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The Next Revolution: 3D XPoint™ non-volatile memories with speed and performance close to DRAM

See also the UPDATE on that from Intel Corporation’s (INTC) CEO, Brian Krzanich Presents at Sanford C Bernstein Strategic Decisions Conference 2016 – Brokers Conference Transcript of June 1, 2016.

Transistorless 3D XPoint™ non-volatile memories with speed close to RAM but with more than 10x density: 128 Gb per die in 2016 vs. the current 8Gb DRAM per die in 2015. This technology has been developed over many years by Micron and Intel jointly:
• less than 1 µsec Persistent Memory with DIMMs based on 3D XPoint™
• less than 10 µsec ultra fast Intel Optane™ SSD NVMe SSD

This will lead to a new industry shakeout, similar to one which happened between 1970 and 2016 due to the very fundamental progress in transistor densities for DRAM arrays and logic circuits on a die. See slide #3. For your convenience included here as well:

Microcomputer Revolution and the Computer Industry Shakeout -- Dec 2016Stop the video if you need more time to understand or think about a slide.

This slideshow contains 3 minutes of presentation with 11 slides followed by 7 minutes of keynote by Rob Crooke Intel SVP and GM of the Non-Volatile Memory Solutions Group at IDF16 on Shenzhen China April 13, 2016:
• 3D NAND technology focusing on cost and capacity improvements
• 3D XPoint™ technology focusing on breakthrough in speed and performance
• Demostration of the ultra fast Intel Optane™ SSD NVMe SSD, early prototype

Think especially about the last slide:

Improving data movement through system-level integration in Intel® Scalable System Framework (SSF) -- Feb 2016

Tablet and smartphone market trends

September update: Qualcomm’s smartphone AP revenues declined 17% year-over-year in the second quarter of 2015, Strategy Analytics estimated. Qualcomm maintained its smartphone AP market share leadership with 45% revenue share, followed by Apple with 19% revenue share and MediaTek with 18% revenue share. For the rest 18%: After a difficult 2014, Samsung LSI continued to recover and more than doubled its smartphone AP shipments in the second quarter of 2015 compared to the same period last year. Samsung LSI capitalised on its Galaxy S6 design-win in Q2 2015. In addition the company featured in multiple mid-range smartphones from Samsung Mobile. Full report: Smartphone Apps Processor Market Share Q2 2015: Samsung LSI Maintains Momentum
… The global tablet AP market declined 28% year-over-year to reach US$679 million in the second quarter of 2015, according to Strategy Analytics. Apple, Intel, Qualcomm, MediaTek and Samsung LSI captured the top-five revenue share rankings in the market during the quarter. Apple led the tablet AP market with 27% revenue share, followed by Intel with 18% revenue share. Qualcomm ranked number three, narrowly behind IntelGT400150821[1]Full report: Tablet Apps Processor Market Share Q2 2015: Apple and Intel Maintain Top Two Spots

Digitimes Research saw global tablet shipments fall to 45.76 million units in second-quarter 2015, showing a 10% decrease on quarter and representing more than a 15% decrease on year. Full report: Global tablet market – 2Q 2015 End of September update 

Investors.com comments on tablet and smartphone market trends — Q2’2015:Investors.com comments on tablet and smartphone market trends -- Q2'20151. Apple, Samsung lose ground in tablet market — LG and Huawei gain
2. Apple, Huawei [and Xiaomi] buck slowing smartphone sales trend

As the commenting articles by Investors.com are based on press releases of 2 market research companies I will give the web reference here for those press releases themselves, as well as 3 other press releases not commented on by Investors.com (if there are trend indications in the press releases themselves I will copy them alongside the web reference):

  1. July 29, 2015Worldwide Tablet Market Continues to Decline; Vendor Landscape is Evolving, According to IDCIDC on the Top 5 WW Tablet Vendors between 2014Q2 and 2015Q2“Longer life cycles, increased competition from other categories such as larger smartphones, combined with the fact that end users can install the latest operating systems on their older tablets has stifled the initial enthusiasm for these devices in the consumer market,” said Jitesh Ubrani, Senior Research Analyst, Worldwide Mobile Device Trackers. “But with newer form factors like 2-in-1s, and added productivity-enabling features like those highlighted in iOS9, vendors should be able to bring new vitality to a market that has lost its momentum.”
  2. July 30, 2015Huawei Becomes World’s 3rd Largest Mobile Phone Vendor in Q2 2015 [says Strategy Analytics]
    Strategy Analytics - Huawei becomes world's 3d largest phone vendor in 2015Q2 -- 30-July-2015

    • Woody Oh, Director at Strategy Analytics, said, “… Smartphones accounted for 8 in 10 of total mobile phone shipments during the quarter. The 2 percent growth rate of the overall mobile phone market is the industry’s weakest performance for two years, due to slowing demand for handsets in China, Europe and the US.”
    • Neil Mawston, Executive Director at Strategy Analytics, added, “… Samsung has stabilized volumes in the high-end, but its lower-tier mobile phones continue to face intense competition from rivals such as Huawei in Asia. … Apple outperformed as consumers in China and elsewhere upgraded to bigger-screen iPhone 6 and 6 Plus models.”
    • Ken Hyers, Director at Strategy Analytics, added, “… Huawei is rising fast in all regions of the world, particularly China where its 4G models, such as the Mate7, are proving wildly popular. Huawei has finally overtaken Microsoft to become the world’s third largest mobile phone vendor for the first time ever.”
    • Neil Mawston, Executive Director at Strategy Analytics, added, “Microsoft shipped 27.8 million mobile phones and captured 6 percent marketshare worldwide in the second quarter of 2015. Microsoft’s 6 percent global mobile phone marketshare is sitting near an all-time low. Microsoft continues to lose ground in feature phones, while its Lumia smartphone portfolio is in a holding pattern awaiting the launch of new Windows 10 models later this year. Xiaomi shipped 19.8 million mobile phones and captured 5 percent marketshare worldwide in Q2 2015. Xiaomi remains a major player in the China mobile phone market, but its local and international growth is slowing and Xiaomi is facing intense competition from Huawei, Meizu and others. As a result, Xiaomi may struggle to hold on to its top-five global mobile phone ranking in the coming quarters.”
  3. June 17, 2015Business smartphones shipments in Q1 up 26% from last year, now 27% of total smartphone market [says Strategy Analytics]
    Strategy Analytics - 1Q15 Worlwide Business Smartphone Shipments -- 17-June-2015Android was the most dominant OS in terms of business smartphone shipments in Q1, accounting for nearly 60% of all business smartphones (corporate- and personal-liable). It was also the dominant BYOD device; 68% of personal-liable shipments in Q1 were Android. Apple iOS accounted for only 27% of BYOD shipments in Q1, but was the dominant platform in terms of corporate-liable smartphones, with 48% of Q1 CL shipments. The difference in Android/iOS shipments between the CL and IL categories reflects the continuing corporate perception that iPhones are “safer” than Android-based devices.

    • Shipments of personal-liable smartphones (i.e. “bring your own device,” or BYOD, phones) drove market growth in Q1
    • Strategy analytics defines personal-liable devices as devices purchased by the end-user and expensed back to the company or organization, or devices purchased outright by individual users but used primarily for business purposes linking to corporate applications and backend systems.
    • While personal liable devices dominate worldwide business smartphone shipments, some regions are more resistant to the BYOD trend than others. Such regions include Western Europe and Central Europe, where corporate-liable devices are the dominant types of business smartphones. In Western Europe in Q1, 61% of the 10 million business smart phones were corporate-liable. Central and Eastern Europe had a slightly higher rate of BYOD devices shipped in Q1 — 41% — but the majority of smartphones shipped in this regions was also corporate-liable. This a sharp contrast to North America, where three-quarters of business smartphone shipments are personal-liable. The trend in Western and Eastern Europe reflects the more corporate-centric approach businesses take to mobility in these regions.
  4. July 29, 2015Mobile Broadband Tablet Subscriptions to Double to 200 Million by 2021, says Strategy Analytics Strategy Analytics - Mobile Broadband Tablet Subscription forecasted till 2021 - 29-July-2015

    • Strategy Analytics forecasts global mobile data subscriptions on tablets will more than double from 2015 to 2021, reaching over 200 million
    • Around the globe, over 100 million wireless connections on cellular enabled tablets will be added through 2021. By 2021 tablets will only account for 2 percent of total mobile subscriptions, a 2.7 percent population penetration rate.
  5. July 29, 2015Intel Maintains Top Spot in Non-Apple Tablet Apps Processors in Q1 2015 says Strategy Analytics
    Strategy Analytics - 1Q15 Tablet AP Revenue Share $733M -- 29-July-2015
    ⇒The global tablet applications processor (AP) market declined -6 percent year-over-year to reach $733 million in Q1 2015

    • According to Sravan Kundojjala, Associate Director, “Intel maintained its top spot in the non-Apple tablet AP market in unit terms in Q1 2015. Strategy Analytics estimate Android-based tablets accounted for over 70 percent of Intel’s total tablet AP shipments in Q1 2015. We expect Intel’s Atom X3 cellular tablet chip product line to help Intel maintain its momentum in the tablet AP market.”
    • Stuart Robinson, Executive Director of the Strategy Analytics Handset Component Technologies (HCT) service added, “Strategy Analytics estimates that baseband-integrated tablet AP shipments accounted for over one-fourth of total tablet AP shipments in Q1 2015, helped by a strong push from Qualcomm, MediaTek and Spreadtrum. We expect continued momentum for integrated APs as IntelRockchip and others join the bandwagon.”
  6. July 30, 2015Windows Tablet Shipments Nearly Double in Q2’15, says Strategy Analytics
    ⇒Global Tablet Shipments and Market Share in Q2 2015 (preliminary)
    Strategy Analytics - Global Tablet Shipments and Market Share in Q2 2015 (preliminary) -- 30-July-2015

    • Windows-branded Tablets comprised 9 percent of shipments in Q2 2015, up 4 points from Q2 2014
    • Android-branded Tablet shipment market share was flat at 70 percent in Q2 2015
    • Apple continued its slide in market share down to an all-time low of 21 percent in Q2 2015, 4 points lower than Q2 2014
    • Vendors with strong 3G and LTE connected Tablet strategies such as Huawei, LG, and TCL-Alcatel gained market share as leaders like Apple, Samsung, and the White Box community lost ground
Tablet & Touchscreen Strategies Senior Analyst Eric Smith added, “Windows share continues to improve as more models become available from traditional PC vendors, White Label vendors, and Microsoft itself though a healthy Surface lineup and distribution expansion. The key going forward will be if the coming wave of 2-in-1 Detachable Tablets is a hit with consumers or if they go the way of the Netbook—we remain cautiously optimistic on this point.”
Tablet & Touchscreen Strategies Service Director Peter King said, “Apple’s fortunes will turn around soon as it will launch the 12.9-inch iPad Pro as well as an iPad mini 4 in Q4 2015. New features in iOS 9, which are exclusive to iPad such as multi-tasking and a more convenient soft keyboard, will also help compel upgrades by owners of older iPad models. Meanwhile, Huawei and LG have posted fantastic growth primarily due to well-executed 3G and LTE connected Tablet strategies.”

Then I will add 2 additional information pieces from  Strategy Analytics:

Oct 8, 2014: Replacement Demand to Boost PC Sales in 2015, says Strategy Analytics

Having experienced negative growth since 2012, global PC sales are expected to rise 5 percent in 2015 driven by replacement of an ageing installed base according to Strategy Analytics’ Connected Home Devices (CHD) service report, “Computers in the Post-PC Era: Growth Opportunities and Strategies.”

Click here for the report:

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=10146

  • PC sales will fall by 4 percent in 2014 before returning to modest growth in 2015 and beyond to support replacement demand.
  • Strategy Analytics’ consumer research of computing device usage in developed markets indicates that PCs remain essential computing devices despite healthy Tablet sales.
    • Frequent Tablet usage has grown by 22 percentage points from 2011 to Q4 2013 up to 32 percent of all households while frequent Mobile PC (excluding Tablets) usage has stayed steady through this period, as 63 percent of all households indicated they frequently used Mobile PCs.
    • Frequent usage of all PCs (including Mobile and Desktop PCs and excluding Tablets) remained above the 90 percent mark of all households, falling only 3 percentage points during this period.

Strategy Analytics - Global Computing Devices Installed Base 2009-2018 -- 8-Oct-2014Quotes:

Eric Smith, Analyst of Connected Home Devices, said: “Multiple PC ownership is falling as Tablet sales supplant replacement demand for secondary PCs mainly used for casual tasks. Still, PCs will remain essential devices as households eventually replace their primary PCs used for productivity tasks such as spreadsheet and video editing or personal banking.”

David Watkins, Service Director, Connected Home Devices, added: “The modern Tablet user experience is quickly arriving on the PC thanks to more affordable 2-in-1 Convertible PCs and new operating systems which blend traditional PC and Tablet user experiences. We see development of these forces aligning perfectly with an older PC installed base ripe for replacement in 2015.”

May 1, 2015: Children Change Disney’s Digital Strategy: “App TV” Now Central To Content Planning by David Mercer

Multiscreen TV behaviour is at the centre of television’s stormy transformation – viewing of broadcast, linear TV on the TV screen is apparently in decline while consumption on smartphones and tablets is increasing. Making sense of the big picture is increasingly challenging, and legacy players like broadcasters and the major content owners are inevitably somewhat resistant to the idea that their traditional businesses are under serious threat.

Strategy Analytics - The New TV - Global TV Capable Screens Installed Base -- 1-May-2015We have monitored the early stages of this transformation for the past decade and see its results in our own research, and we continue to predict further industry disruption in our forecasts. But sometimes it is only when you hear the evidence given in person by a senior executive at a leading global player that the scale of the challenge and opportunity are finally brought home.

This happened at last week’s AppsWorld event in Berlin, where I chaired the TV and Multiscreen conference. The speaker was Andreas Peters, Head of Digital for the Walt Disney Company Germany, Austria and Switzerland. Andreas presented some of the most compelling evidence I have yet heard that television is truly a multiscreen medium for the next generation of viewers.

Disney’s challenge in Germany was to launch a television show called Violetta aimed at 8-12 year old girls. It had been introduced successfully in Argentina but had failed in the UK. As it often does, Disney had invested considerable amounts in merchandising and retailers were eagerly anticipating sales of the new product lines. The show was first broadcast on German free TV on May 1st 2014 but it achieved only very low ratings.

The question for Disney managers was whether traditional TV had stopped working. A crisis meeting was held with a view to writing off the investment. Disney had previously not made its shows available online in Germany but the Violetta situation was so serious they were persuaded to experiment. Two episodes were made available on Youtube with a link to Disney’s own website. Viewing of the content on Youtube very quickly went viral until Disney had achieved a reach of 50% of 8-12 year old girls and eight million views. Violetta went on to become a success in German-speaking markets.

The evidence was clear: for some shows at least, younger children cannot now be reached using the traditional broadcast TV/big screen model. Peters explained that the Violetta experience was transformative for the Disney organisation and led to the inclusion of online and digital media as a key element in the business case for many products. In fact it also led to the development and launch of Disney’s own Watch App, which includes live streaming and seven-day catch-up programmes from the broadcast Disney Channel.

Even after the Violetta experience Disney was sceptical that an app was needed – there was a feeling that the website would be sufficient. Nevertheless the app was launched and Disney had planned for 20,000 downloads. Instead it has passed one million downloads in its first six months. Peters noted: “This was a real shock for us. We completely underestimated the demand.” Around 500,000 viewers are now using the Disney Watch app for linear television viewing, in addition to millions of shows being downloaded for catch-up viewing. Peak app viewing hours are between 6am and 8am and then between 1pm and 9pm on school days, with a different pattern at weekends. Peters made it clear that children did not want lots of features built in to the app – just like TV, they just want to hit “play” and watch.

“Our TV colleagues of course don’t want to believe this,” said Peters. “But the world has changed and it will continue to change.” Disney has also seen a knock-on effect from its app launch with an increase in free-to-air broadcast TV viewing. But the firm is now clear that mobile is not just an add-on to TV or a promotional tool; it must be an integral part of the entire process.

There are many implications for content strategy. TV and Digital have to “understand each other”, which is a challenge when the KPIs in each world are very different. As we have often heard, the video industry is crying out for a set of common metrics which can apply and support advertisers in both TV and online worlds. Video consumption patterns vary and different content may be relevant to different platforms.

But the overall lesson is clear: “TV” is not just the big screen in the corner of the living room. It must embrace multiscreen distribution strategies in order to reach its maximum potential. TV companies are betraying their audiences and their investors if they don’t target the 6.4bn addressable screens available to them.

The Dawn of the SoC 2.0 Era: The TSMC Perspective

From its companion post The Dawn of the SoC 2.0 Era: The ARM Perspective

futureICT - Cortex-A Roadmap Strategy -- April-2015

Source of the slide: ARM Cortex系列核心介绍 (Core ARM Cortex Series Introduction, 52RD, April 13, 2015)

Regarding TSMC itself the April 8 conclusion in TSMC Outlines 16nm, 10nm Plans article by EE|Times is:

“It’s not completely clear who is ahead at 16/14 but I think TSMC is making a major commitment to trying to be ahead at 10,” Jones said. “If that happens and TSMC has closed the gap with Intel, the issue is then if TSMC’s 10 and Intel’s 10 are the same,” he said.

Background from the April 14, 2015 TSMC Symposium: “10nm is Ready for Design Starts at This Moment” article in Cadence Communities Blog:

The 10nm semiconductor process node is no longer in the distant future – it is here today, according to presenters at the recent TSMC 2015 Technology Symposium in San Jose, California. TSMC executives noted that EDA tools have been certified, most of the IP is ready or close to ready, and risk production is expected to begin in the fourth quarter of 2015.

Here are some more details about 10nm at TSMC as presented in talks by Dr. Cliff Hou, vice president of R&D at TSMC (right), and Dr. BJ Woo, vice president of business development at TSMC (below left). At the TSMC Symposium, speakers also introduced two new process nodes, 16HHC and 28HPC+ (see blog post here).

According to Woo, TSMC is not only keeping up with Moore’s Law – it is running ahead of the law with its 10FF offering. “We have done a lot more aggressive scaling than Moore’s Law demands for our 10nm technology,” she said. A case in point is the fully functional 256Mb SRAM with a cell size that is approximately 50% smaller than the 16FF+ cell size. She called this an “exceptional shrink ratio” that goes beyond traditional scaling.

And it’s not just SRAM. The 10FF node, Woo said, can scale key pitches by more than 70%. Combine that with innovative layout, and 10nm can achieve almost 50% die size scaling compared to 16FF+. “And this is very, very aggressive,” she said.

After noting that the 16FF+ already provides “clear performance leadership,” Woo said that 10FF offers a 22% performance gain over 16FF+ at the same power, or more than 40% power reduction at the same speed. This comparison is based on a TSMC internal ring oscillator benchmark circuit. For the Cortex-A57 test chip used to validate EDA tools, the result was a 19% speed increase at the same power, and a 38% power reduction at the same speed.

New features in 10FF include a unidirectional (1D) layout style and new local interconnect layer. These features help 10FF achieve a 2.1X logic density improvement over 16FF+, whereas normally TSMC gets about a 1.9X density boost for node migration, Woo said. In addition to the density improvement, the 1D Mx architecture can reduce CD (critical dimension) variation by 60%, she said.

And an already remarkable quote from April 12, 2015 TSMC Symposium: New Low-Power Process, Expanded R&D Will Drive Vast Innovation: TSMC Executive article in Cadence Communities Blog:

Hock Tan, CEO of Avago, described a symbiotic relationship between TSMC and his company that led to a super high-density switch for a networking customer, implemented in 16FF+. The switch has 96 ports, each running 100G Gbps, and drawing less than 2W each. That enables, in a next-generation data center, the tripling of a switch performance to more than 10 Tbps.

Moreover, according to the April 12, 2015 TSMC Symposium: New 16FFC and 28HPC+ Processes Target “Mainstream” Designers and Internet of Things (IoT) article from Cadence Communities Blog:

16FFC is a “compact” version of the 16nm FinFET+ (16FF+) process technology that is now in risk production at TSMC. It claims advantages in power, performance, and area compared to the existing 16FF+ process, along with easy migration from 16FF+. It can be used for ultra low-power IoT applications such as wearables, mobile, and consumer.

28HPC+ is an improved version of the 28HPC (High Performance Compact) process, which is itself a fairly recent development. Late last year 28HPC went into volume production, and it provides a 10% smaller die size and 30% power reduction compared to TSMC’s earlier 28LP process. 28HPC+ ups the ante by providing 15% faster speed at the same leakage, or 30-50% reduction in leakage at the same speed, compared to 28HPC.

TSMC also provided updates on other processes on its roadmap, which includes the following:

  • High Performance – 28HP, 28HPM, 20SoC, 16FF+
  • Mainstream – 28LP, 28HPC, 28HPC+, 16FFC
  • Ultra Low Power – 55ULP, 40ULP, 28ULP, 16FFC (16FFC is in both mainstream and low power categories)

In connection with that remember the September 29, 2014 announcement:
TSMC Launches Ultra-Low Power Technology Platform for IoT and Wearable Device Applications

TSMC (TWSE: 2330, NYSE: TSM) today announced the foundry segment’s first and most comprehensive ultra-low power technology platform aimed at a wide range of applications for the rapidly evolving Internet of Things (IoT) and wearable device markets that require a wide spectrum of technologies to best serve these diverse applications. In this platform, TSMC offers multiple processes to provide significant power reduction benefits for IoT and wearable products and a comprehensive design ecosystem to accelerate time-to-market for customers.

TSMC’s ultra-low power process lineup expands from the existing 0.18-micron extremely low leakage (0.18eLL) and 90-nanometer ultra low leakage (90uLL) nodes, and 16-nanometer FinFET technology, to new offerings of 55-nanometer ultra-low power (55ULP), 40ULP and 28ULP, which support processing speeds of up to 1.2GHz. The wide spectrum of ultra-low power processes from 0.18-micron to 16-nanometer FinFET is ideally suited for a variety of smart and power-efficient applications in the IoT and wearable device markets. Radio frequency and embedded Flash memory capabilities are also available in 0.18um to 40nm ultra-low power technologies, enabling system level integration for smaller form factors as well as facilitating wireless connections among IoT products.

Compared with their previous low power generations, TSMC’s ultra-low power processes can further reduce operating voltages by 20% to 30% to lower both active power and standby power consumption and enable significant increases in battery life — by 2X to 10X — when much smaller batteries are demanded in IoT/wearable applications.

“This is the first time in the industry that we offer a comprehensive platform to meet the demands and innovation for the versatile Internet of Things market where ultra-low power and ubiquitous connectivity are most critical,” said TSMC President and Co-CEO, Dr. Mark Liu. “Bringing such a wide spectrum of offerings to this emerging market demonstrates TSMC’s technology leadership and commitment to bring great value to our customers and enable design wins with competitive products.”

One valuable advantage offered by TSMC’s ultra-low power technology platform is that customers can leverage TSMC’s existing IP ecosystem through the Open Innovation Platform®. Designers can easily re-use IPs and libraries built on TSMC’s low-power processes for new ultra-low power designs to boost first-silicon success rates and to achieve fast time-to-market product introduction. Some early design engagements with customers using 55ULP, 40ULP and 28ULP nodes are scheduled in 2014 and risk productions are planned in 2015.

“TSMC’s new ultra-low power process technology not only reduces power for always-on devices, but enables the integration of radios and FLASH delivering a significant performance and efficiency gain for next-generation intelligent products,” said Dr. Dipesh Patel, executive vice president and general manager, physical design group, ARM. “Through a collaborative partnership that leverages the energy-efficient ARM® Cortex®-M and Cortex-A CPUs and TSMC’s new process technology platform, we can collectively deliver the ingredients for innovation that will drive the next wave of IoT, wearable, and other connected technologies.”

“Low power is the number one priority for Internet-of-Things and battery-operated mobile devices,” said Martin Lund, Senior Vice President and General Manager of the IP Group at Cadence. “TSMC’s new ULP technology platform coupled with Cadence’s low-power mixed-signal design flow and extensive IP portfolio will better meet the unique always-on, low-power requirements of IoT and other power sensitive devices worldwide.”

