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Archive for September, 2012

Materials Market To Top $50 Billion In 2013

Thursday, September 20th, 2012

By Lara Chamness
Given current macroeconomic headwinds, this year is proving to be challenging to forecast. Most analysts recently downgraded their semiconductor revenue forecasts to flat or low-single digits, down from the more optimistic forecasts of 4% to 6% growth presented earlier in the year.

SEMI believes that the semiconductor materials will trend with the device market. As such, the current expectation is for 2% growth for this year and 4% for 2013 for semiconductor materials revenues. If this happens, the materials market will experience four consecutive record breaking years, resulting in a market valued at $50.7 billion in 2013 (Figure 1).

Fig. 1: Materials Forecast By Segment

Source: SEMI Materials Market Data Subscription August 2012.

An interesting trend shown in Figure 1 is the increasing importance of packaging materials. Historically, wafer fab materials accounted for about 60% of the materials market revenues. However, in 2009, wafer fab materials contracted at a much more severe rate, driven in large part by steep declines in average pricing for silicon wafers—27% compared to 4% for packaging materials. Immediately out of the downturn, both segments rebounded sharply, but growth moderated for wafer fab materials in 2011 at 4%, while packaging materials grew 9% as demand increased for advanced packaging for smart phones and other mobile devices.

Figure 2 provides more detail into which materials are driving the change. In 2002, Silicon and Photomasks accounted for 38% of the total materials market. By the end of this year, it is expected that these two materials groups will account for 27%. Packaging materials substrates and bonding wire are expected to increase their prominence in the market, while gases, photoresists and photoresist ancillaries, leadframes and ceramic packages lost market share. A key driver of bonding wire’s increase is the price of gold. This is prompting many suppliers to transition to copper, which will represent about 30% of wire shipments this year. As copper wire adoption increases, we expect to see wire revenue share decline.

The increase share of packaging substrates highlights the importance of advanced packaging technology, which has become a critical enabler of mobile devices. Given the projected growth of the mobile market, we expect the packaging materials market to grow accordingly.

Fig. 2: Segments Evolve Over Time

Source: SEMI Materials Market Data Subscription August 2012.

Given the nominal growth expected for the semiconductor market, SEMI is forecasting that semiconductor materials will increase 2% this year and 4% in 2013, resulting in four consecutive record-breaking years for the materials market. The composition of the semiconductor materials market has evolved over the past decade. As the market for mobile devices swells, so will the need for advanced packaging solutions.

To learn more about semiconductor materials and key market trends, register to attend the SEMI Strategic Materials Conference, which will be held at SEMI headquarters in San Jose, California on Oct. 23 and 24. For more information about SEMI, visit www.semi.org.

—Lara Chamness is a senior manager market analyst at SEMI

Front-End Fab Equipment Spending To Grow 17% In 2013

Friday, September 7th, 2012

By Christian Gregor Dieseldorff
SEMI just released an update to its World Fab Forecast database, which indicates that total fab spending for equipment needed to ramp fabs, upgrade technology nodes, and expand or change wafer size could increase 16.7 percent in 2013 to reach a new record high of $42.7 billion. The estimate includes new equipment, used equipment, or in-house equipment but excludes test assembly and packaging equipment.

The latest edition of the SEMI World Fab Forecast lists over 1,150 facilities (including 300 Opto/LED facilities), with 76 facilities starting production this year and in the near future. The database tracks projected spending on equipment and construction. Since the previous fab database publication in May 2012, SEMI analysts have made over 296 updates to more than 230 facilities (including 52 Opto/LED fabs) in the database.

Semiconductor manufacturing foundries were significant drivers of fab equipment spending in 2012 with over $10 billion combined investment. Their dominance is expected to continue with approximately $10 billion additional equipment spending in 2013.

In 2012, the Americas had the largest percentage of fab construction. From 2010 to 2012, over $6 billion will be spent in the Americas on fab construction projects led by Intel, Globalfoundries, Samsung, and Micron. Most of these construction projects will be completed by the end of 2012. No immediate new fab projects in the Americas are anticipated, resulting in projected investment for 2013 construction to drop below $500 million from almost $3 billion in 2012.

In 2013, most of the fab construction in will occur in Taiwan, China, and Korea. Samsung has begun an aggressive conversion of up to four existing Memory lines to System LSI. A transition from Flash to System LSI is difficult; some drop in capacity in Memory is expected, but the company is expected to compensate by building a new fab for Memory, in Xian, China, with a massive investment of $7 billion. The fab is expected to begin construction mid-September 2012.

The SEMI World Fab Forecast provides additional detail about the phases for ramping this leading-edge Flash fab with huge potential capacity. Other increases in fab construction investment will come from SMIC’s new fab in Beijing, and TSMC and UMC fab projects in Taiwan. Learn more about the SEMI fab databases here and here.

Webinar: Sept. 18 “Semiconductor Manufacturing Industry Outlook”
For more information, attend the upcoming webinar “Semiconductor Manufacturing Industry Outlook” on Tuesday, Sept. 18, 2012 at 10:00am Pacific. The webinar is free to SEMI members and $100 for non-members.

The webinar will focus on semiconductor equipment spending trends in relation to fabs and the semiconductor materials market including packaging materials. Jonathan Davis, president, SEMI Global Semiconductor Business, will moderate the webinar. Presenters include: Christian Gregor Dieseldorf, on “Fab forecast of equipment spending and capacity: Where are we heading in 2012 and 2013?” and Lara Chamness, SEMI senior analyst manager, on “Semiconductor Equipment and Materials Update.”

More information about the webinar is available here:
To register, click here.

—Christian Gregor Dieseldorff is a senior analyst and director of Market Research at SEMI.