-Planck-Institut für Quantenoptik, have devised a single-crystal synthetic diamond to enable the development of a quantum-bit memory. Using Element Six’s synthetic diamond technology and its chemical vapor deposition (CVD) process, the researchers also demonstrated a quantum bit memory that exceeds one second at room temperature.

This is said to be the first time that such long memory times have been reported for a material at room temperature, giving synthetic diamonds an advantage over rival materials and technologies, such as cryogenic cooling.

Mikhail Lukin of Harvard’s Department of Physics, said: “These findings might one day lead to novel quantum communication and computation technologies, but in the nearer term may enable a range of novel and disruptive quantum sensor technologies, such as those being targeted to image magnetic fields on the nano-scale for use in imaging chemical and biological processes.”

Element Six’s synthetic diamonds are ideal for applications that require extreme hardness and thermal conductivity. Applications include semiconductors, lasers, quantum computing, and magnetometry and bio-medical sensors.

ReRAMs take another step towards commercialization
R&D organization IMEC recently presented improvements in performance and reliability of resistive RAM (ReRAM) cells by process improvements and stack engineering. RRAM is a promising next-generation memory technology that could replace NAND flash.

IMEC demonstrated asymmetric bipolar RRAM cells with high-performance and ultra-low operation current at <500nA. A hafnium scavenging layer was proven to be key in the stack asymmetry of defect distribution and in the forming process. The state resistances were controlled by introducing aluminium oxide as insert layer, hafnium oxide was kept as a buffer material for further improving the filament resistance control, and stack thinning allowed a lower forming current.

These results were obtained in cooperation with IMEC’s key partners in its core CMOS programs, including Globalfoundries, Intel, Micron, Panasonic, Samsung, TSMC, Elpida, SK Hynix, Fujitsu, Toshiba/SanDisk, and Sony.

Seeking to cut costs — and reportedly preparing for a big merger — Japan’s Renesas Electronics Corp. has sold a fab within one subsidiary, Renesas Northern Japan Semiconductor Inc., to Fuji Electric Co. Ltd.

Renesas will transfer Renesas Northern’s Tsugaru factory, based in Goshogawara, Aomori, to Fuji Electric. The companies plan to complete the transfer on July 1, 2012.

As part of its previous merger with NEC Electronics Corp. in 2010, Renesas has been reviewing and consolidating its manufacturing sites. Now, according to recent reports, Renesas , Fujitsu Ltd., and Panasonic Corp. are in talks to spin out their System LSI design and development operations into a separate company. That fabless entity would work with another manufacturing-related spinout, managed by GlobalFoundries, which would take over two fabs now owned by Renesas and Fujitsu.

So far, however, Renesas, Fujitsu and Panasonic have yet to discuss the deal.

In the meantime, Renesas continues to cut costs. In November of 2010, Renesas decided to spin off its Mobile Multimedia SoC Business Division and transfer the business to a new consolidated subsidiary, Renesas Mobile Corp. The spin-off, which offers system-on-chip (SoC) products for mobile devices and car navigation systems, was followed by the purchase of the wireless modem business of Nokia Corp.

Then, in March of 2011, Renesas sold its wafer fabrication facility in Roseville, Calif., to Telefunken Semiconductors International LLC. That 200mm fab was previously owned by NEC.

In January of 2012, Renesas obtained a portion of Mitsubishi Electric’s land in the Kitaitami operation. In turn, Mitsubishi Electric acquired Renesas’ manufacturing building located within the premises of Mitsubishi Electric’s Kitaitami operation. Also in January, Renesas exited the large-sized display driver IC business. Renesas SP Drivers Inc., a consolidated subsidiary of Renesas Electronics, will continue to supply small- and mid-sized display diver ICs as in the past.

In March, Renesas sold its high-power amplifier unit and the business operation of its manufacturing site, the Nagano Device Division, to Murata. As part of this ongoing review process, an agreement was reached last week to transfer the Tsugaru Factory to Fuji Electric, which had been considering a new manufacturing facility to further expand the supply capacity of its power semiconductor business. Fuji will continue to manufacture products currently being produced at the Tsugaru Factory for Renesas.

