Array
(
    [content] => 
    [params] => Array
        (
            [0] => /forum/index.php?threads/gf-delays-14nm.5166/
        )

    [addOns] => Array
        (
            [DL6/MLTP] => 13
            [Hampel/TimeZoneDebug] => 1000070
            [SV/ChangePostDate] => 2010200
            [SemiWiki/Newsletter] => 1000010
            [SemiWiki/WPMenu] => 1000010
            [SemiWiki/XPressExtend] => 1000010
            [ThemeHouse/XLink] => 1000970
            [ThemeHouse/XPress] => 1010570
            [XF] => 2020771
            [XFI] => 1050170
        )

    [wordpress] => /var/www/html
)

GF Delays 14nm?

hist78

Active member
Some new development of the GF's 14nm:

http://blogs.barrons.com/techtrader...es-short-interest-moves-apple-chip-jockeying/

"Longtime semiconductor equipment observer Robert Maire of Semiwatch this morning warns that tool makers could be hurt in Q1 because contract chip maker Global Foundries is diverting shipments of equipment to make chips at 14 nanometer dimensions to a warehouse."

“We hear that tool makers are told that the fab facilities are not ready and it sounds like a one to two quarter delay,” writes Maire. “Some tool makers are speculating that the delay could also be related to financial issues or yield issues or a host of other odd rumors.”
 
Last edited:

Daniel Nenni

Admin
Staff member
Some new development of the GF's 14nm:

Tech Today: Amazon Mobile Commerce Surges, Short Interest Moves, Apple Chip Jockeying - Tech Trader Daily - Barrons.com

"Longtime semiconductor equipment observer Robert Maire of Semiwatch this morning warns that tool makers could be hurt in Q1 because contract chip maker Global Foundries is diverting shipments of equipment to make chips at 14 nanometer dimensions to a warehouse."

“We hear that tool makers are told that the fab facilities are not ready and it sounds like a one to two quarter delay,” writes Maire. “Some tool makers are speculating that the delay could also be related to financial issues or yield issues or a host of other odd rumors.”

Very interesting, thank you. So TSMC is accellerating equipment deliveries while GF and Samsung are delaying them.

Since GF licensed the Samsung 14nm process and will copy exact this supports the claims that it is not at an acceptable yield level to be copied yet. This may also suggest that Samsung has breached the Apple A9 wafer agreement. I will look into this more.
 

Daniel Nenni

Admin
Staff member
Some new development of the GF's 14nm:

Tech Today: Amazon Mobile Commerce Surges, Short Interest Moves, Apple Chip Jockeying - Tech Trader Daily - Barrons.com

"Longtime semiconductor equipment observer Robert Maire of Semiwatch this morning warns that tool makers could be hurt in Q1 because contract chip maker Global Foundries is diverting shipments of equipment to make chips at 14 nanometer dimensions to a warehouse."

“We hear that tool makers are told that the fab facilities are not ready and it sounds like a one to two quarter delay,” writes Maire. “Some tool makers are speculating that the delay could also be related to financial issues or yield issues or a host of other odd rumors.”

This is not true. I have spoken to multiple sources including GF. I will write more detail tonight. I also sent email to Robert Maire. But no response.
 
Dan,

GF definitely won’t admit it.

Does this analyst Robert Maire (it seems you know him) have incentive to fabricate a report to damage GF? Or, is he mistaken?
 

Daniel Nenni

Admin
Staff member
Dan,

GF definitely won’t admit it.

Does this analyst Robert Maire (it seems you know him) have incentive to fabricate a report to damage GF? Or, is he mistaken?

GF doesn't lie to me. They will give me a "no comment" if they have to but they will not lie. I have a few more calls to make so stay tuned. Here is the post that started it all:

http://www.velocitysemicon.com/late...tch-by-robert-maire-of-semiconductor-advisors

As you can see these guys sell stuff:

http://www.velocitysemicon.com/about-velocity/company-mission

D.A.N.
 
Last edited:
Dan,

Thanks for the update.

Maybe you can consider asking GF more meaningful questions:

How many wafers per month its 14nm will reach at what time frame?

Any comments on the yields, since many reports of low yielding 14nm at Samsung/GF?

Is GF to produce for a new (outside of AMD) and big customer? What’s the volume from this big customer?

Why AMD does not plan to roll out 14nm chips from GF in 2015?
 
