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Editorial: AXT Fights Back
... AXT is doing what many semiconductor companies are forced to do these days. They're continuing to trim back, cut to their core competency, and doing everything they can to maintain shareholder value. The latest hurdle placed in their face was a patent infringement claim waged against activities in AXT's...
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Cree Scores ABB's Portfolio of SiC PatentsJuly 24, 2003...Cree, Inc. of Durham, North Carolina USA, which has always been noted for
its SiC substrate and SiC power device design and manufacturing, has acquired
from ABB Research Ltd. ABB's impressive and long-standing portfolio of patents
and patent applications relating to SiC technology. The acquisition includes
patents ranges from epitaxial growth technology to device and circuit-level
technology and includes 44 USA patents and patent applications, together with
corresponding international patents and applications and certain related "know-how."
Cree's ace when it comes to SiC power devices, co-founder John Palmour, Cree's
Executive VP, Advanced Devices, commented that, "These patents represent a very
significant investment in silicon carbide research, all of which has been directed
toward the development of SiC power devices. We are very familiar with ABB's
considerable efforts in this area, and we look forward to continuing to advance
this technology. The transfer is part of ABB's stated strategy to divest non-core
businesses to focus on its key power and automation technologies." Company
news release. For those unfamiliar with The
ABB Group and their core competencies, ABB is headquartered in Zurich, Switzerland
and considered a leader in power and automation technologies that enable utility
and industry customers to improve performance while lowering environmental impact. One can see why the interest in SiC development over the years. Those are the kind of industries SiC serves best. ABB will presumably now become a buyer rather than a maker of the devices as they need them. The ABB Group of companies operates in around 100 countries and employs around
135,000 people. ABB has recently streamlined its divisional structure to focus
on two core businesses: Power Technologies and Automation Technologies. The
Oil, Gas and Petrochemicals division is slated for divestment. At the end of
April, ABB included in their financial update that their continued divestment
of non-core business were on schedule. Company
news release. Vitesse To Exit Optical Module Products BusinessJuly 24, 2003...While the consensus within the communications sector is that they're finally
"off life support," a historically strong compound semi pioneering
company, Vitesse Semiconductor of Camarillo, California USA has weighed in with
its quarterly earnings report with very little optimism and that it is, indeed,
exiting the optical module products business. Vitesse stated that they decided
to discontinue their line of optical module products due to "continued
depressed levels of demand for these products," and said that they are
currently "evaluating their options for this product line, including the
possible sale to a third party of the related assets and operations." If
unsuccessful, they plan to cease operations of the optical module business and
terminate the related employees prior to September 30, 2003. Vitesse first announced
they would close their 6-inch GaAs wafer fabrication facility in Colorado Springs
by the end of September 2003. Now opto. Vitesse co-founder, President and CEO,
Lou Tomasetta stated, "The decision to exit the optical module business was
very difficult. While we were more optimistic about our growth prospects in
this area a year ago, the overall market for these products has failed to materialize
in a significant way." He went on to explain: "For some time we
have been evaluating alternatives for the Colorado Springs fab. Over the past
few quarters, we tried to find a suitable buyer for this facility but were unable
to identify an economically viable opportunity. I am very disappointed to see
us lose some of our most talented and hard-working employees at both of these
facilities. However, these are decisions dictated by the economic realities
of the difficult environment we are currently in, and we believe they are in
the best interests of our shareholders." He concluded in a bit of an
upnote, saying... "From a business standpoint, visibility is starting
to improve gradually as our customers are now beginning to put their future
needs in the form of orders rather than forecasts." Company
news release.
