|
SAN FRANCISCO—Programmable logic vendor Xilinx Inc. is keeping tight lipped about the source of a supply problem that caused it to lower its June quarter outlook, but some speculate that the issue is related to 65-nm yield issues at foundry partner United Microelectronics Corp. (UMC).
Xilinx (San Jose, Calif.) last week lowered its June quarter revenue estimate, citing a shortfall in sales due to inability to meet strong demand for its Virtex-5 FPGAs. The company said it now expects sales to be down about 5 percent from $395 million in the March quarter, but added that it expects to resolve the supply issues by next quarter.
A spokesperson for Xilinx said the company would not elaborate on the supply issues prior to making its quarterly report on July 15.
On Monday (July 6) Taiwanese IT media outlet Digitimes reported that the Xilinx supply issue is the result of yield problems with UMC's 65-nm process. The report, which cited unidentified industry sources, said UMC declined to comment. UMC spokespersons did not immediately respond to a request for comment from Programmable Logic DesignLine.
Tristan Gerra, an analyst with financial management company Robert W. Baird & Co. (Milwaukee), said he had no specific information on the source of the supply glitch or any 65-nm yield issues at UMC. In an interview Monday, he noted that yield problems typically occur at leading-edge nodes and said it would be unusual for a company to experience problems at 65-nm, which is considered a mature process technology.
Still, Gerra said he suspects the Virtex-5 supply issues are probably tied to manufacturing problems at UMC.
"UMC has been falling behind TSMC over the past few years," Gerra said. "They've had issues we know at 45-nm as well. We think [UMC] is likely to continue to losing market share."
Gerra also suggested that it was possible that, with foundry utilization rates climbing in recent months, UMC was forced to make some allocation decisions that shorted Virtex-5.
Tim Luke, research analyst at Barclays Capital, agreed, saying the supply glitch was more likely caused by the allocation of resources at UMC as opposed to a technical problem, given that Virtex-5 devices have been in volune production for months.
"It appears to reflect some challenges associated with bringing capacity back up at UMC as demand has improved," Luke said.
Luke said he excepted Xilinx to get the issue resolved quickly, though he added that there was some remaining uncertainty related to how the demand picture is shaping up.
Gerra said Altera Corp., Xilinx' chief competitor, is likely to see a short-term gain in sales as a result of the Virtex-5 issue. But, assuming the supply issue is resolved quickly, as Xilinx has indicated, Gerra said he believes that Xilinx will still end up taking market share from Altera this year. But that could change if the problem persists, Gerra said.
Gerra noted that Xilinx has had manufacturing issues with UMC in the past, most notably with the Virtex-II product at 90-nm.
|
