- APPL landmark deal for INTC CPUs -fixes encryption
- ASML outbids LRCX for KLAC - To save EUV
- Chinese investor group takes stake in AMAT
Intel and Apple jointly announced a breakthrough deal in which Intel will supply the CPUs for Apple Iphones and Ipads replacing Apples internal custom designed CPUs. The CPU switch will be implemented on the Iphone 7 due out in the fall. The switch is motivated by the current fight with the government over encryption which the processor switch will fix.
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At a joint announcement with Brian Kraznich, the Ceo of Intel, Tim Cook the Ceo of Apple explained the deal.
" This agreement with Intel for CPUs to be used in all Apple Iphones & Ipads provides a number of benefits to Apple, most important of which is the need for an "irreversible" encryption system. The additional benefit is that Apple does not need to rewrite the existing software code for the new CPU. Existing "A series" processor code will be run through a standard Intel X86 , 4 core processor which will produce an "unintelligible" and therefore encrypted output. Intel will also provide the processors at a lower cost while manufacturing them in the United States"
Brian Kraznich went on to say; " Intel has a history of supplying the Apple Mac product line and will be happy to use the "contra revenue" model to supply Apples mobility product needs"
When questioned by analysts about the impact on system performance Cook responded by saying; " Of course there will be a degradation in the performance & usability of the overall product given the change in processors but we think its a small price to pay for an encryption that is 100% irreversible", Cook further elaborated " After running native Apple IOS software through an Intel processor, nobody, not even the CIA, NSA or FBI will be able to extract anything useful or intelligible from the device and that level of security is more important than an impact on system performance"
ASML outbids Lam in late deal to buy KLAC to save EUV prospects.....
It has been reported in the Dutch press that ASML and KLAC have reached a deal wherein ASML will emerge as the new acquiror of KLAC, beating out the prior agreement with Lam by a whopping 30% price premium over the Lam bid for KLAC.
ASML is obviously motivated by the need to get the infrastructure needed for EUV in place if it has any hopes of inserting EUV into high volume manufacturing by the 3nm node.
Much as ASML acquired Cymer years ago to get the key laser technology needed for the core of EUV technology now ASML is acquiring KLAC to get the key EUV reticle inspection technology at the heart of the EUV ecosystem.
Lam Research, which benefits from the continued delay of EUV by selling tools for "multi patterning" was happy that KLAC had already suspended the EUV inspection program and after completing the acquisition had planned on "Wacking" the rest of the staff and efforts associated with the EUV inspection tool, permanently putting it to rest.
ASML was forced to step up when it learned of the planned permanent erasure of the project considered critical to EUV's success.
ASML's Ceo Peter Wennink said " We are very pleased with our agreement with KLAC on the merger. Aside from the obvious benefit for our EUV project we will see significant financial benefit given the close fit of KLAC's high margin model to our own." , he went on to say " the fact that this agreement is "very late in the game" is of no consequence as we are very used to doing things very slowly and very late as evidenced by the EUV project itself...."
Lam will receive a large "break up" fee for being out bid. When reached for comment a spokesperson for Lam said "they had not yet decided on wether to make a counter offer or not."
Chinese investment firm to take 30% equity stake in Applied Materials...
China continues on its streak of semiconductor related investments and bids to become a major player in the industry. Following the unsuccessful bid on Micron and the bid on Western Digital and with it Sandisk, China is now proposing a 49% minority stake in semiconductor equipment maker Applied Materials.
This follows closely on the heels of Applied's recent announcement of a $615M investment in China to strengthen its position there.
The Chinese investment firm, Shining Moon Investments LP is a sister organization to Beijing E-Town Dragon Semiconductor Industry Investment Center LP which is in the process of buying Mattson technology. Both are subsidiaries of the $100B goverment investment fund targeting the semiconductor industry.
A spokesman for Shining Moon, Won Hung Lo , described the investment as part of a long term goal to bring China on par with Taiwan, Korea and the US in the critical semiconductor industry.
As a result of this investment, AMAT executive headquarters will be moved to Shanghai to allow closer cooperation in China and prepare for a Tax inversion which will domicile AMAT in China. An existing Chinese equipment maker, AMEC as well as Mattson Technology will be merged into Applied. Gerald Yin, Ceo of AMEC will become the CTO of Applied.
Gary Dickerson, Ceo of Applied commented " I am happy to be moving back to Asia and will be running the combined organization from its new headquarters in Shanghai". Dickerson had previously moved along with his family to Japan in advance of the failed TEL merger, only to come back to the US. " We already have a plan in place to run Applied from an Asian headquarters so this transition will be faster and more efficent a second time around"
Trump organization buys Global Foundries..
In a bold and surprising move which has been the trademark of Donald Trump, the Trump Organization announced that it had reached an agreement with Abu Dhabi to acquire Global Foundries. The Trump Organization wouldn't say how much Abu Dhabi paid for Trump to take control of GloFo but informed sources put the figure at $10B.
This is much the same as the deal for GloFo to take over IBM's semiconductor assets where IBM paid GloFo to take it, now Abu Dhabi has paid to dispose of GloFo.
Trump bragged "Just like we are going to make Mexico pay for the wall I got Abu Dhabi to pay us to take back Global Foundries.....what a great deal!" he went on to say "we are going to bring chip making back to the USA and stop those chips from Asia entering the country and instead make jobs & chips in the US"
Trump wasted no time and has already emblazoned the fab in Albany New York with the trademark "Trump" moniker visible from miles away on the New York State throughway.
Trump himself said; " this is not going to be a huuuuge deal, quite the opposite, its going to be a very tiny, microscopic deal, so tiny in fact thats its measured in nanometers" he added, " If theres anything I know something about, its tiny things, .....just take a look at my hands..."
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