25-07-2012, 09:35 AM
(25-07-2012, 12:41 AM)mrEngineer Wrote: [ -> ](25-07-2012, 12:04 AM)l0nEr Wrote: [ -> ]Wow. Thanks to all the industry experts for their knowledge on the industry.
I'm a little confused about how the industry work.. as in the supply chain.. anybody know a place where i can find some understanding on how the industry works? I have problems trying to figure out what UMS makes actually, and how are they different from other 'precision engineering' firms such as Hi-P, Venture Corp., etc... (i guess i shouldnt be investing in things i dont understand).
My miserable knowledge only tells me that Intel hasnt slashed capex estimates, and Qualcomm and Nvidia are still short of chips.
Thanks! Help?
But i did notice that the Phlx semiconductor sector index has been on a downtrend since March...
https://www.google.com/finance?client=ob...NASDAQ:SOX
Hi-P and Venture are contract manufacturers which assembles the components and create a microcontroller and put the microcontroller into the plastic cover that was created using the injection moulds.
You can find more information from Kopikat's previous posting somewhere in the forum.
One more point on why replacement or maintenance capex is large in Semicon is because on top of monthly or annual prevent maintenance, the equipments parts have to be replaced to ensure that there are less particles generated after wear and tear. 1 dust particle can be the typical size of 1-2um while the nmos or pmos gate size is minimum now 22nm. So you can imagine the damage a particle can do to 1 chip. That is also why yields are so difficult to achieve as technology gets smaller.
Well, there is 1 GOOD NEWS for semicond industry..
And that is 450mm fab is finally going to get started in the next 6 mths...
But this is probably going to be located in USA...
Reason being why 450mm fab take off is so slow is because ASML, world leader in lithography tool refused to release the tools required for 450mm... All the other equipment makers are already ready to support 450mm but because ASML does not want to release the tool, the rest suck thumb...
This pissed off Intel to an extend that they bought into substantial ASML's shares and get them to release the tools...
Intel need the next generation tools to produce the next generation processors and only 450mm can justify the yield.. As mentioned by mrEngineer, the smaller the gate size, 1 dust can kill.. so to make the overall yield higher and cut down production cost, the wafer has to get bigger... that is why the Intel needs 450mm...
(25-07-2012, 08:34 AM)KopiKat Wrote: [ -> ]On the contrary, it was 'mrEngineer' who posted a good summary of the Electronics Industry in another thread.
Although I ought to place more focus on analysing Electronics related stocks as I do have a bit of core competence here, I find it more worthwhile to spend my time with other less complex industries (where I started with zero competence) like REITs (most times, inreasing rentals thereby raising DPU) or even SPH or Popular Hldgs. Why? Electronics biz is very cyclical (more downs than ups) and most times, highly competitive (especially on price). It's either you try to catch the cycles (buy at low cycle and sell at peak) or you have to figure out those in a successful niche or look for the leaders (the best, the strongest). I find it difficult as it keeps changing and I need to put in lots of time and efforts just to keep abreast of what's happening...
As for UMS, when I was looking at it briefly, their core competence is in Precision Engineering, with focus on Metal parts ie. machining, welding, anodising, plating,... and predominantly on Semicon Eqpt Makers, mainly on one key customer cum shareholder. Altho' their expertise can be easily ported over to other Industries like Aerospace, which uses metal parts, I don't see them as being very successful here...yet(?). I don't really know why, perhaps 'Nick' will know better. So, yes, in theory, UMS need not be too dependent on the highly cyclical semicon biz but in practice, they seem to be not succeeding in diversifying out. Perhaps the CEO is too busy developing his own biz...
I didn't follow Venture or Hi-P. But, from their websites and what I vaguely remembered, yes, 'mrEngineer' is right, they are more in the CEM biz.
Venture started out focussing on CEM biz. But, today, I see from their website, they have become more vertically integrated ie. they can do ODM and even ASIC design (highly margins here, I believe). Not sure if they had also integrated the Precision Engineering part, but not unlikely.
As for Hi-P, IIRC, the 'P' stood for 'Precision' ie. they started out as a Precision Engineering biz focussing on 'moulds' which are used to produce plastic parts eg. chassis. But, today, when I looked at their website, they have also become a more integrated co., which includes CEM. Still, I believe their core competence remains in Precision Engineering.
IMO, that's how both cos. had reacted to this declining profit margin kind of biz of the Electronics Industry ie. Vertical / Horizontal Integration.
So, you see, how much work it takes just to try to understand these biz? In comparison, it's less time consuming and more rewarding for me to pick up new knowledge in sunset industries (less exciting but not much changes) like book stores or even publishing... I hope..
Well, this is from my experience as an IA student in Shanghai Venture...
Venture is mainly involves in OEM biz.. Something like what Foxconn is doing for Apple...
Venture is involved in many types of electronics products and the bulk of the assembly line is in China... HP printer cartridges are assembled by Venture...
Venture is definitely facing cost pressure as the labour cost in China starts to rise.. especially in Shanghai..