According to an IC Insights report, the 47 percent full-year 2017 jump in the price-per-bit of DRAM was the largest annual increase since 1978, surpassing the previous high of 45 percent registered 30 years ago in 1988! This sounds interesting!
Are the rising DRAM prices aiding startup Chinese competitors? Are major DRAM suppliers somehow stunting global DRAM demand?
Dr. Walden C. Rhines, president and CEO, Mentor Graphics, a Siemens Business, said: “The DRAM business has always gone through cycles of imbalance between supply and demand. Growth of demand in the last 18 months has been stronger than growth of supply.
“Substantial investments in 2017 by the MOS (metal-oxide semiconductor) memory producers, as well as the addition of China to the supply chain, will correct this imbalance late this year or, at the latest, early next year.”
The DRAM price-per-Gb has been on a steep rise. To this, Dr. Rhines said: “It is a commodity, although there are many types of specialty DRAMs emerging. Because DRAMs are viewed by customers as a near-commodity, the price is heavily influenced by the availability of supply. Supply has been very tight during the last 18 months.
Malcolm Penn, chairman and CEO, Future Horizons, UK, added, “This is supply and demand, pure text-book economics.”
Are the rising DRAM prices opening the door for startup Chinese competitors?
Dr. Rhines noted: “Chinese competitors made their decision to invest in DRAM capacity long before the recent strengthening of demand in the balance of supply and demand. Of course, higher, or stable, pricing may make it easier for new producers to absorb the costs of ramping up new capacity and developing experience with a new technology.”
Malcolm Penn agreed: “Potentially yes, and to anyone else. Coca Cola were contemplating building DRAMs in the 1990s. DSRAM market boom, again, pure text-book economics. Whether or not they succeed is an entirely different matter. If the Chinese do enter the market, can they then survive the inevitable downturn and cycles? That remains to be seen!”
Can the startup Chinese DRAM producers field any competitive product soon? Dr. Rhines noted: “They probably can. But, they will have to develop a production base of “learning” to reduce cost, improve yields and maybe even reliability. This will take some time.”
Penn added: “Technically (i.e., meeting the spec), probably, yes. Reliability, probably no, for the Tier 1 customers (that will take several years to build up the production experience). Cost, definitely not!
“Their small fab scale and late learning curve start means that their die cost will be sizably higher than those of Samsung and SKH, and also Micron. Plus, their yields will be lower. Then, there’s the deep cash pockets issue to fund these ongoing cost disadvantages.”
In a separate situation, some 300mm fabs closing, for example, ProMOS. Dr. Rhines said: “It’s because of an imbalance of supply and demand for the products they make, thus limiting their profitability. It could also be because they don’t see an adequate investment return from the expensive new capacity investments, and therefore, find it more attractive to phase out some of their existing capacity.”
Malcolm Penn felt that the fabs were too old and technically obsolete.
Finally, are there more IC companies making transition to fab-lite or fabless business model?
Penn noted: “There’s no-one left to change! Everyone’s now fablite or fabless, except for Intel and Samsung (logic) and the memory manufacturers.”
Dr. Rhines said: “Based upon the growth of foundry revenue vs. total semiconductor revenue growth, there must be a continuing transition of capacity away from IDMs toward foundries. In addition, IDMs like Samsung are finding it economic to build the foundry business to increase the volume base of products that utilize their technology and capital investment.”
Artificial Machines enables smart product innovation with strategic partnerships with Mentor Graphics and Qualcomm
There are a lot of things in electronics manufacturing happening across, in China, Japan, Korea and Taiwan. When that activity in electronics manufacturing happens in India, it is a matter of great pride for the country. The company bringing pride to India is the Pune-based Artificial Machines.
Artificial Machines was founded in April 2008. Headquartered in Pune, India, it has sales office on Wall Street, New York, USA. It is focusing on IoT, smart machine design, and artificial intelligence (AI).
Manish Buttan, CEO, Artificial Machines, said: “We are one of the oldest IoT companies. We work with automotive and electronics companies. The HAZE platform was developed in 2015. We are focused on converting traders to makers. We are designing over 20 product lines in consumer electronics.
“We are currently building the TV platform for Videocon and the Videocon Aryabot 2 AC, which is in progress right now. For Eureka Forbes, we have done a few water purifiers. We are also working on a few products for Tata Housing including a door phone, smart lock, smart camera, fire safety, and several products for Godrej & Boyce.
“We are a design house, and designers at the PCB level. We make everything in India. The idea is to develop the IP. We can connect anything built on the HAZE platform. For example, a video doorphone has built-in VoIP. We are lowering the automation costs as well.”
What is HAZE?
Artificial Machines has developed the HAZE platform. The HAZE platform is not just an IoT platform. It is a smart product innovation platform.
“We will develop artificial intelligence for cars by 2018. We will also build the entire electronics for the cars,” Buttan added.
Artificial Machines has partnered some of the largest OEMs in India that have licensed the HAZE platform to develop a range of products in India. Buttan said: “As of today, we have five licensees – Eureka Forbes, Godrej & Boyce. Tata Housing, Usha International, and Videocon. Their products will soon show the ‘Powered by HAZE’ Logo.
“All HAZE Platform Intellectual Property belongs to Artificial Machines. Our customers are promoting the platform by adding our logo to their products. The HAZE License requires that the primary components be purchased through us. The HAZE IP is free to license for customers and we charge a subsidized customization fee for modify HAZE for their requirements. We are heading into a $20-$50 million turnover over the next five years.
“PCBs are being made in India. Also, in China. With Usha, we are doing smart fans, air coolers and lighting brands. With Godrej & Boyce we are doing refrigerators, ACs, smart washing machines, etc.
