Chuck,
There is some good and bad news for AMD in this report -
eet.com
Taiwan Quake: Impact roils markets, designs
By George Leopold and Rick Merritt EE Times (09/23/99, 7:00 p.m. EDT)
WASHINGTON ? The financial and technical impact of the Taiwan earthquake rippled across the globe Thursday (Sept. 23) and escalated to more than $300 million in damages and lost revenue, as engineers scrambled to restore power to one of the crucial electronics-manufacturing hubs in the world.
Partial power was reported restored to two of the biggest foundries in the world, TSMC and UMC, but their factories remained closed. Some engineers, eyeing memory-price spikes, began rethinking systems designs. And crisis team from at least one semiconductor equipment company flew in from the other side of the world to begin the delicate task of recalibrating hundreds of multimillion-dollar lithography machines. Technology stock prices sank on the uncertainty of the quake's impact.
The first big tangible fallout from the tragedy hit Advanced Micro Devices: Two out of three of AMD's Taiwan board makers, who were rushing to build boards for AMD's Pentium III-killer Athlon processor, are out of action. GVC and Microstar have halted production of their Athlon boards in the aftermath of the quake.
First International Computer is running at about 60 percent capacity at a Taipei plant, the only one currently making the Athlon boards, said Tom Chang, director of marketing for FIC in Fremont, Calif.
"As of right now it looks like it is only FIC. The others say they will be two or three weeks away from shipping again," said Doug Massa, a channel marketing manager for AMD in Sunnyvale. "This is definitely a speed bump for us. It was an unforeseen problem."
Before the quake, AMD sent a number of engineers to Taiwan to help other motherboard makers including Acer and Asustek ramp up boards that use the fast CPU in hopes a number of other boards will ship by the end of the year. However, the complex design has slowed the pace of uptake, said a senior
engineer at NEC's PC group who asked not to be named.
"Athlon is definitely a challenge that has a lot of people burning the midnight oil right now, in part because it uses a fast 200 MHz front side bus," the engineer said." Also AMD has not yet been able to get out boards that support two-way processors. That would really be competitive against the Intel Xeon line."
The power problem In Washington, officials in contact with U.S. personnel surveying the damage in Taiwan stressed the long-term consequences of the earthquake on Taiwan's electronics industry. "Power rationing is going to continue for the next three weeks," said a State Department official who tracks Taiwan. "That's obviously going to have an effect on the semiconductor plants over there."
That conflicted with reports from Taiwan Power, the island's main utility, that indicated full power could be restored by Saturday. TSMC, the world's largest pure-play foundry, said it had regained 65 percent of its power, and UMC said it had regained 70 percent of power.
According to reports out of Taipei by the American Institute for Taiwan, the private corporation that represents the United States there, the industry's loss could reach $313 million due to power outages and lost production. Private estimates were even higher.
Taiwan produces between 13-15 percent of the world's semiconductors. It also accounts for 80 percent of PC motherboard production and roughly two-thirds of global wafer production and processing. Estimates of its share of the DRAM market range between 5 and 6 percent. According to Taiwan's Institute of Information Industry, total hardware production topped $33 billion in 1998.
Given its sheer size, the electronics industry's losses are also expected to have a major impact on Taiwan's economic growth. According to Taiwan's Ministry of Economic Affairs, economic growth is expected to decline from 6 percent to 5.6 percent as a direct result of the earthquake. Taiwan is the U.S.' seventh-largest trading partner.
"A lot of people are really going to be hurt by this," said Rupert Hammond-Chambers, vice president of the U.S.-Taiwan Business Council (Arlington, Va.). "It will take the whole of the fourth quarter for us to really start seeing the [quake's] impact."
The industry group estimated Taiwan's IC production totaled $1.88 billion in August. Taiwanese fabs are losing an estimated $63 million each day they are shut down, Hammond-Chambers said. U.S. and Taiwanese officials estimated that plant closures at Hsinchu would be closer to $15.6 million per day.
Still, industry observers doubted semiconductor firms would begin moving out of Taiwan to new locations in mainland China or Thailand. Chip makers will continue to "base production around the chip market" in Taiwan, Hammond-Chambers predicted.
Price spikes
The initial impact of the Taiwan earthquake in Asian markets was to drive up memory prices. In Beijing's Zhongguancun electronics district, for instance, retail prices for memory modules jumped 20 percent this week after the earthquake struck. Meanwhile, prices for 64-Mbit SDRAMs from South Korea jumped $24 on the Beijing retail market to $139. Memory module prices in China had already been climbing after a typhoon struck Hong Kong the previous week.
Japanese products sold in China were slightly cheaper than Korean chips, according to local vendors. The sudden sharp jump in memory prices has prompted the emerging Chinese semiconductor industry to reassess its production plans. Shanghai Huahong NEC Electronics Co., Ltd., the Chinese government's joint venture with Japan's NEC Corp., is set to start up its volume production on its new line beginning this week. The fab had been producing 5,000 wafers a month during trial processing. The fab will eventually produce 20,000 wafers a month.
Spikes in the price of SDRAMs have design engineers rethinking the mix of SDRAM versus Direct Rambus designs they may put into the mix this fall, potentially nudging the ramp of Rambus up a notch.
"We've been told to go back and look at Rambus designs," said the NEC engineer. "Instead of a 95/5 percent mix of SDRAM and Rambus we may move to a 90/10 percent mix. But that would require a whole new mix of chip sets and other components and a whole new test program. It's not a simple change."
The engineer does not expect to get a full report on the overall Taiwan sourcing situation until Monday at which point a switch in the memory mix would be determined. He said the quake has enormous potential for disrupting PC design plans since NEC, like many companies, source motherboards, displays, keyboards, power supplies and cable harnasses from Taiwan.
Expecting power to return soon, foundry officials called in strike teams from their semiconductor equipment vendors to begin the task of recalibrating the hundreds of finely-tuned machines rattled silent by the earthquake and power outage.
Stepper shock troops ASML Lithography (Veldhoven, The Netherlands) flew a six-member team to bolster its two-dozen-strong engineering group in Taiwan and begin to service 300 lithography steppers populated throughout Hsinchu Science Park. The recalibration, while routinely done in fabs on a weekly or bimonthly basis, still will take days, given the situation, an ASML spokesman said.
"It's just not just press reboot on your computer," said Mark Bigelow, a spokesman for ASML's U.S. operations (Tempe, Ariz.). Engineers will need to power up the steppers, check software settings and then run a test wafer on each machine machine, shooting through an overlay reticle to render an array of alignment marks over the image field. Once that's done, the engineers will run the test wafer under a second stepper and then through a metrology machine to discover how far off the alignments are, Bigelow said.
Bigelow said it's not unreasonable to be able to recalibrate an average fab in a day, "but it's going to take longer because of power down situation and physical shaking."
Bigelow said it's unlikely that any of the million-dollar quartz lenses were damaged in the temblor. They're often put through rougher shaking, even in special packing, during delivery from Veldhoven to customer sites, he added.
Meanwhile, the big three Taiwan semiconductor houses, TSMC, UMC and Winbond announced charitable contributions to quake relief totaling more than $16 million. ?Additional reporting from Brian Fuller and Sunray Liu
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--------- I'm glad to know that FIC is running. IMO, recently most of the Athlon motherboard supply has been from FIC. The other three plants, except for Microstar, supply very few motherboards based on Pricewatch Athlon Motherboard list.
Goutama |
