Winners & Losers

What are AMD and Micron really doing with all that money they’re raising? What will happen to the price of DRAM and flash? And what does the price of water have to do with anything? All this and more…

Who’s Up?
Total wafer shipments were up slightly from last quarter, and 11.5 percent year over year. Does that mean they’re going to finally hire more support staff? For that matter, does it mean they’re going to hire any support staff ever again? Is there a link between the rise in productivity and the rise in coffee prices?

A professor at Purdue University claims he has a better way of producing hydrogen fuel from water. While this is a globe-cooling development, and one that certainly warrants a serious look, the hidden question is what this will do to the price and supply of water. There are ripple effects for every decision, no pun intended. And in places like the southeastern United States, there already is too little water to go around for a rapidly growing population.

Mentor Graphics’ Calibre platform has a loyal new fan—UMC. The foundry is now using Calibre for better yield at 90 and 65nm. Considering the foundry business has consolidated into a handful of large players at the advanced process nodes, the importance of this win in the EDA world should not be underestimated.

Sematech says there are real solutions emerging for cleaning wafers at 45nm. There have been some major advances in optics in the past couple years, allowing engineers to see individual atoms. And with insulation now measured in less than 10 atoms, in some cases, that’s become increasingly necessary. Now the question is whether they’ll be able to tell one atom from another.

Cirrus Logic replaced its CEO, who was ousted over stock options backdating. This is a painful but necessary step. It’s time to move on.

LG Philips LCD introduced a flexible color display. It won’t be long before you can roll up your display and shove it in your back pocket. That should leave the airport security staff scratching their heads.

Who’s Down?
Looking at first AMD, then Micron, you have to wonder what’s really going on. AMD is raising $2.2 billion, and Micron is raising another $1.1 billion. That begs two questions. First, why do they do this in increments of 1.1? Second, and arguably more important, when companies raise this kind of capital they’re either gearing up for a major purchase—or strings of purchases—or they’re in deep, deep trouble. So which is it?

Applied Materials turned in a strong Q2, but its projection for Q3 dragged the company’s stock down. This begs another question: Is capital equipment a leading indicator or a trailing indicator? And with the compression of the front and back end, can it be both—or neither?

NEC downgraded its profit forecast to $75 million instead of $333 million, the number it offered up in February. NEC is blaming lackluster sales of IT platform equipment. Translation: Vista didn’t boost sales like previous operating system releases.

Finally, it appears that DRAM and flash foundries are getting entirely too expensive for most players in the market. Remember the Sony battery recall? How about the collusion trials for price fixing?

–Ed Sperling, Editor in Chief