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The global chip market has hit the bottom of this cycle and will rebound next year, with memory poised for growth in the second of 2023 driven by a resurgence in server investments, Soo-Kyoum Kim, Vice President of IDC, predicted in a presentation at SEMI Korea Members Day.

One of the surprising side effects that came out of the COVID-19 pandemic is the acceleration of the digital transformation of global economies, which has driven a structural shift and propelled the already mature semiconductor industry to record highs.

During their session Creating a Data Ecosystem to Enable End-to-End Advanced Predictive Manufacturing, Laura Matz of EMD & Raj Narasimhan of Micron provided a case study of their uncommon partnership in creating a shared data ecosystem to prove the advantages of advanced predictive manufacturing.

The world’s most advanced manufacturing factories are leading the way in driving efficiency and sustainability.In advance of its 2020 meeting, the World Economic Forum welcomed Micron into its Global Lighthouse Network, a group of advanced manufacturers “that are showing leadership in applying the technologies of the Fourth Industrial Revolution to drive operational and environmental impact.”For years, Micron has been helping clients integrate artificial intelligence (AI), big data analytics and the industrial internet of things (IIoT) into their factories. And now Micron’s factory is one of the first facilities in Singapore, along with Infineon, to be recognized by the Global Lighthouse Network.In a recent interview with Channel News Asia, Manish Bhatia, executive VP of Global Operations, explained how Micron has been practicing what it preaches: “Our products enable new technology trends such as IoT, 5G, cloud computing and autonomous driving. Applying these technologies in our own manufacturing facilities demonstrates the enormous potential in driving business value. Industrial IoT and artificial intelligence are part of the biggest revolution since the advent of robotic manufacturing productivity 50 years ago.”For Micron, this journey started with the need to “keep pace with the technological advancement of our semiconductor processes,” Manish said. “We wanted to provide higher-capacity, higher-performance, lower-cost and lower-power chips.”This meant embarking on the same journey they guide clients through: “We started by focusing in 2014 on simple statistical analysis to improve our production processes,” Manish said. “Following that, we developed more complex deep learning and AI capabilities to draw insights from our data. Most recently, we introduced IoT sensors — like cameras and acoustic sensors — to gather even more data that allows us to further improve our production processes.”The Singapore factory plays a critical role in developing leading-edge NAND. Micron’s Singapore presence, composed of two wafer-fabrication facilities and one assembly and test facility, serves as the base for worldwide operations. With over 500,000 square feet of cleanroom space, the location is also a designated NAND Center of Excellence, driving the implementation of the company’s leading-edge 3D NAND production for use in mobile phones, solid-state drives, digital cameras and more. Micron employs approximately 8,000 people in Singapore.The World Economic Forum says the results of the Singapore transformation have been spectacular: Micron’s “semiconductor fabrication facility has integrated big data infrastructure and IIoT to implement artificial intelligence and data science solutions, raising product quality standards and doubling the speed at which new products are ramped.”Below are notable achievements that Micron was recognized for: Automation of production and maintenance produced a 4% tool availability improvement. The IIoT-enabled smart factory led to a 22% scrap and product downgrade reduction. Advanced analytics for process optimization with OEMs reduced time to ramp new products by 50%. Deep learning optical-defect detection created a 2% yield improvement. The integrated deviation management platform reduced time to resolve quality issues by 50%. Micron was a natural choice for the Global Lighthouse Network, an organization whose creation is timely. The World Economic Forum points out that “global production industry is lagging in its adoption of Fourth Industrial Revolution manufacturing technologies, with more than 70% of companies stuck in pilot-phases … [There is] a need for a neutral learning platform to showcase top-use cases, roadmaps and organizational approaches to adopting and scaling technologies from which other companies globally could benefit.”As part of the Global Lighthouse Network, Micron will be able to share knowledge and best practices with peers, support new partnerships and help other manufacturers deploy technology, adopt sustainable practices and transform their workforces. We can all build on this community of like-minded organizations, levering technology to improve efficiencies and promote sustainability.This recognition from the World Economic Forum is a win-win. We look forward to joining the club of lighthouse factories around the world and to helping propel the entire global manufacturing industry into the Fourth Industrial Revolution. At Micron, we are at the forefront of this transformation and welcome the opportunity to serve as a lighthouse.Koen De Backer is responsible for driving Micron’s smart manufacturing initiatives and digital operations including capabilities with IoT, artificial intelligence, advanced analytics, cognitive computing and machine learning to enhance Micron’s business, global operations and product development. Prior to joining Micron, Mr. De Backer led large-scale operations projects for more than a decade to help clients reduce inefficiencies and achieve excellence in manufacturing, procurement, supply chain and support functions.Most recently, De Backer was a partner at McKinsey Company, where he steered the semiconductor consulting practice in Southeast Asia and was one of the firm’s leading experts on applying artificial intelligence and automation techniques across operations and support functions such as finance, human resources and procurement. Additionally, Mr. De Backer consulted with high-tech global clients while working at Deloitte Consulting, Altran Europe and CSC. Mr. De Backer holds a master’s degree in business administration from INSEAD and a master’s degrees in both industrial management and electromechanical engineering from Katholieke Universiteit Leuven.De Backer is also chairman of the SEMI Southeast Asia Smart Manufacturing Chapter. For information on participating in the chapter, contact Shannen Koh at [email protected].

