Business Outlook for 2005 Much Better than Expected

December 9, 2004...If you weren't at the annual CS Outlook conference, held in Dallas Dec. 6-8th, you should have been. Those attending confirmed which companies are doing especially well, with Cree, Color Kinetics, and Skyworks due to show the best report cards for 2004, and Lumileds, GELcore, Aixtron, Nitronex, and Emcore emitting especially good prospects for joining Cree and Skyworks in the best success rankings by the end of 2005. Especially encouraging was that those companies, as a collective, represent a cross-section of the industry and show how diversified the CS industry is. The fact that we cover it all, is why the annual Outlook conference traditionally draws senior managers, strategic planners and industry analysts. It was indeed The (Compound Semi Industry) Club, with new faces coming on the scene to join the familiar cadre of established friends and colleagues. Special thanks to our co-chairs this year, Tom Cordner, Executive VP, Office of the President of TriQuint Semiconductor and Bernd Schulte, Chief Operating Officer of Aixtron. And our appreciation especially to our sponsors, Aixtron (Premier), and Gold Sponsors, Veeco and Mykrolis.

We covered all the bases, from substrates through systems integration, and the although 2004 was clearly another tough year for all, those companies thinking "outside the bulb" or "outside the envelop" and clearly "outside the traditional box" are the ones that will prosper in 2005. Consensus was that as an overall community, the compound semi companies are essentially back to pre-bubble levels of earnings, with all but the super-winners like Cree have endured what looks to be the closing pages of cutbacks as all the industries the CS suppliers address slowly work their way back to profitability. Intellectual Property (IP) issues were brought up in almost every presentation and proved to be a strong topic in each of the panel discussions.

We'll be reporting in detail next week, but we thought all readers of CompoundSemi News and LIGHTimes would want to know that everyone attending learned a tremendous amount from those making presentations and through the buzz in the halls, all made great new contacts and everyone appeared to cut the usual number of impressive deals behind the scenes. The pdf forms of the presentations will be made available online soon to each of the attendees. You'll be receiving an email from Tom Griffiths with your access password as soon as they're all posted. To those who presented, get any corrections, updates or changes in to him ASAP. Simply email him at tomg @ compoundsemi.com or call him direct at +1 (512) 257-9888. If you weren't able to attend but would like access to the presentations, contact Tom and... negotiate.

Patent Issues Highlighted in December Issue of LIGHTinsight
December 9, 2004...Intellectual Property (IP) is the focus of this month's LIGHTinsight. The title of this indepth treatment of the topic is "The Art of Manufacturing of IP" which is authored by our Founding Editor, Jo Ann McDonald, author of The McDonald Report which appears daily in both CompoundSemi News and LIGHTimes. LIGHTinsight is an added feature of our LIGHTimes 2nd Page member service. (Click here for more on how to become a LIGHTimes 2nd Page member.) If you're already a member, you know how to easily access the report. If you forgot, read on. This installment of LIGHTinsight is chock full of IP related SSL industry topics, conveniently grouped and reviewed, complete with hotlinks to the patents themselves. If you're not yet a 2nd Page member, or if as a member you haven't gotten around to reading it all yet (it's rather long, as usual), here's the opening graph as a tease to get you motivated. (Note that as a USA-based online-only news source (both print magazines serving the CS industry are owned and operated by large UK publishing houses and have no direct affiliation to CompoundSemi Online) our LIGHTimes and LIGHTinsight viewpoint and writing style is noticeably "American". For that we don't apologize, but thought you'd appreciate the clarification.) Here's the 'tease'...

THE ART OF MANUFACTURING IP
With the rate of IP (intellectual property) related "news" this Fall, I thought it appropriate to focus on Nitride-related IP in this issue of LIGHTinsight. When first pondering the topic, I felt the community was finding itself caught in yet another rampage of slinging IP threats and boasts until I tuned in Charlie Rose over PBS and caught HP's Chairman/CEO, Carly Fiorina. As part of the panel discussion with Charlie, Carly noted that HP files an average of 10 new USA patents per day! That obviously leaves our compound side of the semiconductor sector in the dust. I truly pity the USPTO reviewers. The point of the program was discussing the shift from manufacturing prowess in the USA to China. Some say that about the only thing the USA seemed to command anymore, beyond the battlefield, is the manufacture of high tech IP. Others further the dismay pointing out that IP is the only economic defense we have left! The West, in general, has always been better at producing ideas than labor. But then... it is "the information age..."