Last edited:

hist78

Active member
GF doesn't lie to me. They will give me a "no comment" if they have to but they will not lie. I have a few more calls to make so stay tuned. Here is the post that started it all:

December 25, 2014 Semiwatch By Robert Maire of Semiconductor Advisors

As you can see these guys sell stuff:

Velocity: At the Center of Supply and Demand

D.A.N.

The above first link you pointed to painted a worrisome picture. GF not only asked suppliers to hold the shipment in the storage, they also asked the supplier to negotiate new payment terms. Is it just limited to certain suppliers or much wider? Or this is totally a fake story? Thanks.
 

hist78

Active member
Dan,

Thanks for the update.

Maybe you can consider asking GF more meaningful questions:

How much wafers per month its 14nm will reach at what time frame?

Any comments on the yields, since many reports of low yielding 14nm at Samsung/GF?

Is GF to produce for a new (outside of AMD) and big customer? What’s the volume from this big customer?

Why AMD does not plan to roll out 14nm chips from GF in 2015?

Sorry, You ask too much informaiton. They have to kill you if they tell you the truth.
icon8.png
icon11.png
 

Daniel Nenni

Admin
Staff member
The above first link you pointed to painted a worrisome picture. GF not only asked suppliers to hold the shipment in the storage, they also asked the supplier to negotiate new payment terms. Is it just limited to certain suppliers or much wider? Or this is totally a fake story? Thanks.

Here is something official from GF which is pretty much what they told me:

Global Foundries Says on Track with 14-Nano Chip Tech - Tech Trader Daily - Barrons.com

I'm still working on it.
 
Last edited:

Robert Maire

Moderator
I am not mistaken...

I have checked my facts with numerous tool makers...

Global Foundries admitted they are warehousing tools today....
They asked tool vendors for modified terms for what sounds like 1-2 quarters of potential delay.

They put out a carefully "spun" statement that doesn't say wether they are delayed or not .....

Tool vendors were only told of this in the last two weeks as a surprise that they were not happy with ....sounds unplanned given that tools have been on order for a long time with a last minute change to a holding pattern at a warehouse

I it quacks like a duck and waddles like a duck....its probably a duck
 
I am not mistaken...

I have checked my facts with numerous tool makers...
...

December 25, 2014 Semiwatch By Robert Maire of Semiconductor Advisors

It’s great that Robert Maire himself came out to assert his observations.

Another analyst Sundarajan seconds Maire's view.

Writes Sundarajan, “We Second the Global Foundries 14nm Tool Warehousing Observation: Our checks seem to second the notion that recently Global Foundries may be sending its 14nm tools to the warehouse, instead of starting the tool acceptance process.”

Global Foundries Warehousing Tools, But Don?t Panic, Says Summit - Tech Trader Daily - Barrons.com

In addition, a few days before Maire’s report of Dec 25, I had said Abu Dhabi, the financier of GF, is in financial trouble due to the oil price crash. It’s not unthinkable for GF to negotiate new payment terms.

Abu Dhabi
https://www.semiwiki.com/forum/f293/misinformation-intel-tsmc-4952-3.html#post17423
 

hist78

Active member
I am not mistaken...

I have checked my facts with numerous tool makers...

Global Foundries admitted they are warehousing tools today....
They asked tool vendors for modified terms for what sounds like 1-2 quarters of potential delay.

They put out a carefully "spun" statement that doesn't say wether they are delayed or not .....

Tool vendors were only told of this in the last two weeks as a surprise that they were not happy with ....sounds unplanned given that tools have been on order for a long time with a last minute change to a holding pattern at a warehouse

I it quacks like a duck and waddles like a duck....its probably a duck

Thank you for bringing this news to public. What I'm thinking is that GF probably is telling the truth. Their 14nm plan is on track and following their current plan. But what they didn't say is:

1. Their "plan" is not the same as public perceived (guessed).
2. The actual GF's plan is probably much smaller, slower, and later than many outsiders think.
3. What GF news announcement today didn't mention is why they asked suppliers to modify payment terms. Delaying payment can improve a company's cash flow and increase near term profit. But because GF is not a public company and they don't need to worry about short term revenue/profit, as long as Abu Dhabi supports them. So why they need to delay payment? I think plunging oil price is one possibility as user_2013101 pointed out.
4. Or GF's current plan doesn't envision any large Apple's orders coming soon?
 
