ST. LOUIS – LaBarge Inc. has received a $3.2 million contract from Bell Helicopter, a Textron Inc. company, to continue to produce electronic assemblies for the H-1 Upgrade Program for helicopters used by the U.S. Marine Corps.

This program currently calls for 280 upgraded utility or attack aircraft: 100 UH-1Ys and 180 AH-1Zs. 

LaBarge expects to produce the box-level electronic assemblies at its Huntsville, AK, facility beginning in January, continuing through July 2010.

The company has supported the H-1 Upgrade Program since 2004.

EL SEGUNDO, CA – After experiencing a mild recovery in the second quarter, the global DRAM market is showing renewed signs of weakness, with prices expected to fall during the third quarter as a result of bloated inventories, says iSuppli Corp.

After iSuppli upgraded its rating of near-term conditions for DRAM suppliers to neutral, up from negative on April 25, the market bottomed out and manufacturers’ profitability improved during the second quarter. Following months of losses, a few top-tier suppliers managed to attain profitability starting in June, and a handful are expected to do so in the third quarter.

However, the market is showing renewed warning signs, with OEM contract prices for DRAM likely to decline in August and September, says the research firm.

“The average DRAM contract price is expected to decline by more than 10% from the current level by the end of the third quarter,” predicted Nam Hyung Kim, director and chief analyst, memory ICs, at iSuppli. “The inventory level in the channel and among PC OEMs has increased compared to the second quarter. Global economic conditions are adding more uncertainty on the demand side of the equation.”

DRAM shipments exceeded expectations in the second quarter, causing prices to decline in the third quarter. iSuppli’s preliminary estimate is that DRAM unit shipments increased by 15% sequentially, much higher than the anticipated 10% rise.

“The higher-than-anticipated increase in unit shipments in the second quarter signals that excess inventory is being shifted from the DRAM suppliers to the buyers,” Kim noted.

iSuppli is maintaining its neutral rating for DRAM market conditions for suppliers at this time. However, iSuppli will continue to watch near-term developments in market fundamentals to determine if a rating update is required.

DRAM suppliers now are reducing their capital spending levels, a development that eventually will cause supply levels to become more constrained and prices to rise – leading to a recovery in the industry, says iSuppli. However, this recovery is likely to take place slowly.

DRAM wafer output will rise by a small margin of only 10% in 2009, compared to 40% in 2007, iSuppli predicts. However, the top-2 DRAM suppliers, Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc., are engaging in an aggressive migration to the sub-60 nm manufacturing process, boosting their output and raising the risk of further oversupply that may linger into the first half of 2009, says the firm. This could delay a market recovery until the second half of 2009. 
 

On April 25, iSuppli predicted the NAND flash memory spot market price rally that occurred early in the second quarter would be short-lived, a forecast that proved correct, the company says. After iSuppli slashed its NAND flash forecast early this year, the market has been mired in terrible conditions, primarily as a result of a major inventory overhang and weak consumer spending that has led to oversupply.

However, suppliers have been adjusting to the oversupply ever since. Because of this, the supply/demand equation is expected to come back into balance by the fourth quarter, according to iSuppli. This means NAND flash suppliers will suffer for one more quarter before pricing should begin to recover.

 

MACAO, CHINA – EMS provider Nam Tai Electronics Inc. reported second-quarter sales of $146.2 million, down 26.1% year-over-year.

SAN JOSE, CA – Global sales of semiconductors for the first half of 2008 grew to $127.5 billion, an increase of 5.4% year-over-year, the Semiconductor Industry Association reported today.

June sales of $21.6 billion were up 8% compared to June 2007, and up 0.5% sequentially.

Second-quarter sales of $64.7 billion increased 3% sequentially.

Thus far, increased energy costs have had little impact on demand for electronic products that drive semiconductor demand, said the association.