Mice Are Getting Brighter
December 6, 2004...Cats beware...Thanks to Agilent Technologies of Palo Alto, California USA, which recently introduced an LED-based optical mouse sensor that provides better tracking control than the company's previous-generation LED-based devices, mice are indeed getting brighter. The new Agilent sensor is said, by Agilent, to outperform other optical mouse sensors by working over a wider variety of surfaces, including wood desktops and halftone images. Only Agilent's revolutionary laser mouse technology, which was introduced earlier this year, works on more surfaces, due to its 20x improvement over LED-based devices in surface tracking accuracy. According to Ed Keane, navigation sensors business manager for Agilent's Sensor Solutions Division, "Agilent's latest LED-based optical mouse sensor provides performance enhancements that enable OEMs to offer higher-performing corded or wireless mice at a moderate incremental cost. Consumers can expect increased precision, reliability and performance with optical mice powered by Agilent's new navigation sensor."

Sony Pays $40M to Ampex as IP Settlement
December 6, 2004...With so much IP in the news in and around our compound semi and SSL communities, we found it interesting to see what the big players are up to in IP disputes. In an article posted on Nikkei Net titled Sony To Pay $40M To Ampex To Settle Patent Dispute we see that Sony Corporation has settled a lawsuit filed by USA magnetic tape pioneer, Ampex Corporation of Redwood City, California USA. Sony has agreed to pay Ampex $40 million to settle a digital camera-related lawsuit by Ampex, which is now billed as a "visual information technology company. As part of the settlement, Sony will now be permitted to manufacture and sell various products, including digital videotape recorders and digital still cameras under several Ampex patents through April 2006. Ending the dispute, Ampex said it will withdraw the lawsuit, filed both with a federal district court in Delaware and the International Trade Commission, an independent U.S. government agency. Sony described the settlement "as an appropriate solution to the patent case." Ampex filed the original complaint with the ITC in July of this year asking for an injunction against the import and sale of the Sony products because they violated its patents on digital image storage and retrieval devices. Evidently this suit against Sony is just one of a string of such settlements. Earlier, Ampex settled with Canon and Sanyo and next to settle is likely to be Eastman Kodak. Ampex's initiative in protecting its IP, and winning from such an impressive list of competitors turned users of Ampex's technologies provides a notable example for those contemplating either the challenge or the enforcement of IP.

Opto Tech Cranks Up Blue LEDs, Cuts Back on OLEDs
November 30, 2004...According to a Nov. 30th DigiTimes post, Opto Tech Corporation of Taiwan has reported that it has begun volume shipment its Nichia-branded LEDs, but that the Taiwan manufacturer of LEDs, image sensors and system products plans to cut back their intended production of OLEDs, eliminating 240 OLED division employees. The reason given is "a loss in yields" of OLED panels, and that the OLED market has "failed to meet expectations. The company does plan to take orders as its yield rate improves, and they also see no downturn in their other lines.

Arima Ups the Taiwan Blue LED Ante
November 30, 2004...Arima Optoelectronics of Taiwan is seeing an uplift in LED product orders which includes blue spectrum antistatic LEDs and LEDs for automotive uses, according to a DigiTimes update. Arima is reported to "have recently succeeded in creating a new process for making GaN blue LEDs," resulting in what they term a being able to improve the antistatic capability "from 700 volts ESD (electrostatic discharge) HBM (human-body model) to 2,000-4,000 volts" and that samples of the antistatic LED chips have already been delivered to domestic and international packaging firms. The reported intent is for Arima to also start providing its automotive-use LEDs in 2005 to international car manufacturers naming Nissan Motors' high-end TEANA model.

Osram Posts Details of Harvatek White LED Licensing Deal
November 29, 2004...As followup to our Nov. 23 coverage on Osram's licensing of white LED technology to Harvatek Corporation in Taipei, Taiwan, we point our readers to the newly posted Nov 18th Osram Opto news release that fully describes the licensing arrangements. The contract between the two is a royalty bearing license "to manufacture and sell white LEDs with conversion technology, for which Osram holds patents." As we stated in our initial coverage, the technology enables InGaN chips to be combined with a suitable fluorescent converter. The arrangement with Harvatek follows previous Osram LED-related contracts that have been signed with Nichia, Rohm, Everlight, Lite-On, Vishay and Samsung. Included in the deal with Harvatek are three USA patents and two European patents LIGHTimes 2nd Page members can access links to and descriptions of the patents involved and commentary...

Densen Cao
CAO Group, Inc.
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