UMS Holdings

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Global semiconductor industry to remain strong in 2Q-3Q14, says TSMC chairman

Josephine Lien, Hsinchu; Steve Shen, DIGITIMES [Friday 28 March 2014]

The global semiconductor industry will remain promising in the second and third quarters of 2014, according to Morris Chang, chairman of Taiwan Semiconductor Manufacturing Company (TSMC).

The production value of Taiwan's semiconductor industry is expected to reach NT$2 trillion (US$65.46 billion) in 2014, buoyed in part by TSMC's leading market position in the 28nm process and the commencement of the 20nm process, Chang said on the sidelines of the annual meeting of the Taiwan Semiconductor Industry Association (TSIA).

The mobile device market, led by smartphones, will continue to prosper in the next two years, serving as the growth engine of the semiconductor industry, Chang commented.

Internet of Things (IoT) will be the next big thing after smartphones to drive revenue growth in the semiconductor industry, Chang noted.

However, the semiconductor industry will not be the biggest beneficiaries in the IoT era, but will play an important role as the basic supplier in the IoT ecosystem, Chang added.

While the global semiconductor industry was growing at a rate of 3-5% over the past 2-3 years, some companies such as Qualcomm, MediaTek and TSMC have seen their revenues expand by nearly 20% annually during the same period as these firms have been able to keep up with the development of the mobile device industry, Chang asserted.

On average, each smartphone sold worldwide contributes US$8 to TSMC's revenues, and much higher to Qualcomm's, Chang noted.

In addition to foundry houses, the advancement of SiP packaging technology, MEMS sensors and low-power consumption chips will be essential to the development of the IoT ecosystem, Chang commented.

http://www.digitimes.com/news/a20140328PD214.html

(vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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Higher Semiconductor Spending To Drive Applied's Growth In 2014

March 28th, 2014 by Trefis Team

http://www.trefis.com/stock/amat/article...m=artPopin

(vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(28-03-2014, 10:19 PM)itskenneth Wrote: How about this scenario whereby he wants to increase dividend per quarter to 1.2 cents to reflect the growth and expansion of the Group’s business but wants to maintain the dividend at 1 cent a quarter, hence this bonus issue exercise?

Yearly dividend payout per share:

Before Bonus Share: Current Scenario
= 5 cents of Ordinary Dividend + X cents of Special Dividend
= 1 + 1 + 1 + (2 + X)
= 5 cents + X

After Bonus Share :
= 0.8 + 0.8 + 0.8 + (1.6 + 0.8 X ) = equivalent theoretical payout after adjusting for bonus issue
= 4 cents of Ordinary Dividend + 0.8 X cents of Special Dividend
= (0.8 + 0.2) + (0.8 + 0.2) + (0.8 + 0.2) + (1.0 + 0.8 X )
= 1 + 1 + 1 + (1 +0.8 X ) = alternative payout scenario – to maintain quarterly dividend of at least 1.0 cent.

1 + 1 + 1 + (1 + 0.8 X) or 1 + 1 + 1 + (2 + X), ultimately, the “lever” or the key determinant for total yearly payout still lies in X ?

Nevertheless, to be able to maintain paying out quarterly dividend of at least 1.0 cent AFTER the bonus issue in itself should reflect positively on the company - afterall, it is a bigger undertaking that involve greater commitment, IMO.

Have to wait and see if our prediction is correct.

(vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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It is an increasing trend for companies to maintain their dividend per share after bonus issue. It is one way to raise the dividend return to shareholders (the other being an increase in the absolute value of dividend per share). Naturally, the former has the twin advantage of boosting trading liquidity as well.

Post-bonus, to maintain the base 5.00 SG cents dividend, UMS needs to generate distributable cash of $21.5 million. This can be easily achieved in normal and good years judging by the cash-flow history of the Group.

OCF (including finance cost)

2010: $27.5 mil
2011: $34.6 mil
2012: $28.3 mil
2013: $27.7 mil

There is room for additional capex of $5 million p.a even if the 5 cents dividend is to be maintained. Let's not forget that the Group also has $29.2 million cash and no debt. Hence, I expect the base dividend to be maintained in FY 2014 barring a major dip in earnings in 2H.

(Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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(30-03-2014, 12:56 PM)Boon Wrote:
(28-03-2014, 10:19 PM)itskenneth Wrote: How about this scenario whereby he wants to increase dividend per quarter to 1.2 cents to reflect the growth and expansion of the Group’s business but wants to maintain the dividend at 1 cent a quarter, hence this bonus issue exercise?

Yearly dividend payout per share:

Before Bonus Share: Current Scenario
= 5 cents of Ordinary Dividend + X cents of Special Dividend
= 1 + 1 + 1 + (2 + X)
= 5 cents + X

After Bonus Share :
= 0.8 + 0.8 + 0.8 + (1.6 + 0.8 X ) = equivalent theoretical payout after adjusting for bonus issue
= 4 cents of Ordinary Dividend + 0.8 X cents of Special Dividend
= (0.8 + 0.2) + (0.8 + 0.2) + (0.8 + 0.2) + (1.0 + 0.8 X )
= 1 + 1 + 1 + (1 +0.8 X ) = alternative payout scenario – to maintain quarterly dividend of at least 1.0 cent.

1 + 1 + 1 + (1 + 0.8 X) or 1 + 1 + 1 + (2 + X), ultimately, the “lever” or the key determinant for total yearly payout still lies in X ?

Nevertheless, to be able to maintain paying out quarterly dividend of at least 1.0 cent AFTER the bonus issue in itself should reflect positively on the company - afterall, it is a bigger undertaking that involve greater commitment, IMO.

Have to wait and see if our prediction is correct.

(vested)

my point was that
Before Bonus Share: payout of 1 cent per share for 1000 shares is $10

so maybe they intend to increase dividend to 1.2 cents per share for the existing shareholders which equates to $12 for 1000 shares.

But through this bonus issue exercise, each existing 1000 share becomes 1200 shares and so this bonus issue exercise will allow the company to continue giving 1.0 cents per share which is an increase in the dividend payout to 12$ for the existing shareholder's new 1200 shares without changing the dividend payout amount.

maybe this addresses the rationale of giving due recognition to its shareholders for their continuing support for the Company because it would benefit existing shareholders more then the new shareholders.
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Mr Market seems to like the latest bonus issue and its share price is currently trading at multi-years high of 80.0 cents. Assuming the 5 cents base dividend is maintained post bonus issue, this will translate to an effective yield of 7.8% (excluding the 3.5 cents dividend for 4Q 2013).

(Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
Reply
TSMC likely to launch 16nm FinFET+ process at year-end 2014

Josephine Lien, Taipei; Steve Shen, DIGITIMES [Monday 31 March 2014]

Taiwan Semiconductor Manufacturing Company (TSMC) is likely to add two more advanced processes to its 16nm process portfolio in order to compete with the 14nm nodes to be released by Intel and Samsung Electronics, according to industry sources.

According to TSMC's original roadmap, the 16nm FinFET process is expected to enter trial production at the end of 2014. But TSMC now plans to release a 16nm FinFET+ process also at the end of 2014 and a more advanced 16nm FinFETprocess in 2015-2016, the sources noted.

The 16nm FinFET+ process is expected to enter volume production in early 2015 and may help TSMC win A9 processor orders from Apple, the sources indicated.

Some mobile fabless customers may directly adopt the 16nm FinFET+ process since it gives an additional die shrink, while migrating from 20nm, according to JP Morgan Securities.

The more advanced 16nm process is tentatively named as 16nm FinFET Turbo, the sources noted.

http://www.digitimes.com/news/a20140328PD213.html

(vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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I d like to buy a few more lots to avoid odd share numbers for bonus share. When to buy at this situation when it keep going high...

jeff
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(01-04-2014, 07:46 AM)Jeff Wrote: I d like to buy a few more lots to avoid odd share numbers for bonus share. When to buy at this situation when it keep going high...

jeff

Same situation. I've been waiting for a long time to add on but the price keeps going up. Seems too costly to add on now? Maybe can wait till XD. Hopefully, the bonus shares will be given only after that. Big Grin
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These are old articles, nevertheless, they provide interesting insights.

I guess it is not easy for AMAT in managing its client interests - afterall AMAT does know the "secrets' of its clients - and its clients are relying on AMAT's products and services to outperform each others - not a bad problem to have though.

Wondering if the "discount" given by UMS to AMAT in 2012 has to do with "rebate" to Samsung - haha !

