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Fab Equipment Spending To Rise

Friday, June 7th, 2013

By Christian Gregor Dieseldorff
Fab equipment spending will grow two percent year-over-year (US$ 32.5 billion) for 2013 and 23 to 27 percent in 2014 ($41 billion) according to the May edition of the SEMI World Fab Forecast. Fab construction spending, which can be a strong indicator for future equipment spending, is expected to grow 6.5 percent ($6.6 billion) in 2013, followed by a decline of 18 percent ($5.4 billion) in 2014. The new World Fab Forecast report covers fab information on over 1,100 facilities, including such details as capacities, technology nodes, product types, and spending for construction and equipment for any cleanroom wafer facility by quarter. Reported spending reported includes new, used and in-house equipment for volume fabs to R&D, for product types such as IC facilities, Discretes, and LEDs.

Fab Equipment Spending Growth Reaches into Positive Territory
The 2nd half of 2013 is expected to be much stronger with a 32 percent growth rate or $18.5 billion compared to 1st half of 2013 ($13.9 billion). The equipment spending increase in the second half is attributed to growing semiconductor demand and improving average selling price for chips. 2014 is expected to have 23 to 27 percent growth of $41 billion year-over-year (YoY), which would be an all-time record.

Looking at product types, the largest amounts of spending on fab equipment in 2013 will come from the foundry sector, which increases by about 21 percent. This is driven mainly by capex increases by TSMC. The memory sector is also expected to have an increase of only one percent, which is still impressive after a 35 percent decline in the previous year. The MPU sector is expected to grow by about five percent. A double-digit increase in the Analog sector in 2013 will still translate into low absolute dollar amounts, compared to the other sectors mentioned. (See Figure 1)


Figure 1: Fab Equipment Spending by Product Type over Time (Foundries include System LSI)

2014 is expected to be a growth year for fab equipment spending for almost all major product segments. For example, spending for Memory is expected to increase over 40 percent, but spending amounts are not expected to exceed what was seen in 2010 or 2011. MPU is expected to increase by over 50 percent, driven mainly by the ramp of 14nm facilities. The foundry sector is still expected to have the highest spending for fab equipment on 2014, but growth rate may slow to about 15 percent.

Construction Projects: Indicator for more Future Equipment Spending
Typically construction spending is a good indicator for more equipment spending in the future, because any fab built will need to be equipped. Figure 2 is taken directly from the World Fab Forecast report. See Figure 2.


Figure 2: Fab Construction Spending by Region over Time

Fab construction spending in 2013 has improved to almost 15 percent growth YoY growth ($6.6 billion) with 38 known construction projects. Last year (2012), the number of projects was higher, but the total dollar amount much less with $5.8 billion. This year fewer but much larger projects are under way.

2014 shows a decline of about 18 percent ($5.4 billion) in construction spending with only 21 construction projects expected to be on-going. However, these construction projects include large fabs and some are 450mm-ready. If only a couple of new fabs start construction soon, fab construction spending will improve a lot for 2014.

Top spenders for fab construction in 2013 are TSMC and Samsung, who plan to spend between $1.5 and $2 billion each, followed by Intel, Globalfoundries and UMC. Details in the World Fab Forecast report may hint at some surprises.

Fab Forecast: Cautious but more Optimistic
Compared to other published forecasts in the industry, the SEMI World Fab Forecast shows the same trends for fab equipment in 2014; however, SEMI’s projections about 2013 differ. Two prior fab database reports predicted 0 percent growth in equipment spending, but SEMI now expects two percent growth YoY. Capital expenditure for semiconductor companies is expected to grow three percent in 2013 and 12 percent for 2014. Demand keeps increasing such as media tables and smart phones, ASP for chips are expected to improve and many revenue predictions for 2013 are in the strong single digits. Overall, the scenario remains cautious but more optimistic than in prior forecasts. Learn more at SEMICON West.

—Christian Gregor Dieseldorff is an analyst in the SEMI Industry Research & Statistics Group,

Photomask Market Update

Thursday, May 16th, 2013

By Lara Chamness
The worldwide semiconductor photomask market was $3.2 billion in 2012 and is forecast to reach $3.5 billion in 2014. After reaching a market peak in 2011, the photomask market contracted 4 % in 2012. The mask market is expected to grow 3 % and another 3% sequentially over the next two years. Key drivers in this market continue to be advanced technology feature sizes (less than 45nm) and increased manufacturing in Asia-Pacific. Taiwan remains the largest photomask regional market for the third year in a row and is expected to remain the largest market for the duration of the forecast.