CSR has an unequalled reputation in Bluetooth technology and has been instrumental in its progression, including helping to write the Bluetooth Smart standard that is meeting the demands of today’s rapidly evolving consumer electronics market,” said Joep van Beurden, CEO at CSR. “For many years, CSR has closely collaborated with TSMC, and we are pleased to demonstrate the results of that collaboration with the adoption of the 40ULP platform for our next generation of Bluetooth Smart devices including products for markets like smart home, lighting and wearables that are enabling the growth of the Internet of Things. Our solutions simplify complex customer challenges and help speed their time to market by allowing them to design and deliver breakthrough low power wireless connected products on these powerful new platforms.”

“The imaging SoC solutions of Fujitsu Semiconductor Limited bring the best balance between high imaging quality and low power consumption, to meet the significant demand from our customers and the electronics market,” said Tom Miyake, Corporate Vice President, at System LSI Company of Fujitsu Semiconductor Limited. “We welcome that TSMC is adding the 28ULP technology to its successful 28nm platform. We believe this technology will provide our SoCs with the key feature: low power consumption at low cost.”

Nordic Semiconductor has been a pioneer and leader in ultra-low power wireless solutions since 2002, and with the launch of its nRF51 Series of Systems-on-Chip (SoCs) in 2012 the company established itself as a leading vendor of Bluetooth Smart wireless technology,” said Svenn-Tore Larsen, CEO of Nordic Semiconductor. “We have been collaborating closely with TSMC on the selection of process technology for our upcoming nRF52 Series of ultra-low power RF SoCs. I am happy to announce that we have selected the TSMC 55ULP platform. This process is a key enabler for us to push the envelope on power consumption, performance and level of integration of the nRF52 Series to meet the future requirements of Wearable and Internet of Things applications.”

“Built on TSMC’s Ultra-Low Power technology platform and comprehensive design ecosystem, Realtek’s Bluetooth Energy Efficient smart SoC, BEE, supports the latest Bluetooth 4.1 specification featuring Bluetooth Low Energy (BLE) and GATT-based profiles,” said Realtek Vice President and Spokesman, Yee-Wei Huang. “BEE’s power efficient architecture, low power RF, and embedded Flash are ideal both for the IoT and for wearable devices such as smart watches, sport wristbands, smart home automation, remote controls, beacon devices, and wireless charging devices.”

Silicon Labs welcomes TSMC’s ultra-low power initiative because it will enable a range of energy-friendly processing, sensing and connectivity technologies we are actively developing for the Internet of Things,” said Tyson Tuttle, Chief Executive Officer, Silicon Labs. “We look forward to continuing our successful collaboration with TSMC to bring our solutions to market.”

“Synopsys is fully aligned with TSMC on providing designers with a broad portfolio of high-quality IP for TSMC’s ultra-low power process technology and the Internet of Things applications,” said John Koeter, Vice President of Marketing for IP and Prototyping at Synopsys. “Our wide range of silicon-proven DesignWare® interface, embedded memory, logic library, processor, analog and subsystem IP solutions are already optimized to help designers meet the power, energy and area requirements of wearable device SoCs, enabling them to quickly deliver products to the market.”

As well as the ARM and Cadence Expand Collaboration for IoT and Wearable Device Applications Targeting TSMC’s Ultra-Low Power Technology Platform announcement of Sept 29, 2015:

ARM® and Cadence® today announced an expanded collaboration for IoT and wearable devices targeting TSMC’s ultra-low power technology platform. The collaboration will enable the rapid development of IoT and wearable devices by optimizing the system integration of ARM IP and Cadence’s integrated flow for mixed-signal design and verification, and their leading low-power design and verification flow.

The partnership will deliver reference designs and physical design knowledge to integrate ARM Cortex® processors, ARM CoreLink™ system IP, and ARM Artisan® physical IP along with RF/analog/mixed-signal IP and embedded flash in the Virtuoso®-VDI Mixed-Signal Open Access integrated flow for the new TSMC process technology offerings of 55ULP, 40ULP and 28ULP.

“TSMC’s new ULP technology platform is an important development in addressing the IoT’s low-power requirements,” stated Nimish Modi, senior vice president of Marketing and Business Development at Cadence. “Cadence’s low-power expertise and leadership in mixed-signal design and verification form the most complete solution for implementing IoT applications. These flows, optimized for ARM’s Cortex-M processors including the new Cortex-M7, will enable designers to develop and deliver new and creative IoT applications that take maximum advantage of ULP technologies.”

“The reduction in leakage of TSMC’s new ULP technology platform combined with the proven power-efficiency of Cortex-M processors will enable a vast range of devices to operate in ultra energy-constrained environments,” said Richard York, vice president of embedded segment marketing, ARM. “Our collaboration with Cadence enables designers to continue developing the most innovative IoT devices in the market.”

This new collaboration builds on existing multi-year programs to optimize performance, power and area (PPA) via Cadence’s digital, mixed-signal and verification flows and complementary IP alongside ARM Cortex-A processors and ARM POP™ IP targeting TSMC 40nm, 28nm, and 16nm FinFET process technologies. Similarly, the companies have been optimizing the solution based around the Cortex-M processors in mixed-signal SoCs targeting TSMC 65/55nm and larger geometry nodes. The joint Cortex-M7 Reference Methodology for TSMC 40LP is the latest example of this collaboration.

For the above keep in mind The TSMC Grand Alliance [TSMC, Dec 3, 2013]:

The TSMC Grand Alliance is one of the most powerful force for innovation in the semiconductor industry, bringing together our customers, EDA partners, IP partners, and key equipment and materials suppliers at a new, higher level of collaboration.

The objectives of the TSMC Grand Alliance are straightforward: to help our customers, the alliance members and ourselves win business and stay competitive.

We know collaboration works. We have seen it in the great strides our customers and ecosystem members have made through the Open Innovation Platform® where today there are 5,000 qualified IP macros and over 100 EDA tools that supports our customers’ innovation and helps them attain maximum value from TSMC’s technology.

Today Open Innovation Platform is an unmatchable design ecosystem and a key part of the Grand Alliance that will prove much more powerful. Looking at R&D investment alone, we calculate that TSMC and ten of our customers invest more in R&D than the top two semiconductor IDMs combined.

Through the Grand Alliance TSMC will relentlessly pursue our mission and collaborate with customers and partners. We need each other to be competitive. We need each other to win. Such is the power of the Grand Alliance.

[Some more information is in the very end of this post]

A related overview in Kicking off #ARMWearablesWK with an analysts view of the market post of November 17, 2014 of ARM Connected Community blog by David Blaza:

Today as we kickoff ARM Wearables Week we hear from Shane Walker of IHS who is their Wearables and Medical market expert.

Shane’s take on this market is that it’s for real this time (there was a brief Smartwatch wave a few years ago) and will continue to be a hot growth sector through 2015. One of the great benefits of talking with analysts like Shane is they help you think through what’s going on and bust a few myths that may have found their way into our thinking. For example I asked Shane what the barriers to growth were and he carefully and patiently pointed out that Wearables are growing at a 21% CAGR already and will hit $12b in device sales this year (without services, more on that later in the week).  So this is not an emerging or promising market, it’s here and growing at an impressive rate. By 2019 Shane’s estimate is that it will hit $33.5b in device sales and services are increasingly going to factor into the wearables experience (Big Data is coming!).

Shane breaks the Wearables market down to 5 major categories:

  1. Healthcare and Medical
  2. Fitness and Wellness
  3. Infotainment
  4. Industrial
  5. Military

I’m glad he did this for me because wearables are incredibly diverse and this week you are going to see some category defying products here such as smart Jewelry where does that fit?

Below you can see a table chart that Shane was willing to share that shows his estimate for market size and units sold, the main learning for me is how much of this market is healthcare related. Also attached below are details on what services IHS offer in the Wearables market or you can find them here.

futureICT - World Market for Wearable Technology - Revenue by Application -- IHS-November-2014

attached is: Wearable Technology Intelligence Service 2014.pdf  [IHS Technology, November 17, 2014]

Note the following table in that:
futureICT - Wearable Technology Data Coverage Areas by IHS

More information:
– A Guide to the $32b Wearables Market [IHS Technology, March 11, 2015]
– which has a free to download whitepaper:
Wearable Technology: The Small Revolutions is Making Big Waves

Brief retrospective on the SoC 1.0 Era

futureICT - Shipments of TSMC Advanced Technologies Q1'2009 - Q1'2015

Detailed Background from TSMC’s quaterly calls

Q1 2015:

Mark Liu – TSMC – President & Co-CEO
[update on new technology]

The continuous demand of more functionality and integration in smartphones drives for more silicon content. We expect smartphones will continue to drive our growth in the next several years.

In the meantime, we see IoT appears us — present us new growth opportunities. The proliferation of IoT not only will bring us growth in the sensor, connectivity and advanced packaging areas, the associated application and services, such as big data analytics, will also further our growth in the computation space, including application processor, network processor, image processor, graphic processor, microcontroller and other various processors. That was the long-term outlook.

I’ll update some of our 10-nanometer development progress. Our 10-nanometer technology development is progressing well. Our technology qualification remains in Q4 this year.

Recently we have successfully achieved fully functional yields of our 256-megabit SRAM. Currently we have more than 10 customers fully engaged with us on 10-nanometer. We still expect to have 10-nanometer volume ramp in fourth quarter 2016 and to contribute billing in early 2017.

This technology adopts our third-generation FinFET transistor and have scaling more than one generation. Its price is fully justified by its value for various applications, including application processor, baseband SoC, network processor, CPU and graphic processors. Its cost and price ratio will comply to our structural profitability considerations.

As for new technology development at TSMC, I’d like to start with — to update you our 7-nanometer development. We have started our 7-nanometer technology development program early last year. We also have rolled out our 7-nanometer design and technology collaboration activity with several of our major customers. Our 7-nanometer technology developments today are well in progress.

TSMC’s 7-nanometer technology will leverage most of the tools used in 10-nanometer, in the meantime achieve a new generation of technology value to our customers. The 7-nanometer technology risk production date is targeted at early 2017.

Now I would like to give you an update on EUV. We have been making steady progress on EUV. Both our development tools, we have two NXE 3300 have been upgraded to the configuration of 80 watt of EUV power, with an average wafer throughput of a few hundred wafers per day. We continue to work with ASML to improve tool stability and availability. We also are working with ASML and our partners on developing the infrastructure of EUV, such as masks and resists.

Although today the process on record of both 10-nanometers and 7-nanometer are on immersion tools, with innovative multiple patterning techniques, we will continue to look for opportunity to further reduce the wafer cost and simplify the process flow by inserting EUV layer in the process.

Now I’d like to give you an update of our recently announced ultra-low-power technologies. We have offered the industry’s most comprehensive ultra-low-power technology portfolio, ranging from 55-nanometer ULP, 40-nanometer ULP, 28-nanometer ULP, to the recently announced 16 FFC, a compact version of 16 FinFET Plus, enable continual reduction of operating voltage and power consumption. Today more than 30 product tape-outs planned in 2015 from more than 25 customers.

This 55- and 40-nanometer ULP will be the most cost-effective solution for low- to mid-performance wearable and IoT devices. The 28 ULP and 16 FFC will be the most power-efficient solution for high-performance IoT applications. In particular, our 16 FFC offers the ultra-low-power operation at a supply voltage of 0.55 volts, with higher performance than all of the FD-SOI technologies marketed today.

Lastly I’ll give you an update of our recent IoT specialty technology development. We have developed the world’s first 1.0-micron pixel size 16-megapixel CMOS image sensor, with stacked image signal processor, which was announced in March by our customer for the next-generation smartphone. Secondly, we continue to drive the best low resistance in BCD [Bipolar-CMOS-DMOS for DC-to-DC converter: together with Ultra-High-Voltage (UHV) technology for AC-to-DC converter—are the key to enable monolithic integrated PMIC design] technology roadmap, from 0.18 micron to 0.13 micron and from 8-inch to 12-inch production for wireless charging and fast wired charging of mobile devices. We continue to extend our 0.13 BCD technology from consumer and industrial applications to automotive-grade electrical system control applications.

Lastly, recently we have started production in foundry’s first 40-nanometer industrial embedded Flash technology that was started from November last year. And this technology recently passed automotive-grade qualification, that was in March, for engine control applications.

C.C. Wei – TSMC – President & Co-CEO

I will update you the 28-nanometer, 20 and 16 FinFET status and also our InFO business.

First, 28-nanometer. This is the fifth year since TSMC’s 28-nanometer entered mass production. 28-nanometer has been a very large and successful node for us. Our market segment share at this node has held up well and is in the mid-70s this year. We expect this to continue in year 2016. In comparison, this is better than what we had in the 40-nanometer node.

The demand for 28-nanometer is expected to grow this year due to the growth of mid- and low-end smartphones and as well as the second-wave segment, such as radio frequency, circuit product and the Flash controllers that migrate into this node.

However, due to some customers’ inventory adjustments, which we believe is only going to be for the short term, the demand for 28-nanometer in the second quarter will be lower than our previous quarter, resulting in 28-nanometer capacity utilization rate to be in the high-80s range. But we expect the utilization rate of the 28-nanometer to recover soon and to be above 90% in the second half of this year.

While we are in the mass production, we also continue to improve the performance of our technology. Last year we have introduced our 28-HPC, which is a compact version of 28-HPM. For the purpose of helping 64-bit CPU conversion for mid- to low-end market, this year we further improved the 28-HPC to 28-HPC Plus. For comparison, 28-HPC Plus will have 18% power consumption — lower power consumption at the same speed or 15% faster speed at the same kind of power.

As for the competitive position, we are confident that we will continue to lead in performance and yield. So far we do not see there is a very much effective capacity in High K metal gate at 28-nanometer outside TSMC. And since we have already shipped more than 3m 12-inch 28-nanometer wafers, the learning curve has given us an absolute advantage in cost.

Now let me move to our 20 SoC. TSMC remains the sole solution provider in foundry industry for 20-nanometer process. Our yield has been consistently good after a very successful ramp last year. But recently we have observed customers’ planned schedule for product migration from 20 nanometer to 16 FinFET started sooner than we forecasted three months ago.

As a result, even we continue to grow 20-nanometer business in the second quarter of this year, our earlier forecast of 20-nanometer contributing above 20% of total wafer revenue this year has to be revised down by a few points to a level about the mid teens. That being the case, we still forecast the revenue from 20-nanometer will more than double that of year 2014’s level.

Now 16 FinFET. The schedule for 16 FinFET high-volume production remains unchanged. We will begin ramping in the third quarter this year. And the ramp rate appeared be faster than we forecasted three months ago, thanks to the excellent yield learning that we can leverage our 20-nanometer experience and also due to a faster migration from 20-nanometer to 16 FinFET.

In addition to good yield, our 16 FinFET device performance also met all products’ specs due to our very good transistor engineering. So we believe our 16 FinFET will be a very long-life node due to its good performance and the right cost. This is very similar to our 28-nanometer node.

We are highly confident that our 16 FinFET is very competitive. As we’ve said repeatedly, combining 20-nanometer and 16-nanometer, we will have the largest foundry share in year 2015. And if we only look at 16-nanometer alone, we still can say TSMC will have the largest 16- or 14-nanometer foundry share in year 2016.

Now let me move to our InFO business update. The schedule to ramp up the InFO in second quarter next year remains unchanged. We expect InFO will contribute more than $100m quarterly revenue by next year, fourth quarter next year, when it will be fully ramped.

Right now we are building a new facility in Longtan, that’s a city very near to Hsinchu, where our headquarters are, for ramping up InFO. Today a small product line is almost complete and it’s ready for early engineering experiment. This pilot line will be expanded to accommodate the high-volume ramp in year 2016.

Andrew Lu – Barclays – Analyst

… I think Mark presented at the Technology Symposium in San Jose mentioned that 16 FinFET versus competing technology is about 10% performance better. So can you elaborate what’s 10% performance better? If our die size is larger than our competitors, how can we get the 10% performance better?

Mark Liu – TSMC – President & Co-CEO

In the conference we talked about 16 FinFET Plus. That is our second-generation FinFET transistor. In that we improved our transistor performance a great deal. According to our information, that transistor speed, talk about speed at fixed power, is higher than the competitor by 10%. That’s what I meant. …  Because of the transistor structure, transistor engineering.

Andrew Lu – Barclays – Analyst

Compared to competing — is the competing the current competitor’s solution or the next-generation competitor’s solution? For example, LPE versus LPP or something like that?
Mark Liu – TSMC – President & Co-CEO
The fastest one. The fastest.
Andrew Lu – Barclays – Analyst
Their best one?
Mark Liu – TSMC – President & Co-CEO
Yes.

Dan Heyler – BofA Merrill Lynch – Analyst

My second question is relating to 20-nanometer. Here you certainly have a lot of growth in 16, with customers taping out aggressively, especially next year. Given your high share at 28, how do you keep 28 full? You obviously have a lot of technology there. Customers will move forward.

So I’m wondering, could you elaborate on new areas that are actually creating new demand at 28, such that you can continue to grow 28 next year. And do you think you can grow? I think previously you said maybe hold it at current levels even with 16 growing. So just maybe revisit that question.

C.C. Wei – TSMC – President & Co-CEO

To answer the question, I think the high-end smartphone will move to 16 FinFET. However, the mid- to — and lower-end smartphones will stay in the 28-nanometer because that’s very cost effective. And mid- and low-end smartphone continues to grow significantly. So that will give a very strong demand on 28-nanometer. In addition, we still have a second-wave product, like RF and Flash controller, as I use as an example, move into 28-nanometer.

So summing it up, I think the 28-nanometer’s demand continue to grow while we move into the 16 FinFET for high-end smartphone.

Michael Chou – Deutsche Bank – Analyst

As Mark has highlighted your EUV program, Does that imply you may consider using EUV in the second stage of your 16-nanometer — 10-nanometer ramp-up, potentially in 2018 or 2019? 

Mark Liu – TSMC – President & Co-CEO

Yes, we always look for opportunity to insert EUV in both 10-nanometer and 7-nanometer. The EUV technology provides not only some cost benefit, but also simplify the process. That means you can replace multiple layers with one layer that helps your yield improvement. So there’s opportunity both in quality and cost always exist so long as EUV’s productivity comes to the threshold point.

And in — as you noticed on 10-nanometer, our capacity build will largely done in 2016 and 2017. So 2018 will be inserted, if inserted, will be combined with some other tools upgrade, some tool upgrade to 7, for example, and replaced by the EUV tools. In that node it will not be a fresh capacity build with EUV at that time because that’s a little bit late in the schedule for the 10.

7-nanometer, of course it will be higher probability adopting EUV. And the benefit will be bigger because the 7-nanometer has a lot of multiple layers, quadruple, even multiple patterning layers, thus EUV can be more effective in reducing the cost and improve the yield, for example. So that’s our current status.

But today EUV is still in the engineering mode. The productivity, as you heard, will still have some gaps for practical insertion of the technology. So we’re still working on that, in that mode. And we have — although we have one-day performance up to 1,000 wafer per day, but I was talking about average still a few hundreds. And we need to get to more than 1,000 to consider a schedule to put it into the production.

Randy Abrams – Credit Suisse – Analyst

As you go to fourth quarter, how broad is the customer base? Is it a single key product or are you seeing broadening out of 16 FinFET as you ramp that in fourth quarter?

Mark Liu – TSMC – President & Co-CEO

… As for the second half, we think, first of all, the inventory adjustment will largely complete towards the end of second quarter.

We think the end market of smartphone is still healthy growth this year. Therefore the second half will resume the growth. And, more importantly, our 16 FinFET technology will start to ramp in the second half. So that will contribute a lot of growth, more than the 20-nanometer shipment reduction. So those two factors.

Roland Shu – Citigroup – Analyst

My first question is on given the fast ramp of 16-nanometer, so are we going to see meaningful revenue contribution for 16 in 3Q?

C.C. Wei – TSMC – President & Co-CEO

We ramp up in third quarter this year, but it’s many layers of process, plus about one month is back-end. So in 3Q we expect just the revenue just very minimum.

Bill Lu – Morgan Stanley – Analyst

This is a follow-up to Randy’s question. But I’m going to go over some numbers with you first before I ask the question, which is we did the math. I don’t think these are exactly right. But over the last five years we’ve got IDM zero growth, fabless 8%, but system houses above 20%, right. So system houses, I’m excluding memory, just the system LSI, the logic portion. I think that might be slightly conservative.

Now that’s a pretty big change. And I’m wondering how you should think about that, how you should — if you look at TSMC addressing the system houses versus the fabless customers, if you look at, for example, your market share, if you look at your margin for the system houses versus the fabless, how do you think about that?

Mark Liu – TSMC – President & Co-CEO

Yes. Indeed, in the past five years the system houses sourcing and foundry business to us has a much higher growth rate, as you quoted. But remember, that came from a very small base. Okay? But we welcome system house sourcing because we consider them are fabless too, fabless companies, the companies without fabs, bring business to us.

It’s not necessarily the margin has to do with what type of company sourced. It has to do with our value to that company and also the size, the size of the business. If the business is bigger, of course the — we probably can enjoy a slightly — a little bit better price. So it depends on the size of the business, less dependent on what company, system company or non-system company’s business.

Steven Pelayo – HSBC – Analyst

For the last three years or so, TSMC’s been growing 20%, 30% year-on-year revenue growth rates. First quarter 50% year on year. But to Bill’s question there, it does look like in the second half of the year, if I play around with your full-year guidance and what you’re doing, low single-digit year-on-year growth rates. And if we exclude maybe 16-nanometer, above 16-nanometer, maybe it’s flat to down. Is that the new industry? What are we talking now for industry growth rates for both the semi industry and in the foundry market this year?

90 days ago you suggested the semi market was going to grow 5% this year with foundries growing 12%. In light of your new guidance, in light of what it looks like you’re going to have very slight year-on-year growth rates in the second half of the year, what do you think that means for the overall industry?

Mark Liu – TSMC – President & Co-CEO

We think the semiconductor growth this year currently is indeed we adjusted down from 5% earlier to 4% at this time. Yes. We think it’s really due to the macroeconomic situation around the world today. And therefore the foundry market — foundry growth rate will adjusted down too. We are looking at about 10% range. So that’s why we revised our view on the current semiconductor growth.

Brett Simpson – Arete Research – Analyst

My question on 10-nanometer, I know it’s still 18 months away from ramp-up, but can you talk about how fast this ramp might scale relative to 20-nanometer or 28-nanometer?

And as you ramp up 10-nanometer for high-end smartphones, would you expect low-end smartphones to start migration from 28 with 16 FinFET in 2017?
Elizabeth Sun – TSMC – Director of Corporate Communications
… Your question seems to say that if we ramp 10-nanometer in the future, which will be targeting the high-end smartphone, will the low-end smartphone be migrating from 28-nanometer into 16-nanometers.
Brett Simpson – Arete Research – Analyst
And  just to add to that, Elizabeth, how quickly will 10-nanometer scale up relative to the scaling of 20-nanometer — the ramp-up of 20-nanometer and 28? Will it be as fast?
Elizabeth Sun – TSMC – Director of Corporate Communications
So the profile of the 10-nanometer ramp, will that be steeper than the profile of the 20 or the 28-nanometer?

Mark Liu – TSMC – President & Co-CEO

Okay. The first part of the question has to do with 10-nanometer ramp for the high-end smartphone, will the mid/low-end move to 16? I think we — this is up to our customers’ product portfolio. We definitely know a lot of customer is looking at 28-nanometer to use — to do as the low end. But the specification, the smartphone processor specification changes constantly. So what portion of that product will move to 16-nanometer? We think definitely there are some portion, but how a big portion really depends on their product strategy.

On the 10-nanometer ramp, I wouldn’t say it’s bigger. But at least it’s similar scale of our ramp as we do in 16 and as we do in 20.

Brett Simpson – Arete Research – Analyst Great.