Gursharan Singh, Micron’s senior vice president of Global Assembly and Test, spoke with us about the progress of Micron’s new facility in Penang, the company’s smart manufacturing advancements, its ongoing initiatives to hire and develop talent, and its support of the greater Malaysian community during the COVID-19 pandemic. Micron to Open Center of Excellence in PenangMicron’s 52.6-acre Center of Excellence for SSD assembly and test in Batu Kawan Industrial Park in Penang is slated to open in early 2021. Micron is investing RM1.5 billion over the next five years and has committed to adding 1,000 team members.“In parallel to the building’s construction, we have built a temporary site in Seberang Prai where nearly 1,000 of our team members have already set up the production line for SSD,” Singh said. “Once the new plant is ready, this operation will be moved to Batu Kawan, giving us the advantage to ramp up production and hit the ground running without the lag of waiting for the operationalization of a new facility.”Malaysia to Gain From Micron’s Global Manufacturing NetworkMicron’s commitment to Malaysia extends beyond business investments. As an industry powerhouse, Micron’s Malaysia operations will tap into its global expertise and best practices.“Malaysia is in a unique position to benefit due to its close proximity with our NAND Center of Excellence in Singapore,” Singh said. “We are learning from our factory in Singapore, which implements the latest advances in smart manufacturing, as we develop the facility in Batu Kawan. Those lessons will be used to ensure that new technologies are deployed cost-effectively and push the envelope to get them to the next level.”On the talent front, Micron is creating a pipeline of local Malaysian talent from a young age. This means driving multiple STEM initiatives targeting local primary and secondary schools and includes a Women in Science and Engineering Program we’re offering at 39 of Penang’s secondary schools. We’re also creating internships for engineering degree holders through the company’s Industry Student Engagement Program (ISEP) and continuing a training program for young diploma holders held in conjunction with Penang Skills Development Centre (PSDC) to give them skills that are required by the industry.Our workforce development initiative also gives Micron an opportunity to work with young talent new to the industry so they can learn and undergo in-depth industry training from more experienced peers."We use our global network of expertise to train young workers and give them the opportunity to learn and participate in this start-up-like environment,” Singh said. “We have already hired nearly 40 new college graduates from Universiti Sains Malaysia (USM). Our game plan is to continue on this path by hiring a higher percentage of local graduates and giving them access to our facilities to learn our technology and advance our Malaysia facility. More than that, we hope our collaboration with local universities can extend further into high-impact research initiatives that benefit the wider community."Micron’s Commitment to Malaysia’s Communities During the COVID-19 PandemicMicron is investing in the greater Malaysian community as the country fights the current COVID-19 pandemic. Malaysia is one of five countries prioritized to receive grants from Micron’s $35 million global relief fund. The company recently announced a RM2.6 million donation from the Micron Foundation that will help the three groups most in need – front-line workers and hospitals, children and the elderly in charitable homes, and underprivileged families in Muar and Penang near its facilities. The goal is to quickly distribute aid such as medical and personal protective equipment, food and household items, and financial assistance.In addition, Micron is supporting its Malaysian employees by making a one-time assistance payment of RM1,300 to 94% of its workforce based in Muar and Penang. This is the percentage of the workforce meeting the eligibility criteria.Designated as an essential services provider by the Malaysian government, Micron continues to maintain its local operations. Micron products built in Malaysia are critical to helping the world effectively cope with COVID-19. Our technology enables advanced medical devices for treatment, data centers and supercomputers used by scientists to find new solutions, and e-learning and videoconferencing capabilities that connect the world during this period of restricted movement.Sangeeta Rajgopal is Head of Country Communications Marketing, Singapore Malaysia Global Communications Marketing, Micron