2012 Regional Photomask Market

Source: SEMI Photomask Characterization Summary Report – March 2013

The mask making market is becoming increasingly capital-intensive. According to data from SEMI, 2012 was the third record year for Mask/Reticle making equipment growing 14% year-over-year from the previous record year of 2011 to reach $1.3 billion.

While the market for mask making equipment is growing, the number of device manufacturers in leading-edge production is on the decline; in 2012 only six device manufacturers were capable of producing sub-23nm devices on a large scale. TSMC and GlobalFoundries are scheduled to have sub-23nm production available later this year. Both ramps are delayed from initial announcements of production runs in the fourth quarter of 2012 according to SEMI’s fab database.

As capital intensiveness of the photomask industry increases, captive mask shops are increasing their market share of the total mask market; captive mask shops have grown their market presence in recent years as they now represent 43% of the market, up from 30% in 2006.

Device manufacturers have been successful in extending 193nm lithography for 20nm processing while EUV remains delayed. Progress has been made with directed self-assembly, although more work needs to be done to get it production-ready. Source power remains a critical roadblock for EUV. However, recent co-investments by Intel, Samsung, and TSMC in ASML and the acquisition of Cymer by ASML should hasten development. That said, device manufacturers are maintaining parallel lithography roadmaps for 14nm and 10nm device structures.

No compelling lithography solutions have emerged for 1X processing. Nanoimplant and ebeam have made marginal progress, but remain lagging in many critical areas such as throughput and resolution capability. In the absence of a breakthrough, device manufacturers will be forced to resort to triple patterning for 10nm device structures and quadruple patterning for critical layers for sub-10nm feature sizes.

It remains to be seen how the industry will maintain Moore’s law as the costs of advanced lithography increase faster than increased device density gains. But then again, the semiconductor industry is full of some of the smartest people in the world who have managed to engineer cost effective solutions around previous lithography roadblocks.

A recent SEMI published report, Photomask Characterization Summary, provides details on the 2012 Photomask Market for seven regions of world including North America, Japan, Europe, Taiwan, Korea, China, and Rest of World. The report also includes data for each of these regions from 2007 to 2014.

To find out additional information on this new report, please click here for additional information including a list of tables and figures.

—Lara Chamness is a senior market analyst for SEMI Industry Research and Statistics.

Upbeat Prediction

Thursday, April 18th, 2013

By Clark Tseng
The semiconductor industry started out quite strong in 2012 but declined rapidly in the second half of the year, resulting in a slight year-over-year decline of 2.7% in worldwide semiconductor sales. On the other hand, worldwide capital equipment market recorded a decline of 15% from $43.5 billion in 2011 to $36.9 billion in 2012 according to the SEMI WWSEMS report. While industry forecasts for semiconductor revenue trend from mid-to-high single digit growth in 2013, overall capital investment this year may remain conservative. SEMI expects a flat to single-digit decline trend this year and a strong recovery in 2014.

For Southeast Asia region, we expect capital equipment investment to bottom out in the first half of 2013, with a mild pickup in the second half followed by a strong recovery in 2014. Overall front-end fab equipment spending is expected to double next year from $810 million in 2013 to $1.62 billion in 2014. Foundry and memory are the two major sectors that invest most in the region. For foundries, GlobalFoundries’ expansion plan at Fab 7 will be completed by mid-2014 while UMC continues to upgrade their Fab 12i capacity to 40nm process.

The memory sector represents an even bigger chunk of investment in the region. The latest SEMI World Fab Forecast data shows that memory is the only sector in the region to see investment growth this year. Other sectors, such as power semiconductor and MEMS are expected to see meaningful recovery in 2014, contributing to the overall growth.

Capacity growth at front-end fab shows 1.7% increase this year, with an expectation of higher growth, 8.2%, in 2014, exceeding overall global capacity growth of 5.2% according to the SEMI World Fab Forecast. The growth will mainly be driven by the Memory sector, specifically from NAND flash capacity as Micron gears up for further expansion at its Singapore NAND flash facility next year plus ongoing capacity conversion from DRAM to NAND flash at Fab 7 (Tech).

Singapore is emerging to become the third-largest NAND flash manufacturing country in the world, following South Korea and Japan, by the end of 2014. The conversion and the expansion projects will drive related semiconductor investment in the region in 2013 and 2014.

For the assembly and test sector, Southeast Asia has long been the focal point of the industry with a large installed capacity from both IDMs and OSATs. This position contributes to the region being the largest packaging materials consumption market in the world, representing a market size of $6.6 billion in 2013 and $6.8 billion in 2014. The region’s back-end equipment investment remains significant with more than $1 billion spending each year throughout 2012 to 2014, accounting for about 17% of worldwide share according to the SEMI WWSEMS.

