Cypress Semiconductor CEO T.J. Rodgers is a well-known maverick in the chip business, who played a sizeable role in the solar-power market with a spinoff called SunPower. Now he’s putting his weight behind another startup that is announcing its plans Wednesday after laboring two years in secrecy.
It’s called Deca Technologies, and the goal is to transform the way chips are packaged for use in products such as smartphones and computers. Packaging is an unglamorous part of the semiconductor business, which typically takes place after the higher-profile operation of processing chips on silicon wafers. After wafers are sawn into individual components, the chips are typically flown off to different facilities where they are encapsulated in plastic and metal modules that can be attached to circuit boards for use in a system.
But there are problems with this standard procedure, Rodgers says, particularly as pressures grow to squeeze components tightly together in portable products.
For one thing, the standard plastic packaging is often too large and inefficient in sending data to other chips. And many functions–like microprocessors and random-access memory and radio circuitry–require different production recipes and can’t easily be integrated on one piece of silicon.A newer technology, sometimes called wafer-level packaging, could alleviate some of the issues. The approach fabricates circuitry that connects chips to other components on top of entire wafers rather than adding interconnections to chips individually. Chips handled this way can be soldered on to boards with no additional packaging.
Tim Olson, Deca’s president and CEO, estimates the approach is being used on only about 10% of the industry’s production today. That’s largely because of the cost of the technology and the time the process takes.
Those are the issues that Deca are tackling. By borrowing a lower-cost wafer processing approach–which SunPower developed for use in manufacturing photovoltaic cells–the startup believes it can dramatically reduce the money and time it takes to do wafer level packaging.
Deca can do create the interconnection layers in a few days versus three or four weeks, Olson says. It is not saying exactly how much less expensive its services will be, but he notes that the company takes its name from ten–as in tenfold reduction in price.
As Rodgers puts it, the existing wafer-level packaging services are using machines that cost $1 million to $4 million and process ten to 40 wafers an hour. The SunPower-based manufacturing process, he says, uses machines that cost $200,000 to $1 million and handle 200 wafers an hour.
“We are bring solar wafer economics to chip-scale packaging,” Rodgers says.
Deca says it has six customers “engaged” in using its services. It expects initial revenue in the first quarter of 2012.
Rodgers doesn’t see Deca’s business ending there. The company, which is based in Arizona but will carry out its manufacturing at SunPower facilities in the Philippines, later plans to make a new kind interconnection devices that substitute for conventional circuit boards. Such silicon pads, sometimes called interposers, allow chips to be placed next to each other and offer many more high-speed connections between the components than conventional circuit boards.
Deca is majority-owned by Cypress, with SunPower holding a minority stake. About $35 million has been committed to the venture so far, with Cypress expecting to invest little more than twice that in total.
Rodgers, a celebrated critic of government red tape and accomplished wine maker, believes it make more sense to structure such ventures as startups that have equity upside for participants rather than keep them as units of Cypress. It worked with SunPower; that company’s spin out in 2008 yielded a $2.8 billion tax-free distribution to Cypress shareholders.
“That’s how we fund revolutionary things,” Rodgers says.
Challenger: CEO Exits Reach 11-Month Low In October
DOW JONES NEWSWIRES
Turnover of chief executives dropped to an 11-month low in October, but was still higher than the year-ago period, outplacement firm Challenger, Gray & Christmas Inc. said.
Last month, 91 CEOs said they were leaving, down 16% from September's total and up 12% from a year earlier. Departures were announced from companies including computer giant International Business Machines Corp. (IBM), mortgage company Freddie Mac (FMCC) and newspaper operator Gannett Co. (GCI).
The total number of departures recorded this year remains slightly below last year's pace. So far, Challenger has tracked 1,013 CEO departures, 3.3% fewer than the 1,048 CEO changes reported from January through October last year.
Financial and computer firms had the highest CEO turnover for October. The health care sector has seen the highest number of CEO changes this year, including eight departures in October.
Noble CEO Leiman Quits After Company’s First Loss in 14 Years
November 09, 2011, 11:26 AM EST
Nov. 10 (Bloomberg) -- Noble Group Ltd. Chief Executive Officer Ricardo Leiman quit after the commodity supplier reported its first loss in about 14 years, citing defaults by U.S. cotton farmers and a plunge in carbon credits in Europe.
Chairman and founder Richard Elman, 71, will be acting CEO until talks with Leiman’s unidentified replacement are completed, the Singapore-listed supplier of energy, food and mining commodities said yesterday in a statement after the market closed. Noble also reported a third-quarter net loss of $17.5 million, compared with a profit of $157.2 million a year earlier.