Last edited:

hist78

Active member
I know nothing about the tools installation and deployment. Does the following article, published on Dec. 13, 2014, mean anything to GF's explanation regarding storing new arrived tools into a separate warehouse?

A fruitful relationship with Apple - Times Union

"There's still a lot of construction activity happening right now to finish and fit-up the spaces and install tools and equipment," GlobalFoundries spokesman Travis Bullard said. "But all of the clean-room areas on the campus are now certified and ready for equipment."
 

hist78

Active member
I am not mistaken...

I have checked my facts with numerous tool makers...

Global Foundries admitted they are warehousing tools today....
They asked tool vendors for modified terms for what sounds like 1-2 quarters of potential delay.

They put out a carefully "spun" statement that doesn't say wether they are delayed or not .....

Tool vendors were only told of this in the last two weeks as a surprise that they were not happy with ....sounds unplanned given that tools have been on order for a long time with a last minute change to a holding pattern at a warehouse

I it quacks like a duck and waddles like a duck....its probably a duck

Hi Robert,

A question for you: have you heard what kinds of new payment terms GF is looking for? We might get some more sense about how GF is doing.

I always think the payment term from the equipment purchase contracts is private and confidential. But to my surprise, TSMC files major equipment purchase/contract announcement with Taiwan Stock Exchange every time such transaction happened. I have reviewed about 20 of them (there are many more, all in Chinese) up until December 31, 2014. The payment term is clearly stated in each filing and the term is very straightforward. It's always 90% by wire transfer 30-day after shipment and 10% 30-day after passing acceptance verification.

In each filing, it reports the amount of the contract, the vendors, if the vendor has any special interest related to TSMC, date period for executing the contract, payment terms, how TSMC comes out this price, if TSMC Board of Directors have discussed it or if they have any comments, etc.

Daniel often talks about the importance of corporate transparency. TSMC's major purchase filing can be a good example. Is there any other company in semi industry doing this way?
 
Last edited:

Robert Maire

Moderator
Hi Robert,

A question for you: have you heard what kinds of new payment terms GF is looking for? We might get some more sense about how GF is doing.

I always think the payment term from the equipment purchase contracts is private and confidential. But to my surprise, TSMC files major equipment purchase/contract announcement with Taiwan Stock Exchange every time such transaction happened. I have reviewed about 20 of them (there are many more, all in Chinese) up until December 31, 2014. The payment term is clearly stated in each filing and the term is very straightforward. It's always 90% by wire transfer 30-day after shipment and 10% 30-day after passing acceptance verification.

In each filing, it reports the amount of the contract, the vendors, if the vendor has any special interest related to TSMC, date period for executing the contract, payment terms, how TSMC comes out this price, if TSMC Board of Directors have discussed it or if they have any comments, etc.

Daniel often talks about the importance of corporate transparency. TSMC's major purchase filing can be a good example. Is there any other company in semi industry doing this way?

The new terms revolve around when the tool makers get paid and responsibility during the warehousing period. I won't get into specifics as that could identify the people that gave me the information.

TSMC and the 90/10 rule is typical in the industry.

The issue is one of ownership and who takes title to the equipment and when....
Normally when it leaves the loading dock of the tool maker, title passes and the clock starts ticking on the first 90% (be it 30, 60 or 90 days etc;)
So tool makers typically expect payment within 30 days of ship.
In the GF case the tools are in a sort of limbo where they have left the loading dock of the tool maker but are not destined to the fab so GF is not taking ownership and does not assume payment liability (unless tool makers can work out some other alternative). This is further re-enforced by the fact that GF wants tool makers to pay for the storage (as if the equipment is still the property of the tool makers).
Terms are usually set in the PO process which occured in most cases many months ago, so to getting thrown a curveball when you are 9 months pregnant and told you are not getting paid and you add insult to injury and have to pay for storage, the tool makers aren't happy.

In some cases , tool makers may miss their revenue targets for the December quarter cause it was too late in the quarter (end of December) to make changes or ship to other customers. Though they could technically not ship the tools or take them back, in most cases they are customized and would incur significant cost to re-configure and re-ship etc; . So they are probably better off letting the tools sit in a warehouse and hope the delay isn't too long.