Aside from manufacturing capacity, the Southeast Asia region is now extending its value proposition to IC design and R&D areas with more joint development projects between multi-national corporations and local institutes. We expect to see a more robust semiconductor ecosystem arise from the region as a result of these endeavors and as companies seek ready access to customers throughout Asia-Pacific and South Asia.

For information on exhibiting at SEMICON Singapore 2013 (May 7-9), please visit www.semiconsingapore.org/Exhibitors/ExhibitNow. For information and visitor registration, go to www.semiconsingapore.org.

For information on SEMI market information, visit: www.semi.org/marketinfo

—Clark Tseng is an analyst with SEMI Taiwan’s Industry Research & Statistics.

The Learning Imperative

Thursday, March 21st, 2013

By Tom Morrow
An often under-appreciated component of Moore’s Law has been the massive learning and education effort required to sustain continuous improvement at the incredible rate predicted by Gordon Moore nearly 50 years ago. The industry regularly calculates the contribution of lithography-based scaling, wafer size increases, and yield improvements necessary to keep pace with aggressive cost reduction schedules, but not enough attention is paid to the enormous contribution of human capital — fueled by training and education in new technologies new practices and new processes — necessary to implement next-generation production requirements.

The SEMI Advanced Semiconductor Manufacturing Conference (ASMC 2013) has addressed this need for more than 20 years. This year ASMC will be held May 13-16 in Saratoga Springs, New York. The event features more than 85 presentations, including peer-reviewed manuscripts, workshops and tutorials covering critical process technologies and fab productivity strategies. To make this event the most valuable and informative of its kind, ASMC is coordinated and managed by an industry-committee consisting of 45 engineering and science leaders from the “Who’s Who” of semiconductor technology companies. This year’s ASMC 2013 conference co-chairs are Russell Dover, Brion (an ASML Company) and Stefan Radloff, Intel Corporation.

ASMC 2013 technical sessions include:

• Advanced Patterning/Design for Manufacturing
• Factory Optimization
• 3D/TSV Technology
• Interactive Poster Session
• Yield Enhancement
• Advanced Metrology
• Defect Inspection
• Advanced Equipment Processes and Materials
• E-Beam Inspection
• Advanced Process Control

This year’s event also features several panel discussions, keynote speeches and other forums to share knowledge on new and “best practice” semiconductor manufacturing issues and concepts. This year ASMC features workshops and tutorials on Computational Lithography by Intel Corporation, 3D-ICs by GLOBALFOUNDRIES, 450mm wafer processing moderated by G450C, and sub-10nm manufacturing.

Conference keynotes include:

• “Fab Material Next Generation Challenges: Affordability & Quality” — Tim Hendry, vice president, director of Fab Materials Operation, Intel Corporation
• “IC Market Trends and Forecast” — Bill McClean, president, IC Insights

ASMC also holds an interactive poster session and reception to enable researchers, suppliers, and manufactures to meet and discuss the newest concepts and solutions in nano-manufacturing, productivity and yield. During this session, participants can engage authors in in-depth discussion of a wide range of issues.

ASMC 2013 is presented by SEMI with technical sponsors: Institute of Electrical & Electronics Engineers (IEEE), IEEE Electron Devices Society (EDS), and IEEE Components, Packaging and Manufacturing Technology Society (CPMT). Corporate sponsors include: Applied Materials, ASML, ATMI, ChemTrace, CNW Courier Network, DAS, Edwards, KLA-Tencor, GLOBALFOUNDRIES, Marcy NanoCenter at SUNYIT, MSP, NY Loves Nanotech, and Valqua.

Registration for ASMC 2013 is available at www.semi.org/asmc2013. For more information, contact Margaret Kindling at mkindling@semi.org.

—Tom Morrow is the chief marketing officer at SEMI

SEMICON West: Accelerating R&D

Monday, March 11th, 2013

By Karen Savala
Earlier this month, SEMI announced the addition of the Silicon Innovation Forum (SIF) to SEMICON West to help accelerate the innovation pipeline for advanced semiconductor technology. This exciting program was developed in collaboration with leading strategic investment groups in our industry, including Applied Ventures, Dow Chemical Company, Intel Capital, Micron Ventures, TEL Venture Capital, and Samsung Ventures. SIF is designed to bridge funding gaps for new and early-stage companies by providing a platform to showcase new ideas to potential partners and investors. Qualifying companies can participate through presentations at the SIF Conference, through table-top displays during a reception, and through one-on-one meetings with qualified investors. The SIF Conference will be free to all SEMICON West attendees, but the Innovation Showcase and Reception for one-on-one presentation and meeting opportunities will be restricted to qualified partnership and investor groups.