TriQuint Sees Wireless Handsets and WLAN Market ImprovingJuly 24, 2003...There's hope for a communications recovery brewing, and included in that camp
is TriQuint Semiconductor of Hillsboro, Oregon USA that reported today somewhat
uplifting earnings news. Ralph Quinsey, President and CEO of TriQuint stated,
"We are encouraged by our activity in wireless handsets, the WLAN market
and the modest rebound in our optoelectronics business. The quick acceptance
and design-in of our recently announced new products, including our family of
GSM power amplifier modules, our industry leading 3.8mm cellular duplexer and
our growth in 802.11 wireless local area networks (WLAN) validates our wireless
strategy of supplying the market with RF products and solutions that improve
the performance and lower the cost of our customers' applications. Additionally,
we believe our first sequential growth quarter in optoelectronics marks the
turning point in our investment for this market. Our focus continues to be the
rapid introduction of new products in all of our markets leveraging our core
competence across a diversity of opportunities." The quarter at TriQuint
yielded first first orders booked for a GSM power amplifier module for wireless
phones, first orders for a duplexer for the Korean wireless phone market, a
6% increase in revenue from SAW filter products for wireless phones, and sale
of the undersea LASER product line to JDS Uniphase for $6.6 million. TriQuint
also completed the transfer of the Infineon wafer fabrication process from Munich
to the Oregon facility. Company
news release. Mindspeed's Earnings Report OptimisticJuly 24, 2003...The first of the optimistic earnings reports for the communications sector
are coming in. Mindspeed Technologies of Newport Beach, California USA reported
$20.2 million for the third quarter of fiscal 2003, which ended June 27, 2003.
Revenues increased 10 percent from second quarter fiscal 2003 revenues of $18.3
million, in line with the company's upwardly revised outlook provided in mid-June.
"We are very pleased with the market's reception to our spin-off from Conexant
Systems, as well as the positive response from our customers worldwide,"
said Raouf Halim, Mindspeed's CEO. "The Mindspeed team is very excited about
the opportunity to achieve success as an independent, focused company and to
build significant long-term value for our shareholders." During the third
quarter, the company's revenues from the Asia-Pacific region grew 37% sequentially,
representing 38% of total third quarter revenues. Revenues from the Americas
and Europe contributed 51% and 11% of total revenues, respectively. From an
end market perspective, the enterprise market contributed an estimated one third
of Mindspeed revenues in the third quarter, with access and metro carrier markets
generating approximately two-thirds of revenues. Company
news release. Agere's Earnings Report OptimisticJuly 24, 2003...Agere System's earnings this quarter also brought hope for the communications
sector. With a 3% increase in Revenue, 38% reduction in reported net loss and
$4 million increase in cash. "We are pleased with the continued improvements
in our financial performance," said John Dickson, President and CEO. "We
grew our revenues for the second straight quarter and reported positive cash
flow from ongoing operations. We have now essentially completed our manufacturing
consolidation plan, and have reduced our net loss every quarter during the fiscal
year. "Going forward, our continued investments and market penetration in key
areas such as storage SOCs, mobile terminals, ATM, SONET/SDH and storage area
networking segments should position us for success as our end markets gain momentum."
Company news release. Skyworks Looking UpJuly 24, 2003...Skyworks Solutions of Woburn, Massachusetts USA also weighed in on the up side
for communications companies, reporting revenues of $150.2 million for the third
fiscal quarter ended June 27, 2003, up 10% versus combined company revenues
of $137 million in the same period last year and compared with $157.4 million
in the second fiscal quarter. Skyworks reported that they've again delivered
to guidance in spite of a wireless market environment impacted by CDMA challenges
in Asia and the economic disruption from SARS in China. "Our relative
strength is being driven by the ramp of new design wins, especially within our
direct conversion transceiver and cellular systems product areas as handset
OEMs, ODMs and contract manufacturers increasingly demand higher levels of integration,"
stated David J. Aldrich, Skyworks' President and CEO. "Meanwhile, we strengthened
our balance sheet during this period of temporary market softness with the recent
addition of a $50 million credit facility from Wachovia Bank. This instrument
provides for a low cost of capital without dilution to our shareholders as we
prepare for a stronger second half of the year and beyond." Company
news release. KMI Reports Optical Networking Markets Primed for ReboundJuly 24, 2003...PennWell's KMI Research has produced their latest assessment of the Optical
Networking Markets and the report is that the market as a whole appears ready
for a rebound. KMI reports that, while optical networking equipment for SONET,
SDH, DWDM, DXC, and OXC declined 53% in 2002 to $10.1 billion, following a depressing
29% decline in market value from 2000 to 2001, the optical networking equipment
market will decline another 6% in 2003 before rebounding slightly in 2004. Their
new report is titled Optical Networking: Worldwide Equipment Markets Update
and it it, KMI analyst Michael Arden reports, "Products within the optical-networking
equipment mix will have widely varied results. The big losers in the 2003 market
will be traditional SONET and SDH and cross-connects. Most categories in 2004
will grow, with DWDM and optical cross-connects having some strong upward shifts.
