IDC Sees Tech-Spending Drop; Newport Corp. Partners for Design
It seems no one may want the massive Newport Beach chip making facility owned by Conexant Systems Inc., which rumors had the company trying to unload on Taiwan’s United Microelectronics Corp., the world’s second-largest contract chipmaker.
Just before Conexant’s announcement last week that it will trim employment at the Newport Beach chip fabrication plant,called a fab,by 450 people to only the most specialized staffers, financial wire service Reuters reported that UMC said it could shut down one of its plants if the economy didn’t turn around. Translation: Conexant may not have been able to convince a slowing UMC to buy the plant and had to take the more undesirable path: laying off a healthy portion of its fab staff and restructuring its other manufacturing operations.
Who could blame UMC for not wanting to take over the plant? Since Conexant’s Newport Beach fab is older,hailing from the days when Conexant was still a part of Rockwell International Inc.,UMC may not have wanted to make upgrades to the facility.
Additionally, UMC said it expects to decrease spending on 8-inch wafer manufacturing,the type of chip process used at Conexant’s Newport Beach plant,in favor of the 12-inch process. Additionally, the cost of running an electricity-gobbling fab in California would be a deterrent for any company looking to increase manufacturing capacity.
In the meantime, Conexant needed to do something with plant. Analysts had long said that running a fab was prohibitively expensive and that Conexant’s slowing business augured an eventual sale of the plant. And even with last week’s decision to lay off workers, many still expect Conexant to move to a more fabless model and outsource production to contract manufacturers,a trend which could mean Conexant would still sell the remaining portion of the Newport Beach plant.
Neither Conexant nor UMC commented on a potential sale of the plant.
Still No Spending?
Just when OC’s tech executives thought it might be safe to say technology spending should bounce back in the coming quarter, wayward research firm International Data Corp. reports that global spending on technology could take a $150 billion nosedive. The problem spot: Europe.
Apparently, IDC hadn’t expected the current slowdown in economic growth to lull tech spending. “However, spending in some segments of the European IT hardware has clearly tempered, including weaker demand from service providers for networking equipment and a slowing growth rate for PC sales,” IDC’s report said.
The news may not be the best for OC’s tech biggies,such as Western Digital Corp., Toshiba, Kingston Technology Co., Conexant and Broadcom Corp.,which all sell products to the major PC makers or the networking equipment makers. Still, IDC didn’t sack all tech segments, saying that software and technology services spending would still post strong growth this year.
Newport News
Newport Corp.’s been busy lately.
The maker of chip manufacturing parts announced that it has aligned with fiber-optics company Haleos Inc., based in Blacksburg, Va., to develop new manufacturing equipment.
“We joined forces with Haleos, a company we believe to be an innovative supplier of fiber-optic components and next-generation optical solutions,” said Newport Chief Executive Bob Deuster in a statement. Under terms of the alliance, Newport and Haleos will research, design and build Newport’s automation equipment at Haleos’ facilities.
“In doing so, Newport solidified a relationship that provides us with unique and upfront access to the manufacturing and automation needs of optics companies seeking commercially viable automation solutions,” Deuster said.
A few days after the alliance announcement, Newport said it had been granted a patent for a new piece of manufacturing technology,a robotic arm that allows chips to be handled by only their edges during manufacturing.
“These innovations are designed to improve yields and lower our customers’ total cost of ownership, and are examples of the advanced technology we have added to our portfolio through our recent merger with Kensington Laboratories,” Deuster said. “The inventions help semiconductor equipment manufacturers minimize wafer mishandling, especially as they move to larger, 300mm wafer sizes, and to increase the speed and throughput of their systems.”
Trimedyne in China
Irvine’s Trimendyne Inc. said it received the OK from China to sell its Holmium laser systems on the mainland. According to the company, two laser systems have already been sold and will be stationed in a major university hospital in Beijing.
Trimedyne makes surgical lasers and disposable and reusable fiber optic devices for minimally invasive surgical procedure.
“We are excited to be entering the Chinese market and are encouraged by our initial success,” said Trimedyne Chief Executive William Schubert Jr. “We are also training our distribution network that encompasses the entire country and will be targeting sales of our lasers to urology, spinal, orthopedic, gynecological, gastrointerology and ENT specialties.”