The SIF is just one of the many activities and forums devoted to R&D and the innovation pipeline at SEMICON West. The need for breakthrough ideas has never been greater, but R&D budgets, venture capital and private funding sources for advanced semiconductor technology development have significantly declined over the past decade. To help accelerate R&D in the industry — and to encourage innovation from new sources — SEMI is planning a number of new programs to serve the R&D community and the industry’s innovation cycle.

“A Conversation on the Future of Semiconductor Technology” will be an executive panel discussion with leaders from the industry’s top R&D consortia. The conversation will feature Dan Armbrust, president and CEO of SEMATECH, Luc Van den hove, CEO of imec and Laurent Malier, CEO from CEA-Leti, discussing the status of current consortia programs, the top technical challenges facing the coming nodes, and the radical changes unfolding in industry R&D as we speak.

The TechXPOT programs at SEMICON West will also address critical R&D issues facing the industry, including nonplanar transistor processing challenges, lithography, 450mm wafer processing, and 3D stacked ICs. New this year will be programs on silicon photonics, transparent conductors, nano-defect inspection, and productivity innovations for existing lines and fabs. Contributors and organizers to the International Technology Roadmap for Semiconductors will also discuss the latest ITRS edition.

In the over twenty years I have been in the industry, I have never seen so many critical and concurrent R&D barriers facing the industry. At the same time, the process of R&D and innovation — through universities, consortia, start-ups, industry leaders, and innovative smaller companies — has never been in such a state of flux. No place else on earth will host more international technical innovators, visionary leaders, and bright minds of the next generation than SEMICON West.

Attendee registration is now open. If you know of any new and early-stage companies with innovative ideas, encourage them to participate in the Silicon Innovation Forum.

—Karen Savala is president of SEMI Americas

Taiwan: Aggressive Investments In Equipment For 2013-2014

Thursday, February 21st, 2013

By Christian Gregor Dieseldorff
Semiconductor equipment spending in 2012 declined significantly in the second half of the year as sluggish conditions in the global economy dampened some investments in the industry. Counter to this trend was spending in the Taiwan, which could come in at the $9.3 billion to $9.5 billion range. This represents $800 million more in equipment for Taiwan compared to 2011, and marks Taiwan as the largest equipment-spending region in the world.

Though semiconductor equipment sales are expected to moderate again in 2013, investments by foundries for leading-edge technology nodes and by foundries for advanced packaging remain key segments were spending is expected to remain strong. Taiwan, of course, is home to industry leading players in these segments, so Taiwan is expected to remain a top market for equipment spending this year and next.

Taiwan Semiconductor Manufacturing Company (TSMC), as Taiwan’s and the world’s leading semiconductor manufacturer, is always in the spotlight of semiconductor investment competition. Last year, following a massive investment from Intel amounting to $4.1 billion, TSMC agreed to sink money into ASML to accelerate chip manufacturing technology and also invested $339 million into research targeting the development of Extreme Ultraviolet (EUV) and 450 mm lithography tools.

In addition, TSMC also announced a capital expenditure budget of $9 billion for 2013, with growth of 8.4% from 2012 to achieve a 15% to 20% increase in revenue in 2013, which has been higher than global semiconductor average revenue growth in recent years. Also the R&D spending will increase from $1.37 billion in 2012 to $1.6 billion in 2013.

Last year, driven strong mobile chip demand, TSMC enjoyed early success of 28nm ramp up. This year, TSMC will spend $9 billion to increase its total capacity by 10% including a tripling of 28nm capacity. The 28nm process had already accounted for 22% of all TSMC wafer sales in Q4 last year and this is expected to grow to 30% this year.

In packaging, advanced form factors, such as 3D-IC and wafer-level-packaging, are focal points for new investments. These growing and emerging packaging technologies— mainly for devices consumed in mobile electronics—offer opportunities for new equipment processes and new materials development.

The overall Taiwan backend equipment market is expected to expand with the surge in demand for mobile devices. Major outsource assembly & test (OSAT) companies, such as Advanced Semiconductor Engineering (ASE) and Silicon Precision Industries (SPIL), are speeding up their advanced packaging investment in Taiwan thanks to the strong demand from communication sectors. Both ASE and SPIL indicated that their upcoming expansions were planned in view of long-term demand growth, as well as to enhance their ability to fulfill customer needs and expectations. In 2013, ASE will spend $0.6 billion to $0.7 billion, while SPIL will spend around $0.4 billion to expand their capability and R&D investment.