Next-gen SONET and SDH will continue to build on its momentum since being introduced
in 1999." The 2002 market numbers reflect changes in regional activity and
growing momentum in metro and other short-distance equipment deployments, resulting
in market-share shifts in some categories. North America and Western Europe
were hit particularly hard by the telecom collapse, while China and Korea have
helped to lessen the impact in the Asia-Pacific region. KMI generously shared
considerable details in their company
news release. European IC Fabs Overtake USA in Top 10 Standings with Motorola Out of the
RunningJuly 24, 2003...Simultaneous with a flurry of
press releases out of Motorola on new mobile products and affiliations (which
probably helped do a bit of "damage control,") Scottsdale, Arizona
USA market research firm, IC Insights Inc., hit Motorola hard when they publicized
their newest Top 10 rankings of international chip makers. According to IC Insights,
a major shakeup got underway the first half of 2003, with the most dramatic
shift being the absence of Motorola in the rankings. Mot dropped from the Top
10 for the first time since the company built its first fab in 1959. IC Insights,
which dutifully specializes in closely tracking worldwide semiconductor chip
output, noted that three of the top 10 suppliers were from Europe, three from
Japan, two from the USA, one from Korea, and one from Taiwan, thus indicative
of the balanced representation of geographic regions that underscores how very
international this business is... and who's starting to overtake whom, at least
geographically. IC Insights also noted that this is the first time that there
were more European companies on the list than USA companies. Intel retained
its #1 ranking , but the rest of the list changed considerably. Samsung was
#2, Renesas, the recently formed Hitachi/Mitsubishi JV claimed #3, Texas Instruments
was the only other USA chip maker, ranking #4, Toshiba captured #5, STMicroelectronics
#6, Infineon #7, NEC #8, Philips #9, and TSMC came in #10. Overall, this report
is another sign that things are looking up for the semiconductor industry as
a whole. There was a 22% increase in the value of the euro in the first half
of '03 versus the second half of '02, , which significantly boosted the results
of Infineon and Philips when converted into U.S. dollars, and within the overall
performance of the Top 10 companies, sales grew 12% while the entire worldwide
semiconductor market also grew the same 12%, demonstrating an increase to $74.3
billion from a year ago in 2002, when sales totaled $66.3 billion. Company
news release. NEC's New High Def Mobile Phones Available in the USAJuly 24, 2003...Thanks to a newly inked relationship between NEC Corporation and AT&T Wireless,
NEC's new 515 High Definition Mobile+ (HDM) handsets will be available to the
American market starting July 28th, through AT&T Wireless retail outlets. The
rollout will be under the direction of NEC America, Inc. (NECAM). The launch
of the 515 HDM in North America is a key part of NEC Corporation's plans to
significantly expand its overseas mobile phone business within the fiscal year
ending March 2004. NEC plans to introduce approximately 20 new handsets for
international markets, utilizing the company's most advanced, Japanese market-proven
technologies. "As the Japanese mobile phone market approaches maturity, NEC
expects to secure profitability through expanding in the promising overseas
market, based on its experience and expertise as Japan's top mobile phone supplier,"
said Yoshiharu Tamura, general manager of the Mobile Terminal Division at NEC
Corporation. "NEC aims to become a leading manufacturer of mobile Internet handsets
with a 15% market share, revenue of one trillion yen and overseas handset sales
comprising 50% of its total mobile phone sales in 2005." For those keeping close
tabs on where NEC is and where it's headed, we refer you to this especially
helpful and informative company
news release. Nitronex Scores $11.3 Million in VC and Rolls out GaN/Si Power Transistor SpecsJuly 22, 2003...Yesterday, upon posting our latest issue of CompoundSemi
News, we reported that Nitronex Corporation of Raleigh, North Carolina USA
rolled out the details on their future and prototype device
specifications for their SIGNATIC line of RF power transistors, and
today official word comes in that they've scored another $11.3 million in VC
funding. These collective moves, along with their not-so-quiet attendance at
Blue 2003 investigating the potential (or not) of getting back into GaN on Si
blue spectrum LEDs, leads industry followers to believe that GaN on 4 inch silicon
substrates may be experiencing a comeback. Those banking on the possibility
are venture groups include Alliance Technology Ventures (ATV), TPG Ventures,
VantagePoint Venture Partners (VPVP) and other previous investors of Nitronex.
