China's second- and third-largest contract chipmakers Shanghai Hua Hong NEC and Grace Semiconductor have agreed to merge in a sector in need of a consolidation and technology upgrades, sources said on Thursday.

Microprocessor vendor Advanced Micro Devices has decided to cancel APUs that Globalfoundries was set to make for it on 28nm process technology, according to online reports. Instead AMD will start afresh using the 28nm gate-last HKMG manufacturing process technology from alternative foundry TSMC, the reports said.

Samsung Electronics plans to invest a record KRW38 trillion (US$34 billion) in 2012, sharply up from around KRW30 trillion this year, local online news provider Edaily reported Wednesday, citing unnamed industry sources.

Globalfoundries has postponed its plan to start building the Gulf's first microprocessor-fabrication plant in Abu Dhabi next year.

MEMS foundry Silex Microsystems has licensed its Sil-Via technology for through silicon vias (TSVs) to Nanoshift for use in the early development of complex MEMS products.

Applied Materials CEO Mike Splinter told analysts on a conference call that he is now expecting chipmakers to spend US$1 billion less on new equipment than the company forecast in July. "We've seen demand from our foundry customers soften significantly in the past six weeks," Splitner said.

While global semiconductor revenue is projected to expand by 7.2% in 2011, Walden Rhines, chairman and CEO of EDA vendor Mentor Graphics, sounds a note of caution about maintaining this growth in 2012.

TSMC has begun trial manufacturing of next generation chips for Apple's mobile devices, according to a source with knowledge of the matter.

David Wang has resigned as CEO of Semiconductor Manufacturing International Corp. (SMIC), according to the China-based foundry, which named Wenyi Zhang chairman of the board of directors and acting CEO.

"What foundries are seeing more and more, and what we're seeing overall, is a very tight linkage to consumer demand. All of us are disappointed with demand for PCs this year, and tablets probably will be 20 million units short of what people thought was possible for the year..."

Citigroup chip analyst Glen Yeung has predicted some possible relationship whereby Intel might provide foundry services to manufacture some of Apple's custom chips that power iPhone and iPad devices. Those chips are made by Samsung at present.

Chip manufacturing firm Globalfoundries will begin construction of a new manufacturing plant in Abu Dhabi next year, the majority stakeholder of the company said on Friday.

Abu Dhabi's Advanced Technology Investment Company (ATIC) plans to increase its stake in the Globalfoundries microchip business to over 90% by the end of 2011, according to a senior executive. ATIC's stake rises as it pours investment into Globalfoundries, in which it last year acquired a 65.8% stake for US$2.1 billion.

"I don't think Samsung would ever want to be No. 2 in any market," said Catherine Morse, the general counsel and director of public affairs at Samsung Austin Semiconductor.

"Based on a number of inputs, we believe Intel is also vying for Apple's foundry business," said Gus Richard, an analyst with Piper Jaffray & Co., in a new report.

MagnaChip Semiconductor has signed a wafer foundry agreement with Atmel, a major provider of microcontrollers and touch solutions.

The move leaves some to wonder if the silicon foundry giant is gradually moving into the IC-packaging world, thereby competing against Amkor, ASE and other subcontractors. Rick Cassidy, president of TSMC North America, said TSMC remains focused on the foundry market. But "lines are blurring" between some parts of the wafer manufacturing and packaging processes, Cassidy said.

Taiwan's UMC will take the "lead role" in making the OMAP 5 device on a foundry basis for TI, said Kevin Ritchie, senior VP and manager of TI's technology and manufacturing group. For the OMAP 5, TI may work with other foundries, but Samsung does not appear to be one of the candidates. With the OMAP 4, TI has been "dissatisfied" with its foundry arrangement with Samsung, Ritchie said.

Renesas Electronics America will sell its semiconductor wafer fabrication facility in Roseville, California, to Telefunken Semiconductors. The sale price is approximately US$53 million, and the closing for the sale is planned for May 2, 2011. Telefunken also will enter into a supply agreement with Renesas for manufacturing services at the Roseville factory.

Globalfoundries expects revenues to rise at least 14% to more than US$4 billion in 2011, and aims to overtake United Microelectronics Corp. (UMC) of Taiwan to be the world's second-largest contract chipmaker by revenues, CEO Douglas Grose said in an interview.

Nova Measuring Instruments has announced that three major foundries recently placed US$12 million orders for its integrated and standalone metrology tools. The tools will support manufacturing and development for both the 4x and 3x technology nodes, and are expected to ship within the first and second quarters of 2011.

"Leading-edge capacity excess, driven by Globalfoundries' expansion primarily, means pricing is going to come down," said Intel CEO Paul Otellini. "As leading-edge pricing comes down, so does the trailing-edge [pricing], hollowing out the business. That means real trouble for Globalfoundries and TSMC over the next few years." He conceded that Samsung was a different case with its memory and logic operations.

Fabless LCD developer Pixel Qi has announced it has struck a manufacturing partnership with Chunghwa Picture Tubes (CPT) of Taiwan.

The recession caused fab tool vendors to de-accelerate their investments and programs in 450mm. As a result, 450mm production has been delayed at least to 2017 or 2018, said Trevor Yancey, an analyst with IC Insights.

Toshiba is hammering out a deal to outsource fabrication of advanced system chips to Globalfoundries, the Nikkei business daily reported, citing company sources.

Globalfoundries plans to double its capital spending to US$5.4 billion in 2011, said CFO Robert Krakauer. The money will go toward upgrading a plant in Dresden, Germany, building another in upstate New York and planning a factory in Abu Dhabi.

She was previously the chief operating officer of Osram Opto Semiconductor. She joined them in 2008. She also had executive positions at Altis, AMD, among others.

"You used to have myriad semiconductor companies building fabs. Now they are expecting a couple of foundries to do it all for them," said Malcolm Penn, founder and principal analyst with Future Horizons.

IBM seems to be shifting away from semiconductor manufacturing, and planning to rely on Samsung and GlobalFoundries as foundry suppliers. Both foundries are set to have wafer fabs for foundry operations in the US, which could help cement relations.

For 2011, the fab tool growth will be driven by foundry and NAND to offset a "pause in DRAM" ...

The semiconductor sector of Abu Dhabi's economy is set to pump US$4 billion into the capital, creating up to 6,000 new employment positions in Abu Dhabi over the next decade, according to industry insiders.

"The company has a small foundry business, which operates under the radar and is 'always looking' for customers," according to one source. "The company has been doing this for sometime, but not saying anything about it or at least not publicizing it."

While Intel is almost certain to do other foundry deals like the one announced today, we don't see the chipmaker actually pursuing a real foundry model. Rather, Achronix and deals like it will enable Intel to develop new markets with less downside risk, and will ultimately grow the company's IDM business through acquisitions.

Another source familiar with the situation said the money would likely be used to expand capacity at the company's Beijing plant, specifically to quickly ramp-up production of chips using 65nm technology.

Achronix Semiconductor has announced strategic access to Intel's 22nm process technology, and plans to develop the most advanced FPGAs.

In addition to the ISO/TS16949 certification, Grace has successfully rolled out its Automotive Zero Defect Program, which offers a set of tighter process control measures during wafer processing.

He pushed the silicon foundry giant into the platform arena. TSMC originally launched the so-called Open Innovation Platform in 2008 as an industry-wide design enablement initiative.

The executive also said the outlook for chip demand remains solid for the remainder of this year, but cautioned another cyclical downturn could be in store next year as industry capacity continues to increase.

Don't look now, but a fab tool downturn could be on the horizon.