This year, SEMI ISS covered it all – from a high-level semiconductor market and global geopolitical overview down to the neuro morphic and quantum level. Here are key takeaways from the Day 1 keynote and Economic Trends and Market Perspectives presentations.In the opening keynote, Anne Kelleher from Intel pointed to the huge growth of data, with fabs collecting more than 5 billion sensor data points each day. The challenge, Kelleher noted, is to turn massive amounts of data into valuable information. Moore’s law is not dead. New models of computing benefit still from Moore’s law and advances in Si/CMOS technologies for conventional, deep learning, neuro morphic and quantum computing.With customers expecting continual improvements in applications, the question is whether the chip industry is moving fast enough to meet these expectations, Kelleher said. A broad supply chain, equipment and materials innovations, and attracting the “best of the best” college graduates to fuel innovation is key, she said.In the economic trends session, Nicholas Burns (ambassador ret.) from Harvard University pointed out that we will see a major shift in power. The U.S. will remain the major world power over the next 10 years, but we will see a major shift in power in the next coming decades as the gap with countries like China, Russia and India continues to narrow.Duncan Meldrum from Hilltop Economics said that we are passing the peak growth of economic cycle. He warns that a more likely outlook is that a global growth recession is developing. Although semiconductor MSI growth will see a noticeable slowdown in 2019 and 2020, the semiconductor industry is still healthy over the longer term.Bob Johnson from Gartner sees demand shifting from consumer to commercial applications with higher ROIs and budgets. AI, IoT and 5D are the major enablers. He sees structural changes in the semiconductor industry especially for memory but also for Moore’s law with increasing costs and fewer players.The DRAM markets shows volatility and NAND market may be negative in 2019 but non-memory are expected to accelerate mainly because of increasing content and some price hikes.Overall Gartner expects good long-term growth with a CAGR (2017 to 2022) of 5.1%, outpacing 2011 to 2016 CAGR of 2.6%. After a strong 2018 with 13.4% revenue, he forecasts a slower 2019 with 2.6% growth followed by a 8% growth in 2020 and negative growth rate in 2021.Andrea Lati of VLSI went “Back to fundamentals” in his presentation about the industry. VLSI sees a downside bias due to slowing global economy, tariffs, and trade wars. Future drivers are data economy, cloud, AI and automotive.As memory leads the 2019 slowdown, analog, power, logic and other sectors remain in positive territory. VLSI lowered its semiconductor equipment forecast for 2018 from 20% (Jan. 2018) to 14% (Dec. 2018) but increased its sales outlook from 8% to 15% in 2018. VLSI expects revenue to slow into the first half of 2019 but increase to over 4% in the second half of the year, resulting in total 2019 drop of 2.7%. Semiconductor equipment sales are expected to drop from 14% in 2018 to -10% in 2019.Michael Corbett of Linz Consulting, covering wafer fab materials in the years of 3D scaling, sees these as good times for the industry. His outlook for wafer fab materials is bullish based on strong MSI and because wafer fab materials suppliers are getting bigger because of M As.In the Market Perspective session, Sujeet Chand of Rockwell Automation pointed out that as more and more data is generated, the problem is how to get value of all the data collected. There is a need to create the right architecture for machine learning and AI and big data is increasingly being replaced by contextual/structured data. He expects Industry 4.0 to drive foundries to become smaller, more flexible and more productive.In the Technology and Manufacturing session, Aki Sekiguchi of TEL addressed process challenges in the age of co-optimization. The semiconductor industry continues to expand, driven by massive growth of interconnected devices, with heavy demand for processing power and storage. He expects an exponential increase of data from about 40ZB in 2018 to 50ZB in 2020 to 163 ZB in 2026.Major technologies such as DRAM, 3D NAND and logic are dealing with scaling challenges. The density of DRAM (Mb/chip) is plateauing according to 2015 to 2020 trend data, with DRAM is in need of EUV. Memory capacity demand is leading to increasing layers and higher aspect ratios that is concern for 3D NAND and mainly for plasma etch. With Logic already implementing 3D structures, it appears to be in a solid position. Buddy Nicoson of Micron talked about his 50 years in the industry and looked ahead to the next 50. The anchors – quality, cost, scale and speed – won’t change. It has been a great journey so far with unprecedented opportunities and challenges ahead of us. We are getting into a convergence (specialization, integration) and solution-based phase. We will see some inflection points in the coming years, with the best yet to come.Christian G. Dieseldorff is senior principal analyst in the Industry Research and Analysis group at SEMI in Milpitas, California.