The prototype product generating current attention is a 20-Watt device slated
for release by year end, to challenge the incumbent silicon LDMOS technology.
As a precursor to commercial market launch, Nitronex recently started to sample
device prototypes to select US and European customers. “The initial feedback
we’re receiving from customers is positive,” said Paul Williams, Managing
Director, Nitronex (Europe) Ltd., “and it validates the continued financial
support. The independent test data from our customers strengthens Nitronex’s
claim that it is leading the move to next generation power transistor technology,
necessary for widespread deployment of 3G wireless networks.” Links to the
VC companies and details on the rollout plan are included in Nitronex' company
news release. Our news features are reported
by the CompoundSemi News staff writers.
For submissions or content suggestions, you can contact us using
editor -at - compoundsemi.com
For more information and to reserve promotion space contact
Info7 -at - compoundsemi.com
or call +1 (512) 257-9888 |
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The
McDonald Report
Commentary & Perspective...
July 24, 2003...AXT is doing what many semiconductor companies are forced to do these days.
They're continuing to trim back, cut to their core competency, and doing everything
they can to maintain shareholder value. The latest hurdle placed in their face
was a patent infringement claim waged against activities in AXT's optoelectronic
operation, which AXT has announced is up for sale, partnership, or some other
type marriage that keeps that facility alive and utilized. The original suit
was made by Cree Lighting and Boston University and revolves around AXT's use
of GaN-based buffer technology. While everyone uses some kind of GaN based buffer
technology to produce blue spectrum LEDs (no choice, there isn't much useable
native GaN substrate material in the market as yet), this particular suit
is based on Ted Moustakas' U.S. Patent No. 5,686,738
titled "Highly Insulating Monocrystalline Gallium Nitride Thin Films,"
which is officially owned by Boston University and licensed to Cree.
That same patent was the crux of the historic litigation between Cree and
Nichia that some say brought all the "big guys to the table" and
which resulted in a bevy of cross-licensing or some kind of commitment to not
cross-sue anymore. AXT, not being a major blue spectrum LED producer, wasn't
one of the "big guys." Facing another court tussle with SEI on the
substrate side for alleged infringement, AXT has let it be known they won't
take these tactics lying down. Formal action began yesterday when AXT filed
a countersuit against Cree and BU denying the claim against Cree and BU both,
"alleging that the plaintiffs' actions were intentionally designed to interfere
with AXT's prospective business relationships, attempted to gain an unfair business
advantage, and violated Section 2 of the Sherman Act and the Cartwright Act."
AXT is requesting the USA Court in Northern California dismiss the complaint
"with prejudice" and demanding that AXT receive damages and injunctive
relief. Company news
release.
With so much backroom noise about "the big guys" in HB-LEDs
suing "the little guys" and recent news of Nichia's infringement
muscle resulting in the immediate shutting down an unnamed Korean blue spectrum
LED maker, AXT's decision to fight back may portend of things to come for others.
In their quarterly earnings report, AXT again underscored that they have improved
the performance of their substrate business since the downturn began during
the third quarter of 2001. "Our costs are down substantially, product
quality has improved, and the substrate business generated more than $8.6 million
in cash during the past 24 months," said Morris Young, President and CEO.
"Our decision to discontinue the optoelectronics business was difficult,
but it was the right one. Now we can focus all of our efforts on growing and
improving the performance of our core substrate business."
AXT sees market conditions very favorable in their two largest end markets
for substrates, wireless handsets and red and yellow light emitting diodes.
According to Morris Young, "the end use markets for our materials sales
are improving. We are committed to complete the efforts needed to turn the substrate
business around including further improving product quality, regaining market
share, and reducing costs of production." Company
news release. AXT has an impressive cadre of MOCVD reactors in their Southern
California opto facility, and they claim to also have a strong IP portfolio
to go with it. Some up and coming, relatively quiet opto manufacturer might
see this as a good opportunity for teaming as a means of producing product for
the American market close to the market source than, say, Taiwan or Japan. Whatever
the outcome to the facility, this initial "fight back" case by one
of "the little guys" against "the big guys" will likely
be precedent-setting. And ironically, it's a similar scenario to the way Cree
handled IP disputes aimed against them by others in the past.