Taiwan is bucking the industrial downtrend by investing more to better position itself with respect to the industry’s volatility and intense competition. The increase in investment happening in Taiwan is a positive sign for the global semiconductor equipment market. The demand from Taiwan foundries and OSATs will fuel excitement for the upcoming SEMICON Taiwan 2013 (Sept. 4-6), which is expected to attract more exhibitors and visitors from around the world. The exhibition will focus on critical industry topics covering developments in lithography, 450mm, 3D-IC, substrate and advanced packaging, green manufacturing, high-brightness (HB) LEDs, MEMS, printed and flexible electronics, and other related technologies.

SEMICON Taiwan 2013 Featured Technology Pavilions
SEMICON Taiwan 2013 also offers the following technology pavilions and country pavilions that drive traffic and bring energy to the show floor:

The call-for-exhibitors is open now. Space is limited. For more information, please visit www.semicontaiwan.org.

—Christian Gregor Dieseldorff is a SEMI Industry Research & Statistics analyst.

Tightening the Purse Strings

Thursday, January 24th, 2013

By Christian Gregor Dieseldorff
When forecasting fab spending, capacity ramps, and related technology node transitions, analysts must not only examine the semiconductor industry, but also track and consider economic factors such as GDP, political events, oil prices, unemployment rates, and consumer sentiments. The latest SEMI World Fab Forecast report, published at the end of November 2012, reveals major changes from previous estimates for 2013. With macro factors such as the slowing Chinese economy, turmoil in the Middle East, the United States’ fiscal cliff and debt ceiling debates, and the official “double-dip” recession in Europe, big capital spenders have revised their current spending plans. The outcome of the election in South Korea and patent suits with Apple also may affect Samsung’s capex decisions for 2013.

A Year of Uncertainty
Despite current difficult times and unknowns, growing demand for mobile devices, such as tablets and phones, inspires an improved outlook for chip sales in 2013. Various forecasts range from 4% to 16%, averaging 7%, revenue growth next year.

Typically, chip sales and capex ride the same roller coaster; however, 2013 appears to be another year of uncertainty. While chip sales may rise in 2013, some perspectives for equipment sales range from low-single-digit growth down to negative double digits.

The largest spenders on fab equipment are TSMC, Samsung, and Intel, yet the latter two have yet to make any official announcements about their 2013 capex plans. Using bottom-up methodology, the World Fab Forecast is able to project quarter by quarter fab equipment and fab construction spending, as well as capacity addition and expected changes in technology nodes, based on currently known information and plans.

Fab equipment spending for Front End Fabs 0% (flat) in 2013
In August, the World Fab Forecast report predicted 17% growth for Front End equipment, which was revised downward to 0% growth (flat) (or U.S. $32.4 billion, including Discretes and LEDs, used equipment and in-house equipment) in the November report. Possible scenarios for 2013 vary from -5% to +3% change for equipment spending, mainly pending capex plans by TSMC, Intel and Samsung. The projected number of facilities that are equipping will drop from 212 in 2012 to 182 in 2013. In addition, Fab equipment spending saw a drastic dip in 2H12 and, accounting for seasonal weakness and near-term uncertainty, 1Q13 is expected to be even lower (See Figure 1).

Figure 1

Examining equipment spending by product type, System LSI is expected to drop in 2013. Spending for Flash declined rapidly in 2H12 (by more than 40%) but is expected to pick up by 2H13. The foundry sector also is expected to increase in 2013, led by major player TSMC, as well as Samsung and Globalfoundries.

Construction Spending Up in 2013
While fab construction spending slowed in 2012, at -15%, the SEMI World Fab Forecast report projects an increase of 3.7% in 2013 (from $5.6 billion in 2012 to $5.8 billion in 2013). The report tracks 34 fab construction projects for 2013 (down from 51 in 2012). An additional 10 new construction projects with various probabilities may start in 2013. The largest increase for construction spending in 2013 is expected to be for dedicated foundries and Flash related facilities.

Capacity Additions Slow in 2012 and 2013
Many device manufacturers are hesitating to add capacity due to declining average selling prices and high inventories. This is pronounced in the Flash sector, as seen with Sandisk investments since the beginning of 2012 and both Samsung and Toshiba starting 3Q12. Figure 2 displays World Fab Forecast data showing a sharp decline in installed capacity growth rates for 2012 and 2013 compared to 2010 and 2011 rates.