Over the years, Artificial Machines has participated in developing products such as the Mahindra XUV BlueSense App, Savant home automation System, Vidyo conference platform, Lifeshield home security system, Brookstone grill monitoring app / baby monitor app, and the Videocon Aryabot AC, which are in the market.
Products to be launched include a few water purifiers, smart refrigerator, and next-gen air conditioners. Products that will be completing this year include air coolers, smart lighting, Android TVs, Android refrigerators, video door phones, smart locks, smart cameras, fire safety equipment, and washing machines.
Roles of Mentor Graphics and Qualcomm
What role does Mentor Graphics play in all of this? Mentor Graphics came into the picture, and gave Artificial Machines their tools. Mentor PCB development and validation process involves over 75 processes of reliability. Mentor Graphics has strategically partnered with Artificial Machines and invested EDA tools worth $15 million.
This makes Artificial Machines have the world’s best design tools in PCB design, embedded, automotive, chip design, and manufacturing validation.
Buttan said: “We have a strategic partnership with Mentor Graphics. All of the tools are available to traders. We also have an agreement with Qualcomm. Each OEM can innovate their ideas.”
Qualcomm has been very supportive with the Snapdragon chip licensing to Artificial Machines. Microchip is a premium partner for low-and mid-segment processors. All of these give Artificial Machines some of the widest range of processors and platforms to work with – Bare Metal, Linux and Android. This makes it easy for customers to build Android hardware with HAZE licensing.
Artificial Machines also works closely with several large global manufacturers. Having in-house Valor manufacturing validation tools allows it to provide pre-validated hardware for manufacturing.
Thanks to Mentor Graphics for introducing me to this company.
It has been a long and splendid journey. I wish that my parents — Bina and Pramode Ranjan Chakraborty — were still alive! This is dedicated to both of you.
Special mention needs to be made of my wife, Shima Chakraborty, who has been my constant companion and source of strength, since my mother passed away.
What memories I have! Nani Narayanan of Motorola lent me his mobile phone so I could make my first call to my wife, Shima, in 1995, at a trade show. Of course, I was well into Apple, Telstra, Cisco, and some other global companies at the time.
Association of Radio Industries and Businesses (ARIB) was there, from Japan, to promote the use of PHS (personal handyphone system) in India in 1995. The Israel delegation was there in India, again in 1995, to sell security products. Anil Prakash and his PTC India chapter, visit to AT&T and Advantech with Pravin Rikhy.
I first heard of TSMC and other semiconductor majors in 1996, when I arrived in Hong Kong. I became friends with Intel, Texas Instruments, STMicroelectronics, and later, Mentor Graphics, Cadence and Synopsys. In Oct. 2006, at Global Sources, I selected the New Products Gallery at the China Sourcing Fair.
My visit to Ericsson’s fab in Kista, Sweden, in 2000, Infineon’s fab in Dresden, Germany, 2002, Intel’s in 2008, Samsung in 2014! I happened to break the news of TD-SCDMA in 2000, and later, visited Siemens in 2002 to have a first look at the handset. Well, there are so many memories to share. I can go on! 🙂
I have to thank all of my classmates and members of my BHS cricket team, my guru, Keshtoda (Shankar Ghosh), Dabbu (Pushpendra), Raju (Rajkumar), Lippi (Rajiv) and recently, Kitty, Len, Raj, etc. Lately, Aanchal, Geri, Geetanjali, Usha, Varsha, Sanjana, and so many others. At Global Sources, I have Alfred Cheng, Claudius Chan, Daniel Tam, John Ng, and so many others to thank.
A special thanks to Rob Gunayan and everyone at EEWeb!
Let’s turn our attention to semiconductors. The key question: how is the industry performing?
Now, the Semiconductor Industry Association (SIA) has put it as $26 billion for May 2016, an increase of 0.4 percent compared to previous month’s total of $25.9 billion, but a decrease of 7.7 percent compared to the May 2015 total of $28.1 billion.
If we look at SEMI’s North American semiconductor equipment industry figures,
the three-month average of worldwide bookings in June 2016 was $1.71 billion. The bookings figure is 2.1 percent lower than final May 2016 level of $1.75 billion, and 12.9 percent higher than June 2015 order level of $1.52 billion.
However, IC Insights has lowered its 2016 semiconductor market forecast to -1 percent. It says, ” Rarely can there be strong semiconductor market growth without at least “good” worldwide economic growth to support it. ”
Besides the impact of Brexit on the UK, and how it can impact the European semiconductor industry, the DRAM industry is said to register a 19 percent drop of $8.5 billion this year to $36.5 billion. The semiconductor market growth, excluding DRAM, is forecast to be +2 percent for 2016.
As the SIA puts it, “additional research is needed as we transition to an even more connected world, enabled by innovations like the IoT.”
According to the SIA, research is needed in areas such as energy-efficient sensing and computing, cyber-physical systems, intelligent storage, real-time communication ecosystem, multi-level and scalable security, next-generation manufacturing paradigms, insight computing, and an IoT test platform.
Why can’t today’s computers process data like the brain? Brain-inspired computing has been a focus area. How that will pan out would make interesting reading.
Dear friends, how have you all been? It feels really good to be back! It has been nearly tw0 years that I have been away. You may want to know what I have been doing so far?
Well, first, I was Head of Content at CIOL, and later, went off to Singapore for a stint at Control Engineering Asia. However, early this year, I experienced a massive heart attack, that put me off for some time!
Thanks to all of your best wishes, I am once again, back!
I will continue to write about my favorite topic – semiconductors and electronics. As well as topics around active/passive components, automation technologies, automotive, ICs, IoE/IoT, LEDs, MCUs, MPUs, photonics, PV/thin film solar, robotics, security, telecom, etc.
Hope you all like and enjoy. 🙂