Thank you. And let me just have a follow-up here. There’s been a lot of talk in the industry about one of your larger customers [Qualcomm] planning to introduce a new application processor on both Samsung’s 14-nanometer process as well as your 16 FinFET for the same chip later this year. And we haven’t really seen a single chip get taped out on two new processors at the same time before in the industry. So my question, how does this really work between the two foundries? Does it mean that that one customer can adjust dynamically, month to month, how they allocate wafers between you and Samsung? Or am I — or how might this work?
Elizabeth Sun – TSMC – Director of Corporate Communications … So your question seems to say that there is a customer that appeared to be working with two different foundries on the 14 and 16-nanometer node. And the products are about to arrive. You would like to understand how this customer will be allocating month by month the — what’s the production or the orders with both of the two foundries. Is that your question?
Brett Simpson – Arete Research – Analyst
Yes, that’s right. Whether they can move around dynamically how they allocate wafers. That’s right.

C.C. Wei – TSMC – President & Co-CEO

Well my answer is very typical. Our 16 FinFET is really very competitive. And we did not know that customer going to — how they’re going to allocate. I cannot even make any comment on that.

Gokul Hariharan – JPMorgan – Analyst

First of all on 16-nanometer, since Dr. Wei mentioned that next year a lot of demand on entry-level to mid-end smartphone is still going to stay at 28-nanometer, could you talk about your visibility for second-wave demand for 16-nanometer? 

What is the visibility that you have? Is it going to be really strong? Because you mentioned that a lot of the cost-sensitive customers would still stay on 28, at least for next year.

C.C. Wei – TSMC – President & Co-CEO

For 28-nanometer I said mid to low end this year that, and next year probably, that smartphone will stay in 28-nanometer because it’s very cost-effective and performance-wise is very good. For 16 FinFET I think that people will start to move with their product plan and some of the mid-end smartphone will move into 16-nanometer. That’s for sure.

In addition to that, we also see improving our 16 FinFET ultra-lower-power Mark just mentioned. And that will have a lot of application. And every product, lower power consumption is one of that advantage.

And so that would be our second wave of 16 FinFET.

Dan Heyler – BofA Merrill Lynch – Analyst

… So on 16, this FinFET Compact which is getting introduced, when would we expect to see that in volume production?

C.C. Wei – TSMC – President & Co-CEO

FFC? That will be ready next year. And we expect that high-volume production starts probably two years later. That’s year 2017. 2018 will reach the high volume.

Dan Heyler – BofA Merrill Lynch – Analyst

Okay. So is there a — so the cost-down version for mid-end phones FinFET that you alluded to, plus low power, when is that available?

C.C. Wei – TSMC – President & Co-CEO

Probably in 2017 second half.

Q4’2014:

Lora Ho – Taiwan Semiconductor Manufacturing Company Ltd – SVP and CFO

During the fourth quarter, the strong 20-nanometer ramp was mainly driven by communication-related applications. As a result, communication grew 18% sequentially and the revenue contribution increased from 59% in the third quarter to 65% in the fourth quarter. As for other applications, computer grew 7%, while consumer and industrial declined 21% and 11% respectively.

On a full-year basis, communication increased 39% and represented 59% of our revenue. The major contributing segments included baseband, application processors, image processors and display drivers. Another fast-growing application in 2014 was industrial and standard, which grew 30% year over year. The growth was mainly driven by increasing usage of power management ICs, near-field communications and audio codec within the mobile devices.

By technology, 20-nanometer revenue contribution started with a very small number in the second quarter, jumped to 9% in the third quarter and reached 21% in the fourth quarter. Such unprecedented ramp cannot be achieved without seamless teamwork with our customer, the R&D and operational people in TSMC.

On a full-year basis, 20 nanometer accounted for about 9% of our full-year wafer revenue. Looking forward, we are confident that 20 nanometer will continue its momentum to contribute 20% of the revenue for the whole year 2015.

Meanwhile, customer demand for our 28-nanometer wafers remained strong. Accordingly, these two advanced technologies, 20 nanometer plus 28 nanometer, represented 51% of our fourth-quarter total wafer revenue, a big increase from 43% in the third quarter.

Mark Liu – Taiwan Semiconductor Manufacturing Company Ltd – President and Co-CEO

Now I’ll give you a few words on 10-nanometer development update. Our 10-nanometer technology development is progressing and our qualification schedule at the end of 2015, end of this year, remains the same. We are now working with customers for their product tape-outs. We expect its volume production in 2017.

On the new technology development in TSMC, I’ll begin with beyond 10 nanometer I just talked about. We are now working on our future-generation platform technology development, with separate dedicated R&D development teams. These technologies will be offered in the 2017-to-2019 period. We are committed to push forward our technology envelope along the silicon scaling path.

In addition to the silicon device scaling, we are also working on the system scaling through advanced packaging to increase system bandwidth, to decrease power consumption and device form factors. Our first-generation InFO technology has been qualified. Currently we are qualifying customer InFO products with 16-nanometer technology. And it will be ready for volume ramp next year, 2016. We are now working on our second-generation InFO technology to supplement the silicon scaling of 10-nanometer generation.

On the other side, in addition to the recently announced 55ULP ultra-low power technology, 40ULP, 28ULP technologies for ultra-low power application, such as wearable and IoT, we are also working on 16ULP technology development. This 16ULP design kit will be available in June this year. It will be just suitable for both high-performance and ultra-low power or ultra-low voltage, less than 0.6-volt applications.

C.C. Wei – Taiwan Semiconductor Manufacturing Company Ltd – President and Co-CEO

Good afternoon, ladies and gentlemen. I’ll update you on 28, 20, 16-nanometer status and the InFO business.

First on 28 nanometer. Since year 2011, we started to ramp up 28-nanometer production. Up to now we have enjoyed a big success in terms of a good manufacturing result and, most importantly, the strong demand from our customers. This year we expect the success will continue.

Let me give a little bit more detail, first on the demand side. The demand continues to grow, which are driven by the strong growth of mid- and low-end 4G smartphones, as well as the technology migration from some second-wave segments, such as the radio frequency, hard disk drive, flash controller, connectivity and digital consumers.

Second, on the technology improvement, we continue our effort to enhance 28-nanometer technology by improving the speed performance while reducing the power consumption. 28HPC, 28 ultra-low power technology are some examples.

So to conclude the 28-nanometer status, we believe we can defend our segment share well because of excellent performance and performance/cost ratio and our superior defect density results.

Let’s talk about the 20 SoC business status. After successfully ramp up in high volume last year, we expect to grow 20-nanometer business more than double this year due to high-end mobile device demand, which were generated by our customers’ very competitive products. Our forecast of the 20-nanometer business, as Lora just pointed out, will contribute 20% of the total wafer revenue. That remains unchanged.

Now on 16-nanometer ramp-up. We expect to have more than 50 product tape-outs this year on 16-nanometer. High-volume production will start in third quarter, with meaningful revenue contribution starting in fourth quarter this year. In order to stress again what our Chairman already mentioned, that combining 20 nanometer and 16 nanometer we expect to enjoy overwhelming market segment share.

Last, I will update on the InFO business. The traction on InFO is strong. We have engaged with many customers. And a few of these customers are expected to ramp up in second quarter next year. Right now we are building a small pilot line in a new site to prepare for high-volume production next year. Also we expect this InFO technology will contribute sizeable revenue in 2016.

Dan Heyler – BofA Merrill Lynch – Analyst

…. I guess as we look at your pie chart on your slide with communications and computer being amazingly only 9% of your revenue, and, say, 10 years ago that chart was much, much different, with computer being the biggest. As we look at computer opportunities going forward, I think to some extent there’s maybe a sense of a little bit of disappointment in that we don’t see ARM necessarily in PCs yet. We haven’t really necessarily seen that ecosystem come through in the server business. And big data being such an important trend going forward, with compute growing about 15% per year, I’m wondering what TSMC is doing or what your view of that opportunity will be in the future as a potential growth driver.

Morris Chang – Taiwan Semiconductor Manufacturing Company Ltd – Chairman

Server is one of them, Mark. Well there’s IoT actually also, and just don’t forget that mobile actually we think has a few more years to run yet. Really the TSMC silicon content in the average phone is actually increasing, which is something that is not recognized by a lot of people, because everybody says that the weight, the gravity is shifting to the middle level, lower-level priced phones. But according to our data, and we have kept track of it for quite a long time, the average of TSMC silicon content in the average phone is actually increasing.

So — and look, we still look for over — I think the number we have is that by 2019 there’ll be 2b phones manufactured. It is — I think last year it was, what, 1.3b? I think, yes, 1.3b. 1.3b to 2b. And, well, and the average TSMC silicon content per phone is increasing. And the number of phones is going up. So that’s by no means a — it’s still there. It’s still a growth engine.

And then IoT, I think we talked about IoT before, and now we are certainly not oblivious to the server possibility. So why don’t I ask Mark to talk about the server and maybe C.C. will talk a little about the IoT.

Mark Liu – Taiwan Semiconductor Manufacturing Company Ltd – President and Co-CEO

Okay, Dan. I’ll just respond to you on the server part. Chairman talked about the area we’re mostly focused on, phone, today. And that would drive — give us growth momentum in the next several years.

On server, we work with the product innovators around the world. And such a field definitely we’ll not lose in our radar screen and theirs. And TSMC has been, over the years, developed our technology to suit for high-power computing.

And from 65, 40, 28 to 16 nanometer, we continuously improve our transistor performance. And today we believe our 16 FinFET Plus transistor performance probably is the top of — is one of the top of the world. It’s well suitable, well capable of doing the computing tasks.

And actually before server, and there are several supercomputers around the world, in US and in Japan, already powered by our technology, doing the weather forecasting, whether the geo exploration applications today. And on the server, on ARM in particular, we have very close partnership with ARM in recent years. And ARM is a very innovative company. They produce CPU core and new architecture every year. And we reached our leading-edge technology very early with ARM and to design their leading-edge CPU cores. And that will continue and several of our customers are taking advantage of that.

Yes, in the past it’s been getting into slower as expected. That’s because the software ecosystem is slower to come. And — but actually a lot of the server companies, system company is continuing investing in this ecosystem. Linux-based ecosystem is coming very strong too. So I think the trend will continue. And we will, with our customers, get into these segments in the next — in the near future. Yes.

C.C. Wei – Taiwan Semiconductor Manufacturing Company Ltd – President and Co-CEO

For the IoT, that would be a big topic right now in the whole industry. All I want to say is that we are happy to share with you that, a long time ago, we already focused on our specialty technology, which are the CMOS image sensor, MEMs, embedded Flash, all those kind of things. Today we add another new technology, ultra-low power, into it. And that will be the basis for the IoT technology necessary in the future. We believe that when the time comes and IoT business becomes big, TSMC will be in a very good position to capture most of the business. That’s what I share with you. Thank you.

Randy Abrams – Credit Suisse – Analyst

… And the follow-up question on profitability. If you could give a flavor on structural profitability for 2015 and some of the flavor for 20, how quick that may get to corporate margins, and for 16, because it’s an extension, whether that could be near corporate margins as that comes up. And if you could give a comment on the inventory at current levels, if there’s any — if that will stay at these higher levels from the WIP you’ve been building or if that may come back down to a different level.

Lora Ho – Taiwan Semiconductor Manufacturing Company Ltd – SVP and CFO

Randy, you have multiple questions. I recall you asked for the structural profitability. That’s you first question, right? From what we can see now, we are quite confident we can maintain equal or slightly better structural profitability, standard gross margin versus 2014.

For the 20-nanometer and 16-nanometer ramping, how would that affect corporate margin? I have said in last July it usually takes seven or eight quarters for any new leading-edge technology to get close to the corporate average. So for 20 nanometer, it will take eight quarters. So we believe — so 20 nanometer start to sell in second quarter 2014, and we expect by first quarter 2016, that’s eight quarters, it will be at corporate average level.

For 16, we are going to mass produce this product. It will follow the similar trend. 16 nanometer will be based on the feature of 20 nanometer, so the margin will start to be higher. But it will also follow the similar trend. It takes seven quarters to reach to corporate average. So say we plan to mass produce 16 FinFET in third quarter 2015, so by first quarter 2017 you will get close to corporate average. So there will — before that there will be still small dilutions. For this year, the dilution will be 2 to 3 percentage points. And the last year, the second half will be 3 to 4 percentage points and very low in 2016.

Donald Lu – Goldman Sachs – Analyst

… Chairman, about six months ago you gave us a comment on your estimate on TSMC’s market share in FinFET in 2015, 2016, 2017. So has that changed?

Morris Chang – Taiwan Semiconductor Manufacturing Company Ltd – Chairman

… Donald’s question was I said — actually I looked up my statement at that time, July 16 of last year. I said on the subject of 16 and 20, 16-nanometer and 20-nanometer technology, I said that — I actually made three statements.

The first statement was that because we started 16 a little late, our market share in 2015, our 16-nanometer market share in 2015 will be smaller than our major largest competitor’s.

The second statement I made was that we started 16 late because we wanted to do 20. And so if you combine 20 and 16, our major competitor, who will be slightly ahead of us this year on the 16, he has very little 20. Almost no 20 at all. And if we combine 20 and 16, our combined share in this year will be much higher than that competitor’s.

The third statement I made is that in 2016 we will have much larger share in just 16 nanometer than that competitor.

All right. First I want to say that I, at this time, stand on those statements. In fact, I now will add a couple of statements. The statements I will add are — that’s fourth statement now. Okay? When we have a larger share of just 16 alone in 2016, the 16 market will also be much larger than this year, 2015. So, yes, we’re slightly behind. We have a smaller market share in 2015 in a smaller market. Next year we will have a larger share, in fact much larger share, in a much larger market, 16.

So — and another statement I want to make is that I’m, at this point, very, very comfortable with all those statements that I have made on July 16 last year and the statements that I have added today. I’m very comfortable. I don’t know whether I answered your question or not, Donald.

Donald Lu – Goldman Sachs – Analyst

Yes. How about 2017, if –?

Morris Chang – Taiwan Semiconductor Manufacturing Company Ltd – Chairman

What? Well, 2017, the share is going to continue. We’re not going to lose the leadership on 16 market share once we recapture that in 2016. It’s going to continue 2017, 2018. And also both 20 and 16 are going to live longer than you might think now. Well 28, for that matter, will also live longer than you’d think.

Michael Chou – Deutsche Bank – Analyst

… Can we say your 16-nanometer market share in 2016 will be quite similar to your dominance in 28 nanometer, given that your 20 nanometer is the only provider? So the apple-to-apple comparison should be 28 to 16 nanometer.
Elizabeth Sun – Taiwan Semiconductor Manufacturing Company Ltd – Director of Corporate Communications
So market share in 16 nanometer in 2016, will that be the same as our market share at 28 nanometer, I would say, back in 2013, 2014?
Michael Chou – Deutsche Bank – Analyst Yes

Morris Chang – Taiwan Semiconductor Manufacturing Company Ltd – Chairman

Well, no, I don’t think so, because 28, of course we were virtually sole source. And 16, we already know we’re not. There’s at least one major competitor and then there’s another one that’s just eager to get in. I don’t mean that first competitor’s accessory, I mean another one.

Brett Simpson – Arete Research – Analyst

My question is around 28 nanometer. You’re running a large capacity at 28 nanometer at the moment. So can you share with us what your capacity plan is for 28? As you migrate more business to 20 nanometer and below over the next couple of years, do you intend to convert 28-nanometer capacity to lower nodes, or do you think you can keep the existing 28-nanometer capacity running full going forward.
Elizabeth Sun – Taiwan Semiconductor Manufacturing Company Ltd – Director of Corporate Communications
All right. Let me repeat Brett’s question so that people here can hear it better. Brett’s question is TSMC’s 28-nanometer capacity is very large. As our technology migrates to more advanced nodes, such as 20 and 16, in the next few years, what will be our plan on capacity of the 28 nanometer? Will we still have large demand to utilize those capacities or we need to do some changes?

Morris Chang – Taiwan Semiconductor Manufacturing Company Ltd – Chairman

Every — in every generation we worry a lot about the conversion loss we will suffer when we convert the equipment of that — the existing capacity of that generation to the capacity of the next generation. Now, so we do two things. First, we try to minimize that conversion loss. And since we’ve been living with the problem for so long now, I think we’re getting to be pretty good at it. So the conversion loss from one generation to another is normally in the low single digit, low middle single digit. Now the second thing we try to do is, and I think we actually have been doing it perhaps even more successfully than the first thing. The first thing was to try to minimize the conversion loss. The second thing we try to do is we try to prolong the life of each generation. And I was saying just five minutes ago that I think that the life of 28 nanometer may be longer than a lot of people think. And I mean it. Actually we’re still making half-micron stuff. And we try to prolong the life of every generation as we continue to migrate to advanced technologies. And 28 is certainly a generation that we want to prolong the life of.

Bill Lu – Morgan Stanley – Analyst

My first question is on 28 nanometers. If I look at your capacity this year versus 2014, how much is the increase in capacity?

Morris Chang – Taiwan Semiconductor Manufacturing Company Ltd – Chairman

High teens. High teens actually.

Gokul Hariharan – JPMorgan – Analyst

… First, I had a question on there’s been a lot of controversy about cost per transistor, whether Moore’s law — the economics of Moore’s law are slowing down. Your competitor Intel has put out a very emphatic statement saying that until 7 nanometer they’re seeing that continuing at the same pace as before. But there has been a lot of noise from the fabless community in the last couple of years that at 20 nanometer or at 16 nanometer there is a potential slowdown.

Could we have TSMC’s version now that you’re pretty much ready to start 10 nanometer and thinking already about 7? That’s my first question.
Elizabeth Sun – Taiwan Semiconductor Manufacturing Company Ltd – Director of Corporate Communications
So, all right. Let me repeat. Gokul, your question is mainly on the comments on cost per transistor. Some of the other players, I think you’re referring to Intel, who has made comments that they do see the cost per transistor to continue into 7 nanometer and so they can handle the economics of the Moore’s law. Whereas, on the other hand, fabless companies begin to complain about not seeing enough economics, starting with 20 nanometer. So what is TSMC’s statement regarding this economics issue?

Mark Liu – Taiwan Semiconductor Manufacturing Company Ltd – President and Co-CEO

Let me answer this question. The cost of transistor continues to go down. And by scaling mostly is — everybody knows, nobody I think has refused that statement — we see the cost of transistor continues going down in a constant rate. And in going forward, the cost of transistor going down probably at slightly slower rate. That’s the argument. But it really depends on companies. And for some companies simply do not have the technological capabilities. And today, further going down the Moore’s Law technology developments, just a few. And we — as far as whether those costs can — is — can get enough returns, and of course that has to do with how much that technology brings value to the product where they command the price. And today we see certain segments will continue to need that type of system performance to get enough return. So this is the reason we committed to push the system scaling.

Roland Shu – Citigroup – Analyst

Just a 10-nanometer question to C.C. Since, C.C., you said we are expecting to volume production of 10-nanometer in 2017. But I remember in the past two quarters actually our goal was to pulling in 10-nanometer mass production by end of 2016. So are we pushing out the 10-nanometer mass production schedule a little bit on that?

C.C. Wei – Taiwan Semiconductor Manufacturing Company Ltd – President and Co-CEO

Let me explain that, because 10 nanometer, the mask layers is about 70 to 80. So you’ve got to start in 2016 to have output in 2017. So what I’m talking about is 2017 is to start to have revenue.

Q3 2014:

Lora Ho – TSMC – SVP & CFO

By technology, after two years of meticulous preparation we began volume shipments of 20-nanometer wafers. The revenue contribution went up from 0% to 9% of the third quarter wafer revenue. This is the fastest and the most successful ramp for a new technology in TSMC’s history.

Mark Liu – TSMC – Co-CEO


On 10-nanometer development, our 10-nanometer development is progressing according to plan. Currently we are working on early customer collaboration for product tape-outs in 4Q of 2015. The risk production date remain targeted at the end of 2015.

Our goal is to enable our customers’ production in 2016. To meet this goal, we are getting our 10-nanometer design ecosystem ready now. We have completed certification of over 35 EDA tools using ARM’s CPU core as the vehicle. In addition, we have started the IP validation process six months earlier than previous nodes with our IP partners.

We are working with over 10 customers on their 10-nanometer product design. The product plans show wide range of applications, including application processors, baseband, CPU, server, graphics, network processor, FPGA and game console. Our 10-nanometer will achieve industry-leading speed, power and gate density.

C.C. Wei – TSMC – Co-CEO


Next, I’ll talk about the 16-nanometer ramp and competitive status. In 16-nanometer, we have two versions, 16 FinFET and the 16 FinFET Plus.

FinFET Plus has better performance and has been adopted by most of our customers. 16 FinFET we began the risk production in November last year and since then have passed all the reliability qual early this year. For the FinFET Plus, we also passed the first stage of the qualification on October 7 and since then entered the risk production. The full qualification, including the technology and product qual, is expected to be completed next month.

So right now we have more than 1,000 engineers working on ramp up for the FinFET Plus. On the yield learning side, the progress is much better than our original plan. This is because the 16-nanometer uses similar process to 20 SOC, except for the transistor. And since 20 SOC has been in mass production with a good yield, our 16 FinFET can leverage the yield learning from 20 SOC and enjoy a good and smooth progress. So we are happy to say that 16-nanometer has achieved the best technology maturity at the same corresponding stage as compared to all TSMC’s previous nodes.

In addition to the process technologies, our 16 FinFET design ecosystem is ready also. It supports 43 EDA tools and greater than 700 process design kits with more than 100 IPs. All these are silicon validated. We believe this is the biggest ecosystem in the industry today.

On the performance side, compared with the 20 SOC, 16 FinFET is greater than 40% speed faster than the 20 SOC at the same total power or consumes less than 50% power at the same speed. So our data shows that in high-speed applications it can run up to 2.3 gigahertz. Or on the other hand, for low-power applications it consumes as low as 75 miniwatts per core.

This kind of a performance will give our customer a lot of flexibility to optimize their design for different market applications. So far we expect to have close to 60 tape-outs by the end of next year.

In summary, because of the excellent progress in yield learning and readiness in manufacturing maturity and also to meet customers’ demand, we plan to pull in 16-nanometer volume production through the end of Q2 next year or early Q3 year 2015. The yield performance and smooth progress of our 16 FinFET, FinFET Plus further validate our strategy of starting 20 SOC first, quickly follow with the 16 FinFET and FinFET Plus. We chose this sequence to maximize our market share in the 20-, 16-nanometer generation.

Next, I’ll talk about 28-nanometer status. We had strong growth in second quarter on 28-nanometer. And the business grew another quarter and accounted for 34% of TSMC’s wafer revenue in third quarter. On the technology side, we continue our effort to improve yield and tighten the process corners, so that our customer can take advantage of these activities and shrink their die size and therefore reduce the cost.

Let me give you an example. On 28LP, the polysilicon gate version, we now offer a variety of enhanced processes to achieve better performance. We also offer a very competitive cost so that our customers can address the mid- to low-end smartphone market. In addition to the 28LP, we also provide a cost-effective high-K metal gate version, the 28HPC for customers to further optimize the performance and the cost. Recently, we added another 28-nanometer offering we called 28 Ultra Low Power, for ultra low power applications obviously. We believe this 28ULP will help TSMC customers to expand their business into the IoT area.

In summary, we expect our technology span in 28-nanometer node will enhance TSMC’s competitiveness and ensure a good market share. We also expect the strength of the demand for our 28-nanometer will continue for multi years to come. In response, we are preparing sufficient capacities to meet our customers’ future demand.

Q2 2014:


Morris Chang – TSMC – Chairman

Now a few words on 20-nanometer and 16-nanometer progress. In the last two and half to three years, 28-nanometer technology has driven our growth. In the next three years, 20 and 16-nanometer technologies are going to drive our growth; 28 in the last two and half to three, 20 and 16 in the next three.

After two years of meticulous preparation, we began volume shipments of our 20-nanometer wafers in June. The steepness of our 20-nanometer ramp sets a record. We expect 20-nanometer to generate about 10% of our wafer revenue in the third quarter and more than 20% of our wafer revenue in the fourth quarter. And we expect the demand for 20-nanometer will remain strong and will continue to contribute more than 20% of our wafer revenue in 2015. It will reach 20% of our total wafer revenue in the fourth quarter of this year and it will be above 20% of our total wafer revenue next year.

