Hill: 2012 to Beat Prognosticators Forecasts
By David Lammers
Novellus Systems CEO Rick Hill, in what may be one of his last public appearances in that role, said orders for semiconductor equipment are strengthening and 2012 may turn out to be much better than prognosticators are forecasting.
Speaking early Thursday (Jan. 12) at the Needham Growth Conference for investors, Hill said “the force fields are in place” for 2012 to be “flat to slightly up” in terms of semiconductor equipment revenues.
In its mid-quarter update in December, Novellus executives said orders were bouncing back from the second-half dip. Hill said forecasters which see a roughly 5-10 percent decline in wafer fab equipment spending this year may be proven wrong. Calling himself “a lone wolf” in predicting a flat or positive growth year, Hill said “by the end of the second quarter I think we’ll see Dataquest saying that the industry is growing again.”
On Wednesday, SEMI predicted that fab equipment spending will decline about 11 percent in 2012, though it hedged that forecast by saying that several of the largest companies could upgrade their spending plans, resulting in a relatively small 4 percent decline from the robust spending seen in 2011 overall. WFE spending was in the $30 billion range last year.
Displaying his acerbic wit, Hill said “the world may be coming apart, but people are still busy buying electronics products so they can read all about it.”
In a familiar line of argument, he said equipment investments will be driven by new applications and systems made possible by advancing semiconductor technologies. Among the growth engines are solid-state disk drives (SSDs) which have long been a favorite topic for Hill and other Novellus executives. He said progress is being made in the vertical NAND development effort, which would require depositing from 32 to 64 alternating layers of nitrides and oxides, with deeply etched holes created to form connections between the vertically stacked storage cells.
Widespread addoption of SSDs is “on the horizon, reachable and touchable,” he said, adding that the cost per bit and density of NAND devices are “at an inflection point to replace rotating (HDD) memory with solid-state storage.”
Hill claimed that the vertical NAND emphasis on deposition and etch plays into the hands of the combined Novellus-Lam company, a deal which Hill said is likely to close in the second quarter. The enlarged Lam Research will be better able to develop dep-and-etch solutions for customers fielding vertical NAND products. “There is no question the combined companies (Novellus and Lam) can better address a spectrum of applications. The combined companies have more arrows in the quiver.”
Hill said the 450mm wafer transition will “start to materialize” in 2017, after EUV lithography works out its challenges. “The first push has to be to make EUV viable. That is numero uno. Then we have to freeze on a node for 450, so that we can have a more organized transition that is economically viable.”
Hill has said he will retire from Novellus after the merger goes into effect. He briefly touched on his 38-year career in the semiconductor industry, noting that the equipment industry changed after 2000 as mega-sized semiconductor companies came to dominate. While acknowledging there “will always be opportunities” for the smaller equipment companies, Hill said the largest chip makers require vendors which can scale equipment production “from zero to the highest levels” of volume production in roughly six months.
“It is tough for the small companies,” Hill concluded.
Tags: Novellus Systems, SEMI, vertical NAND