By Shweta Dhadiwal
At the investors/analyst event held in Hong Kong, Geneva based chip maker STMicroelectronics claimed to have restructured, having changed its strategies and focus. The new focus areas include improving manufacturing efficiency, cost reduction, and introducing new products like micro electromechanical systems (MEMS) and solar cell electronics.
Alain Dutheil, COO, said “We have improved our financial strength and stability, and have over $2.76 billion in gross cash and marketable securities exiting March 2010,” he said.
Focus on emerging markets
India is one of the strategic market for semiconductors with total available market size of US$ 3 billion in 2009. It is clear that there is a need for supply of local and customised products which offers huge market opportunities.
Asia Pacific now accounts for more than 40 per cent of the company’s revenue. STMicroelectronics will continue to develop these emerging markets, along with South East Asia, shared Carlo Bozotti, president and CEO, STMicroelectronics.
“A lot of new product and application design is happening in China and India. R&D activities in Asia will help in addressing the new market and local customers. At the same time, it will also have the benefit of lower operating costs,” said Bozotti.
Renewed product focus
STMicroelectronics has a wide portfolio of products covering almost 60 per cent of the categories in the market. The company is well positioned to address the needs of every segment through its five major product blocks, shared Bozotti. “Power is one of the fastest growing segments and the volumes are really very high. New materials like silicon carbides promise opportunities in the future,” he said. STMicroelectronics has made strong R&D investments in MEMS. “The business is accelerating and new families of products like gyroscopes are shaping up,” he added. Microcontrollers are moving from 16-bit to 32-bit and STMicroelectronics has licensed ARM to serve this segment. “Although there are numerous ARM licensees, our peripherals and expertise will be the differentiator,” Bozotti said. The company has no plans to develop its own core for 32-bit, nor to license any other 32-bit core.
“We are developing new technologies for advanced logic in 32-nm, BICMOS, HCMOS for complex ASICs, etc. This is another important development,” shared Bozotti. “The new platforms for set top boxes, has a huge market in China, India and South Asia and offers features like 3D graphics and video. For the growing digital TV market, we introduced a platform early this year,” he added.
The company is focusing on energy efficient products, solar products, e-metering applications and LED applications. “Especially for India and other Asian countries, STMicroelectronics is looking forward to provide security products for e-governance and smart cards,” expressed Bozotti.
Increasing manufacturing efficiency
The company is determined to increase the manufacuring efficiency by increasing the manufacturing capacity and reducing the cost through streamlining.
In order to respond to customer demands, STMicroelectronics is increasing its capacity in several key areas. “The first priority is that we are increasing our 20.3 cm(8 inches) capacity in smart power technology in Italy and 30.5 cm (12 inch) capacity in advanced CMOS technology in France. Second, we are expanding the procurement of wafers from silicon foundries. Third, at our 15.2 cm (6 inch) power and analogue facility in Singapore, where we are already running at about 15,000 wafers per day, we expect to increase capacity over the course in this year. We believe this is the biggest fabrication plant, in terms of output, in the world for analogue and power,” shared Bozotti.
The currency conversion rate, cost efficiency and roll over depreciation are expected to cut costs by about 10 per cent in wafer manufacture, from the first quarter through to the fourth quarter of 2010. The assembly cost reductions will be driven by volume and the shift to Asia.