Though putting tools in a "buffer" if the loading dock gets jammed up makes sense, this is far beyond that. Normally the construction of a fab is a highly choreographed affair with tool deliveries scheduled down to the hour in terms of specific schedule.; litho, process control, etch, dep & thermal bays etc;. Putting the tools in an off site storage first is not the way its done at TSMC, Samsung or Intel etc;. What is going on at GF is way out the the ordinary.

Even though tool makers are mostly public companies , their contracts are private for competitive reasons. AMAT wouldn't want TSMC to see the deal it gave Intel and vice versa. So this is not part of normal SEC transparency.

Corrections and Amplifications;

1) I have worked in the semiconductor industry for over 25 years, primarily from a financial perspective. I have done over $6B in transaction for semi companies (more than the next several professionals put together) including the initial public offerings of ASML, Sandisk and SMIC to name a few, among many others. I have also raised billions of dollars in follow on offerings. Over the last 8 years I have been a consultant to semiconductor and equipment companies and have been directly responsible for biz dev, marketing and some commercial contract negotiation. I am not some dumb wall street MBA. I came from a tech background with a BSEE and BSCS. So if I am not a semiconductor "professional" then it sounds like only those with doctorates in plasma physics, who have worked for Intel for 30+ years would qualify.

2) I received no email from Daniel, only a request from him to connect on Linked In , which I accepted and a request from Daniel to be added to my Newsletter list, which I did. My email address is rmaire@semiconductoradvisors.com . I also own the website semiconductorequipment.com but don't use that email except to send the newsletter.

3) I am not affiliated in any way with Velocity Semiconductor Equipment, they receive my newsletter and sometimes repost excerpts. So I don't have anything to sell through them. I do consulting and my newsletter which investors pay for.

4) "GlobalFoundries" is the trademark and "Global Foundries" is the commonly used name of the company. Its like saying I misspelled "IBM" by saying "International Business Machines". I suppose my using the common moniker "GloFo" is a really bad spelling mistake that exposes my stupidity........

5) I get my information direct from the parties involved and verify from multiple sources. I do not take as gospel the carefully spun statement of a PR "flack" whose sole job is to put the most positive spin on the company. If a meteor hit a fab the PR person would probably say it was planned that way.

6) I have nothing to gain by being negative on GF. I live in New York and want to see it succeed as I think its great and a welcome addition. I do have a responsibility for bringing the truth to my subscribers who use the information to make critical investment decisions. Shipping tools to a warehouse which impacts revenue recognition is a big deal and needs to be brought out to the open. Its a big no-no that can cause jail time if improperly accounted for.

I was also responsible for breaking the news about ASML and IBM and revealing the truth about what the tests really meant when 99% of investors and 99% of dumb wall street analysts thought that the carefully leaked , partial information was that the tools were in real production making 700 wafers a day rather than the fact the no wafers were actually harmed in the "simulation". ASML's valuation went up by billions of dollars that day based on false assumptions and lack of information and transparency.

Hope that all this information can be used to correct some misconceptions and untruths.

Robert
 

Daniel Nenni

Admin
Staff member
Robert,

If you go back and look at my LinkedIn invitation I included a private note which you did not respond to so lets correct that untruth.

D.A.N.
 

hist78

Active member
The new terms revolve around when the tool makers get paid and responsibility during the warehousing period. I won't get into specifics as that could identify the people that gave me the information.

TSMC and the 90/10 rule is typical in the industry.

The issue is one of ownership and who takes title to the equipment and when....
Normally when it leaves the loading dock of the tool maker, title passes and the clock starts ticking on the first 90% (be it 30, 60 or 90 days etc;)
So tool makers typically expect payment within 30 days of ship.
In the GF case the tools are in a sort of limbo where they have left the loading dock of the tool maker but are not destined to the fab so GF is not taking ownership and does not assume payment liability (unless tool makers can work out some other alternative). This is further re-enforced by the fact that GF wants tool makers to pay for the storage (as if the equipment is still the property of the tool makers).
Terms are usually set in the PO process which occured in most cases many months ago, so to getting thrown a curveball when you are 9 months pregnant and told you are not getting paid and you add insult to injury and have to pay for storage, the tool makers aren't happy.

In some cases , tool makers may miss their revenue targets for the December quarter cause it was too late in the quarter (end of December) to make changes or ship to other customers. Though they could technically not ship the tools or take them back, in most cases they are customized and would incur significant cost to re-configure and re-ship etc; . So they are probably better off letting the tools sit in a warehouse and hope the delay isn't too long.