Figure 2

Breaking down the industry by product type, growth of capacity for System LSI will be less robust (20% increase in 2012, down to 14% in 2013). Flash capacity additions dragged in 2H12, with a sluggish 2% expansion overall for the year. However, the SEMI World Fab Forecast data show more activity by mid-2013, with nearly 6% growth, adding more than 70,000 wafers per month (in 300mm equivalents for Flash.) The data also point to a rapid increase of installed capacity for new technology nodes, not only for 28nm but also from 24nm to 18nm and first ramps for 17nm to 13nm in 2013.

Potential Improved in 2013
If the global economy and GDP begin to show improvement and higher single-digit chip sales growth proves to be right, the equipment spending growth may ride the same roller coaster again and has the potential to go even higher for 2013. Modeling some of these scenarios, we expect equipment spending for Front End Fabs could be between -5% to +3% in 2013.

SEMI Industry Research and Statistics Group: a Worldwide Dedicated Team
Since the last fab database publication at the end of August 2012, the SEMI worldwide dedicated analysis team has made 307 updates to more than 200 facilities (including Opto/LED fabs) in the database. The latest edition of the World Fab Forecast issued end November 2012, lists over 1,150 facilities (including 300 Opto/LED facilities), with 78 facilities starting production this year and in the near future.

The SEMI World Fab Forecast uses a bottom-up approach methodology, providing high-level summaries and graphs; and in-depth analyses of capital expenditures, capacities, technology and products by fab. Additionally, the database provides forecasts for the next 18 months by quarter. These tools are invaluable for understanding how the semiconductor manufacturing will look in 2012 and 2013, and learning more about capex for construction projects, fab equipping, technology levels, and products.

The SEMI Worldwide Semiconductor Equipment Market Subscription (WWSEMS) data tracks only new equipment for fabs and test and assembly and packaging houses. The SEMI World Fab Forecast and its related Fab Database reports track any equipment needed to ramp fabs, upgrade technology nodes, and expand or change wafer size, including new equipment, used equipment, or in-house equipment.

Also check out the Opto/LED Fab Forecast. Learn more about the SEMI fab databases here and here.

—Christian Gregor Dieseldorff is a SEMI Industry Research & Statistics analyst.

2012 Year-End Consensus Forecast

Thursday, December 13th, 2012

By Lara Chamness
While the first half of the year started out with strong booking and billing activity, continued economic uncertainty has led many device manufacturers to cut back on their equipment investments during the second half of this year. The recently published SEMI Year-End Consensus Forecast predicts that the new equipment market will contract 12.2 percent for this year (to $38.2 billion) and decline another 2.1 percent for 2013, with an overall market gain of 12.5 percent expected for 2014. This year-end forecast contrasts sharply with the Mid-Year Forecast SEMI presented in July, which anticipated a 2.6 percent decline this year. As such, it is helpful to think of SEMI’s consensus forecast as a measure of industry-wide sentiment for the entire new equipment industry, which includes equipment for both fabs and test and packaging houses.

Unlike SEMI’s World Fab Forecast, the SEMI Year-end Consensus forecast focuses only on new equipment and covers both “front-end” and “back-end” equipment. The Year-End Consensus forecast predicts that wafer processing equipment, the largest product segment by dollar value, is anticipated to decrease 14.8 percent in 2012 to total $29.3 billion, on par with 2010 spending levels. The forecast predicts that the market for assembly and packaging equipment will decline by 5.1 percent to $3.2 billion in 2012. The market for semiconductor test equipment is forecasted to decline by 4.8 percent, reaching $3.6 billion this year. On the positive side, the “Other Front End” category (fab facilities, mask/reticle, and wafer manufacturing equipment) is expected in increase 6.3 percent in 2012.

Korea, Taiwan, and North America are the largest spending regions, though only Korea and Taiwan are expected to show an increase in spending for 2012—Taiwan (12.7 percent increase over 2011) and South Korea (10.7 percent increase). In 2012, Taiwan and South Korea each will reach equipment sales of $9.6 billion, with North American sales totaling $8.0 billion. Rest of World (ROW), Europe, and Japan will be the most negatively impacted in 2012.

Projects driving the Korean equipment market this year include but are not limited to Samsung ramping Lines 16, S1-A and S1-C and making technology upgrades to many of its other lines, as well as SK Hynix upgrading M10 and M11(+M4) and ramping M12. TSMC is making significant investments in Fab 12, Fab 14, and Fab 15 this year, while other smaller device manufacturers are making non-trivial investments in the region.

In 2013, China, Taiwan and Japan are expected to have slight to moderate positive growth, with all other regional markets contracting, resulting in another 2.1 percent reduction in sales. 2014 sales are expected to rebound, increasing 12.5 percent with all regions registering positive growth.

