Amid the soaring oil prices and impending energy crisis, more semiconductor companies are investing in solar. For examples, the world number one microprocessor maker, Intel capital has announcement its $38 million investment in Berlin-based solar module manufacturer Sulfurcell GmbH (Ref). This investment follows Intel last month surprising announcement to spin off a solar cell manufacturing company, SpectraWatt. Intel’s chip archrival IBM is also moving into the thin-film solar cell arena through a manufacturing partnership with TOK (Ref).

On the other hand, the world number one semiconductor equipment maker, Applied Material, has made one of its largest investment in Singapore. It broke ground for the construction of a new Singapore operations facility two days ago. The new 32,000 square meter operation facility in the Changi North Industrial Park will serve as a hub for Applied’s business activities throughout Asia. It is expected to be completed in late 2009. The building itself is solar-powered and capable of producing up to 350 kilowatts of energy or equivalent to powered 90 HDB homes (Ref). AMAT is also the first beneficiary of the newly launched Singpaore EDB’s Solar Capability Scheme (SCS). Applied already has a Singapore Building at the Changi Business Park and is expected to book nearly $1B in solar equipment orders this year (Ref). Below is an excellent marketing video from AMAT on solar manufacturing.

In the last two weeks, there were a spate of financial reports from various semiconductor companies. I would say that the financial performance for the last quarter for most semiconductor companies is either dismay or showing a bearish future. Just take a look at a few of them here:

• Intel: Although the world’s largest chip maker posted a strong revenue of $10.7bn and a $2.3bn profit in Q4 2007, it sent a cautionary statement on its 2008 outlook and forecasted a lower Q1 2008 revenue. Moreover, on top of EC and Japan antitrust litigations, Intel also faced new antitrust lawsuit from New York State. A bad start for the year(Ref).
• AMD: Intel’s archrival AMD posted a staggering loss of $1.8 billion for Q4 2007 and a net loss of $3.379 billion for the fiscal 2007, in terms of GAAP accounting. However, its operational gross margin has improved significantly with a close to break-even non-GAAP operating loss of $9 million (Ref). The financial sector seemed to take this positively and gave AMD the benefit of doubt, prompting AMD’s share price to rise after the financial announcement. AMD’s shares further rose as much as 8 percent Wednesday on speculation that IBM might buy over AMD (Ref).
• STMicroelectronics: STM reported a net loss of $477 million and $545 million operating loss for the fiscal 2007. It put the blame on a weak dollar and the impairment charges from the sale of its flash memory business (Ref). STM and Intel are jointly selling its NOR flash memory business to form a new, independent company, Numonyx. However, the new venture is allegedly delayed by at least a quarter (Ref). This has casted some doubt on the new venture.
• Motorola: Motorola is losing significant market share in their mobile phone business unit. For the fiscal 2007, it reported a $553 million operating loss and $49 million net loss on sales of $36.6 billion (Ref). There is a doubt whether Motorola could stay afloat given its deteriorating performance in technology innovation.
• Spansion: Memory chip makers are really in the doldrum. The world’s largest NOR Flash maker, Spansion reported a 2007 net loss of $263 million, and its Q4 loss widened on a drop in sales and a jump in research and development costs (Ref).
• Qimonda: DRAM makers are also not spared from the harsh memory market. The DRAM ASP has dropped more than 40% in Q4. Qimonda recorded an EBIT loss of $859 million in Q4 2007. It has been forced to cut capital spending and halt the construction of its 300mm fab in Singapore in an effort to conserve cash (Ref).
• LSI and National Semiconductor: LSI has announced a fourth-quarter loss of $2.0 billion, or minus $2.88 per share (Ref). In recent years, LSI has taken the inevitable step towards fabless. National Semiconductor is also moving towards fabless model as it announced that it will lay off ~200 fab workers (Ref).
• Applied Material: The equipment makers will be the worst hit this year due to significant drop in the capital spending by most chip makers. AMAT said it would reduce its global workforce by ~1000 positions, or about 7%, through a combination of job elimination and attrition (Ref).
• Nanya: Taiwanese memory-chip makers are also not spared. Nanya and Inotera have posted record Q4 loss on a fall in chip prices (Ref).

The recent global financial meltdown further dampens the market sentiment (watch video below). I feel the outlook of the semiconductor industry in 2008 will be quite pessimistic.