SEMI Releases latest update to World Fab Forecast with adjusted semiconductor revenue consensus for second-half 2018 and 2019 Global semiconductor revenue in 2018 is now expected to reach $473.8 billion and clock a growth rate of 15 percent, a significant upward revision from the 7.5 percent expansion (to $442.9 billion) forecast at the start of the year by six research and investment forecasts tracked by SEMI Industry Research and Statistics (SEMI IR S). Data center growth will remain robust in the coming quarters, fueling demand for memory devices. In addition, cloud computing will continue to spur strong CPU, GPU, networking, ASIC, and DRAM and NAND demand through 2019, driving a consensus 3.63 percent year-to-year growth to reach the semiconductor revenue of $491 billion in 2019. Fab equipment spending (new and used) for 2018 is expected to increase by 14 percent to a record high of $63 billion, according to the last data from the SEMI World Fab Forecast, published by SEMI IR S. For 2019, fab equipment spending (new and used) is expected to increase 8 percent to another record of just under $68 billion. Memory continues to be the biggest swing factor in fab spending in 2018 and is expected to lead growth into 2020. 3D NAND will see the most capacity added in 2018 and 2019 with growth of 41 percent in 2018 and 27 percent in 2019, according to the SEMI World Fab Forecast. DRAM investment will see even stronger growth in 2018 and 2019 driven by new capacity addition as well as the continued technology shrink towards 1y/1z nm. For the first half of 2018, global spending for semiconductor fab equipment continues its growth momentum from 2017. Though we expect some softness in the second half of 2018, the outlook for 2019 remains robust with a fourth consecutive year of growth – the first such run since the 1990s. This prolonged growth cycle has been propelled by memory and will be extended by significant investment in China in 2019. Although a potential slowdown in 2020 is a concern, the overall outlook for semiconductor demand remains solid due to broad-based growth trends in data center, artificial intelligence (AI)/machine learning (ML), automotive, and industrial segments. Following are other SEMI forecasts for fab spending. Installed Capacity 3D NAND will see the most capacity added in both 2018 and 2019 with growth of 41 percent in 2018 and 27 percent in 2019. Foundry capacity growth is steady at 3 percent in 2018 and 6 percent in 2019, driven by both leading-edge and trailing-edge capacity buildup. 200mm fab capacity will increase 4 percent in 2018 and 3 percent in 2019, fueled by demand for MCU, sensors, PMIC, MOSFET and Driver IC. New Facilities / Construction Spending In 2018, there are 72 construction projects with investments totaling $15 billion, a year-over-year increase of 23 percent. Construction spending will reach all-time highs with China continuing its lead at US$7 billion in 2018, shattering its own record of $6.3 billion investment in 2017. Most construction spending in 2018 will be for Memory (just under $9 billion), primarily for 3D NAND followed by DRAM. Foundry will log second place in construction spending at just under $5 billion. Fab Equipment Spending Fab equipment spending (new and used) for 2018 is expected to jump 14 percent to a record high of US$63 billion, flat from the forecast issued in June 2018. Equipment spending (new and used) for 2019 is expected to increase 8 percent to another record of just under US$68 billion, a downward adjustment from +9 percent published in June 2018. We believe equipment spending will remain healthy, driven by solid, broad-based demand and predictable technology investments on top of constructive SEMICAP equipment fundamentals. Activity Report The August report features 1,265 records including about 300 Opto- and LED-related facilities. We have made 223 changes related to 216 fabs/lines. The modifications include the addition of new records, changes to existing records, the deletion of records since the February 2018 World Fab Forecast report. We are tracking 103 future facilities/lines with various probabilities that will start volume production in 2018 or later. Download a sample report Not a subscriber? Please review SEMI fab databases listed below. Our databases deliver the latest forecast and a complete analysis of front-end fabs and foundries worldwide. They are ideal resources to empower your market research. Eugenia Liu is a Senior Product Marketing Manager at SEMI.