The following results are given in terms of market size in billions of U.S. dollars.

SEMI 2012 Year-End Equipment Forecast by Market Region

The SEMI Industry Research and Statistics group provides timely market and trend information for market research, competitive analysis, and sales forecasting. We focus on the global semiconductor capital equipment, selected materials markets and fab forecasting data. Please visit www.semi.org/marketinfo for additional information.

SEMI has a long tradition of generating “Consensus Forecasts” for new semiconductor equipment. These forecasts are published two times a year in conjunction with SEMICON West in July and SEMICON Japan in December. The intent of these forecasts is to provide a gauge of member sentiment for market conditions. SEMI bases this forecast on monthly “bookings and billings” data that it collects directly from semiconductor equipment suppliers, data from the SEMI World Fab database, and feedback from equipment suppliers. The “Consensus Forecast” covers both “Front-end” equipment (typically associated with wafer fabrication) and “Back-end” equipment (equipment used to package and test individual devices). The “Consensus Forecast” contrasts to the “bottoms-up” forecast generated by the World Fab database, which bases its projections on CapEx announcements by device manufacturers and only covers fab equipment, including used and equipment manufactured directly by fabs.

—Lara Chamness is a senior market analyst for SEMI industry research and statistics.

New Materials And Collaboration

Thursday, November 15th, 2012

By Tom Morrow
John Smythe, advanced technology lead for Micron’s Advanced Materials Technology Group, kicked off the 2012 Strategic Materials Conference (SMC) on Oct. 23, with a comprehensive overview of the materials challenges to continued scaling in memory, including a status update on several novel and emerging materials sets that may have potential at sub-20nm.

How the industry will address these challenges through an evolution (or radical transformation) of the traditional collaboration models between equipment supplier, materials supplier and device maker also became a key topic during the two-day conference. Trends, challenges and collaboration strategies in other semiconductor devices, OLED displays, PV, and LEDs were also discussed at the conference, which highlighted the synergies and trends in advanced materials application and development. SMC is organized by the Chemical and Gas Manufacturers Group (CGMG) special interest group at SEMI.

Smythe outlined the scaling challenges facing memory cell technology going forward. Unlike the recent past, now “electrostatics are beginning to dominate,” requiring innovative approaches involving new and novel material sets that are complex and not well understood. More than 120 different material combinations have been tested in the industry over the past few years and their impact on etch, clean, and deposition sources are just beginning to be evaluated.

“If you really don’t understand the interactions, you’re just guessing,” he said. “We are only at the beginning of the learning curve.”

Smythe discussed how emerging memory cell material systems lack scaled solutions. Fundamental principles of electrostatics and dielectric leakage limit dimensional scaling of charge-based memory systems. Dry etch, CMP, cleans and cell material sources/methods will be challenged beyond normal evolutionary paths. Future memory cell technology must rely on characteristic changes of alternate state variables related to more complex cell material and electrode systems. This will significantly increase complexity in the form of additional atoms and hence additional aspects of control and interaction risk. Many of the candidate systems are likely to drive new requirements in the materials/chemistry supply chain.

Micron currently evaluates new memory technology by the parameters of data retention, bit density, endurance, power per bit, and manufacturability (see chart). Each of the potential new memory technologies, such as FeRAM, MRAM, and molecular switches, has associated risks with these attributes that can only be determined through costly analysis. Academic research can help guide that analysis to a point, but often focus on non-critical parameters that are not important for commercial development. According to Smythe, “Did they (academic researchers) test for the really hard things, or did they test for the easy things in order to get published.”

Micron Emerging Memory Strategy

The challenge for Micron and other manufacturers is aligning research and development priorities around the complexities of new materials evaluation. The rapid expansion of elements used in semiconductor manufacturing over the past decade—commonly illustrated with a color coded periodic elements table — only begins to illustrate the complexities involved. Each new element reflects a new molecular set. Tellurium, for example, is found in a variety of applications, including organotellurium compounds such as dimethyl telluride, diethyl telluride, diisopropyl telluride, diallyl telluride and methyl allyl telluride are used as precursors for metalorganic vapor phase epitaxy growth. Each new molecule has unique characteristics that can drive materials/chemistry related issues. According to Smythe, a key differentiating factor is generally the choice of subtractive versus damascene patterning pathway.