The 16-nanometer development leverages off 20-SoC learning and is moving forward smoothly. Our 16-nanometer is more than competitive, combining performance, density and yields considerations. 16-nanometer applications cover a wide range including baseband, application processors, consumer SoCs, GPU, network processors, hard disk drive, FPGA, servers and CPUs. Volume production of 16-nanometer is expected to begin in late 2015 and there will be a fast ramp up in 2016. The ecosystem for 16-nanometer designs is current and ready.

A few years ago, in order to take advantage of special market opportunities, we chose to develop 20-SoC first and then quickly follow with 16-nanometer. We chose this sequence to maximize our market share in the 20/16-nanometer generation. As the 20/16 foundry competition unfolds, we believe our decision to have been correct.

Number one, in 20-SoC, we believe we will enjoy overwhelmingly large share in 2014, 2015 and onwards.

Number two, in 16-nanometer, TSMC will have a smaller market share than a major competitor in 2015. But we’ll regain leading share in 2016, 2017 and onwards.

Number three, if you look at the combined 20 and 16 technologies, TSMC will have an overwhelming leading share every year from 2014 on.

Number four, in total foundry market share, after having jumped 4 percentage points in 2013, TSMC will again gain several percentage points in 2014. This is the total foundry market share covering all technologies. After having increased 4 percentage points last year, TSMC will gain another several percentage points this year.

Now a few words about 10-nanometer. The 10-nanometer development is progressing well. The 10-nanometer speed is 25% faster than the 16-nanometer. The power consumption is 45% less than 16-nanometer and the gate density is 2.2x that of the 16-nanometer. Power is 25% faster. Did I say power? I meant speed. Speed is 25% faster, power is 45% less, gate density 2.2 times more, all compared with 16-nanometer.

We work closely with our key customers to co-optimize our 10-nanometer process and design. We expect to have customer tape outs in the second half of 2015.

William Dong – UBS – Analyst

Good afternoon Mr. Chairman. I guess — we keep talking about technology. I guess the question I want to ask is that with all this rush to continue to push down technology roadmap, to go down to 16, to 14 and to 10 nanometer, what are our thoughts about what’s driving this demand? As we move toward, for example, Internet of Things, is there such a requirement to keep pushing on the technology front to actually have enough, sufficient demand to keep driving it down?

Morris Chang – TSMC – Chairman

Well, if the cost is low enough — cost is very much a part of the equation. If the cost is low enough, the demand will increase because we can see a lot of applications that are just waiting there. Of course I’m talking about the mobile products, but I’m also talking about Internet of Things, so wearables and so on, so on, Internet of Things. The applications are just waiting there for better, for faster speed and lower power and higher density ICs. Cost is definitely in the equation.

So, yes, when you ask will the demand be there. If we can get the cost down to an acceptable level, demand will be there. And of course that’s why — that’s how things like EUV come into the question. Nobody has asked about that yet. We actually were prepared to answer that with the same answer that we gave you last time, by the way, that we are still planning to — there’s still a possibility to use EUV on one, one or two — or just one layer in the 10 nanometer, yes. One layer, one layer in 10 nanometer and 7 I think is, of course, an even better candidate.

Dan Heyler – BofA-Merrill Lynch – Analyst

Hopefully this question simplifies and doesn’t complicate things. Just to make sure I understand this share loss thing, so basically what you’re saying is the share loss at 16, these are customers that are choosing to skip 20? Is that how should I think of this that these are not any — are any of these customers that are currently 20 that are going to 16 next year or is this all people that are choosing to skip 20?

Morris Chang – TSMC – Chairman

Well, first of all, I want to question the word share loss. I don’t consider there is share loss because just like 32/28 we had zero share in 32. But then we were very successful in 28. The two really belong to the same generation. And 20 and 16 also belong to the same generation. So, yes — and share loss means that you start with something and then you lose it, it becomes less. Well, this year nobody has — everybody has zero share, okay. And I am just saying that we will start on 16, we will start with a lower share than we did with 20 or 28. We start with a lower share than we did with 20 or 28. And then we’ll get back to a high share in 2016. I’m just arguing with him, but he did have a question; what was that?

Dan Heyler – BofA-Merrill Lynch – Analyst

Or just simply are your — are these customers moving to 16, are these the ones that have currently been on 20 or are these the guys that have skipped because the debate in the industry is should we go straight to 16 and skip 20. So are these customers that have basically been at 28 and are skipping 20 and going straight to 14 at your competitor?

Morris Chang – TSMC – Chairman

Mainly because our customers wanted it sooner. We got in a little late, as I said; our customers wanted it sooner. So that’s why we’re starting — and we’ll catch up only a little later.

Michael Chou – Deutsche Bank – Analyst

Chairman, regarding the 16/20 nanometer, could we say your total market share in 16 and 20 nanometer will be similar to 28/32 for the corresponding period? Can we say that?


Morris Chang – TSMC – Chairman

The combined 20 — I just ran an analysis just a couple of weeks ago, so I know exactly the answer to your question. The combined 20/16 market share in the first two years of its existence, which is this year and next year — well, I guess I have to add in 2016 — the combined — our combined 20/16 share in 2014, 2015 and 2016 will still be greater than our combined share of 32 and 28 in 2012, 2013 and 2014.

Q1 2014:


Mark Liu – Taiwan Semiconductor Manufacturing Company Ltd – President & Co-CEO

Then I cover the updates on 16 FinFET, 16 FinFET plus and our 10 FinFET. First, we have two general offers for customers, 16 FinFET and 16 FinFET plus. 16 FinFET plus offers 15% speed improvement, the same total power, compared to 16 FinFET. More importantly, 16 FinFET plus offers 30% total power reduction at the same speed, compared to 16 FinFET.

Our 16 FinFET plusmatches the highest performance among all available 16-nanometer and 14-nanometer technologies in the market today. Compared to our own 20 SoC, 16 FinFET plus offers 40% speed improvement. The design rules of 16 FinFET and 16 FinFET plus are the same; IPs are compatible.

We will receive our first customer product tapeout this month. About 15 products planned for 2014, another about 45 in 2015. Volume production is planned in 2015. Since 95% tools of 16 and 20 are common, we will ramp them in the same gigafabs in TSMC. 16 FinFET yield learning curve is very steep today and has already caught up with 20 SoC. This is a unique advantage in TSMC 16-nanometer.

For 10 FinFET, 10 FinFET offer TSMC’s third generation FinFET transistor, designed to meet the power and the performance requirement of mobile computing devices. 10 FinFET will offer greater than 25% speed improvement, the same total power, compared to 16 FinFET plus. More importantly, 10 FinFET offer greater than 45% total power reduction at the same speed, compared to 16 FinFET plus.

10 FinFET will offer 2.2X of density improvement over its previous generation, 16 FinFET plus. So, currently, 10 FinFET development progress is well on track, but risk production will be in 4Q 2015. Above are the key messages on three items.

C.C. Wei – Taiwan Semiconductor Manufacturing Company Ltd – President & Co-CEO

…  I would like to take this opportunity to share with you the two topics with you; namely, the 20 SoC ramp and TSMC’s advance assembly solution to our customer. First, I will brief you on the status of 20 SoC ramp.

Let me recap what we had said in the last meeting here. We started 20 SoC production in January this year and by fourth quarter of this year, the 20 SoC will account for 20% of the quarterly revenue — wafer revenue. And for the whole year of 2014 we expect 20 SoC will be about 10% of our total wafer revenue of the year of 2014, of course. All these expectations remain the same today.

Now, there are some major achievement I would like to share with you. First, on the ramping speed. 20 SoC by far is the fastest ramping in TSMC’s history. Of course, this fast ramp is to meet customers’ strong demand. And I believe this production of 20 SoC in TSMC represents one of the largest mobilization in semiconductor history. Let me share with some numbers, so you can have a snapshot on this ramp.

In about one year’s time we have built a manufacturing team of 4,600 engineers and 2,000 operators in two fabs; Fab 14 in Tainan and Fab 12 in Hsinchu. More impressively, in the same time period, close to one thousand engineer has been relocated among TSMC’s fabs in Hsinchu, Taichung and Tainan. All these are prepared for the 20 SoC’s ramp-up. This magnitude of mobilization, I believe, is not an easy job. We move people around that show our strength in manufacturing and this highly mobilization is not moving the tool or just a handful around. We’re talking about we’re moving the engineer and operator among TSMC’s fabs. In the meanwhile, we have installed more than 1,500 major tools for this 20 SoC ramp.

Of course, the faster ramp has done with a very good device reliability and a very good wafer defect density. Without those, the fast ramp will make no sense. Now how important are these 20 SoC ramp? Well we knew that 28 nanometer provided the engine of TSMC’s profitable growth in the years of 2012 and 2013 and similarly, we expect 20 SoC will provide the engine of TSMC’s profitable growth in year 2014 and 2015.

Now let me switch gear to advanced assembly technologies. The purpose of — for us to develop advanced assembly technology is to provide our customer a better performance and a lower power consumption, while at a lower cost as compared to the previous assembly solution. For example, we have developed CoWoS and CoWoS has been developed to connect two dies or more dies together to have a very high performance and a very low power consumption and today CoWoS is in a small volume production already. However, the cost structure of CoWoS has made CoWoS only suitable for some very high performance applications and the products. To address the cost structure issue and for those mobile — very large volume mobile devices, we have developed a derivative technology called InFO; that stands for integrated fan-out.

InFO will have significant lower cost as compared to CoWoS and at the same time, InFO also can have the same capability to connect multiple dies together just as the CoWoS did. Currently, we’re working with major customers and the InFO, to incorporate this structure into their future product. We have delivered many functional dies to our customers already and the process optimization are ongoing.

In fact, we are very excited about TSMC’s advanced assembly technology development as we’re building a innovative solution for our customers product, which requires high performance, lower power consumption and at a very reasonable cost structure.

Michael Chou – Deutsche Bank – Analyst

I don’t know, C.C. Wei, could you give us more color on the advanced packaging you just mentioned. What’s the difference between this one and CoWoS?

C.C. Wei – Taiwan Semiconductor Manufacturing Company Ltd – President & Co-CEO

The difference between the InFO and the CoWoS is actually the geometry to connect multi-dies together. In the CoWoS, actually we are using very small geometry, actually 65 nanometers of geometry to connect the multi-dies together. In InFO, we’re using the larger geometry, which are still technical confidential information. But the cost is much, much lower.

Brett Samson – Arete Research – Analyst

Just had a quick question. Can you give us a sense within the 28 nanometer nodes, how does that split between poly-SiON and high-K and how do you think this might trend through this year?
Elizabeth Sun – Taiwan Semiconductor Manufacturing Company Ltd – Director, Corporate Communications
So Brett’s question is what is really the mix between poly-SiON, that is our 28 LP, versus our high-k metal gate and what is going to be the trend with respect to that kind of mix throughout this year?

Mark Liu – Taiwan Semiconductor Manufacturing Company Ltd – President & Co-CEO

Allow me to answer that. Our 28 nanometer high-k metal gate has three options, 28HP, 28HPM and 28HPC. And this year these 28 high-k metal gate technology will be about 85% of the overall 28 nanometer in terms of the wafer.

Dan Heyler – Bank of America Merrill Lynch – Analyst

… I want to follow up on this InFO, this is quite interesting. Could you just maybe elaborate a bit more on what exactly are you going to be attaching, so which devices are we talking about in terms of what – with CoWoS it was pretty much PLD [Programmable Logic Devices, like Altera] companies were there and others, some baseband. So what devices are you attaching on the initial generation between the different chips? And second part of that question would be what kind of — how many customers do you expect to manage to have in this area, because you start peddling lots of devices and lots of customers it gets really complicated, you start to look more like an OSAT [Outsourced Semiconductor Assembly and Test]. So I wonder if this is going to be a pretty small group of high volume products? And finally on — as you attach — are you actually doing a chip attach or will you be doing only the wafer level activity and will you be having — working with the OSATs to do the actual chip attach?

C.C. Wei – Taiwan Semiconductor Manufacturing Company Ltd – President & Co-CEO

Dan, to answer your question, the InFO actually we’re right now working on application processor together with memory dies. That’s good enough for you. I cannot say anything more than that. We’re working with mobile product customers and we did not — we expect very high volume, but we did not with many, many customers as current status. We’re working on the wafer level process, stacking die, and couple of them, we’re able to do the complete line all here.

Q4 2013:


Morris Chang – Taiwan Semiconductor Manufacturing Co., Ltd. – Chairman

Good afternoon, ladies and gentlemen. Today, our comments are scheduled as on the slide on your left. First, I’m very glad to have the opportunity to introduce our new top management team.

I’d first start with Lora, although I think everyone knows Lora well. Lora has a bachelor’s degree from Chengchi University, a master’s degree from National Taiwan University, both degrees in finance. She worked for Cyanamid, Wyse, Thomas & Betts and TI-Acer before she joined TSMC in 1999. And she has been TSMC’s CFO since 2003.

Next, Dr. C. C. Wei. C. C. has a bachelor’s degree from Chiao Tung University and a Ph. D. from Yale University, both in electrical engineering. C. C. worked for TI, SGS, Chartered before joining TSMC in 1998. C. C. has been Senior VP of Operations, Senior VP of Business Development, Co-COO, and in the Co-COO job CC was successively responsible for R&D and Operations. Now C.C. is President and Co-CEO.

C.C. is 60 years old and I should add that Lora is 57 years old.

Mark Liu; Mark has a B.S. from National Taiwan University and a Ph. D. from Berkeley, both in electrical engineering and computer science. Mark worked for Intel, Bell Telephone Labs before joining TSMC in 1993. And at TSMC he has been VP, Senior VP of Operations and he was also a Co-COO, and all the time he was Co-COO he was responsible for our sales, marketing and planning.

And now Mark and C.C. are Presidents and Co-CEOs of the Company. Mark is 59 years old.

C.C. Wei – Taiwan Semiconductor Manufacturing Co., Ltd. – President & Co-CEO
[about the technology aspects of TSMC’s growth engine]

Good afternoon everybody. I am C.C. Wei and I will give you the update of our 28-nanometer high-K metal gate version. Let me recap the history. We started 28-nanometers volume production in year 2011 mainly on the 28LP, the oxynitride version. And since then the business continued to grow. So last year, we had tripled 28-nanometers of business versus year 2012. That in this year, year 2014, the business for 28-nanometer will continue to grow at least by another 20%, and all the increase are coming from the 28-nanometers high-K metal gate version, which is we name it 28HPM.

Let me add more color to it. We expect we’re going to have about more than 100 tape-outs from about 60 customers in this year in 28HPM. Now you may ask it why? Why there are so many products that were designed on this technology? One of the main reason I can give it to you is the performance, the superior performance. For example, 28 HPM compare with the 28LP that will gain another 30% of the speed at the same kind of power consumption, or you can say that at the same power consumption — at the same speed, you will consume 15% less power. And everybody knows that the power consumption in the mobile device is very important. That’s why we think we have a very high, good business on the 28 HPM.

Now, furthermore, after the 28HPM, we also offer 28HPC, which is a low-cost version of the 28HPM. The 28HPC is developed to meet the customers’ demand to compete in the mid-to-low-end smartphone market. We expect that this 28HPC will have a very strong demand in the next two years. That’s what we have.

Okay, let me give you some information on the competition to explain why we are so confident on this 28 nanometers high-K metal gate business. If you still remember that long time ago, we mentioned about gate-first and gate-last. Still remember that terminology? All right. So, simply to say that gate-last version will give you better performance and a better process control. As a result, all our customers will enjoy using the gate-last versions that technology to have a higher or better performance than other products which are designed with a different approach.

In addition to that I’ll say that because of the better process control and TSMC’s manufacturing excellence, we have a much better yield than our competitor, so that our customer will enjoy the lower die cost. That’s what we have. And that’s why we explained that our confidence that the 28 nanometers business continue a very good business for us.

Now, let me switch the gear to 20-SoC. That’s another exciting news that we have, I want to share with you. 20-SoC is a technology that we developed to enable TSMC’s customer to lead in the mobile device market. And this technology we are believe in this year, next year, well I have a very good business to capture. So, what is the status now of the 20-SoC? We have two fab, Fab 12 and Fab 14 that complete the qual of 20-SoC. And as a matter of fact, we started production. We are in volume production as we speak right now. So, it’s in the high-volume production as we are speaking right now.

Let me add more information to that. First, there are more than $10 billion had been committed to build capacity. Second, we have more than 2,500 engineers and 1,500 operators right now in manufacturing, doing the 20SoC volume production. The ramping rate will be the fastest one in TSMC’s history. Using the ramping rate, you can get the hint of the business, how big the business is.

Another fact to share with you, we have probably — at the end of this year, we have more than dozens of tape-out from about a dozen customers that they are producing the 20SoC product, okay? You may ask, good business, how about the competition? If you have a very strong competition, you might — cannot have too much of confidence on the future. Let me talk about the competition.

I’m very confident that our 20SoC is the highest gate density in volume production at 20 nanometers node. And please remember that; highest gate density and a high volume production. I don’t see any company today can claim on this kind of production and with this kind of gate density at this time, nobody. And most of our competitors, to be frank with you, they’re not even into this game yet. So we are confident to have a good business that will contribute to TSMC’s revenue — wafer revenue by probably around 10% this year. And with that I conclude my presentation and thank you for your attendance.

Mark Liu – Taiwan Semiconductor Manufacturing Co., Ltd. – President & Co-CEO
[about TSMC’s competitiveness versus Intel and Samsung]

I will start this topic by update you our recent development status of our 16-FinFET technology. 16-FinFET technology has been a very fast paced development work in TSMC and we have achieved the risk production milestone of 16-FinFET in November 2013, November last year. And this month, we should pass the 1,000 hours so-called the technology qualification. So the technology is ready for customer product tape-out.

Our 16-FinFET yield improvement has been ahead of our plan. This is because we have been leveraging the yield learning of 20SoC. Currently 16-FinFET SRAM yield is already close to 20SoC. And with this status we are developing an enhanced transistor version of 16-FinFET plus, with 15% performance improvement. It will be the highest performance technology among all available 16 and 14 nanometer technology in 2014. The above progress status is well ahead of Samsung.

Let me comment on the Intel’s recent graph shown in their investor meetings, showing on the screen. We usually do not comment on other company’s’ technology, but this is — because this has been talking about TSMC technology and as Chairman said, has been misleading. To me it’s erroneous, based on outdated data. So I like to make the following rebuttal.

futureICT - 2013--Intel Is Committed to Press Ahead on Density - Enables a 'Transistor Like' Lead in Density

2013: Intel Is Committed to Press Ahead on Density – Enables a “Transistor Like” Lead in Density

futureICT - Jan-2014--Density Comparison by TSMC vs Intel 2013 statement

January 14, 2014: Density Comparison by TSMC vs. Intel’s 2013 statement at its Investor Meeting

On this view graph, the vertical axis is the chip area on a log scale. Basically this is compared at chip area reduction. On the horizontal axis, it shows four different technologies; 32/28, 22/20, 14/16-FinFET and 10-nanometer. 32 is Intel technology and 28 is TSMC technology. So is the following three nodes; the smaller number 20, but on 14-FinFET is Intel, 16-FinFET is the TSMC. On the view graph shown at Intel investor meeting, it is with the grey plots showing here. The grey plots shows the 32 and 20 nanometer, TSMC is ahead of the area scaling, but however, with 16, the data, grey data shows a little bit uptick. And following the same slope, go down to the 10 nanometer. What’s the correct data we show on the red line, that’s our current TSMC data. The 16, we have been volume production on 20 nanometer, as C.C. just mentioned, this is the highest density technology in production today.

We took the approach of significantly using the FinFET transistor to improve the transistor performance on top of the similar back-end technology of our 20 nanometer. Therefore, we leveraged the volume experience into volume production this year, to be able to immediately go down to 16 volume production next year, within one year. And this transistor performance and innovative layout methodology can improve the chip size by about 15%. This is because the driving of the transistor is much stronger, so that you don’t need such a big area to deliver the same driving circuitries.

And for the 10 nanometer, we haven’t announced it, but we did communicate with many of our customers that that will be the aggressive scaling of technology we’re doing. And so, in the summary, our 10 FinFET technology will be qualified by the end of 2015. 10 FinFET transistor will be our third generation FinFET transistor. This technology will come with industry’s leading performance and density. So, I want to leave this slide by 16 FinFET scaling is much better than Intel said, but still a little bit behind Intel.

However, the real competition is between our customer’s product and Intel’s product or Samsung’s product. TSMC’s Grand Alliance; that is the alliance of us, our customers, EDA, IP, communities and our supplier is the largest and the only open technology platform for the widest range of product innovations in the industry today. As for the tape-out of our 16 FinFET, more than 20 customer product tape-outs on 16 FinFET technology is scheduled this year already. They include wide range of applications; baseband, application processors, application processor SoCs, graphics, networking, hard disk drive, field programmable array, CPUs and servers. Our 16 FinFET technology captured the vast portion of products in the semiconductor industry.

We’ve been actively working with our customer’s designer on this since last year. TSMC’s speed and productization of the customer’s product and our ability to execute for a short time-to-market for a customer are far superior than Intel and Samsung.

Lastly, I would comment on the mobile products. With this 16 FinFET technology and the innovations of processor architecture and various IP from our customers, we are confident that this planned, 16 FinFET mobile product, which is going to tape out to us, will be better than Samsung’s 14 nanometer and better than Intel’s 14 SoC. Thank you very much.

Roland Shu – Citigroup Global Markets – Analyst

… Is the 16-plus is improving from the design you were saying or this is just for the performance enhancement or are we going to consider to change our 16-plus to — even to the — same as the 14-nanometer? …

Mark Liu – Taiwan Semiconductor Manufacturing Co., Ltd. – President & Co-CEO

16 FinFET-plus is a transistor enhancement. For the design — back-end design rule are similar to 16 FinFET, therefore designer can design on 16 FinFET and re-characterize, upgrade their product performance. This transistor, as I mentioned, also can reduce the cell size, standard cell size, and with the enhanced performance transistor. That’s the way to reduce the chip size. So we do not intend to change the naming. I mean this is engineering, this is the word — this is the name that we chose earlier based on the physical consistent number and we do not intend to change name.

Randy Abrams – Credit Suisse – Analyst

My first question on the management structure now with the Co-COOs promoted to Co-CEOs. If you could talk about how the responsibilities would change with their promotion to Co-CEO? And for yourself, Dr. Chairman, how will your activities change versus before this move? So if you could talk about the roles for each of the different Co-CEOs and yourself now.

Morris Chang – Taiwan Semiconductor Manufacturing Co., Ltd. – Chairman

We started with President and the Co-CEO in November, and it has been now two months. And if you ask me now, has my life changed in the last two months? My answer is no. It has not changed. But I think that my effort, my time has been spent more on the coaching aspects. I think that — I do believe that I do more coaching. If I spend 100 hours and — I now perhaps spend 20 hours of the 100 hours on coaching, whereas in the past, I’d probably spend only 5 or 10 hours of the 100 hours on coaching.

Now, actually, this is an overseas call, is this correct? Yes. So let me just explain very briefly what the Taiwan law and customs are in relation to a Chairman’s authority and responsibility. Basically, by both law and custom, the Chairman of a company has the ultimate authority and responsibility, basically. However, he may delegate his authority and responsibility to the President. He may also take it back anytime. He can delegate any and all, any or all of the responsibilities to the President. And now these two gentlemen, their titles is President and co-CEO. President comes first. They are, in a very legal sense, Presidents. Now the co-CEO is basically a Western term. And then in the United States, a CEO usually bears the final ultimate responsibility and authority as a Chairman in Taiwan does. In the US, it’s the CEO. Now — so my role in the future is really to convert these two gentlemen from the Taiwan sense President to the US sense CEO, and it will be a gradual process.

Donald Lu – Goldman Sachs – Analyst So Chairman, (spoken in foreign language).