By Mark LaPedus, SemiMD senior editor

The emerging resistive RAM (ReRAM) market continues to heat up, as Panasonic and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) will describe new breakthroughs in the arena.

At the International Solid-State Circuits Conference (ISSCC) in San Francisco on Wednesday (Feb. 22), TSMC will describe a ReRAM as part of the silicon foundry’s push in the embedded memory space. TSMC, along with National Tsing Hua University in Hsinchu, Taiwan, will disclose the development of a 0.5-Volt, 4-Mbit embedded ReRAM macro, based on a 65nm logic process.

At ISSCC, Panasonic will describe an 8-Mbit multi-layered cross-point ReRAM macro. The device has a 443-MB/second write throughput at 8.2nm pulse widths, which is twice as fast as competing efforts, according to Panasonic. Read access time is said to be 25ns.

Last year, Panasonic claimed to be sampling a 2-Mbit ReRAM, based on a tantalum and oxygen (TaOx) process. The 8-Mbit ReRAM uses the same technology, reportedly based on a 0.18-micron process.

Panasonic's ReRAM structure (Source: Company)

The ISSCC announcements follow what could be the hottest technology within the next-generation memory space. Elpida, Hynix, IMEC, Micron, Samsung, Sharp, Sony, and others are working on ReRAM.ReRAM is “based on the electronic switching of a resistor element material between two stable (low/high) resistive states. The major strengths of ReRAM technology are its potential density and speed,” according to IMEC.

FRAM, MRAM, phase-change, ReRAM and others fall into the so-called universal memory category. Developers of these technologies claim their respective technologies can replace DRAM, NAND, NOR — or all three.

Most next-generation memory types have failed to live up to their promises. They are difficult to make and scale. But some claim the floating gate structure in flash is expected to hit the wall at 14nm, thereby fueling the need for a new memory type.

There are a range of emerging applications for next-generation memories. One of the possibilities is so-called storage-class memories. In this application, there is a need for a new and faster memory that sits between the processor and DRAM in a system to boost I/O performance. In theory, a storage-class memory would offload many of the functions in a power-hungry DRAM.

Block diagram of ReRAM from National Tsing Hua University and TSMC (Source: TSMC, National Tsing)

Embedded is another application. Many foundries offer embedded DRAM IP for system LSIs and other applications, but the technology could soon hit the scaling wall.

In embedded applications, “MRAM and ReRAM have the most promise,” said Fu-Lung Hsueh, a TSMC fellow and director of the Design Technology Division for the foundry giant, in a brief interview at ISSCC.

For some time, TSMC and Qualcomm Inc. have been developing an embedded memory based on MRAM technology. In the future, Qualcomm hopes to incorporate the MRAM IP within its cell-phone chip offerings.

ReRAM is another possibility for the embedded market. TSMC and National Tsing Hua University are developing a ReRAM solution. Hsueh said the device is still in the “prototyping” stage and the work is being conducted at the university level.

That device is said to enable short write times at low voltages. The 4-Mbit macro has four 1-Mbit sub-arrays, comprising of 2,048 columns and 512 rows, according to a paper from TSMC and National Tsing Hua. The entities developed a body-drain-driven current-mode sense amplifier (CSA) and small voltage headroom (VHR) for larger sensing margins. Using a new sensing scheme, the device is said to have a 45ns random read time, according to the paper.

By Mark LaPedus and David Lammers

The consolidation of Japan’s semiconductor industry continues to accelerate, and GlobalFoundries may be playing a key role in a complex deal reportedly involving Renesas, Fujitsu, Panasonic, GlobalFoundries, and, perhaps, Elpida.

According to a report in the Tuesday (Feb. 7) edition of the Nihon Kezai Shimbun (Nikkei), Japan’s largest business-oriented newspaper, Renesas Electronics Corp. , Fujitsu Ltd., and Panasonic  Corp. are in talks to spin out their System LSI design and development operations into a separate company. That fabless entity would work with another manufacturing-related spinout, managed by GlobalFoundries, which would take over two fabs now owned by Renesas and Fujitsu.