(vested)
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Beyond 22nm: Applied Materials, the unsung hero of Silicon Valley
By Sebastian Anthony on December 1, 2011

In the shadow of major semiconductor manufacturers, a little-known but crucial company called Applied Materials has plied its trade for almost 45 years. Inside every Intel, GlobalFoundries, and TSMC silicon chip foundry, there are Applied Materials machines performing some of the finest handiwork known to man. It isn’t just chips, either: Applied provide the systems that enable Samsung and LG to make LCD displays, and Suntech and JA Solar to create photovoltaic solar power cells. Basically, if a company deals in silicon wafers, it’s almost guaranteed that Applied Materials equipment governs most or all of the fabrication process.

“The vast majority of chips in operation today have been through an Applied’s machine at least once. This includes memory, logic and other types of chips produced by integrated device manufacturers and foundries,” CTO Klaus Scheugraf told us in an interview.

To put a finer point on it, when Intel announces that it has reached 22nm, it has done so using Applied Materials equipment. This isn’t to say that Intel’s achievement is any less awesome, but it’s important that we draw a line in the sand before we go any further. Applied Materials provides the tools, but it is down to Intel to make the most of them through chemistry tweaks and chip design. It’s also important to note that AMD, Samsung, and TSMC all have access to the same tools. Applied Materials works closely with manufacturers to customize their solutions, but more on that later.

How is a silicon chip made?

If, like me, you thought that making a CMOS circuit is mostly a matter of lithographically etching paths onto a silicon wafer with a laser, you’re in for a surprise. Yes, lithography is a vital part of chip fabrication, but with modern processes (45nm, 32nm), and especially with new “3D” FinFET (22nm) designs, it is really just one step out of hundreds. Lithography is like laying down the concrete foundations of a skyscraper.

Geek.com has a fairly comprehensive guide on how a chip is made — from melting down sand, to etching, to testing, to binning — but basically, this is what you need to know: Once the chip’s pathways have been lithographically etched, the transistors and copper wire interconnects are grown using a combination of electroplating, ion implantation (doping), chemical vapor deposition, atomic layer deposition, and more. Furthermore, most of these processes can be broken down into tens of steps: ALD, for example, builds up the layers of a FinFET transistor atom-by-atom.

It’s not like all of these processes happen inside a magical, all-in-one, Willy Wonkaesque machine, either: To create a single FinFET transistor, for example, Applied Materials provides no less than seven different machines. The silicon wafers must be moved between each of these machines, usually inside an extremely tight vacuum. When you’re dealing with high-k dielectric layers that are just 10 atoms thick, a single atom of a contaminant can ruin the chip.

To top it all off, in a major foundry, this entire process will be almost completely automated — using software provided by Applied Materials, of course. Just so you get some idea of the scale of the process, too, bear in mind that a 300mm fab, as operated by the likes of Intel or TSMC, costs in the region of $4 billion to build. Each Applied Materials machine is around the size of an office desk or large chest freezer, and costs between $2 and $6 million each. Taking a median price of $4 million, that means there could be 1,000 separate machines in a large silicon foundry — all located within a cleanroom that is probably acres in size.

Tweaking

If every semiconductor manufacturer uses the same Applied Materials hardware, then why is there such a huge difference between the processes used and the chips produced? Why is Intel pushing ahead with 22nm FinFET chips, while GloFo still languishes behind with 32 and 45nm SOI?

The reason is twofold: First, as we alluded to earlier, Applied Materials provides the tools, but it is down to the chip maker (Intel, AMD) or the foundry (TSMC) to decide on the exact processes that are used to create a silicon die. Intel might have a six-layer process, while AMD only has five. Intel might have discovered a variant of hafnium oxide that provides a better high-k dielectric than TSMC. To this end, every chip maker retains some of the best CMOS chemists in the world to secure an edge over the competition. It is their job to really understand the specifications and limitations of Applied Materials machinery, and cajole the best chips out of them.

Second, while Applied Materials equipment is generic — you could buy a full set for $50 million and produce your own 45nm chip today! — the company works with individual manufacturers to tweak each of the machines. If Intel needs a nozzle changed or an piezeoelectric actuator upgraded, Applied Materials is happy to oblige. Like a souped-up car with go-faster stripes and fatter rims, each machine is fundamentally the same but customized to the exact needs of the client.