“Continuing strength in international markets – coupled with healthy demand in the U.S. – helped drive higher worldwide sales of semiconductors in June,” said SIA president George Scalise. “Key demand drivers for semiconductors – especially personal computers, which account for 40% of semiconductor sales, and mobile phones, which drive about 20% of demand – continued to show double-digit unit growth. JPMorgan recently revised upward its forecast for unit sales of personal computers to 13%, with sharp increases in sales of portable systems. Forecasts for unit sales growth of mobile handsets range from 10% to 12% for 2008.

”Emerging markets are a major factor in driving worldwide semiconductor sales,” Scalise continued. “PC unit sales in emerging markets are expected to grow by 19% – more than double the growth rate in developed markets this year. In 2008, developing countries – with sales of over 153 million units – will account for half of worldwide PC sales. In mobile phones, developing countries are expected to account for 66% of total worldwide unit sales of over 1.3 billion, up from 61% last year. The emergence of large middle-class populations in China, India, Eastern Europe, and Latin America has more than offset the effects of slower growth in the U.S. economy. We expect demand for consumer electronic products in these new markets will continue to outpace growth in developed markets for the next several years.

“Inventory for the industry is in balance with minor excess in a few product sectors,” Scalise noted.

SIA said total semiconductor sales in June, excluding memory products, grew 12% year-over-year. Price attrition in memory products contributed to a 6% year-over-year decline in total memory sales, despite sharply increased unit sales.

“Advances in semiconductor technology continue to deliver huge benefits to consumers, as semiconductor devices deliver higher performance and increased functionality at lower cost,” said Scalise. “At the same time, rapid price declines for microchips tend to mask the real growth of the industry. The cost of 1 gigabit of DRAM has declined by 43% during the past year, while the price of 2 gigabits of NAND flash has declined by 61% in the last 12 months. Lower prices enable increased memory content in consumer devices. Micron estimates the memory content of the average PC will increase at least 50% this year, while the memory content in the average cellphone will increase by more than 150%.”

During the past 10 years, the price of a typical desktop PC has declined by nearly two-thirds, while performance and functionality have increased by a factor of more than a hundred, said Scalise. “The impact of advanced technology on energy efficiency is even more dramatic,” Scalise said. “A recent independent study showed computers have become nearly three million percent more energy-efficient over the past 30 years,” he concluded.

PORTSMOUTH, ENGLAND – Semicast forecasts the global market for automotive semiconductors will grow from $20 billion in 2007 to just over $30 billion in 2015. With total 2007 semiconductor revenues of around $255 billion, this suggests the automotive sector accounts for between 7% to 8% of the TAM, says the firm.

Average semiconductor content per new light vehicle is forecast to grow steadily from around $295 in 2007 to $375 in 2015.

Overall, highest growth is forecast for semiconductors used in entertainment systems, such as audio, infotainment, navigation and telematics. Here, demand is forecast to grow from $4 billion last year to $7.5 billion in 2015, a CAGR of almost 9%. The evolution of the entertainment system from audio to infotainment to navigation is the key growth driver in this segment, while increased shipments of rear seat entertainment systems, satellite radio and telematics (such as OnStar) will also drive growth, says Semicast.

Highest semiconductor demand will continue in conventional “under-the-hood” systems. Analysis shows revenues for semiconductors in “under-the-hood” systems accounted for around 80% of the total in 2007; this is forecast to decline only moderately over the period to 2015, to around 75%, says the firm.

NORTH BILLERICA, MA – BTU International Inc., supplier of advanced thermal processing equipment, reported second-quarter net sales of $20.4 million, up 23% sequentially, and up 48% year-over-year.

Net income for the quarter was $300,000, up nearly 67% sequentially, and up 33% compared to the second quarter of 2007.

Net sales for the first six months of 2008 were $37 million, up 22% year-over-year. Net income for the period was $400,000, down nearly 56% compared to the same period last year.

Paul J. van der Wansem, BTU chairman and CEO, said, "Revenues were at the high end of our forecasted range, with strength in both electronics and alternative energy. Despite healthy gross margins, our earnings for the quarter were lower than anticipated, in part due to higher than expected SG&A cost and effective tax rates.

"We will continue to invest in our growth markets, strongly supporting our electronics business and building upon the opportunities we have in the rapidly growing thin film and silicon solar markets.