The report said that if the deal goes through, perhaps sometime in March, the ventures would be receiving funding from the Innovation Network Corp. of Japan (INCJ), a deep-pocketed Japanese investment fund. The consolidation would be finalized in about a year, the story said.

The Nikkei report said the manufacturing spinout would take over Renesas’ Tsuruoka Fab, in Yamagata prefecture (a former NEC fab), and Fujitsu’s logic fab in Mie prefecture. The manufacturing spinout would contract for manufacturing-related services with a new company GlobalFoundries is setting up in Japan. The report makes no mention of any Panasonic manufacturing assets. Renesas operates several others fabs in Japan, making MCUs and discretes, which apparently would not be rolled into the manufacturing spinout.

(Source: Nikkei, Feb. 7)

The story (and the accompanying diagram, at right) also claims that the manufacturing spinout is interested in buying Elpida’s DRAM fab in Hiroshima. In a later report, Nikkei said Elpida officials will meet with GlobalFoundries executives soon to discuss the sale of the Hiroshima fab, but Elpida later said the story was incorrect. The story said Elpida would move DRAM manufacturing to Taiwan.

A GlobalFoundries spokesman said the merger report is “based on rumor and speculation, and therefore we can’t offer any comment.” He noted that there have been earlier rumors about GlobalFoundries buying a fab in Taiwan, and separate reports that GlobalFoundries would buy the Qimonda DRAM facility in Dresden. “We don’t have any announcements to make on this front,” he said.

The report said the ventures would receive funding from the Innovation Network Corp. of Japan (INCJ).

Formed in 2009, the INCJ is a public-private partnership and investment fund. The INCJ says it has an investment capability of approximately 900 billion yen ($10 billion).

Corporate partners in the group include Asahi Kasei, Osaka Gas, Sharp, Shoko Chukin Bank, Sumitomo, Takeda Pharmaceutical, Tokyo Electric Power, Toshiba,  JGC, Development Bank of Japan, Panasonic, East Japan Railway, Hitachi,  Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, General Electric Company of Japan,  and JX Nippon Oil & Energy.

The venture unit is no stranger to forming new entities. Last year, for example, INCJ, Hitachi, Sony and Toshiba signed a deal to merge their small- and medium-sized display businesses, which are operated by subsidiaries of Hitachi, Sony and Toshiba, in a new company to be established and operated by INCJ. The new entity is called Japan Display Inc.

Last month, the INCJ established a special purpose company in which it will invest in voice search technology for use in video streaming Web Sites. The technology is the result of research and development conducted by the National Institute of Advanced Industrial Science and Technology (AIST) and a previously established venture business based on AIST technology transfers.

Renesas was established in 2007 when Hitachi, Ltd. and Mitsubishi Electric Corp. merged their respective MCU-oriented chip units. In 2010, Japan’s NEC Electronics Corp., once the world’s largest IC vendor, merged its logic operations into the newly established Renesas Electronics Corp. In 1999, NEC and Hitachi shed their respective DRAM operations and formed Elpida Memory Inc. Hit with an oversupply of DRAM as consumer’s have switched to NAND-oriented tablets and smartphones, Elpida has been in merger talks with Micron Technology.

The shakeout

Over the years, Japan has lost its footing — and share — in the IC industry. In 1985, NEC was the world’s largest chip maker with sales of $2.1 billion, according to IC Insights Inc. Four other Japanese companies were ranked among the top 10, according to the firm. By 1990, Japanese semiconductor companies occupied the top three positions, led by NEC, which more than doubled its semiconductor sales over the five-year span to $4.8 billion. Six Japanese companies were represented among the top 10 semiconductor suppliers in 1990, according to the firm.

For 2011, IC Insights counted five U.S. companies, two South Korean firms, one European, and two Japanese companies among the top 10 semiconductor suppliers. Renesas and Toshiba were still in the top 10.