First question is, I want to ask the Chairman, how would you — are you satisfied with the transition so far and also, how the two Presidents would share their work? Are they still rotating or not? And (multiple speakers) but probably not now. And maybe give us some details about how the Company is run. And I have a follow-up question on competition.

Morris Chang – Taiwan Semiconductor Manufacturing Co., Ltd. – Chairman

All right. I am quite satisfied with the transition. And these two gentlemen; Mark is now responsible for sales, marketing, strategic planning, business development, and yes, information technology and materials management, all those. And C.C. is responsible for operations, all the operations, and he is also responsible for specialty technology R&D. Specialty technology incidentally accounts for 25% of our total business. So now, Donald, your other question is whether they’re going to rotate. My plan currently is, I don’t plan it that way, I don’t plan it that way right now. However, I deem it’s a pretty flexible thing. Tomorrow, I may take one part of Mark’s and give it to C.C. or vice versa. But I’m not considering rotation, per se. Yes, does that answer your first question?

Donald Lu – Goldman Sachs – Analyst

… Okay, since we are already doing it, why don’t you give us more color? 16-nanometer, for example, are we saying that in terms of die size, performance, our product will be very similar to Intel’s 40-nanometer FinFET? And also, Mark commented that for the FinFET tape-outs, specifically there’s a CPU and server chips, and can we say that TSMC’s CPU and server chips will have the similar physical performance as Intel’s products today?

Morris Chang – Taiwan Semiconductor Manufacturing Co., Ltd. – Chairman

Well, I think, Donald, we have already given everybody enough information on our 16-FinFET. I think that if we keep giving more, we would be helping our competitors who have picked on us. And so, now, we do stand on what we said. We are going to — our Grand Alliance will out-compete Intel and Samsung. Our Grand Alliance on the 16-FinFET will out-compete. By that I don’t mean that we’ll completely exclude them, no, no, no. We can’t do it. We won’t be able to do that. But our Grand Alliance, with us as foundry supplier, will capture a large share of the 16-nanometer. You agree with that don’t you?

Mark Liu – Taiwan Semiconductor Manufacturing Co., Ltd. – President & Co-CEO

The fabless companies in China are very aggressive approaching leading-edge technologies. To tell you, our 16-FinFET this year, already some of the fabless companies will be using it in tape-outs. So, I think all those fabless companies’ subsidy will propel them into the leading-edge technology more.

July 20, 2013: TSMC takes on rivals with Grand Alliance strategy, says Chang [Global Data Point] by TMC News

(Global Data Point Via Acquire Media NewsEdge) Taiwan Semiconductor Manufacturing Company (TSMC) chairman and CEO Morris Chang, at a July 18 investors conference, talked about the importance of the foundry’s close ties with customers and ecosystem partners, and described how TSMC has formed a “Grand Alliance” with EDA, IP, software IP, systems software and design services providers.

TSMC has been competitive against fellow pure-play foundries, said Chang. In the face of rising competition from IDMs, TSMC with its ability to deliver cutting-edge technologies and advanced manufacturing capacity is also able to outshine the rivals, Chang indicated.

With the industry moving towards sub-20nm technologies, Chang believes that TSMC will become more capable of fending off rivals like Samsung Electronics and Intel. “Now in this new era of competition, the competition is not between foundries. It is not between foundries and IDMs. It is between ‘Grand Alliances’ and IDMs,” Chang pointed out.

Chang named ARM, Imagination, Cadence and Mentor as some of TSMC’s IP and EDA partners.

TSMC’s so-called “Grand Alliance” seems like an expansion of its Open Innovation Platform (OIP), which was announced in 2008. TSMC’s OIP is a business strategy aiming to provide integrated services from design to manufacturing to testing and packaging. According to TSMC, the platform is to bring together the thinking of customers and partners under the common goal of shortening design time, minimizing time-to-volume and speeding time-to-market.

In addition, Chang noted that TSMC’s 28nm process technology is on track to triple in wafer sales in 2013. TSMC made 29% of its NT$155.89 billion (US$5.18 billion) revenues from selling 28nm chips in the second quarter of 2013.

Chang also reiterated TSMC’s plans that 20nm technology will begin volume production in early 2014, followed by volume production of 16nm FinFETs within one year.

The ultimate ultrabooks/notebooks and 2-in-1 hybrids/detachables with the upcoming Intel Core M processors

What is presented below it is an incredible advance versus that of one a half year ago. For comparison see my earlier Saving Intel: next-gen Intel ultrabooks for enterprise and professional markets from $500; next-gen Intel notebooks, other value devices and tablets for entry level computing and consumer markets from $300 [this same blog, April 17, 2013] post. Note as well that with Core M Intel is able to differentiate its enterprise offerings from the consumer ones, as the latter could be mainly represented by products like in ASUS EeePC revival with the $199/€199 EeeBook X205 at IFA 2014: the Chromebooks alternative based on Windows 8.1 with Bing [this same blog, Sept 6, 2014].

image

See also the report about IDF 2014 PC Mega Session: 2-in-1s to Rule Mobile, Wireless Everything Coming Soon [Tom’s Hardware US, Sept 10, 2014]

image

They are of the fanless design! So it is time—says Intel—to upgrade your aging PCs to these business-ready touch devices built on the latest Intel Core processors and Windows 8.1:

Touch business-grade performance [Intel YouTube channel, Sept 4, 2014]

Refresh your aging PCs with new business-ready touch devices with Intel Inside®. Give users the features and performance they want while unleashing the productivity of touch. Users expect the mobility and instant touch access they enjoy at home in their workplace. From 2in1s to tablets to all-in-one PCs, an expanding range of business-ready Intel® architecture-based devices provide the right touch device for different worker needs along with the security, manageability, and compatibility IT requires.

For small businesses a special business app bundle from Intel (already available with selected business tablets) is also providing an immediate opportunity to boost productivity:

Intel Business Apps [Intel YouTube channel, Sept 8, 2014]

Chip Shot: Intel Business App Portfolio Now on Windows OS and Intel® Core™ M Processor-based Devices [News story on Intel Newsroom, Sept 5, 2014]

The Intel® Business App Portfolio, a collection of useful business apps to boost productivity and enhance security of small businesses, is now available on the latest Intel-based tablets and 2 in 1 devices running the Windows OS. And, with the app bundle on some of the newest devices powered by Intel® Core™ M processors, users will realize additional benefits with up to 8 hours of battery life with full HD display and up to 50 percent faster CPU performance. Previously offered only on Intel-based tablets running the Android OS, the mobile app bundle includes special offers—valued at more than $250—and is now available with the following Windows apps:

AirWatch, Calc Pro HD, CamCard, Dictionary, DocuSign, Drawboard PDF, McAfee Anti-Virus Plus, Microsoft Office 365 Business, OneDrive, OneNote, Skype, SpeechTrans and Splashtop Business.

It is available for free by purchasing a qualifying device from Intel® Technology Provider members in North America, Latin America and Europe or through Amazon.com (in the U.S. and Canada). Visit www.intel.com/businessapps to learn more.

image

Chip Shot: Intel Releases Mobile App Bundle for Business Tablets [News story on Intel Newsroom, Aug 4, 2014]

Intel® Business App Portfolio is now available for select tablets based on Intel® processors and Android. Intel has bundled a collection of top business apps that include Evernote, ooVoo, Dropbox, McAfee, DocuSign and others, to turn tablets into enhanced productivity tools for workers. With the app bundle, an employee can easily create and share documents and presentations; video conference; access company files in the cloud or a remote PC; guard sensitive data from viruses; and capture images and signatures for business contracts. At an estimated value over $250, the portfolio is a cost-effective solution that meets the needs and budgets of small businesses worldwide to accelerate achieving goals of improving customer interactions and sales growth. The app bundle is available for free by purchasing a qualifying tablet from Intel® Technology Partner members in North America, Latin America and Europe or through Amazon.com (in the U.S. and Canada).

image

The categories in Intel® Business App Portfolio (for small businesses) as of Sept 9, 2014:

  Windows Android
Access OneDrive1
Splashtop Business2 
Dropbox12 
Splashtop Business2  
Assist Calc Pro HD3
Dictionary4
SpeechTrans Ultimate5 

Dictionary
4
SpeechTrans Ultimate5
Capture CamCard6 
DocuSign7 
Drawboard PDF8  
ABBYY Business Card Reader13 
DocuSign7 

CamScanner14  

Connect Skype9  ooV0015 
PrintHand16 
Create Office 365 Business1 
OneNote1 
WPS Office17 
Evernote18 
Swype19   
Protect AirWatch10
McAfee Antivirus Plus11 
McAfee Antivirus Plus11  
For Windows:
1  Special Offer: Coming October 1, 2014 to the Intel® Business App Portfolio! Receive 15% off a 1-year paid subscription to Office 365 Business, which includes the familiar and powerful Word, Excel, PowerPoint, OneNote and Outlook applications, as well as cloud storage with OneDrive! ($23 USD value) 
2  Special Offer: 2-month subscription of Splashtop Business ($10 Value) 
3  Special Offer: Receive 60% off the Full Version of the Calc Pro HD (just $2.99) when you redeem this special offer. 
4  Special Offer: Receive the Dictionary app from Farlex, Inc. for free ($1.99 USD value) 
5  Special Offer: One year of SpeechTrans Ultimate ($24 USD value)  
6  Special Offer: Extend CamCard free trial from 6 months to 12 months with promo code! ($5 USD value) 
7  Special Offer: Special 20% discount on a DocuSign annual subscription (up to a $72 USD value) 
8  Special Offer: A one-year extended trial of Drawboard PDF 
9  Special Offer: Three months of unlimited calling for free!. That means, in addition to making free Skype to Skype calls, you can also call offline contacts on their mobiles and landlines. 
10  Special Offer: 30-day trial with a consultation from a member of dedicated Airwatch SMB account team.
11  Special Offer: 1-year McAfee Antivirus Plus subscription ($35 USD value)
Android specific apps only:
12  Special Offer: 14-day free trial of Dropbox for Business
13  Special Offer: Receive Serial Number and download instructions for the full, premium version of ABBYY Business Card Reader.
14  Special Offer: Receive 3-months Premium service and lifetime paid [CamScanner] app features (totals $20) upon sign-up
15  Special Offer: One-year of ooVoo Video Conferencing Service
16  Special Offer: Activation code to upgrade PrintHand to Premium Mode.
17  Special Offer: While we highly recommend you utilize [MS Office compatible] WPS Office for your office document needs on your Android device, the application is free to use so there is no promotional offer available at this time.
18  Special Offer: While we highly recommend you utilize Evernote for your note taking needs on your Android device, the application is free to use so there is no promotional offer at this time.
19  Special Offer: 30-day trial of the Swype keyboard & dictation.

Mobile Devices (Intel based 2 in 1s and tablets) for the Intel® Business App Portfolio as of Sept 9, 2014:

Windows Android
Acer Iconia A1-830 (7.9”, Z2560)

ASUS MeMO Pad (10.1”, Z2560)

Dell Venue 7 (7”, Z2560)

ASUS Transformer Book* T100 (10.1”, Z3740)
Dell Venue 8 Pro (8”, Z3740D)
HP ElitePad 1000 G2 (10.1”, Z3795)
Microsoft Surface Pro *3 (10”, Core i5/i7)
Samsung Galaxy Tab* 3 (10.1”, Z2560)

Acer Iconia A1-830
(7.9”, Z2560)
ASUS MeMO Pad
(10.1”, Z2560)
Dell Venue 7
(7”, Z2560)

Samsung Galaxy Tab* 3 (10.1”, Z2560)

Atom Z2560 (Q2’13): Clover Trail+ platform
Atom Z3740, Z3740D, Z3795 (Q3’13 and Q1’14): Bay Trail-T Type 4 platform 

Computex 2014: What’s next for Intel: Cheaper 4K, new Core M chip and 3D cameras [Network World YouTube channel, June 5, 2014]

From Kirk Skaugen’s keynote presentation in June 2014. The full presentation you could see in the end of this blog post.

Intel® 14 nm Technology [an Intel Silicon Innovations page as of Sept 9, 2014]

Ultra-fast, energy-sipping devices powered by Intel
Supporting a wide range of products from mobile devices to servers, 14 nm transistors improve performance and reduce leakage power. Intel’s 14 nm technology will be used to manufacture a wide range of high-performance to low-power products including servers, personal computing devices, and products for the Internet of Things. The first systems based on the Intel® Core™ M processor will be on shelves for the holiday selling season followed by broader OEM availability in the first half of 2015. Additional products based on 14 nm process technology will be introduced in the coming months.
imageUsing 2nd generation 3-D tri-gate transistors, the 14 nm technology delivers industry-leading performance, power, density, and cost per transistor, and will be used to manufacture a wide range of products, from high performance to low power.
Smaller is better
imageIntel’s 14 nm technology provides good dimensional scaling from 22 nm. The transistor fins are taller, thinner, and more closely spaced for improved density and lower capacitance. Improved transistors require fewer fins further improving density, and the SRAM cell size is almost half the area of that in 22 nm.
14 nm manufacturing
Intel’s 14 nm process and lead system-on-a-chip (SoC) product are now qualified and in volume production, with fabs in Oregon (2014), Arizona (2014), and Ireland (2015).

Microscopic Mark Bohr: Intel 14nm Processors Explained [Intel YouTube channel, Aug 11, 2014]

Mark is still following the seemingly never-ending path of Moore’s Law. We catch up with him this time for an explanation of Intel’s 14nm manufacturing process. See the first video in this series, 22nm explained: https://www.youtube.com/watch?v=YIkMaQJSyP8 Learn more about Moore’s Law and Intel’s History: http://www.intel.com/content/www/us/en/history/museum-gordon-moore-law.html

Intel® Core™ M Processor [an Intel Core Processors page as of Sept 9, 2014]

Versatile, Mobile, Blazing Fast

Intel® Core™ M and Intel® Core™ M vPro™ processors

With the world’s first processors built on 14 nm manufacturing process technology, PC performance is now possible within a range of ultra-mobile 2 in 1 devices. Blazing fast speed combined with the highest level of energy efficiency in Intel’s history enables razor-thin, fanless designs that meet your needs for both performance and mobility. The Intel® Core™ M vPro™ processor provides additional built-in security features1 to deliver the perfect combination of business-class performance and battery life to keep you productive longer no matter where you are. For small businesses, the Intel® Core™ M processor provides an optimal combination of business-class performance and battery life, so your employees have the power to stay productive longer, no matter where they work. Free yourself from carrying multiple devices and get the best of both worlds in a 2 in 1 device with the conflict-free Intel Core M and Intel Core M vPro processors.

Product Brief:  PreviewDownload
Datasheet, volume 1:  PreviewDownload
Datasheet, volume 2:  PreviewDownload
Specification update:  PreviewDownload

IFA 2014: Intel presents new Core M Processors [allroundpc Youtube channel, Sept 5, 2014]

Intel presents it all new mobile processors at IFA 2014 in Berlin. The new Intel Core M processors are specifically made for mobile devices and are supposed to bring a lot of power while consuming less energy than previous models. More information under: http://www.allround-pc.com/news/2014/intel-core-m-koennen-die-cpus?preview=true&preview_id=80031&preview_nonce=bfdc570414

See also:
Intel® Core™ M Processor for Small Business
Products (Formerly Broadwell),
Fact Sheet: Intel® Core™ M Processor – Razor-thin Laptop Meets Ultra-fast Tablet

image

New Intel® Core™ M Processor Enables Razor-thin, Fanless Designs with the Optimal Blend of Beauty, Performance and Battery Life; Available Holiday 2014 [IFA 2014 press release, Sept 5, 2014]

NEWS HIGHLIGHTS

  • Acer*, ASUS*, Dell*, HP*, Lenovo* and Toshiba* to introduce new Intel® Core™ M processor-based 2 in 1s. Some systems available starting in October.
  • Intel Core M processor delivers amazing performance and battery life for the thinnest, fanless 2 in 1 devices.
  • At a power-sipping 4.5 watts, it is the most energy-efficient Intel® Core™ processor in the company’s history.1

IFA, Berlin, Sept. 5, 2014 – At IFA, a global trade show for consumer electronics and home appliances, Intel launched the new Intel® Core™ M processor, which will power new 2 in 1 devices from a variety of manufacturers including: Acer*, ASUS*, Dell*, HP*, Lenovo* and Toshiba*. Delivering the optimal blend of mobility and performance, Intel’s new processor was purpose-built for amazing performance in the thinnest, fanless ultra-mobile devices. The Intel Core M processor can power razor-thin devices with Intel Core processor-level performance and deliver up to double the battery life when compared to a 4-year-old system.2

“We’ve been on a multi-year mission to address end-user requirements and transform mobile computing,” said Kirk Skaugen, senior vice president and general manager of personal computing at Intel Corporation. “The introduction of Core M marks a significant milestone in that journey. Core M is the first of a new product family designed to deliver the promise of one of the world’s thinnest laptops and highest performance tablets in a single 2 in 1 device.”

Faster Performance, Even More Battery Life
The Intel Core M processor enables up to 50 percent faster compute performance and 40 percent faster graphics performance versus the comparable, previous 4th generation Intel Core processor.3 Consumers with older PCs will notice a more significant performance improvement. The Intel Core M processor delivers up to two times the compute performance and up to seven times better graphics compared to a 4- year-old PC, for example.2

In 2013, Intel delivered the biggest generation-over-generation battery life improvement in the company’s history. The Intel Core M processor and platform power reductions raise the bar on battery life even higher. The Intel Core M processor can handle more than 8 hours of video play, which is up to 20 percent (1.7 hours) longer battery life versus the previous-generation Intel Core processor4 and double the battery life of the average 4-year-old PC.1

Thin, Fanless 2 in 1s Available for Holiday 2014…and Beyond
The Intel Core M processor package is 50 percent smaller and, at 4.5 watts, has 60 percent lower thermal power than the previous generation.5 This lets OEMs design sleek, fanless systems less than 9 mm thin – thinner than an AAA battery and today’s sleekest laptops. There are already more than 20 Intel Core M processor-based OEM products in the development pipeline. The first systems based on the Intel Core M processor will be on shelves for the holiday selling season.

At IFA, manufacturers including Acer, ASUS, Dell, HP, and Lenovo unveiled new, coming-soon Intel Core M processor-based devices across a range of sizes, styles and price points.

  • In Q4, Acer will expand its popular 2-in-1 series of notebooks with the Aspire Switch 12*, featuring a 12.5-inch FHD display with unique kickstand and magnet keyboard to move smoothly between five modes.
  • ASUS introduced the ASUS Zenbook UX305*, an incredibly light and thin Ultrabook™ with a 13-inch QHD display
    Asus unveiled the UX305, its newest flagship laptop at IFA 2014 this week. The device, it claims, is the world’s thinnest 13-in QHD+ ultrabook, giving it one of the highest pixel densities of any computers on the market. It faces competition from the Lenovo Yoga 2 Pro and the Samsung ATIV Book 9 as well as the Apple MacBook Pro Retina Display, although we expect vendors to refresh their current thin-and-light laptop range very soon. At only 12.3mm thick and weighing 1.2Kg, it is light enough to be carried comfortably with one hand. Its specification sheet lists an Intel Core M processor (the 5Y10), Windows 8.1, 4GB or 8GB of LPDDR3 memory, either 128GB or 256GB SSD, an Intel HD Graphics 5300 subsystem, a webcam and a 6-cell, 45Whr battery. As for connectivity, it has three USB ports, one mini-HDMI output and a SD card reader.

    and the ASUS Transformer Book T300FA* 2 in 1, which was unveiled during the Intel keynote. The Transformer Book T300FA is a high-performance 2 in 1 and is expected to be available in Europe this fall for an estimated €599. Looking ahead, ASUS plans to go even thinner with the ASUS Transformer T300 Chi*.

  • Dell has announced its first commercial 2 in 1, the Latitude 13 7000 Series*, which combines a lightweight business Ultrabook and a detachable tablet in one powerful, no-compromise device.
  • HP further extends its award-winning ENVY portfolio with the addition of two new HP ENVY x2* detachable PCs, available in 13.3-inch and 15.6-inch form factors.
  • The new [11.6”] Lenovo ThinkPad Helix*, available in October, is 12 percent lighter and measures 15 percent thinner than its predecessor while packing even more power thanks to the Intel Core M processor.
    [From Lenovo on Sept 4 with the VP PCG Marketing & Design, Dilip Bhatia: “the most complete 2-in-1 in the marketplace”] The ThinkPad Helix is the industry’s leading 2-in-1 device. Powered by the latest Intel Core processor family, sporting a new revolutionary fan less design and up to 12 hours of battery life. Built for business, the ThinkPad Helix. Learn more about Lenovo: http://lnv.gy/lenovo
     
    [From Lenovo on Sept 4 with the product manager for ThinkPad Helix, Sachin Pathak: “specific focus on productivity in business … in line with Lenovo’s multimode strategy to 4 earlier modes now a new desktop mode has been added … etc. –> for ‘full PC connectivity’ ultimately satisfying the ‘business traveller’ ”] Join Kevin Beck for the First Look at the new Think Helix. Lots of awesome new features, including an innovative new fanless design, up to 12 hours of battery life and plenty more surprises. Learn more about Lenovo: http://lnv.gy/lenovo

Intel also previewed a forthcoming Intel Core M processor-based design from Toshiba, and said broader availability of Intel Core M processor-based devices is expected in the first half of next year.

To further system choice and availability, Intel said it is working with ODMs including Wistron* and others. Wistron plans an Intel Core M processor-based design inspired by the Intel “Llama Mountain” reference device. Intel first unveiled the stunning, fanless Llama Mountain reference device, which measures 7.2 mm thin and weighs a mere 670 grams, at Computex in Taiwan earlier this year.

Intel Core M “Broadwell-Y” 2-in-1 Tablet / Ultrabook Reference Design hands on at Computex 2014 http://www.mobilegeeks.com http://www.mobilegeeks.de We got to quickly check out Intel’s new reference design für “Broadwell-Y” based Intel Core M ultrabooks and 2-in-1 tablet style devices. It’s called “Llama Mountain 2” and has a 12,5 inch QHD IPS display with 2560×1440 pixels. The device is only 7,5 millimeters thin and weighs in under 800 grams. It shows what to expect from this years 2-in-1 devices coming in from Intels many hardware partners in the run up to the holiday shopping season!

A “Conflict-Free” Processor; Additional Features
Intel Core M is a “conflict-free” product, which means this product does not contain conflict minerals (tin, tantalum, tungsten and/or gold) that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo (DRC) or adjoining countries.

The Intel Core M processor is available in several versions: the up to 2.0 GHz Intel Core M-5Y10/5Y10a processors and the up to 2.6 GHz Intel Core M-5Y70 processor. The Core M-5Y70 is the highest performing Intel Core M processor and is also available with Intel® vPro™ technology for business 2 in 1s with built-in security features to help protect data, user identities and network access.6

Additional Intel Core M platform features include support for high-quality audio, Intel® Wireless Display 5.0, Intel’s second-generation 802.11ac products and will evolve to support wireless docking with WiGig from Intel. For more information visit:www.intel.com.