The great divide

In short, then, Intel couldn’t reach 22nm without working very closely with Applied Materials’ nanoengineers and chemists — but likewise, Applied also knows the deepest, darkest secrets about AMD’s latest chips. As you can imagine, this is potentially a huge conflict of interest. What if an engineer accidentally gave GloFo Intel’s FinFET secret sauce?

To get around this, Applied Materials actually has separate teams that work with each of its big clients — and an internal network with a very stringent permissions system in place. In theory, an Applied-Intel engineer never sees the Applied-AMD files, and vice versa. “We have strict policies and procedures designed to protect our customers’ confidential information. Protecting customer’s intellectual property is critical to our business culture,” Scheugraf told us, though we didn’t find out whether this segregation is enforced in the physical world as well.

Does Applied maintain separate cafeterias and common rooms for each of its teams? Is their Santa Clara campus split in five, with lookout towers, razor wire, and death strips between the buildings? We may never know. Considering Applied has been doing this for more than four decades, though, it presumably knows what it’s doing.

With this level of confidentially, foundries and Applied can enter into billion-dollar capital equipment and cross-licensing agreements that bring to bear their full, combined arsenal of corporate secrets and patents. It is only then that the first brood of 22nm, or perhaps even 14nm chips, are born.

To 22nm, and beyond!

While we’re certainly pushing the limits of silicon-based CMOS — the gap between two silicon atoms is 0.5nm — multiple patterning, immersion lithography, and 3D Tri-gate (FinFET) transistors mean that chips built with 16 and 11nm processes should be possible within the next few years. As the transistors and interconnects get smaller, so do the tolerances — and the cost per wafer, as you would imagine, increases. “If we look at the foundry transition from the 45nm node to the 14nm node, their overall spending per wafer is almost doubling in this transition due to increasing complexities associated with the three dimensional nature of the transistor, added steps for the interconnect, the increased use of double patterning and the advanced wafer-level packaging occurring at the advanced nodes,” Applied’s CTO told us.

Even so, Applied is doing its bit to increase yields and drive down costs. In a modern CPU there can be more than 60 miles (100km) of copper wiring, and through leakage and heat resistance it increases the total power consumption and heat dissipation of the chip by around 30%. Just this week, Applied Materials announced the Onyx System, which uses an atomic-level treatment to strengthen the dielectric (insulator) around those 60 miles of copper wire, increasing the number of usable dies (yield), and reducing overall power consumption of the chip by 3% — not bad, when one of the most important metrics in today’s computing climate is battery life. Scheugraf told us, incidentally, that some of the big players are already using the Onyx System on their new chips.

So there you have it: Applied Materials, the unsung hero of Silicon Valley that has been guiding the bleeding edge of CMOS since before Intel released its 4004 CPU in 1971. Judging by its entrenchment, expertise, and technology portfolio, Applied is in good stead to see us through to the physical limits of silicon at 11nm… and beyond, to graphene!

http://www.extremetech.com/extreme/10689...con-hero/2
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Samsung Electronics, Applied Materials Settle Row Over Leaked Chip Secrets

By Jun Yang and Victoria Batchelor
Nov 30, 2010 2:24 PM GMT+0800

Applied Materials Inc., the world’s largest maker of chipmaking equipment, agreed to sell gear to Samsung Electronics Co. at a discount for three years as part of an accord to avoid lawsuits related to industrial espionage.

Santa Clara, California-based Applied Materials will provide “volume-based rebates” on purchases of semiconductor products by Samsung and its affiliates, the U.S. company said in a statement yesterday. The agreement started Nov. 1.

South Korean prosecutors charged 10 employees of Applied Materials in connection with leaks of Samsung’s chip-making technologies to smaller rival Hynix Semiconductor Inc. through the equipment maker for more than four years, the Seoul Eastern District Prosecutors’ Office said Feb. 3. No charges were brought against the companies. Applied Materials said in February that its former South Korea head was among those indicted.

Samsung has “agreed to reconcile with Applied Materials related to technology leaks,” Nam Ki Young, a spokesman at the Suwon, South Korea-based company, said by telephone, declining to provide further details because they’re confidential.

The agreement does not affect criminal charges against individuals, including the ongoing proceedings against the current and former employees at Applied Materials’ South Korean branch pending in the Seoul Eastern District Court, the statement said

http://www.bloomberg.com/news/2010-11-30...onics.html
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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