Indeed, there has been a massive restructuring — and shakeout — in Japan’s chip industry. In many respects, Japanese chip makers have been slow to react to the rapid changes in the IC industry.  For too long, Fujitsu, Renesas, Toshiba and other suppliers of logic chips and ASICs were tied to their integrated device manufacturing (IDM) fab strategies and were reluctant to change.

Many of these companies were saddled with too much fab capacity during the down cycles and were hit with massive losses. As a result, many were cash-strapped and unable to invest in new fabs and leading-edge processes. And many were slow to embrace fab-lite strategies when they finally did engage with the silicon foundries.

Unable to react to the changes — and hit by massive losses — Renesas, Fujitsu and Panasonic  face the ongoing trend in Japan: consolidation. And Japan’s lone DRAM maker, Elpida, faces an uncertain future amid huge losses and massive debt.

Late last month, Renesas posted a net loss of 2.4 billion yen ($31.2 million) on sales of 222.9 billion yen ($2.9 billion) in the third quarter. “Owing to semiconductor market downturn affected by stagnant global economy and the impact of Thailand’s flood as well as continuous trend of yen appreciation, semiconductor sales for the three months ended Dec. 31, 2011 were below the company’s expectation,’’ according to Renesas.

Renesas also announced revisions to its forecasts for the fiscal year ending March 31, 2012. Net sales are expected to total 885.0 billion yen ($11.6 billion), down 83.0 billion yen ($1 billion) from the previous forecast announced on Oct. 31, 2011. Net loss for the year is expected to be 57.0 billion yen ($741.2 million).

Late last month, Fujitsu reported a consolidated net loss of 4.3 billion yen ($55 million) for the third quarter of fiscal 2011, representing a deterioration of 20.8 billion yen ($270.4 million) from the corresponding period of fiscal 2010. Third-quarter net sales totaled 1.079 trillion yen ($13.842 million), down 1.5 percent from the corresponding period of the previous fiscal year. Sales of LSI devices and electronic components were hit by weak demand, according to Fujitsu.

In its components and device unit, Panasonic’s sales decreased by 15 percent amid a loss. “This result was due mainly to sluggish sales in semiconductors as well as declines in sales of general components and batteries,” according to Panasonic.

Panasonic issued a pro forma comment on the Nikkei report of the System LSI merger.  “The media report is not based on any official announcements by Panasonic. Though the company has been studying various plans for growth strategy of the business, nothing has been decided,” Panasonic said in a statement.

Kenji Tsuda, who has written several books about Japan’s semiconductor industry, said the merger appears to be a kind of “shotgun wedding” proposal, with the Ministry of Economics, Trade, and Industry (METI) probably thrusting the idea on reluctant managers at the three semiconductor operations involved.

“Now, global chip companies such as Infineon, NXP and Freescale are independent from their former parent companies. That is quite different from the Japanese semiconductor operations, which remain quite traditional,” said Tsuda.

He estimated that in the case of Renesas, 92% of its shares are controlled by NEC, Hitachi and Mitsubishi, even though it is listed as a public company on the Tokyo Stock Exchange.

Japan falters in chip rankings (Source: IC Insights)

By Mark LaPedus, SemiMD senior editor

For some time, Qualcomm Inc. has dominated the baseband or cell-phone chipset market. Others are also competing in the baseband market, such as Broadcom, Intel, Marvell, MediaTek, Renesas, Spreadtrum, ST-Ericsson and TI.

Now, there is a new wrinkle in the arena. Japanese telecommunications giant NTT Docomo Inc. has reached an agreement with five companies — Fujitsu Ltd., Fujitsu Semiconductor Ltd., NEC Corp., Panasonic Mobile Communications Co. Ltd. and Samsung Electronics Co. Ltd. — to establish a fabless joint venture company to develop and sell semiconductor products for mobile devices.

The big surprise is South Korea’s Samsung, which has not been part of Docomo’s major partnerships in the past. Missing in the group was Renesas, a long-time cell-phone chip partner with Docomo. Instead, Renesas is forming close ties with Nokia.

The joint venture company, to be formed by the end of March of 2012, will develop semiconductor products equipped with modem functionality for the LTE and LTE-Advanced mobile communications standards. The venture will leverage the six investing companies’ backgrounds in cellular communication technology, ASICs and foundry manufacturing.

