The Week In Review: Manufacturing

Tesla Motorsplans to build a new 35-GWh, lithium-ion cell production facility for its electric vehicles. It sounds like a good idea. But the factory will bring about only amodest reduction in battery costs, and could create significant overcapacity in the arena, according toLux Research. “The Gigafactory will only reduce the Tesla Model 3’s cost by $2,800, not enough to sway the success of the planned lower-cost EV,” said Cosmin Laslau, an analyst at Lux Research.

Speaking at the 2014CitiTechnology Conference this week, Martin Anstice, president and chief executive ofLam Research,gave an outlookfor the fab tool industry. He also discussed the dynamics in the 3D NAND and finFET arena.

Also at the 2014 Citi Technology Conference, Bob Halliday, senior vice president and chief financial officer ofApplied Materials,gave a bullish outlookfor the fab tool market for both 2014 and 2015. He also discussed Moore’s Law, 3D NAND, finFETs and other topics. And Applied’s acquisition of Tokyo Electron Ltd. is still on track and is expected to close by year’s end, he said.

Advantesthas again won the annualOutstanding Award in Service and Support fromSTATS ChipPAC.

GlobalFoundriesannounced that Louis “Lou” Lupinhas joined the companyas senior vice president and chief legal officer. Lupin succeeds Alexie Lee, who had served as GlobalFoundries’ general counsel since the inception of the company and who has recently taken on the role of chief of staff to the CEO.

United Microelectronics Corp. (UMC)and富士通Semiconductorannounced an agreement for UMC to become a minority shareholder of anewly formed foundry subsidiaryof Fujitsu Semiconductor. The subsidiary will include its 300mm wafer fab located in Kuwana, Mie, Japan. UMC’s 40nm technology will be also licensed to Fujitsu Semiconductor. UMC will invest 5 billion yen as an initial investment by which UMC will subscribe for approximately 9.3% of the company’s shares.

TheEuropean Commission (EC)has found and sanctioneda cartel set up by companies producing smart card chips. In total, the EC has imposed a fine of 138 million euros. The companies involved wereInfineon, Philips, SamsungandRenesas.

Construction of Samsung andSK Hynix’snew DRAM fabrication plants will be finished in 2015, and next year’s plans formanufacturing capacity are currently being changed, according toDRAMeXchange.

According to a new forecast fromIDC全球phablet出货量(sc的智能手机reen sizes from 5.5 to less than 7 inches)will reach 175 million unitsworldwide in 2014, passing the 170 million portable PCs expected to ship during the same period. Next year, total phablet volumes will top 318 million units, surpassing the 233 million tablets forecast to ship in 2015.

Worldwide revenues in the Ethernet switch market (Layer 2/3) reached $5.7 billion in the second quarter of 2014, representing an increase of 6.2% year over year and 8.1% quarter over quarter. Meanwhile, worldwide router market revenues declined 4.0% year-over-year despite growing 7.6% sequentially over the seasonally weak 1Q ‘14,according to IDC.

In the second quarter of 2014,worldwide server shipmentsgrew 1.3 percent year-over-year, while revenue moved upward 2.8 percent from the second quarter of 2013, according toGartner.