The loss and Leiman’s resignation follow a drop in global commodities demand since June on concern Greece and other euro- zone members may default on debt and China’s economic growth has slowed. Noble had reported four straight quarters of year-on- year earnings increases before yesterday.
“We’re disappointed with the performance but we believe it is transitory in nature,” Leiman, 45, said on a conference call before the resignation was announced. The loss was based on “unrealized mark-to-market losses” created in “very volatile market conditions,” he said.
Third-quarter sales jumped 40 percent to $20.9 billion, buoyed by a 34 percent increase in the volume of traded goods.
The Dow Jones-UBS Commodity Index fell 23 percent in the quarter to Sept. 30, its sharpest contraction in three years.
Operating income from Noble’s supply chain almost halved to $242 million in the third quarter from a year earlier. Finance and administrative costs rose and the company posted a $207.7 million net loss on cash flow hedging and a $39.3 million mark- down on long-term investments.
Limited Opportunities
Noble “limited trading opportunities” because of the market volatility and uncertainty, Chief Financial Officer Robert Van Der Zalm said on the conference call. The company still has $10 billion in untapped credit facility commitments and no liquidity issues, he said. Van Der Zalm said on the call the net loss was the company’s first in about 14 years.
A jump in cotton prices in the first half of the year, followed by a recent drop, led farmers to default on contracts, especially in the U.S., Noble said in the statement. Noble had to honor its obligations to cotton buyers by purchasing in the spot market, which eroded profit margins, the company said.
Earnings were also hurt by Europe’s Certified Emission Reductions, or carbon credits, dropping in price to as low as 6.35 euros on Nov. 3 from 13.70 euros on March 16. Noble’s remaining risk of losses on carbon credit is “very small,” Leiman said.
Noble increased its traded tonnage in all segments of the business, helped by acquisitions of sugar and coal assets over the last year. Noble made its biggest acquisition in December, agreeing to pay $350 million in cash and assume $600 million in debt for two sugar mills in Brazil.
Soybean, Ethanol
Focusing on China’s soybean demand, South America’s ethanol business and Mongolia’s mining boom should make the company one of the “winners” as the world economy stabilizes in the next five years, according to brokerage Kim Eng Securities Pte.
“From agriculture to energy, the company has a finger in every pie as a commodity trader,” Kim Eng analyst James Koh said in a Nov. 8 report. Noble will benefit as Asian growth outpaces demand in the U.S. and Europe through 2016, he said.
Noble, down 26 percent this year, closed at S$1.605 in Singapore yesterday after reaching a high of S$2.34 on Jan. 11. Singapore’s Straits Times Index is down 10 percent this year.
Initial Offer
Noble plans to raise about $700 million in an initial public offering of its agriculture unit, two people with knowledge of the matter said yesterday. The company hired JPMorgan Chase & Co. as a global coordinator and Citigroup Inc. and Goldman Sachs Group Inc. as joint bookrunners for a potential listing, said the people, who declined to be identified because the information is private. The IPO may take place in the first half of next year, they said.
Noble has yet to make a final decision on the spinoff and should it go ahead, it will remain a “major shareholder” in Noble Agri, while a “partial divestment” will help raise funds to reinvest into the business, Van Der Zalm said.
Noble said it received permission from the Singapore exchange to list the unit, to be called Noble Agri Ltd., according to a statement yesterday. Noble said it may sell new stock in the unit as well as part of its stake.
Noble, which counts billionaire Elman and China’s sovereign wealth fund among its biggest shareholders, produces about 10 percent of the products it trades, buying the rest. Except for oil, gas and electricity, Noble sells 75 percent of its products to emerging-market economies.
--Editors: Indranil Ghosh, Lars Klemming.
To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net
To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net
GM CEO: Earnings good, but not good enough
November 8th 2011
General Motors reported better than expected earnings in the third quarter on Wednesday, but CEO Dan Akerson said the quarter "isn't good enough," a signal that more cost cutting lies ahead.
GM, the U.S.'s largest automaker, earned $1.7 billion, or $1.03 a share in the third quarter, down from $2 billion earned in the last full period before its initial public offering.
While better than analysts' estimates of 96 cents a share, Akerson said in the company's earning statement Wednesday "Solid isn't good enough, even in a tough global economy."
The company did not give specific guidance on net income in the fourth quarter or lay out any specific measures to improve margins.
The lack of fourth quarter guidance, and the sinking Dow, helped send shares of GM down almost 8 percent shortly before noon.