Following the basic agreement, and as part of preparing to form the joint venture company, Docomo plans to invest 450 million yen ($5.8 million) to establish a subsidiary, called Communication Platform Planning Co. Ltd. The unit is headed by Mitsunobu Komori, executive vice president and chief technical officer of Docomo. Komori will become CEO of the unit.

Will Strauss, president of Forward Concepts, a research firm, believes the new venture will become a captive — not a merchant — player. The venture will devise cell-phone chips for the mobile phone units within Fujitsu, NEC and Panasonic. Docomo primarily sells these cell phones in Japan.

There are still more questions than answers in the new venture. Docomo-branded LTE cell phones, which are built around a baseband solution from Fujitsu, have been shipping for a year or so, Strauss said.

“I believe that Fujitsu fabbed Docomo’s current LTE baseband, (which) is shipping in phones by Panasonic, Fujitsu, etc. That baseband is based on licensed Tensilica DSP cores,” Strauss said.

Now, Samsung is in the mix, which is raising some eyebrows. “Samsung is currently using Ceva DSP (cores) in their LTE basebands,” Strauss said. “So it’s unclear whether Samsung is jumping ship to Tensilica or perhaps the entire group is looking at going another route (maybe Ceva) for their next-generation LTE basebands, called LTE-Advanced,” he said.

In any case, Samsung will likely provide foundry manufacturing services for this venture, especially at the leading-edge. “Samsung has a world-class foundry,” he said. In contrast, Fujitsu, the current foundry in the group, could be limited in making chips at the 40nm node. Beyond that, Fujitsu must resort to foundries like TSMC and others for its production needs.

Missing from the Docomo group is Japanese chip giant Renesas Electronics Corp. At one time, the company had close ties to Docomo as a cell-phone chip supplier. But recently, Renesas acquired Nokia’s ASIC/baseband business. At the same time, Renesas spun off that ASIC/baseband unit into a separate entity. Renesas, as well as Broadcom and ST-Ericsson, are shipping baseband chips to Nokia.

In any case, all vendors are trailing Qualcomm. According to Strategy Analytics, Qualcomm — with 41.7 percent revenue share — ranked number one in baseband chips in Q2 2011, followed by Intel, MediaTek, Texas Instruments and ST-Ericsson.

Qualcomm is shipping basebands to Apple and others. “Qualcomm has an excellent opportunity to benefit from the market transition from 3G to 4G cellular technologies as more phones use 3G and 4G radios (multi-mode radios), resulting in higher chip content, and given a shrinking competitive field with only ST Ericsson, Intel/Infineon, Broadcom, and Marvell real competitors at this point,” said Craig Berger, an analyst with FBR, in a recent report.

“Clearly (Qualcomm) is heavily investing in 3G and 4G technologies with an expanded product offering of baseband modem and integrated baseband/application processor solutions,” he said. “Qualcomm is focused on LTE solutions at 28nm, discussed increased efforts in TD-SCDMA basebands, and plans on pushing Snapdragon or lower-end solutions into end markets including computing, high-end smartphones, mainstream smartphones, feature phones, and even data card solutions.”

Qualcomm’s ARM-based Snapdragon is an integrated solution, which combines the baseband and an application processor on the same die. As smartphones and tablets move towards video and gaming applications, there is a push towards multicore application processors, Forward Concept’s Strauss said. Over time, some 60 percent of all smartphones will make use of an integrated solution, he said.

Multi-core smartphone application processors gained traction in Q3 2011, accounting for almost 25 percent of total smartphone applications processors shipped in Q3 2011, according to a recent report from Strategy Analytics. This growth can be attributed to strong holiday quarter demand for flagship multicore smartphones from major smartphone manufacturers.

According to Strategy Analytics, Samsung’s multicore applications processors for smartphones led the market with 57 percent unit shipment share in Q3 2011, followed by Qualcomm with 18 percent. Texas Instruments and Nvidia were next in the rankings. Samsung benefited from making the application processors on a foundry basis for Apple.