The growth of China’s semiconductor industry outstripped sector expansion in many other regions in 2017 thanks in part to heavy government investments and supportive state policies. But China’s chip industry also struggled under the weight of overheated investment, inconsistent project quality, insufficient investment in research and development, a poor ability to innovate, and barriers to international cooperation. To overcome these headwinds to growth, China must identify global trends in the development of global semiconductor industry and better understand the forces it needs to mobilize to further expand its own semiconductor sector. AI and 5G fuel global semiconductor industry growthIn 2017, global semiconductor industry revenue reached a seven-year peak, expanding 22 percent to nearly USD 420 billion, and entered a new growth phase with artificial intelligence (AI), 5G and other new technologies leading the surge with greater market segmentation, diversification and decentralization. The emergence of smart automobiles, smart cities, smart medicine, AR/VR and other new markets headed the list of new applications. In the next three to five years, semiconductor industry growth is expected to remain stable, with no marked declines. In 2018, the growth rate is expected to fall to between 5 percent and 8 percent, with the expansion more comprehensive and balanced. The memory market, in particular, will find it hard to match its 2017 blistering growth rate. The market’s expected growth of 10 percent to 20 percent will be chiefly driven by DRAM and 3D NAND Flash. In 2019, NAND growth will continue but DRAM shipments could decline. Emphasis on both innovation and investment key to sustainable growth of Chinese IC Under the China government’s Guidelines to Promote National IC Industry Development, designed to provide key policy guidance and capital support for the development of China’s IC industry, the Chinese semiconductor industry is seeing particularly rapid growth that is expected to be a key contributor to continuing global industry expansion. In IC design, HiSilicon and Unigroup Spreadtrum RDA ranked among the top 10 in the world. In wafer fabrication, Chinese IC manufacturing accounted for 13 percent to 15 percent of global market capacity despite SMIC and Huahong Group lagging international competition in advanced processing. In packaging and testing – China’s strongest segment – JCET, NFME and Huatian Technology also ranked in the global top 10. The Guidelines to Promote National IC Industry Development has fueled a boom in capital investments. However, investments must go well beyond fab construction to add new capacity for China’s semiconductor industry to flourish. A strategy for sustainable, long-term chip industry growth must focus more on technology innovation while continuing heavy capital investments, though it takes time for innovation to lead to higher capacity demand and GPD growth and more jobs. Despite large investments by the 02 Special Project in semiconductor equipment and materials, China trails other regions of the world in advanced technologies. Global spending on semiconductor equipment reached a record-breaking USD 56 billion in 2017, with Korea a major driver. In 2017, Samsung alone invested USD 25 billion in semiconductor equipment, followed by TSMC (USD 10.8 billion), Intel (USD 11.5 billion), Hynix (USD 8.5 billion), Micron (USD 0.5 billion), SMIC (USD 2.3 billion) and YMTC (USD 2 billion). In 2018, Samsung’s equipment spending is expected to drop slightly, to USD 24 billion, while investments by Intel and TSMC will be remain roughly equal. China’s equipment spending will continue to grow in 2018, with SMIC and YMTC maintaining investment levels similar to last year’s and other China semiconductor manufacturers starting to ramp up investments. In 2018, China is expected to surpass Taiwan in equipment spending to claim the number two position after Korea. SIIP China dedicated to international connection and cooperation The huge investments in China’s semiconductor industry need to be supported by robust business strategies, greater international cooperation, deeper expertise in advanced technologies, and more skilled workers. China lags the global industry in all of these areas. The rapid rise of China’s semiconductor industry has raised concerns among many countries over China’s growing influence, with some, most notably the United States, going so far as to implement containment measures. Other regions including Japan, Korea and Taiwan followed suit. The continued growth of China’s semiconductor industry hinges on technological innovation enabled by international cooperation, as well as strong international communication to allay concerns and misunderstandings over the rising prominence of China’s chip sector. China must overcome these obstacles. One partial solution is for China to convince the rest of the world that its need a thriving semiconductor industry if only to meet enormous demand for electronics products within its own borders. As the largest international semiconductor industry