Blending the Perspective of the Past with the Vision of the FutureJuly 24, 2003...That headline is actually the slogan of The
Legacy Company, my personal "dba" root company, which was established
30 years ago. Our ranch in Texas is named "Legacy Ranch" and the slogan
applies splendidly to our basic lifestyle and ranch philosophy. Think about
it... If you don't know where you've been, how the blazes can you intelligently
head into the future? And "you" means pretty much everybody. Prior
to establishing Legacy, I was an established high tech journalist in Silicon
Valley, and also a flaming environmentalist. Much of my original motivation
in covering the compounds rested in the premise that I truly believed the routes
the compounds could take us would proved to be better solutions to so many problems
mankind had created in the past. I found myself often bridging the demands of
the fanatics (on any topic) with the workload of the realists who actually rolled
up their sleeves and achieved the goals. I've found after 20 years as a back-to-basics
rancher in rough remote country that native wildlife is to be respected, emulated,
and studied with considerable awe. Few individual humans or their communities
have earned that kind of praise.
The Amish are obviously a rare breed of humans who understand the the
spirit and virtues of "blending the perspective of the past with the vision
of the future. I hadn't thought about that until my buddies at Emcore (Dave
and Steve) found a wonderful, short and very well done feature in MSNBC's
Periscope. The piece is written by Newsweek's Meredith Sadin, carries
a dateline of July 28th, and is titled: Technology:
Buggies With Brights. The online story doesn't show it, but there's a picture
in the print version that will surely show up on Emcore's and Lumileds' (and
probably everyone else's) next internal or marketing presentations. Look
closely. That's not the setting sun to the side of the buggy. That's
a Lumileds white Luxeon HB-LED being put together into a simple, safe headlamp-like
light source for an Amish, horse drawn buggy. With it, night driving is safer
for everyone, the motorists in automobiles sharing the road with those in buggies, and certainly safer for the horse. As Meredith points out, ..."Charged
by a solar or motor-powered generator, the new Luxeon LED is not electrical
and therefore complies with Amish standards. And the LED is energy-efficient:
while old incandescent buggy lights had to be recharged after every six hours
of use, the LED needs recharging every 100 hours."
Newsweek was one of the many news sources we contacted
when promoting Blue 2003.
(Don't forget, audio and PowerPoint versions of the presentations are available
free to the media who couldn't attend, via CompoundSemi Online, and for sale
to others). While I didn't get to talk with Meredith Sadin personally, I'd
like to think we helped the PR people at Lumileds and the other fine companies
who participated in throwing out some strong leads and fresh hooks. It never
occurred to me what a wonderfully appropriate application the Amish use proves
to be. Very much after my own heart. You can bet I'll be in touch with SunLine
Solar, Inc., the company making the Amish-approved white LED headlamp. Sometimes
we feed leads to the mainstream press... and sometimes we follow their lead.
Bravo, Meredith Sadin! Pretty soon everyone in the big city press corps
will be catching on to what this incredible GaN-based technology of ours is
all about, and most of all, why it's worth writing about for the mainstream
public. This application, like so many others, wouldn't have been possible
without the advancements in GaN compound semiconductors.
As our guest speaker, Alex.
M.G. Burton pointed out (he's "The Dean of Dallas' Broadcast Journalism"
and author of "Establishing News Media Relations") at lunch
June 12th when helping us understand the task before us all in weaving our media
plans... "You have an incredible story here." And... I paraphrase...
The energy-efficiency consequences are amazing. You're newsworthy. But keep
your message simple. Tell a good story and people will listen, and learn."
Who knows, one of those young reporters just getting hooked on technology, may
grow up to edit an online "newspaper" that calls to the attention
of the greater world all those wonderful technologies brewing in the back rooms
of labs all over the world. And that, boys and girls, is why I'm always telling
stories from the technology past in this column... so that you readers can blend
that perspective into your own, personal vision of the future.
If you have questions about the
solid state lighting and compound semiconductor industries or have news
or views to share, I'm Jo Ann McDonald, Editor of LIGHTimes and CompoundSemi News.
Feel free to contact me directly, anytime. 
My direct tel at the ranch is
+1-325-463-5345
From time to time Jo Ann may comment on companies in which she holds a
modest investment - be sure to read
her disclosure at some point in time... |