Though putting tools in a "buffer" if the loading dock gets jammed up makes sense, this is far beyond that. Normally the construction of a fab is a highly choreographed affair with tool deliveries scheduled down to the hour in terms of specific schedule.; litho, process control, etch, dep & thermal bays etc;. Putting the tools in an off site storage first is not the way its done at TSMC, Samsung or Intel etc;. What is going on at GF is way out the the ordinary.

Even though tool makers are mostly public companies , their contracts are private for competitive reasons. AMAT wouldn't want TSMC to see the deal it gave Intel and vice versa. So this is not part of normal SEC transparency.

Corrections and Amplifications;

1) I have worked in the semiconductor industry for over 25 years, primarily from a financial perspective. I have done over $6B in transaction for semi companies (more than the next several professionals put together) including the initial public offerings of ASML, Sandisk and SMIC to name a few, among many others. I have also raised billions of dollars in follow on offerings. Over the last 8 years I have been a consultant to semiconductor and equipment companies and have been directly responsible for biz dev, marketing and some commercial contract negotiation. I am not some dumb wall street MBA. I came from a tech background with a BSEE and BSCS. So if I am not a semiconductor "professional" then it sounds like only those with doctorates in plasma physics, who have worked for Intel for 30+ years would qualify.

2) I received no email from Daniel, only a request from him to connect on Linked In , which I accepted and a request from Daniel to be added to my Newsletter list, which I did. My email address is rmaire@semiconductoradvisors.com . I also own the website semiconductorequipment.com but don't use that email except to send the newsletter.

3) I am not affiliated in any way with Velocity Semiconductor Equipment, they receive my newsletter and sometimes repost excerpts. So I don't have anything to sell through them. I do consulting and my newsletter which investors pay for.

4) "GlobalFoundries" is the trademark and "Global Foundries" is the commonly used name of the company. Its like saying I misspelled "IBM" by saying "International Business Machines". I suppose my using the common moniker "GloFo" is a really bad spelling mistake that exposes my stupidity........

5) I get my information direct from the parties involved and verify from multiple sources. I do not take as gospel the carefully spun statement of a PR "flack" whose sole job is to put the most positive spin on the company. If a meteor hit a fab the PR person would probably say it was planned that way.

6) I have nothing to gain by being negative on GF. I live in New York and want to see it succeed as I think its great and a welcome addition. I do have a responsibility for bringing the truth to my subscribers who use the information to make critical investment decisions. Shipping tools to a warehouse which impacts revenue recognition is a big deal and needs to be brought out to the open. Its a big no-no that can cause jail time if improperly accounted for.

I was also responsible for breaking the news about ASML and IBM and revealing the truth about what the tests really meant when 99% of investors and 99% of dumb wall street analysts thought that the carefully leaked , partial information was that the tools were in real production making 700 wafers a day rather than the fact the no wafers were actually harmed in the "simulation". ASML's valuation went up by billions of dollars that day based on false assumptions and lack of information and transparency.

Hope that all this information can be used to correct some misconceptions and untruths.

Robert

Thank you for your detail comment. IMHO, it's not the ideal situation for GF to put aside of new equipment into warehouse while "the clean-room areas on the campus are now certified and ready for equipment." An even more important question is why GF asks for new payment terms, if this is a wide-spread situation?

Unless, I guess:
1. GF doesn't need the new equipment in the near term.
2. GF has some cash flow issues.
 
Last edited:

Daniel Nenni

Admin
Staff member
Thank you for your detail comment. IMHO, it's not the ideal situation for GF to put aside of new equipment into warehouse while "the clean-room areas on the campus are now certified and ready for equipment." An even more important question is why GF asks for new payment terms, if this is a wide-spread situation?

Unless, I guess:
1. GF doesn't need the new equipment in the near term.
2. GF has some cash flow issues.

A third and much more likely scenario is that GF is expanding capacity beyond what they had planned to satisfy a very demanding customer and is simply doing so in a creative manner. The new GF CEO, who I would consider one of the top ten currently, is a VERY clever and educated man so do not expect GF to operate as before, not even close. And remember, this is a fabless CEO so do not expect him to operate within the bounds of other fab CEOs either.

This will be a very interesting year for the fabless semiconductor ecosystem, absolutely.
 
Top