association, SEMI enjoys a unique ability to strengthen the connection between China’s semiconductor sector and its international counterparts. SEMI is well-known for its vital support of the traditional semiconductor equipment and materials markets, but SEMI’s work also spans IC design, manufacturing, packaging and testing. What’s more, SEMI has expanded into innovative market vertical applications such as AI, smart manufacturing, smart transportation and smart automotive as it aims to bring together supply chains across these growth areas. For its part, SEMI China remains dedicated to improving communications and cooperation between the Chinese and global semiconductor industries. SEMI China will also continue to encourage deeper collaboration among individual enterprises and government institutions in the interest of industry growth while making full use of SEMI’s international, professional and localization platform to promote the development of China’s semiconductor industry. Last year, we established SEMI Innovation Investment Platform (SIIP) China to help grow China’s pool of skilled workers, promote advanced technology, generate industry capital, and expand China’s semiconductor industry while developing stronger connections with chip sectors in other regions. SIIP China is focused on the following: Promoting sustainable development of the Chinese semiconductor industry Establishing stronger connections to help take advantage of global technology and investment opportunities Providing a platform for open communications between the Chinese and global semiconductor industries Promoting greater coordination between China and its global partners Helping newly enterprises secure funds for expansion Encouraging greater cooperation with foreign semiconductor manufacturers in the interest of openness and mutual benefit will be the best way for China to overcome obstacles to the development of its semiconductor industry. Meanwhile, China will continue to strive to merge into the global semiconductor industry and become a key partner. SEMICON China has witnessed the development of Chinese semiconductor industry SEMICON China marked its 30th anniversary this year. Over the past three decades, China’s semiconductor industry has seen remarkable growth. This year’s SEMICON China was the largest ever. SEMICON China and FPD China 2018 numbered 3,628 booths, covered 74,000 square meters of exhibition space and attracted 1,116 exhibitors from 21 countries and regions and 91,252 professional attendees from 58 countries and regions. Most of China’s top device makers and global leading packaging houses, together with their equipment and materials suppliers, exhibited at SEMICON China and FPD China 2018, representing the global IC manufacturing ecosystem. The number of SEMICON China and FPD China 2018 visitors jumped 32.3 percent from last year, with representation by professionals from the design, manufacturing, assembly and test, equipment and materials sectors. Lung Chu is President of SEMI China.

Can it be that no more new semiconductor fabs are being built in the U.S.?The last new volume fab known is Micron’s Building 60 in Utah, according to the SEMI World Fab Forecast report published in February 2018. The catch is Building 60 is not a new or greenfield facility but rather an existing structure being retooled for 3D NAND. Fab equipment spending for this fab is expected to be high in 2018.Then there is Fab 42 from Intel. Construction started in 2011 before it was shelved. It is expected to begin equipping by end of this year, with equipment spending expected to be high next year.Other fabs built many years ago are still ramping such as Globalfoundries Fab 8 phase 3 (TDC) and D1X (module 1 and module 2). D1X is a research and development pilot, not a high-volume fab. And Globalfoundries’ plans for a second fab in Malta have been pushed out.Samsung in Austin has space for more modules, but there is no indication they will ever be added.The SEMI World Fab Forecast shows five smaller facilities either planned or under construction, but these have little impact in this U.S. fab construction trend.And that’s basically it! No more volume fabs!If we divide fab equipment spending into two categories – investment in new capacity versus upgrades – we see a declining trend for fabs adding capacity. See chart below. (Compare 2005-2011 with 2017-2019). If we look at 2017, 2018 and 2019, Globalfoundries, Intel, and Micron are the big investors in new capacity.This year 60 percent of all fabs are expected to invest in equipment to add capacity, but just one or two volume fabs (Micron and Globalfoundries) account for the bulk of this growth. Same story for 2019, with two volume fabs (Intel and Globalfoundries) representing the lion’s share of the growth. Strike the Intel and Globalfoundries fabs from the equation, and investments in additional capacity would fall below upgrade spending levels.Once these fabs have reached full capacity, additional equipment investments will significantly lag spending increases for upgrades, signaling the end of new fabs in the U.S.