To illustrate the complex landscape of materials research today, Smythe discussed the challenges of a number of the most promising materials sets in memory technology today, including:

  • Electrolyte CBRAM: Ag-doped GeX, Cu-GeSe, CuTe;
  • Mixed Valence Oxide: CMOx, Pt/PrCaMnO;
  • Stackable PCM with OTS selector;
  • “Simple” HfOx, and
  • STT-RAM: dry etch and clean pathways.

In addition to front-end materials, new memory cell solutions present novel packaging issues, especially with advanced packaging concepts leading to the question, “die to what?” Thermal and stress management issues will become more critical in the future; chip density and performance needs may drive the development of nano composites; anisotropic character tuning may become critical.

Collaboration Models Stressed, Debated
Within this landscape of exploding materials and device complexity, traditional collaboration models between device makers, tool suppliers and materials suppliers are undergoing rapid evolution. In a lively panel discussion on the hot issue, Smythe was joined by representatives from IBM, Applied Materials and Air Liquide to debate the means, mechanisms and requirements for orderly development of next-generation processes.

Jean-Marc Girard, PhD. and CTO of Air Liquide Electronics, began the discussion outlining his view of the requirements for effective collaboration in this new era. He pointed out that device makers need new films and processes on time for their roadmap, as well as a reliable and cost-effective material supply chain before ramp up. They also need fast screening capabilities (synthesis and films) and an understanding of the process CoO anticipation for new molecules already in the R&D stage. But if a precursor is not already available as feedstock, or if it cannot be extracted from a non-isolated intermediate, then a complex investment decision is required to synthesize a new material, with associated equipment-related process dependencies.

How this risk profile is understood and evaluated is increasingly complex as the success rate for new CVD/ALD materials is very low. Complicating the risk assessment is IP protection. Innovations in chemistry are at the core of new process development and IP positions today are increasingly held across the supply chain.

Girard wants to see “a clear collaboration framework in which IP ownership and IP rights are negotiated in advance.” The system should be “virtuous,” favoring disclosure over secrecy with tracking of IP throughout the development process and fair IP recognition and evaluation. Smythe, however, illustrated the difficulty in IP valuation, noting that “Relative Value” should be based on “what can be defined by the fractional content of the end product that results from implementation.” In memory, the silicon portion of the technology is generally more than 400 value-added steps, involving design, product, test, packaging, and more, each with additional degrees of freedom. There is a significant challenge to identify the fractional benefit given the significant infrastructure and relative degree of risk, according to Smythe, and “models with percent of revenue just don’t make sense.” He makes a case for “cooperative development,” where feedback can be assigned increasing equivalent value as the level of detail is increased.

Dr. David Thompson, technology manager for process chemistry at Applied Materials, also emphasized relativity, preferring to focus on the “big problems” and the significant contributions to cost reductions in dollars per wafer pass and cost of ownership. He sees the need for a new role for “process chemists” to bridge the gap between process engineers and synthetic chemists. He also sees a greater need for coupon evaluations to focus resources on full-scale production while increasing the probability of success by evaluating more options earlier. While Thompson emphasizes the need for clear “ground rules and scope” of collaborations, he reinforced the need for “trust.”

Dr. Dale C. McHerron, project manager for process research and strategy at IBM, also summarized the necessity for R&D collaboration. Early and deep collaboration on process, materials and equipment directions are essential to align development roadmaps earlier in the technology development cycle. Advanced technology development must leverage expertise of process equipment and materials suppliers to gain broader perspective on process R&D activities and enable efficient, collaborative R&D projects across the supply chain. But McHerron recognizes that three-way collaborations, while essential, are extremely difficult to arrange and manage. The framework that IBM utilizes, in conjunction with The College of Nanoscale Science and Engineering (CNSE) of the University at Albany, focuses on three levels of collaborations: 1) Joint development projects based on rigorous contractual agreements on IP, cost and return; 2) Beta evaluations with “limited exchange” contractual agreements; and 3) Demos based on “black box” CDAs.

With the exponential growth of new materials in advanced ICs, the complexity of joint collaborations in new process development is rapidly escalating, challenging all players in the supply chain. Other presentations at SMC from academia, other industry sectors, and from adjacent industries such as PV, LED and OLEDs, reinforced the expectation that materials-driven complexity and new collaboration models will be increasing. Key players in the industry recognize the need for rigorous contractual agreements to protect IP and assure fair return, but seem to understand the need for trust, flexibility and shared commitment to industry progress—factors not easily assimilated into legally-binding contracts.

The CGMG holds and sponsors a number of meeting events during the course of the year, including materials sessions at various SEMICON exhibitions and the Strategic Materials Conference. For more information, click here or e-mail: cgmg@semi.org

—Tom Morrow is the executive vice president for emerging markets at SEMI.

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

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