1Energy efficiency based on SPEC CPU2006 Intel estimates for both performance and core power. Comparison made vs. Intel prior generation Intel Core family CPU Processors.
2Intel® Core™ M-5Y70 Processor (up to 2.60GHz, 4T/2C, 4M Cache) vs. Normalized to a 4-year-old PC with Intel® Core™ i5-520UM. Performance based on SYSmark* 2014. Intel® Core™ M 5Y70 compared to Intel® Core™ i5-520UM. Weight based on Intel® Core™ M processor-based 2 in 1 based on Intel® FFRD Llama Mountain. Old PC is OEM laptop with Intel® Core™ i5-520UM and 62WHr battery, 3 lbs weight, 1.1-inch thick.
3Up to 50 percent faster vs. 4th generation Intel Core processors based on: Specfp_rate_base 2006 comparing Intel® Core™ M-5Y70 Processor compared to previous-generation Intel® Core™ i5-4302Y at 4.5W. Up to 40 percent faster graphics vs. 4th generation Intel Core processors based on: 3D Mark Ice Storm comparing Intel® Core™ M-5Y70 Processor with Intel HD graphics 5300 vs. Previous Generation Intel® Core™ i5-4302Y at 4.5W with HD Graphics 4200.
4Intel Core M battery life tested vs. 4th generation Intel® Core™ processor based platforms – 11.6-inch panel; 19×10; 200 nits; 35WHr battery; SSD; 4GB memory. Full HD Local Video Playback Battery Rundown-measured using a Tears of Steel 1080p 10 Mbps video. Configuration: In the device settings, disable all radios. Disable Intel® Display Power Saving Technology (Intel® DPST), set up the system to specified screen brightness using a full screen white background, and re-enable Intel DPST. Turn OFF the adaptive brightness setting under Power Options in Control Panel. Set “Dim the display” to never on both battery and AC. Set “Put the computer to sleep” to never on both battery and AC. Wait 15 minutes after boot. Launch the default video player (Windows* 8.1 Style UI video player for win), start the workload video in a loop, and disconnect the AC plug to start the test. Measure the time until battery is exhausted.
54th generation Intel® CoreTM Processor (40 X 24 X 1.5 mm; 960 mm; 11.5W) vs. Intel® Core™ M processor (30 X 16.5 X 1.05 mm; 495 mm; 4.5W)
6No computer system can provide absolute security. Requires an enabled Intel processor, enabled chipset, firmware and/or software optimized to use the technologies. Consult your system manufacturer and/or software vendor for more information.

Intel Mobility at Computex 2014 with Core-M, WiGig, RealSense [Steve Paine YouTube channel, June 10, 2014]
under Kirk Skaugen –> [46:23]:
>>> Reinvention of the Desktop
>>> 2 in 1 Momentum and the Intel Core M Processor
>>> User Experience at Intel
– then under Herman Eul –> [1:20:38]
>>> The Year of Intel Inside Your Tablet
>>> Powerful Smartphones

From Computex 2014 this Intel mobility keynote is a must-watch for anyone that’s interested in mobile PCs in 2014 and 2015. Intel presents the 10-inch Llama Mountain reference design at 6.8mm thick. Intel also promises to make a completely wireless 2-in-1 and Ultrabook reference design in the post-Broadwell phase that uses WiGig to remove ports. Also includes some great RealSense demos, WiDi products, 20W wireless charging and a live video beautifying demo.

Intel’s desperate attempt to establish a sizeable foothold on the tablet market until its 14nm manufacturing leadership could provide a profitable position for the company in 2016

The stock market is over-optimistic about that: Intel tablets could cure [stock] market conditions [Saxo TV – TradingFloor.com YouTube channel, April 16, 2014]

Intel’s Q1 earnings beat expectations, that’s despite a decline in sales of personal computers. The firm has now outlined a strategy to carve out its own share of the tablet market, changing direction due to the switch in consumer habits. Intel’s PC division saw revenue drop one percent to $7.9 billion. The chipmaker’s shares rose as investors liked the forward looking blueprint for a firm that’s long been associated with the desktop. Intel reports that the firm shipped 10 million tablet chips in 2013 and is offering manufacturers incentives to use its products. Andy Ng – Senior Equity Analyst at Morningstar discusses Intel’s earnings and where he sees growth in the future.

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I am—nevertheless—highly sceptical about that as Allwinner to continue the No. 1 position on Android tablet application processor market with the new UltraOcta A80 SoC optimized for premium devices, without the premium cost, also made universal accross other devices (TV box, notebook, smart TV, All-in-one and digital signage), and operating systems (ChromeOS, Smart TV, Windows, Ubuntu and Firefox OS) [‘USD 99 Allwinner’ blog, April 16, 2014]. My skepticism is also based on The lost U.S. grip on the mobile computing market, including not only the device business, but software development and patterns of use in general [‘Experiencing the Cloud’, April 14, 2014].

You can judge all that for yourself as the background and my analysis behind Intel’s tablet strategy could be found in the following sections of this post below:

  1. Intel’s Mobile and Communications Group (MCG), which the Tablet Group is just a part of, is the largest loss maker segment with losses even growing to $3.15B in 2013 from $1.78B in 2012, and continuing at least into 20145 
  2. Intel is desperate to cheat when comparing its current tablet performance based on Clover Trail+ against much lower priced and lesser frequency ARM Cortex-A9 tablets from brand vendors.
  3. Intel’s Krzanich is betting on sacrificing “contra revenue” dollars for Q2-Q4 2014 tablet market with Bay Trail-based tablets, while hoping to level the playing field with its TSMC produced SoFIA SoCs for the 2015 tablet market.

To understand the technical and business development aspects behind that strategy read my previous posts as well:
Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter [‘Experiencing the Cloud’, April 11, 2014]
IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [‘Experiencing the Cloud’, April 4, 2014]
The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [‘Experiencing the Cloud’, Sept 14, 2013]


1. Intel’s Mobile and Communications Group (MCG), which the Tablet Group is just a part of, is the largest loss maker segment with losses even growing to $3.15B in 2013 from $1.78B in 2012, and continuing at least into 2014 

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Source: Download Quarters Q1 2014 [Intel Corporation – Investor Relations, April 16, 2014]

MCG is one of the new operating segments representing the following organisational responsibility, which is aligned with Intel’s new critical objectives (this particular segment was previously buried in the Other Intel Architecture Group):

  • Mobile and Communications Group (MCG): MCG includes the Phone Group, the Tablet Group and Multi-Comm, all previously part of the Other IA operating segments.
  • Mobile and Communications Group: Delivering platforms designed for the tablet and smartphone market segments; as well as mobile communications components such as baseband processors, radio frequency transceivers, Wi-Fi, Bluetooth*, global navigation satellite systems and power management chips.

imageNote that the previous structure of operating segments (since the end of 2012) was as seen on the right. As far as the organizational size is concerned, according to Infineon Completes Sale of Mobile Phone Business to Intel – New Company Intel Mobile Communications starts operations [Infineon press release, Jan 31, 2011]:

Following the sale, approximately 3,500 employees in total will move globally from Infineon to the new company Intel Mobile Communications GmbH (IMC). IMC will be headquartered in Neubiberg near Munich, Germany.

Then according to Intel® Mobile Communications Profile [Intel, Jan 6, 2012]:

Intel Mobile Communications GmbH is a subsidiary of Intel Corporation headquartered in Santa Clara, USA. The company develops and markets innovative semiconductor products and solutions for mobile communications – most notably in the rapid-growth market segments of smart phones, tablets and ultra-low-cost mobile phones.

The company has approximately 4,000 employees all over the world, about 1,700 of whom work in Germany where the headcount at the company headquarters in Neubiberg near Munich is approximately 1,200. Other German sites are Ulm, Regensburg, Duisburg, Dresden, Braunschweig and Nuremberg. Intel Mobile Communications is represented in altogether 17 countries around the world and has a strong presence in the Asian growth markets.

Considering that the Mobile and Communications Group (MCG) of today was put together from Intel Mobile Communications, the Tablet Group and the Phone Group, the overall number of employees in MCG is quite probably more than 6000 people.

Note that as of May 2013 MediaTek had 6,880 employees and ARM Holdings’ workforce at the same time was 2,261. As of March 2014 Allwinner Technology had 550+ employees (450 of which were engineers). In July 2013 Rockchip had more than 500 employees, 80% were engineers. In September 2013 Spreadtrum had 1,506 employees.

The 4000 strong Multi-Comm business is mostly engaged in standalone baseband processor market which had the following sales structure in 2013 according to Forward Concepts [March 24, 2014]: 

image

Intel, the 2nd leading supplier of 3G thin modems in 2013 – will likely become the 2nd leading supplier of 3G/4G thin modems in 2014. Their focus will be on winning 3G/4G modem orders for notebooks and tablets. They will be challenged by Marvell’s 3G/4G PXA802 TD- LTE modem, which also supports TD-HSPA+ and is already shipping to ZTE.

Intel was—however—warning in its Nov 21, 2013 Investor Meeting presentation that:

image

In fact Strategy Analytics was painting a rather dark picture in Qualcomm’s Dominance Continues with 64 percent revenue share says Strategy Analytics [Feb 21, 2014]:

Qualcomm, MediaTek, Intel, Spreadtrum, and Broadcom captured the top-five revenue share spots in the cellular baseband processor market [which the standalone is just a part of] in 2013. Qualcomm dominated with 64 percent revenue share, followed by MediaTek with 12 percent revenue share and Intel with 8 percent revenue share.

Sravan Kundojjala, Senior Analyst, explains “Qualcomm domination in the cellular baseband market continued in 2013, thanks to its early investments in multi-mode LTE technology. The LTE baseband landscape is expected to be a crowded one in 2014 with several vendors including Broadcom, Ericsson, Intel, Marvell, MediaTek, NVIDIA, Spreadtrum and others are all set to bring commercial multi-mode LTE chip products to the market and this could help drive LTE down into mid-to-low tier devices.”

According to Stuart Robinson, Director of the Strategy Analytics Handset Component Technologies service, “Strategy Analytics calculates that revenue from baseband-integrated applications processors represented over 60 percent of total baseband revenue in 2013, up from 48 percent in 2012. Most baseband vendors have now transitioned their portfolios to include integrated products in order to boost their revenue share.”

According to Christopher Taylor, Director of the Strategy Analytics RF and Wireless Componentservice, “MediaTek overtook Intel to capture the number two spot in the 3G UMTS baseband market in 2013, by Strategy Analytics estimates. MediaTek capitalized on its smartphone chip momentum and improved its baseband-mix. MediaTek’s recent LTE chip announcements could potentially improve its baseband revenue share in future.”

Such a doomsday scenario was even more present in Qualcomm, MediaTek in Two-Horse Race, Says CLSA; Game Over for BRCM, Etc. [Tech Trader Daily at Barrons.com, Apr 11, 2014]

… and predicting many of the challengers will fold up without making a dent in Qualcomm’s position.

We believe that the baseband battle is largely over and expect more consolidation in the next 1 – 2 years. Nvidia is already shifting its investments, and we see a strong possibility that Broadcom exits in the next 6 – 9 months. Intel’s new management may have a bit more time, but we do not see enough opportunity to justify its $2bn+ investments. Marvell is least likely to exit in our view, but we expect it to remain a niche player. Overall, we expect the Qualcomm / MediaTek duopoly to get even stronger in the coming years and see positive implications for the overall industry profitability.

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The baseband market has seen meaningful consolidation over the years. In 2006, there were 15 vendors in the market including larger analog IC vendors such as Texas Instruments, Freescale, and Analog Devices. The market has contracted to about 9 vendors by 2008 and currently has 7 vendors, after the recent consolidation at ST-Ericsson and Renesas.

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Even if second tier vendors make significant progress in LTE, we simply do not see enough opportunity for all these vendors to achieve profitability any time soon.

MediaTek has a higher share in shipments of Chinese smartphones:

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Chinese telcos, in particular China Mobile, are aggressively expanding their 4G networks, and China Mobile is targeting 100m LTE devices for 2014. While China Mobile’s target does appear aggressive, Qualcomm appears to be dominating the early shipments. We expect MediaTek-based LTE phones to start shipping in the next few months and expect a majority of MediaTek’s 3G customers to stick with the company as the China market transitions to 4G. Chinese smartphone OEMs lack the R&D capability of their international peers, and as a result, rely on turnkey solutions from MediaTek and Qualcomm. While MediaTek appears a bit late with LTE, we expect the company to maintain a strong share of the China LTE market longer term given its relationships with domestic handset manufacturers.


2. Intel is desperate to cheat when comparing its current tablet performance based on Clover Trail+ against much lower priced and lesser frequency ARM Cortex-A9 tablets from brand vendors.

For an Intel Clover Trail+ (pre-Bay Trail-T) tablet: A Four-Tablet Comparison: Intel vs. Competition [IREPRockLegend YouTube channel, April 16, 2014]

Here are the benefits for the Intel Retail Edge Program members (Roadie, Producer, Rockstar and Rock Legend). (1) Learn Intel products, latest technology, sales techniques on monthly basis (2) Complete various learning courses, certification programs and earn lots of chips (3) Use chips to redeem all kinds of FREE electronic items (TV, Monitor, Xbox, PS3, iPad, iPod, CPU, Motherboard, SSD, RAM, etc.) (4) Exclusive monthly prize draws for Rockstars and Rock Legends (Notebook, Tablets, Ultrabook, TV, Monitor, etc.) (5) Deep Discount on Summer Deal and Holiday Deal (CPU, Motherboard, SSD, etc.) (6) Exciting competitions for even more prizes (Spring to Win, Score with Intel Core, Primary Objective) (7) Live webinars, events, parties with food & beverages, prizes and more (8) Meet great people from other stores and retail chains Registration is FREE. Join NOW: http://www.intel.com/retailedge

But Intel is cheating here, especially by being at least 2 times more expensive than the others (all the below prices are “best retail ones”), even discounting the 3G call capability:

  1. $300 (but has 3G call capability as well): Asus Fonepad 7 (Intel Atom Processor Z2560 (2 Clover Trail+ cores/4 threads, 1MB Cache, 1.60 GHz) since Q2’13)
    (++Review Asus Fonepad 7 ME372CG Tablet [Notebookcheck.net, Nov 13, 2013)
  2. $119: Amazon Kindle Fire [7”] HD* (TI OMAP 4460 Processor (2 Cortex-A9 cores, 1.20 GHz))
    [* Intel is cheating even more here as the 2nd generation figured in the above test has been replaced half a year ago by a 3d generation 7” Kindle Fire HD tablet which contains the TI OMAP 4470 with 2 Cortex-A9 cores, 1.5 GHz.]
  3. $160: Samsung Galaxy Tab 3 7” (ARM Cortex A9 Processor (2 Cortex-A9 cores, 1.2 GHz) )
  4. $139: Lenovo IdeaTab A1000 (ARM v7 Cortex A9 Processor (MediaTek 8317, Dual Core 1.2 GHz) )

The same cheating is in another new Intel video: A Three-Tablet Comparison: Intel vs. Competition [IREPRockLegend YouTube channel, April 16, 2014] where the $140 Dell Venue 7 16GB, having the same Z2560 CloverTrail+ processors goes against the same 2nd generation Amazon Kindle Fire [7”] HD and the also same Samsung Galaxy Tab 3 7”:

And finally the cheating in the 3d new video is even more inexcusable: Tablets with Intel Inside® vs. the Competition: Samsung as here the $305 Samsung Galaxy Tab 3 10.1” tablet with the same 1.6 Ghz Z2560 (and list price of is compared with the $200 Samsung Galaxy Tab 2 10.1” having just a 1 GHz Cortex-A9 dual core processor:


3. Intel’s Krzanich is betting on sacrificing “contra revenue” dollars for Q2-Q4 2014 tablet market with Bay-Trail-based tablets, while hoping to level the playing field with TSMC produced SoFIA SoCs for the 2015 tablet market

What is contra revenue? [Accounting Tools, March 5, 2013]

Contra revenue is a deduction from the gross revenue reported by a business, which results in net revenue.

Contra revenue transactions are recorded in one or more contra revenue accounts, which usually have a debit balance (as opposed to the credit balance in the typical revenue account). There are three commonly used contra revenue accounts, which are:

  • Sales returns. Contains either an allowance for returned goods, or the actual amount of revenue deduction attributable to returned goods.
  • Sales allowances. Contains either an allowance for reductions in the price of a product that has minor defects, or the actual amount of the allowance attributable to specific sales.
  • Sales discounts. Contains the amount of sales discounts given to customers, which is usually a discount given in exchange for early payments by customers.

In fact what Intel calls in accounting terms “contra revenue” it actually represents the subsidies paid to tablet manufacturers in order bring the Bill of Materials cost of Intel tablets into line with ARM based tablets. Intel was forced into these subsidies otherwise tablet manufacturers weren’t going to offer Intel based tablets.

Intel aggressively promoting tablet CPUs in China [DIGITIMES, April 14, 2014]

Intel has resorted to an aggressive pricing strategy to promote sales of its tablet-use processors, particularly in China, a move which apparently will take on Qualcomm and MediaTek, while ramping up its market share, according to industry sources.

Prices of Intel’s mainstream quad-core tablet CPUs have dropped to below US$5, which are almost on par with those offered by China-based chipset suppliers such as Rockchip Electronics and Allwinner Technology and even below those available from Nvidia, Qualcomm and MediaTek, said the sources.

Consequently, the number of Intel-based tablets is likely to expand in a great proportion as more and more China-based brand and white-box tablet vendors are expected to use Intel’s tablet CPUs to develop new products, the sources revealed.

Intel’s new policy also focuses on deepening its relationship with the supply chain in China, highlighting by its recent announcement of establishing an Intel Smart Device Innovation Center in Shenzhen and a US$100 million Intel Capital China Smart Device Innovation Fund, commented the sources.
To encourage China-based tablet makers to use Intel’s CPUs, the chipset vendor is offering assistance in terms of design, technology and marketing, the sources indicated.
Intel’s offerings will be particularly attractive to white-box tablet makers as they can optimize low-priced chipsets and advanced technologies to roll out competitive models for the entry-level segment, added the sources.
Intel aims to ship 40 million tablet CPUs in 2014, including entry-level Bay Trail family and SoFIA 3G platform products, the sources noted.

Intel Beats on Bottom Line, Misses Revenue Expectations for Q1 Results [TheStreet YouTube channel, April 15, 2014]

New yardsticks emerged on Tuesday as Intel announced its first-quarter results. The chipmaker reported earnings mostly in-line with estimates of 38 cents a share on $12.8 billion in revenues. Analysts were expecting 37 cents a share on revenue of $12.8 billion. Intel decided to break out numbers for new operating segments, including more detail on chip sales for smartphones and tablets as well as the so-called Internet of Things segment, including chips for a variety of gear like smart watches and home appliances.

From Intel Reports First-Quarter Revenue of $12.8 Billion Operating Income of $2.5 Billion, up 1 Percent Year-over-Year [news release, April 15, 2014]

Mobile and Communications Group revenue of $156 million, down 52 percent sequentially and down 61 percent year-over-year.

From Intel’s CEO Discusses Q1 2014 Results – Earnings Call Transcript [Seeking Alpha, April 15, 2014] ragarding the tablet strategy which is carried out by the Mobile and Communications Group:

Brian M. Krzanich – CEO: … We set an aggressive goal of shipping 40 million tablet SOCs this year. And I’m happy to say we’ve tallied more than 90 designs on Android and Windows and shipped 5 million units in the first quarter, placing us squarely on track to that goal.

We demonstrated SoFIA, our first integrated apps processor and baseband, after adding it to the roadmap late last year. We’re on track to ship the 3G solution to OEMs in Q4 2014, with the LTE version following in the first half of 2015.

We also shipped our first Quark SoCs for the Internet of Things and announced an upgrade of Edison to the Silvermont Atom architecture. Edison is on track to ship this summer.

And in the Technology and Manufacturing Group, who’ve worked to advance Moore’s Law as foundational to our long-term success, we began production on our 14-nanometer process technology and remain on track to launch Broadwell in the second half of the year.

And the foundry team extended our collaboration with Altera to the development of multi-dye devices that take advantage of our world-class package and assembly capabilities and Altera’s leading-edge programmable logic.

Stacy J. Smith – EVP and CFO: … The Mobile and Communications Group is down 61% from a year ago. The underlying dynamics are consistent with what we shared at the investor meeting last November.

We’re seeing a decline in our feature phone and 2G/3G multi-[com] [ph] business, as we’re in the midst of a transition to integrated LTE solutions. In addition, the ramp in tablet volume is being offset by an increase in contra revenue dollars.

We’re winning designs and ramping our tablet volume rapidly and we have design wins in LTE that will result in a second half revenue ramp.

Let me even back up and give you — again restate the strategy of what we’re doing here. … what we’re doing is we’re taking Bay Trail, which is a product really designed for the PC market, and we made the decision to take it broadly across different segments of the tablet market this year.

It brings along with it, at least over the course of 2014, a higher bill of materials. And that’s independent from the SOC cost. It’s the power management subsystem, it’s the motherboard that it goes on, it’s the memory solution, those kinds of things. And so, we’re providing some contra revenue to offset that bill of material delta over the course of 2014.

Now, as we said, we’re doing value engineering with our customers and our partners. And so we’re bringing down that bill of material over the course of 2014 independent of any changes to our SOC. …

Brian M. Krzanich – CEO: … We have a series of improvements. They have already started to kick-in in some cases around our power management systems, the number of layers in our motherboards, the memory system integration. All of those things we’ve worked on and actually have started to see the advantages already in our costs.

Stacy J. Smith – EVP and CFO: So, I think on a like dollars per unit, it comes down pretty dramatically over the course of 2014. And it should be relatively small, if at all, as we get into 2015. And it’s, again, the enablement we’re doing around the bill of materials.

And then we also have new products coming into the marketplace, like SoFIA, that’s targeted at the low end, and then in 2015 you’ll see Broxton, which is an SOC more for the mid-range to high-range of the market coming into our product portfolio.

So, the combination of all of that gives us a better cost structure with our own products and a better cost structure overall with the bill of materials as we enter 2015 and then work through 2015.

We’ll have significant unit growth in tablets. But remember that contra revenue isn’t just a gross margin impact; it’s actually a subtraction from revenue. And so that will mute the revenue growth for the segment because you have that negative as we get into the back half and ship more tablets. …

C.J. Muse – ISI Group: In terms of integrated LTE, you’ve talked about when we’ll first see that. But curious when you expect to bring that in house at Intel.

Brian M. Krzanich – CEO: We’ll bring that in on our 14-nanometer process either late 2015 or early 2016. We’re still battling back and forth on how fast we can bring it in and at what impacts that has. 14-nanometer is the technology there.

Blaine Curtis – Barclays Capital: … Maybe actually follows up on CJ’s prior question. The MPG business that you’re now breaking out, it’s pretty clear it’s losing $3 billion, $3.5 billion. How do you think about this business?

Obviously you’re trying to ramp the product set you are a bit behind. You’re entering from the low end and that pricing seems quite tough. You’re facing some subsidies that you have to do on the tablet side.

Are there some milestones that you look at to get this business back profitable? Or maybe would you consider this strategic enough that you would consider continuing to run this as a loss?

Brian M. Krzanich – CEO: So, you asked several questions in there, so let me start to pars it apart. Absolutely this is a strategic business, so let’s just start with that. We think this is critical and we said this in our prepared statements. It’s critical from 2 in 1 devices down through the Internet of Things.

You look across the connectivity requirements there; more and more of the devices are requiring integrated connectivity, whether it be LTE, 3G, Wi-Fi, Bluetooth and all of these connectivities are becoming more and more required.

We don’t go into these businesses thinking that we’re going to lose money. We believe we have a roadmap to get to profitability in that business. The milestones that I look at — and so I’ll give you those for yourself to look at, we have the 7160, the current LTE version out there. We’re the second in LTE. We have the 7260 launch this quarter. I think that’s a critical there.

Again, we’re closing the gap with our competition. We’re bringing out leading edge Cat 6 capability with carrier aggregation. That’s a critical milestone. That puts — that closes the gap and puts us firmly in the LTE capability.

The next one is SoFIA. If you look at the SoFIAs at the end of this year with 3G integration and then a big first half of next year with LTE integration. Remember those products weren’t even on our roadmap six or seven months ago. So, that shows that we’re acting quickly integrating and bringing those products to production.

Then after that is, as Stacy said earlier, Broxton, which is our internal 14-nanometer product. That’s targeted towards the mid to high level. And as we bring that into the second half of 2015 and into 2016, there will be various levels of integration on that.

So, when I look across this, those are the milestones I look at, because those are what drive that along with just the basic cost reduction capabilities we talked about for this year as we get out of this contra revenue into 2015. Those products then place us firmly in leadership capability from the low end to the high end with integration. And those are the milestones to me that will lead to profitability long-term.

Stacy J. Smith – EVP and CFO: And I’ll just add to that, I think you left it off because it was so obvious, but the 40 million tablets is one of the things I see Brian just laser focused on. And as we’ve talked about before, it gets us into the 15% to 20% range of the total tablet market.

It gives us a big enough footprint that we start to see people developing on our architectures. It becomes a self-sustaining ecosystem as we’re bringing these other products to the marketplace. So, don’t lose sight of that one, Blaine.

Stacy Rasgon – Sanford C. Bernstein & Co: I wanted to dig a little bit into the mobile and wireless group. So, you’ve talked a bit about having I guess developing leadership products, leadership position in order to drive profitability. We’re looking at this right now, though. So, we had the business fall more than 50% sequentially.

You have your 7160 which is shipping but apparently it’s not really driving much volume. We have the 7260 which is forthcoming, but we really haven’t heard much about design wins. And you launched at Mobile World Congress without really saying very much there.

We have SoFIA coming, which absolutely is integrated, but it’s being made at TSMC for the next few years which means you lose any potential benefits from your own process technology. And you would seem to be well behind what the market leaders are shipping in terms of 4G.

Just what should we be looking for and over what timeframe should we be looking for, for the ramp? I guess what I’m asking is, how can we get confidence that we’re going to actually see the revenue ramp that is built into the short-term expectations for this year and then going forward, to make sure that you can actually get a profitable business, which obviously would be driving quite a bit of upside to where the models are today?

Brian M. Krzanich – CEO: Remember, the 7160, we gave you a series of products that it’s shipping in. And on the 7260, which will qualify this quarter, we gave you a list of OEM partners that have committed to that platform. So, we’re fairly confident that the ramp in the second half of this year will continue on that product. And it is a leadership product.

SoFIA, you’re right, is built at TSMC. We went for speed and integration. And it was simply quicker to get to market with a competitive product from both a price and performance. We actually believe that the IA core will give us better performance than the competition. And the competition is at that same node at TSMC. And it’s 3G at the end of this year and LTE in the first half of next year.

We then told you that in the second half of next year — and again, we’re debating whether it’s the second half or the first quarter of 2016, but we’ll move all of that internal on to 14-nanometers. And it’s really based on other products that we have moving in at that time and just overall resources all right.

We had a lot going on — the ramp of Broadwell, the ramp of Skylake in the second half of next year, plus bringing these products inside. But I’m very confident that when you do that, plus you add in Broxton, which is targeted towards the mid to high range and again is integrated with leading-edge LTE.

And don’t forget we have a roadmap of LTE products beyond the 7260 that continue the level of carrier aggregation and product leadership. We’re fairly confident that we can continue to grow this business and turn it profitable over that time.

Stacy J. Smith – EVP and CFO: And let me just comment on the question about the long-term profitability. It sounds basic, but it really stems from our manufacturing leadership. If we’re two years ahead of the rest of the industry, and extending it gives us the ability that, as we target our products into the right space from a power standpoint, we will have power advantage or performance advantage and a cost advantage.

That really is our strategy playing out. You’re seeing the first products hitting that theme over the course of this year and into early next year. Bay Trail is a really good product. For the high end of the market, you’ll see products coming into the market that are more targeted at the mid-range and lower end of the market next year. But that’s how the strategy plays out.

I’d say for 2015, I would expect to see reduction in the loss. Not profitability, but a reduction in the loss will feel pretty good when we get there and then we’ll keep driving towards the long-term profitability goal.

Stacy Rasgon – Sanford C. Bernstein & Co:  I’d like to drill in a bit more. I’m actually into the tablet efforts now. So, we’re obviously subsidizing. And I get the idea of reducing BOM cost in order to make up for the deficiencies with the idea being that you can drive improved product set down the road.

But at the same time, if you look at the tablet market, where it is today, you’re obviously not going to be going after Apple any time soon. Maybe there’s a little bit of volume at Samsung. But I mean if you take those guys out, 75% of what’s left is systems that are $250 and below, where your competitors are shipping quad-core chips for much less than $10.

I’m curious to know what kind of economics and pricing you see from that market long-term. And are the — I guess the total revenue pool and profit pool that’s available, even if you were to succeed at your goals, why does that make it a worthwhile effort to actually go after? Or is this simply, as you said, strategic? Is this an attempt to limit further penetration of tablets into the core market?

Brian M. Krzanich – CEO: You’ve asked a question that has multiple questions built into it. But let’s start with what we told you was we’ve got multiple OEM partners building tablets and phones on our products. And we gave you Asus and Dell and Lenovo and Samsung on those products.

If you look at the tablet business overall, it’s broken up into a series of segments. And you’re right; there is a large percentage of them that are $250 and below. Products like SoFIA are specifically designed for that segment.

And our dual-core SoFIA already performs quite well against quad-core systems. As we move into next year, we’ll bring quad-core SoFIA-based products out, as well. And so we believe that we can stay very cost competitive and have a performance leadership.

Remember, Intel has two assets. We have our silicon technology, but we also have our architecture. And one of the things an OEM gets when they build with Intel technology is that they can go into any OS and they can build a single platform and move that on to Chrome, on to Android, on to Windows. And that’s a very unique capability that we provide to OEMs for flexibility.

So, we believe with a product like SoFIA, as we bring that into the market next year, we can absolutely compete in those spaces and make money. You’re probably not going to make as much revenue dollars and as much margin dollars as the PC business, but we think this is still critical. And it’s critical for a variety of reasons. Part of it is simply the scale. You want to have those units. You want to have a presence in all areas of computing.

And the second one is developer attention. You want developers creating new products, doing innovation on your architecture. This is a space that’s got innovation. We are going to bring some of that innovation to this market. You’re going to see some tablets as you go into the end of this year.

We showed them at CES, some of the highlights where you have 3D cameras, you have perceptual computing capabilities for gaming. All of those kinds of things can change the tablet market, along with the PC market.

So, we believe that we can bring a lot of the innovation that we do in the PC down into the tablet space. And again, that keeps the developers developing and interested in our platform. I think for all of those reasons, we want to be in this space and we will be in this space from now on.

Stacy J. Smith – EVP and CFO: That was very complete, but we don’t fear the low end of the market. You look at how we played out in PCs. You can drive a lot of unit growth by participating in PCs now that are $199 to $250. We can have the cost structure because of our manufacturing lead to participate nicely there. And you see that as markets mature, they also segment.

And so we have look, you look at our PC business, we have great demand and profitability in core I7s and it spans down to Bay Trail at the Atom segment of the market. So, it’s a misconception to think that we only want to play at the high end. Our manufacturing leadership can give us the cost structure to play profitably at the low end, as well.

Mark Lipacis – Jefferies: Brian, when you talk about the 40 million unit bogey on tablets this year, could you go through the taxonomy of that a little bit? To what extent do you think this is Windows versus Android? And what’s the class of product you think will represent the mode or the mean? Like where do you think your sweet spot is going to be this year on tablets?

Brian M. Krzanich – CEO: Our mix of OSs reflects pretty much what you see in the marketplace. So, I think, depending on how you look at it, it’s probably something on the order of 90% Android, 80% Android, 10% to 20% Windows.

Our percentages look very much like the marketplace. So, if Windows continues to grow and gain traction I think our percentage would just align directly to that. So, you can — don’t separate what we ship from what’s basically in the marketplace. We’re leadership capability on all of the OSs now.

As far as what is the price point, again, it reflects fairly close to what the marketplace is. You see us in systems below $100 now. The majority of the systems are say $125 to $250, somewhere in there. And then you see us in some of the upper end systems, $250 to $400. And so — but the majority is in that — I’d call it, $125 to probably $250 range.

Mark Lipacis – Jefferies: And then as a follow-up, did you discuss, do you expect to have the Android tablets ramping in volume this quarter? Are we going to be — should we expect to see the Bay Trail Android products at Computex this year? When do we really see the material ramp in the Android products?

Brian M. Krzanich – CEO: Sure, absolutely. You can go out to the store today and buy an Android — in fact, I’d love you to go buy one of the 40 million we’ll sell. But, yes, you can buy Android. It continues to ramp through this quarter. At Computex, we’ll show a series of Android and Windows-based tablets. And they just continue to ramp through this year. But they’re on shelves today. I saw them in the store this weekend.

Stacy J. Smith – EVP and CFO: The majority of the 5 million units, for example, are Android. Just as Brian said, it more or less follows the distribution between Windows and Android.

Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter

Update: At 19:40 on April 14 from the 昂达微博 Onda microblogging
[Detailed background information on Onda you can can can find on the ONDA page of my other, ‘USD 99 Allwinner’ blog. Note as well the neostra ODM/OEM brand which is owned by Onda as it’s manufacturing base.]

# Onda Tablet PC & Intel 64 # [notice] April 21, Onda first Intel 64 Bay Trail-T quad-core tablet quad-core # # Onda V975i , 1099 yuan [$177] / 32GB! 50 can be stored in advance and are now starting to use arrived 100 yuan purchase! 9.7 inches iPad Air retina screen, 64 1.83GHz quad-core CPU, the strongest 64-bit tablet bunker! Starting snapped → Onda V975i “special” double 50 yuan deposit payment in exchange for 100 yuan photographed determine coupon   @ Intel China   @ Intel Core Collection of

image

Details about the Onda V975i shipping from April 21st see after the Onda V819i (shipping from April 14th) details given much below! End of update

Existing local tablet brands working with Intel were BYD, Ramos and Teclast so far. With CTE (China Technical Ecosystem) initiative now they have 14 partners, not only local brands but local IDHs (Independent Design Houses) and OEMs/ODMs as well, as will be presented very soon below (other subjects following that correspond to the other terms that you find in title of the post):

From 英特尔的中国白牌平板之路 (Chinese white-box tablet roadmap by Intel) [中国经济网深圳频道 (China Economic Net Shenzhen Channel), April 3, 2014]


Intel and low-cost Android [and Windows] tablet reference design roadmap (Source Intel)

image

  1. Clover Trail+, Dual Core, Android: Z2580 2GHz, Z2520 1.2GHz, LPDDR2, 8L1 HDI2 
    (Note that Intel was pressed to use the Clover Trail+ for tablets instead of smartphones as it was originally envisaged. See in Saving Intel: next-gen Intel ultrabooks for enterprise and professional markets from $500; next-gen Intel notebooks, other value devices and tablets for entry level computing and consumer markets from $300 [‘Experiencing the Cloud’, April 17, 2013].)
  2. BayTrail-T, Quad Core, Windows: Z3745D 1.83 GHz, 19×12 LCD, DDR3L, 8L1 HDI2
    (3d party AM? Dual Boot solution available)
  3. BayTrail-Entry V0, Quad Core, Android:
    Z3735D (1.83GHz, <=2GB, <=19×12 LCD),
    Z3735E (1.83GHz, 1GB, <=12×8)
    DDR3L, 8L1 HDI2
  4. BayTrail-Entry V2.1, Quad Core, Android:
    Z3735F (1.83GHz, <=2GB, <=19×12 LCD),
    Z3735G (1.83GHz, 1GB, <=12×8)
    DDR3L, 6L1 type 3 PCB
  5. BayTrail-Entry V2.1, Quad Core, Windows
    [note that the Windows-based SoC version started sampling in beginning of April vs. the Android based one in mid February]:
    Z3735F (1.83GHz, <=2GB, <=19×12 LCD),
    Z3735G (1.83GHz, 1GB, <=12×8)
    DDR3L, 6L1 type 3 PCB
1 8L PCB = 8-layer PCB; 6L PCB = 6-layer PCB
2 HDIHigh Density Interconnects (aka Type 4) PCBs are defined as PCBs utilizing blind, buried or microvia technologies. A blind via is drilled from the surface layer with an end target on an internal layer while a buried via is only drilled on internal layers and does not exist on the surface layers. A microvia is commonly referred to as a via with a hole diameter of 0.005’ or less. (Source: PCB Stack-up Overview for Intel® Architecture Platforms Layout and Signal Integrity Considerations, Intel Thainland, December 2008)

image

In 2013 Intel launched the CTE program, where “the CTE acronym stands for China Technique Technical Ecosystem, which can be understood as Chinese technology ecosystem environment and Chinese white-box industry chain”, an alliance of fourteen local tablet manufacturers in Shenzhen including 比亚迪-BYD (Build Your Dreams), 实义德-THD (Thread Technology Co. Ltd.), 创智成-CZC, 汉普-Hampoo, 亿道-Emdoor [Digital] (Emdoor Digital Technology Co. Ltd.), 德天-Techvision (德天信息技术有限公司-Techvision Information Technology Co., Ltd.), 蓝魔Ramos, 台电Teclast (Teclast Electronics Co, Ltd), 广和通Fibocom (Fibocom Wireless Inc.), 微步Wibtek3 (Weibu) (Weibu Electronics Co., Ltd), 天智伟业Wisky (Shenzhen Wisky Technology Co Ltd), 炜疆Range (炜疆信息技术有限公司-Range Information Technology Co., Ltd.), and so on.

3 Wibtek (Weibu) is a Top 1 design house, dedicated in DIY solution products over 13 years with 10 million units MB shipment per year.
– Founded: 2001
– Group Employees: over 1000
– HQ: Shenzhen China
– R&D Force: 500+ engineers
Because of a global brand need, Wibtek is established by TAIWANESE people who were working for A BRAND in the past. Wibtek is currently producing All In One, Mini PC and Motherboards at this moment. As because our profession is motherboard design we easily can claim that Wibtek: “AIO by ITX professionals”.

The below table (taken from Z3600 and Z3700 Series Datasheet as of April 2014 when Type 3 SoC related information was added) is giving the rest of the specific information:

imageIn Brian M. Krzanich IDF14 Shenzhen keynote
[April 2, 2014]

  • Demonstrates Intel SoFIA for the first time just months after adding the new family of integrated Intel® Atom™-based mobile SoCs for entry and value smartphones and tablets to its roadmap.

From Intel CEO Outlines New Computing Opportunities, Investments and Collaborations with Burgeoning China Technology Ecosystem [press release, April 2, 2014]

As 4G LTE service expands in China, Intel is well-positioned to provide a growing share of LTE chipsets. Intel’s 2014 LTE platform, the Intel® XMM™ 7260, meets the five-mode requirement of China Mobile* today, including support for TD-LTE, and TD-SCDMA protocols required in China.

Intel is actively engaged in China for certification of the Intel XMM 7260, paving the way for commercial availability in the second half of 2014 for performance and mainstream device market segments. Krzanich demonstrated the Intel XMM 7260 by conducting the first public, live call using China Mobile’s TD-LTE network, and spoke to strong ecosystem demand for a competitive LTE alternative.

Intel is also developing its SoFIA family of integrated mobile SoCs for entry and value smartphones and tablets. Krzanich demonstrated the family’s first silicon, booting up the new integrated Intel® Atom™ platform just months after adding the product to its ultra-mobile roadmap. He also noted the strategic opportunity these market segments present for Intel and the China technology ecosystems. Intel’s SoFIA 3G platform is on track to ship to OEMs in the fourth-quarter of 2014.

Krzanich also said that Intel is on track to ship 40 million tablets this year, and showcased a variety of innovative designs developed in China by OEMs and ODMs.

From Mobile Innovation With Intel Inside by Hermann Eul [IDF14 Shenzhen, April 3, 2014]image

The general tablet roadmap was presemted as follows:

image

Intel reportedly places 28nm chip orders with TSMC, Globalfoundries and UMC [DIGITIMES, Jan 9, 2014]

Intel has contracted Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture its forthcoming Atom mobile processor series codenamed SoFIA, and also placed orders for entry-level baseband chips with Globalfoundries and United Microelectronics (UMC), according to industry sources.

The contract chipmakers declined to comment on customer orders.

Intel’s SoFIA SoCs designed for entry-level smartphones and tablets will be built using TSMC’s 28nm HKMG process technology, said the sources. As for the other series of Atom SoCs codenamed Broxton, Intel will use its 14nm FinFET process to make the chips targeting high-end mobile devices.

Intel has also placed orders for entry-level baseband chips with Globalfoundries and UMC, using their respective 28nm PolySiON process nodes, the sources indicated. Initial shipments required by Intel are estimated at 7,000-8,000 wafers monthly.
Globalfoundries will first be the primary contract chipmaker for Intel’s 28nm baseband chips, the sources noted. Nevertheless, Intel is likely to release more orders to UMC later in 2014 when the Taiwan foundry improves its 28nm production yield rates, the sources said.

More information:
IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [‘Experiencing the Cloud’, April 4, 2014]
The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [‘Experiencing the Cloud’, Sept 14, 2013]
Form Factor and Average Power Innovations for Ultrabooks™
[April 10, 2013 presentation by Intel at the IDF Beijing] with the following abstract:

Intended Audience: OEMs and ODMs – Motherboard Layout Designers, Power Delivery, and Power Management Architects
In this session we propose methods to improve, form factor, battery capacity, and power consumption for Ultrabook™ devices. We show how High Density Interconnects (HDI) Printed Circuit Boards could free up considerable space for more battery and other features, especially in thinner Ultrabooks. We show current practices with HDI and propose better ways to achieve higher mother board area reduction to close the cost gap between type 3 and type 4 (HDI) designs. For power consumption, we also show design methods to reduce average power, especially by reducing platform idle power.

and agenda:

    • What is HDI?
    • Benefits of HDI in Form Factor Constrained Systems
    • Reducing the Cost of HDI
    • Reducing Platform Power
    • Thermal management an Power Configurability

From Designing Entry and Value Tablets Based on the Intel Platform, Bay Trail – Entry [IDF14 TABS002 session, April 3, 2014] downloadable presentation (PDF)

This session includes an in-depth review of the status and plans for the Intel® platform, Bay Trail – Entry, Intel’s first platform focused entirely on Entry and Value Tablets.

Topics include:

  • Master Reference Design, component catalog and hardware and software differentiation
  • Development and manufacturing tools
  • Schedule and Original Device Manufacturers (ODMs) support model

image

1 MRD7 and MRD8/10 are Android* only. Windows is for selected ODMs with committed volume.

image

image

image

Imperatives for Master Reference Design (MRD) Development and Scaling

  • Master reference design for simultaneous scaling @ multiple ODMs with fast time to market
  • Tailor-made to enable flexible and fast changes with CTE friendly component catalogue
  • Enable differentiation to drive value beyond low cost
  • Manufacturing tools to ensure easy mass production process

image

image

image

image

Intel Platform, Bay Trail–Entry Component Catalogue Goal

  • Strengthen Intel Architecture partnership with CTE hardware ecosystem
  • Improve platform competitiveness, demonstrate performance and flexibility
  • Shorten time to market and enable product variety
  • Reduce project and supply chain risk
  • Enable partners to support customer design directly

image

image

image

Intel software ecosystem enabling efforts

< from slide #22 to slide #36>

Intel tools for development and manufacturing

< from slide #38 to slide #41>


image今天 17:59 Today [2014-0411] 17:59 
昂达微博 Onda microblogging
[Detailed background information on Onda you can can can find on the
ONDA page of my other, ‘USD 99 Allwinner’ blog. Note as well the neostra ODM/OEM brand which is owned by Onda as it’s manufacturing base.]

# 64 Onda first Android tablet # [first] New Intel Bay Trail-T’s first quad-core tablet # # Onda V819i quad-core will soon at @ Jingdong  
@ Jingdong computer digital sale! 16GB is only 799 yuan [$129]! 8.0-inch 1280 × 800 IPS screen ultra-clear, 64 of Bay Trail-T 22nm quad-core CPU, PC-class 7th generation GPU, 64-Bit Flat Panel “core” era! Starting snapped → http://t.cn/8sCvvnD    @ Intel China   
@ Intel Core Collection of

Onda V819i Intel Bay Trail-T 8 Inch IPS Screen Quad Core Android Tablet PC
[Onda Tablet – Buy Products, April 4, 2014]

SKU:820026
Regular Price: $189.90
Special Price: $159.90

Quick Overview

Onda V819i Intel Tablet pre-installed with Quad Core 64-bit 22nm Bay Trail-T 1.83GHz Processor [3735E Bay Trail-Entry V0], with 1280*800 IPS Screen, Dual Camera.

Qty: … Pre-order

Shipping within 1-2 Weeks

From Boris at 4/2/14 11:44 AM

  • Can I be notified when Onda V819i will be in stock?
    Thanks.
  • Onda Tablet:
    Thank you for your mail.
    Onda V819i Intel Tablet will be in stock at the end of April.

Details

Onda V819i Intel Tablet pre-installed with Quad Core 64-bit 22nm Bay Trail-T 1.83GHz Processor [3735E Bay Trail-Entry V0], with 1024*768 1280*800 IPS Screen, Dual Camera.

image

Onda V819i Quad Core features Intel Bay Trail-T Z3735 processor, 1.83GHz.

image

DDR3 L RAM, eMMC up to 150MB/s

image

image

8.0 Inch HD IPS Gorilla Glass Touch Screen

image

189PPI IPS Screen with 1280*800 resolution

image

Onda ROM

image

image

Onda V819i Intel Tablet Features:

OS: Android 4.2
CPU: Intel 3735E [Bay Trail-Entry V0] Quad Core 64-bit Bay Trail-T, 22nm, 1.86GHz, support Burst Technology 2.0
GPU: Intel HD Graphics for BayTrail
RAM   1GB 64bit DDR3L
Storage   16GB eMMC
Bluetooth: Support
Shell Material     Metal
Screen: Capacitive Touchscreen, 1280*800 High-resolution Screen
Size:   8 inch
Resolution:    1280*800 Pixels (16:10)
Display:  IPS Screen
Dual Camera:  2.0MP Front + 5.0MP Back with AutoFocus (OV Camera)

Onda V819i Intel Tablet Details:

Speakers: Dual AAC Speaker
TF Card: Support up to 128GB
Video: 4K HD Videp Play with formats of MP4/3GP/3G2/RM/RMVB/ASF/FLAC/APE/MOV etc.
Gravity Sensor     Yes
Skype     Yes
Multi-Touch     Yes, 10 points touch
OTG:   Yes
HDMI:  Yes, Mini HDMI
Play Store:  Yes, built in
Extend Card     Support TF card up to 128GB extended
Email and Browser: Yes, built in
WIFI:    Yes, 802.11 b/g/n
Earphone Interface     3.5mm
Video    1080P, AVI/MOV/MP4/RMVB/FLV/MKV…
Music     MP3/WMA/WAV/APE/AAC/FLAC/OGG
Ebook     UMD, TXT, PDF, HTML, RTF, FB2…
Battery :  Li-ion 4200mAH

Onda V819i Intel Tablet contain:

1 x Onda V819i Intel Tablet
1 x USB cable
1 x Charger

Onda V819i Intel Tablet Weight:  354g

Onda V819i Intel Tablet Size:  207*122.5*8.5mm

imageUpdate: At 19:40 on April 14 from the 昂达微博 Onda microblogging

# Onda Tablet PC & Intel 64 # [notice] April 21, Onda first Intel 64 Bay Trail-T quad-core tablet quad-core # # Onda V975i , 1099 yuan [$177] / 32GB! 50 can be stored in advance and are now starting to use arrived 100 yuan purchase! 9.7 inches iPad Air retina screen, 64 1.83GHz quad-core CPU, the strongest 64-bit tablet bunker! Starting snapped → Onda V975i “special” double 50 yuan deposit payment in exchange for 100 yuan photographed determine coupon @ Intel China @ Intel Core Collection of 

Onda V975i Quad Core Intel Bay Trail-T 9.7 Inch Retina Screen RAM 2GB Tablet PC [Onda Tablet – Buy Products, April 14, 2014]

SKU:820027
Regular Price: $219.90
Special Price: $209.90

Quick Overview

Onda V975i Quad Core pre-installed with Intel Bay Trail-T 61-bit Processor [3735D Bay Trail-Entry V0], with 22nm and 1.83GHz, 2GB RAM DDR3L and 32GB eMMC ROM,9.7 Inch Retina Screen 2048*1536 resolution 264 Screen PPI. Onda V975i come with Front 2.0M and Back 5.0M Dual Camera.

Qty: … Pre-order

Shipping within 1-2 Weeks

Details

Onda V975i Quad Core pre-installed with Intel Bay Trail-T 61-bit Processor [3735D Bay Trail-Entry V0], with 22nm and 1.83GHz, 2GB RAM DDR3L and 32GB eMMC ROM, 9.7 Inch Retina Screen 2048*1536 resolution 264 Screen PPI.Onda V975i come with Front 2.0M and Back 5.0M Dual Camera.

Intel Z3735 Quad Core 64 bit 1.83GHz

image

8.5mm Ultra-thin

9.7 Inch Retina Screen Android Tablet with 495g

image

HD OV Camera with Auto Focus

Front 2.0M and Back 5.0M HD Camera

image

Top 9.7 Inch Retina Screen

9.7 Inch iPad Air Retina Screen with 267 Screen PPi, Gorilla Glass Touch Screen

image

Onda V975i Quad Core Tablet Features:

OS: Android 4.2
CPU: 64-bit Bay Trail-T Z3735D [Bay Trail-Entry V0], 22nm,1.83GHz, support Burst Technology 2.0
GPU: Gen7,support DirectX 11
RAM   2GB DDR3L
Storage  32GB eMMC
Bluetooth: Support
Shell Material     Metal
Screen: Capacitive Touchscreen, 2048*1536 High-resolution Screen
Size:   9.7 inch
Resolution:    2048*1536 Pixels
Visible Angle: 178°
Screen PPI:  264
Display:  Retina IPS Screen
Daul Camera: Front 2.0 Megapixels, Back 5.0 Megapixels Auto Foucus

Onda V975i Quad Core Tablet Details:

Speakers: Dual AAC Speaker
Video: hd Video Play with formats of MP4/3GP/3G2/RM/RMVB/ASF/FLAC/APE/MOV etc.
Gravity Sensor     Yes
Skype     Yes
Multi-Touch     Yes, 10 points touch
OTG:   Yes
Play Store:  Yes, built in
Extend Card     Support TF card up to 32GB extended
Email and Browser: Yes, built in
WIFI:    Yes, 802.11 b/g/n
Earphone Interface     3.5mm
Video     1080P, AVI/MOV/MP4/RMVB/FLV/MKV…
Music     MP3/WMA/WAV/APE/AAC/FLAC/OGG
Ebook     UMD, TXT, PDF, HTML, RTF, FB2…
Battery :  7800 mAh

Onda V975i Quad Core Tablet contain:

1 x Onda V975i Quad Core Intel Tablet
1 x USB cable
1 x Charger

Onda V975i Quad Core Weight: 495g

Onda V975i Quad Core Size:  241*169*8.5mm

End of update


From 亿道将推低于399元的Windows平板 (Emdoor will be pushing Windows tablet down to 399 yuan [$60]) [平板新闻 (PadNews), April 8, 2014] one can see the following roadmap from the company for 2014:

image

Currently its three 8-inch Windows 8.1 based tablets: EM-I8080-A, EM-I8080-C, EM-I8180 are already in mass production. And now Microsoft Windows system with tablets of 9-inch and less size has started free, which makes its three 8-inch Windows tablets more competitive.

image

In addition Emdoor will launch in the second quarter of this year a 10.1-inch Windows Tablet program supporting 3G/4G network, and a 10.1 inch 3G/4G tablet based on BayTrail-T CR [Cost Reduced] V0 version. In the second quarter it will also launch an 8-inch BayTrail-T CR V0 quad-core 3G tablet, the whole[sale] price will be around $ 139. In the end of the second quarter it will launch an 8-inch BayTrail-T CR V2 3G quad-core tablet, when prices will be further reduced to between $ 99-119. More awesome is that in the third quarter Emdoor will launch a 7 -inch BayTrail-T CR V2 quad-core 3G tablet, and the price will be lower than $99. Obviously in the WiFi-only version of the above scenario the price will be lower.

The current 50K shipment of Emdoor isn’t much, but for the company it is simply a starting point. At the launch party Emdoor also announced this year’s goal: 1KK, namely the 2014 Intel tablet shipments program to reach 1 million units, becoming the market leading Intel tablet IDH. Obviously, this is not small, in order to achieve it is really difficult. How Emdoor will be achieving this?

Emdoor’s approach can be summarized in three points: 1, constantly updated product technology and creating more product forms; 2, the establishment of a sound quality system, providing customers with better product quality; 3,  for the continuous optimization of product cost it will introduce a $60 tablet this year. Here the US $60 tablet PC should be referring to that of Emdoor launching in the third quarter a 7-inch BayTrail-T CR V2 quad-core tablet, as the 3G version priced at only $99, then the price of the WiFi only version should be at around $ 60. Here we must add that BayTrail-T CR supports Windows System.

image

The $60 Tablet PC means that for less than 399 yuan you can buy a Windows tablet, the price really is a little scary. If it really can do at this price, then it will be able completely compete with an ARM-based Android tablet head-on. And an Android tablet does not have the advantage of full compatibility with PC programs. Plus the Intel and Microsoft brands, I believe, will attract a large number of consumers. And with this it will probably be possible to change the current ARM tablet market, a dominant pattern. But before the product is actually listed it’s hard to say, because the outcome will also depend on the specific market feedback.

Intel pre-CTE background in China:

As of 2013

From China tablet/smartphone chain: Leaders emerge but plenty to play for [Supply Chain Research by Credit Suisse, Oct 15, 2013]

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… The China tablet market is also seeing Intel engage more on building reference designs with local players, with several solution houses and local brands rolling out Windows+Android 7-10” tablets for $150-250 factory price for tablets and $300-$350 for tablet + keyboard Win8 + Android models.  …

Intel engaging local tablet suppliers more closely. Intel is putting more energy on penetrating the low-cost tablet market and now has reference models from design houses such as Emdoor and smaller branded companies including Ramos and Vido. The company is offering a thin and light reference design based on Clover Trail now with Bay Trail rolling out in the next 3 months. Factory price for 10” with keyboard ranges from $250-300 for Android and $300-$350 for Android + Wintel. 7.85” tablets are from Intel are now appearing at US$150 factory price, the high-end of the US$50-135 range for tablets based on Mediatek or the Chinese chipset suppliers. We are seeing more effort from Intel to penetrate several of these design houses on tablets, though presence is still very limited at the local smartphone suppliers.

Emdoor Digital background:

As of 2013

Emdoor Digital participates China Sourcing Fair in Hong Kong with multi-platform solutions [press release, Oct 12, 2013]

Emdoor Digital participated China Sourcing Fair in Hong Kong on October 12-15, 2013 with multi-platform solutions. Emdoor Digital unveiled the latest Intel X86 architecture -based tablet solution, ARM Rockchips 3026 and 3168 -based architecture solution. There is also more mature amlogic tablet solution which is already in high-volume production, Marvell 3G call tablet solution, more tablet solutions targeted at different industries, Miracast, TV boxes, TV stick and other products.

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《Scene photos I》

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《Scene photos II》

        Intel Dual System Tablet solution is undoubtedly the major popular model during this exhibition, X86-based Intel Baytrail-T quad-core tablet solution, 1.8GHz, support windows8.1 & android4.2.2 dual system, 10.1 inch, 8 inch two models, this is the world’s first prototype based on Intel Baytrail-T, the mature sampling will be available in the end of October and Mass production in November.

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《Intel tablet solution》[based on Z3740D]

        Intel leaders from different regions and countries visit and guide at Emdoor Digital Booth.

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《 Intel Leaders’visit》

        ARM architecture-based RK3026 is the latest models target at lower-end market, RK3168 for higher-end market, both are undoubtedly the models lead the dual-core market.

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《EM-R3170&EM-R6270》

        For the higher end market, Emdoor Digital has RK3188, M802, large size, thinner and lighter is the characteristics of these models.

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《8”、9.7”、 10.1”》

        For Mass production and most stable performance, Emdoor Digital has full-size models of amlogic AML8726-MXS/MXL chip solution; all 7 inch, 8 inch, 9 inch, 10.1-inch types pass the GMS certification.

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《 Amlogic series models》

        For 3G and calling market, Emdoor Digital has Marvell PXA986 dual-core, PXA1088 quad-core tablet solutions, Phablet, narrow flat border is a major highlight which is also the future market trends.

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《3G Phablet》

        We can see some special tablets customized for different industries on Emdoor Digital booth, POS machines has intelligent cash system, supports NFC, mobile phone , bank card and magnetic card payments manner. And other industrial applications tablets of RFID, Zigbee / Z-wave, etc.

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《Industry Solution》

        There are also TV box, TV dongle , Miracast, etc.

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《 Other products》

        During this Hong Kong exhibition, Emdoor Digital presents multi-platform solutions with numerous product forms, which is undoubtedly one of the booths with rich content, different products for different markets, which is attraction for all buyers on site.

About Emdoor Digital:

  • Emdoor Digital is in charge of R&D of Emdoor. Officially founded in 2010, Emdoor Digital symbolizes the important start for Emdoor to increase research investment and focus on consumer product development and standard operation. Emdoor Digital is one of the earliest teams engaging in tablet PC research, which targets at consumer digital product and solution research and production. At present, it is one of the largest tablet PC main board and ODM/OEM suppliers in Shenzhen.
  • MID solution of Emdoor Digital uses international famous chip processor and intel X86 architecture, the latest ARM architecture with strong CPU function.
    – The latest Android system is adopted, support powerful third-party software.
    – It employs full-touch screen design with resolution covering 800*480 to 1280*800 capacitive multi-touch screen.
    – Built-in WIFI and 3G module (WCDMA/EVDO/TDSCDMA) and GPS module are available.
    – Browsing websites, checking email, QQ/MSN/SKYPK online chatting, online games, online TV, stocks, funds and futures, real-time stock market monitoring, real-time transaction and so on.
    – It is supportive to more office software such as WORD, EXCEL, PPT, PDF, TXT etc.
    – It is supportive to various mainstream audio, video, picture, Flash plug-ins and multiple game clusters.
    – It supports 48 languages and 3G parameters from 28 countries.
    – All solutions adopt ultra-low power consumption but strong power management design, which have stable performance, high yield, fast delivery and good service.
About Emdoor Group:

  • One of the top 10 embedded system enterprises of the top 100 IOT enterprises in China in 2010;
  • One of the top 10 embedded system enterprises in China in 2010;
  • One of the earliest companies in the world that are engaged in research, development and design of MID tablet PCs;
  • Member of IOT Expert Committee of Chinese Institute of Electronics;
  • Golden partner of Microsoft
  • Partner of ARM chip design tool, development tool, ATC training and education
  • Domestic agent of ARM for development tools and chip-level development board.
  • Designated supplier of ARM hardware platform for 2006 National Undergraduate Electronic Design Contest; won “Special Contribution Award” of Ministry of Education and Ministry of Information
  • Its software/hardware co-design system of R&D management system EmTeam won “EDN China” innovation award for 2010;
Emdoor possesses three subsidiaries: Emdoor Electronics, Emdoor Digital and Emdoor Information, which engage in R&D tool, tablet PC and industrial terminal R&D and sales respectively. Emdoor has attached great importance to R&D management, embedment, mobile Internet and Internet of Things for a long time and been devoted to embedment industrial chain in China, providing professional and individualized service and support to customers in chip development tool, EDA development tool, embedment development tool, embedded platform and solution, embedded software test tool, ODM/OEM, embedment training and so on, thus helping customers and global partners to achieve success.
Emdoor has increased investment in independent R&D though making great achievement in independent tablet PC R&D. With the great support of Fudan Technology Venture Park, Emdoor has established Internet of Things R&D Center, Android System R&D Center (Relocated to Shenzhen with a new name Shenzhen Emdoor Information Technology Co., Ltd.) in Shanghai by the end of 2010.
Emdoor Shanghai Internet of Things R&D Center is the new development of Emdoor’s 5-year research in Internet of Things, making wireless sensor networking technology and practical new sensor technology commercialized.
Relying on mature tablet PC R&D platform of Emdoor Digital, Shenzhen Emdoor Information Technology Co., Ltd. has furthered developed a series of industrial tablet solution, such as Zigbee tablet, NFC tablet, RFID tablet, Z-Wave tablet, one dimensional barcode, two dimensional barcode, Infrared Spectroscopy, custom-made industrial tablet, and multiple Internet of Things solutions. It realizes standardized module production based on mature product architecture, enabling itself to create custom-made functions with simple module configuration according to the demand of the project.

As of 2012

http://www.emdoor.com/ Emdoor Electronics 亿道电子

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Emdoor Zigbee Z Wave Tablet Introduction [qing shi YouTube channel, Sept 5, 2012]

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Emdoor NFC Tablet Peer To Peer Introduction [qing shi YouTube channel, Sept 5, 2012]

Emdoor shows $140 9.7″ and $85 7″ Telechips 8803 ARM Cortex-A8 ICS Tablets [Charbax YouTube channel, Jan 13, 2012]

[At CES 2012] Emdoor Digital Technology Co Ltd shows Android 4 Ice Cream Sandwich working on their Telechips based 7″ capacitive and 9.7″ IPS capacitive based Android tablets.

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Emdoor Digital Company Brief: [as of August 2012]

Emdoor Digital subordinate to Emdoor Group is responsible for R&D of Emdoor Group. Emdoor Digital was established in 2010, which symbolized the start that Emdoor Group increased the investment in R&D and its long-term devotion to R&D and standardized operation of the consumer goods. It is positioned for the R&D and production of the digital consumer goods and solutions, with the aim to becoming one of the largest tablet personal computer mainboard and ODM/OEM suppliers in Shenzhen.

Emdoor Digital takes up the R&D team and quintessence of tablet personal computer since 2004, particularly since 2008, having had a specialized R&D team with perfect technology and rich experience since its very start. During the past six years, this team has designed the high-speed ARM embedded processors of Intel/Marvell Xscale PXA255/PXA270/PXA272/PXA310/PXA320 series based on high-speed ARM processors, and it is the largest third-party design team in China for the previous Intel embedded processor with Xscale ARM architecture, good at the substrate design of the software such as Linux, Android, WinCE5.0/6.0 and Windows Mobile operating systems, and having completed the design of multiple customized product solutions.

It is noteworthy that since 2004, Emdoor all the time supported Intel University Program covering the laboratories in Category-A schools of higher education, such as Tsinghua University, Peking University, Xidian University, University of Electronic Science and Technology of China, Tongji University, Fudan University, Zhejiang University, Nankai University, Nanjing University and South China University of Technology, till Intel sold this business to Marvell in 2006. During nearly 8 years from 2003 till 2011, Emdoor education platform and teaching scheme has been purchased by National-level Electrotechnic and Electronic Experiment Demonstration Center of Xidian University, and the embedded laboratories or electrotechnic and electronic experiment centers in almost all schools of higher education (including higher vocational and training colleges).

Emdoor Digital MID Solution Brief:

  • The Emdoor Digital MID Solution mainly uses Amlogic AML8726-MX, AML8726-M3 processor, with the core of Cortex-A9, clocked at 1.5G and featuring strong capacity.
  • The latest Android 4.1 system is adopted, able to support Flash11 and powerful third-party software.
  • All-touch design is adopted, with all levels of resolution covering 800*480-1280*800.
  • Built-in WIFI wireless network can support 3G modules (Optional), WCDMA / EVDO / TDSCDMA, as well as optional built-in GPS modules.
  • It can support web surfing, e-mail sending and receiving, QQ / MSN / SKYPK online chat, online games, Internet TV, stock + funds + futures, real-time pricing, real-time transactions and more other office software, as well as browsing and editing of WORD, EXCEL, PPT, PDF, TXT and other document formats.
  • Able to support all major audio, video, photos, FLASH plug-ins and a number of game sets, as well as 38 countries’ languages and 28 countries’ 3G parameters, all programs use ultra-low power consumption and robust power management design, boasting stable performance, high productivity, fast delivery and excellent service.

Products Development:

  • Feb. 2008  Tablet R &D team was under preparation.
  • Dec. 2008  1st tablet solution which was based on Marvell PXA303 was developed successfully.
  • Mar. 2009  Selected as the key cooperative Design House of Marvell in Great China.
  • Apr.  2009  Tablet with 4.3” touch screen and based on Android 1.1 was 1st published in China.
  • Jun. 2009  Series of Android Netbook were released.
  • Sep. 2009  Tablet with 7” touch screen and based on Android1.5 was 1st published in the industry.
  • Jan. 2010  Tablets with 7” touch screen and built-in WCDMA based on Android forayed into Japanese market.
  • Mar. 2010  7” Tablets with built-in WCDMA based on Android forayed into Germany Vodafone Telecom.
  • Apr. 2010  Changed the chips solution supplier from Marvell to Telechips.
  • Oct. 2010  Mass production started, the PCBA sales volume in Q4 was over 250,000 pieces.
  • Jan. 2011  Tablet solutions based on Android2.3, Telechips 8803, Cortex, 1.2GHz was 1st published in the industry.
  • Apr.  2011  Tablet solutions from 5” to 10” based on Android 2.3.3, Telechips8803 were keeping steady mass production.
  • Jul. 2011  Be the supplier of well known educational enterprises in China for teaching platforms.
  • Sep. 2011  Successively released diversified new tablet solutions such as EM76, EM78, EM89, EM101 and EM102.
  • Oct. 2011  Emdoor Digital was participated in the China Sourcing Fair (Electronics & Components), which was hosted by Global Sources in Asia World-Expo, Hong Kong.
  • Dec. 2011  Tablet solutions from 7” to10” based on Android 4.0, Telechips 8923, Cortex new generation (Cortex-A5) were developed successfully.
  • Jan. 2012  Emdoor Digital was participated in the International Consumer Electronics Show (CES) in L.V.
  • Feb. 2012  Tablet solutions from 7” to10” based on Android 4.0.3, Amlogic 8726, Cortex-A9 were developed successfully.
  • Mar. 2012  Emdoor Digital was participated in the International CeBIT in Hannover Germany.
  • Apr. 2012  Emdoor tablet solutions based on Amlogic AML8726-MX Dual Cortex-A9 were first appeared in China Sourcing Fair (Electronics & Components) in Hong Kong.
  • May. 2012  Emdoor published mass production solution of Dual-core Tablet PC which based on Amlogic AML8726-MX Dual Cortex-A9 in new products release conference.
  • Aug. 2012  Tablet solutions based on Android 4.0.4, Amlogic 8726-MX, Dual core Cortex-A9 appeared successfully at the first China Sourcing Fair-Sao Paulo in Brazil.

Wintel rebirth amid the stock market turning negative about the Wintel future

Despite of the Intel video of a year ago getting totally new meaning this week:

with:

the stock market has just turned negative about the future of both companies:

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source: http://seekingalpha.com/symbol/INTC

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source: http://seekingalpha.com/symbol/MSFT?s=msft

An explanation for that:

Why I Sold All Of My Intel Shares This Week [a “casual investor” by nickname Quoth the Raven on ‘Seeking Alpha’, April 3, 2014]

Summary

  • Intel was upgraded by a Piper Jaffray analyst, who cited a slowing PC market decline.
  • The PC market, sans Mac, has been on a decline that hasn’t ended, despite people like myself predicting it would have bottomed by now.
  • I sold my Intel shares for the time being and am grazing greener pastures.

By now, we all know some of the questionable points about Intel’s (INTC) business. In the past, I’ve written about the company being a little slow on the uptake when it came to mobile and tablet sales. Most recently I’ve questioned the company’s vision for jumping into cloud computing with a major investment and abandoning their in-house Hadoop project, ultimately leading to a major waste of money and resources.

First things first; I sold out of my Intel long position the other day, not necessarily discounting the company to be a long-term hold again at some point in the future. I needed the capital for other purposes, evaluated the many positions in my portfolio, and found the most unease about Intel – so, I sold – for now.

And, sure enough, right after I sold, Seeking Alpha came out and reported that Piper Jaffray came out and upgraded the stock:

  • As part of a change of coverage for chip stocks, Piper is upgrading Intel to Overweight, and downgrading Broadcom (BRCM) to Neutral.
  • The firm thinks Intel will benefit from stabilizing PC sales, and is worried about Broadcom’s mobile customer concentration (presumably with Apple and Samsung).
  • IDC still expects PC shipments to fall another 6% in 2014. But Y/Y decline rates have been narrowing in recent quarters.
  • OTR Global recently reported Broadcom’s 3G baseband chip sales to Samsung have fallen sharply. Samsung has also taken steps to increase its use of in-house Wi-Fi and Bluetooth chips, though that hasn’t stopped Broadcom from continuing to secure combo chip design wins.
  • Apple bought Bluetooth chipmaker Passif Semi last year (possibly for iWatch R&D), but hasn’t yet done anything to suggest it’s working on Wi-Fi chips.

When I dug a little deeper into the reasoning behind the upgrade, one thing perked my ears up. Piper is coming out and assuming that the PC market is going to continue to slow and then eventually bottom. I thought this very same thing six months ago. Since then, I’ve continued to watch the PC market decline – albeit slower now – but it has yet to hit a bottom.

Again, Intel’s biggest friend here has been Mac, which has been able to buck the overall trend of the PC market and continue to sell well. Intel leveraging its relationship with Apple (AAPL) at this point remains a key factor in their success.

As the main constituency of Intel products travel through the sales of PCs, this continues to remain a point of unease for Intel. Additionally, Piper is seemingly betting on a flawless execution and growth of Intel’s Quark chipset which certainly is possible, but remains to be seen at this point.

Gartner’s numbers, shown below, continue to show a decrease in PCs for 2015, and an increase in both tablets and mobilewhere Intel still does not have a steady foothold.

(click to enlarge – source)

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Further, the headlines surrounding the market that even I predicted would have stabilized by now, continue to look ugly. cnet reported:

PC sales will continue to nosedive this year as more consumers scoop up mobile devices, says a new report from Gartner.

Global shipments of personal computers will total 276.7 million in 2014, Gartner forecast on Thursday, a 6.6 percent drop from last year. On the flip side, tablet shipments will jump by 38.6 percent thanks in part to greater demand in regions outside North America.

But the number of people replacing their aging PCs with tablets is actually expected to decline.

But what about globally, you ask? I asked the very same thing – same uneasy headlines, different countries. We continue to see reports, like this one out of Taiwan, claiming that PC sales are poised to decline:

Total PC sales in Taiwan are poised to decline for the fourth consecutive year, as consumers continue to favor mobile devices that are less expensive than, but as productive as, their pricier counterparts, International Data Corp [IDC] forecast yesterday.

National PC sales are expected to fall by 5.1 percent to 2.55 million units this year, following a 15.6 percent fall last year, the market research firm said in a report.

Desktop computers are projected to account for 60 percent of total PC sales this year, with notebook computers making up the remaining 40 percent, the report said.

Last year, desktop and notebook sales in Taiwan reached 1.68 million and 1.01 million units respectively, it added.

But when are we going to hit the coveted bottom that we continue to talk about? It is coming, possibly, but it sure isn’t here yet. And, as long as these sales continue to decline, Intel remains at a vulnerable point as a company. Especially with the questionable vision they have shown of late.

Again, this data [dated March 5] from IDC is once again suggesting that PC sales are going to decline more than we expected this year:

Shipments of new personal computers, most of them equipped with Microsoft Windows (MSFT), will decline more in 2014 than thought a few months ago, researcher IDC said Tuesday.

IDC said that PC shipments will drop by 6% from the year before to approximately 296 million, a smaller number than it forecast three months ago, when it said global shipments would decline 4% in 2014.

Last year, shipments contracted by 10% compared to 2012, dropping to about 315 million new PCs.

IDC revises its numbers quarterly, said Rajani Singh, an analyst with IDC, who pointed out that as the market changes, the company modifies its forecasts, sometimes up, sometimes down.

Even though I thought their new incentive-based pay program was a good idea, there were many that disagreed with me and thought it was bad for business. You could say the same, again, about the company’s recent foray into cloud computing. People ask, “Is it too little, too late?” Why does it seem like Intel is just throwing everything against the wall to see what sticks?

(click to enlarge)

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Do I think Intel is an absolutely horrible stock to be in for the long-term? Of course I don’t. It pays a dividend, has a good balance sheet, and is going to be around for many years to come. Do I think Intel is ripe for a short to mid-term trade? Absolutely not. I think there’s still work that needs to be done at this point before we see Intel push up towards $30/share and, thusly, I made my decision to sell my Intel shares for the time being and enter an Intel holding pattern.

Best of luck to all investors.