Finally! Solid Data For The Semiconductor Secondary Equipment Market
By Joanne Itow, Semico Research Analyst
The semiconductor industry grabs headlines as companies such as Intel announce the construction of multi-billion-dollar state-of-the-art research and manufacturing facilities. High performance servers, PCs and most of our electronic devices would not exist today if it weren’t for the continual advancements made in semiconductor manufacturing technology. While the most advanced chips supply the processing power and memory needed to provide the functionality and capabilities of our newest mobile devices and home electronics, they are surrounded and supported by dozens of other non-leading edge or mainstream semiconductor devices that play a crucial role in the electronics industry but don’t garner the same level of attention.
The vast majority of these mainstream semiconductors are actually manufactured on something less than leading edge technologies. Analog devices, sensors, microcontrollers, optoelectronics, discretes, MEMS and a number of other semiconductor products comprise the largest markets in terms of semiconductor units.
In order to address the increased demand for mature processing capacity, manufacturing facilities can expand in two ways. In some cases, factories can increase unit output with marginal productivity increases and yields. However, many of these factories have already maximized equipment productivity and process yields. Such factories require additional equipment to increase wafer output. In addition, some higher volume products are able to benefit from an increase in wafer size, transitioning from 100mm to 150mm, or from 150mm wafers to 200mm wafers, thus creating new demand, refurbishment, servicing and repurposing opportunities for 150mm and 200mm capacity.
SEMI, the industry association serving the equipment and material supply chains for the microelectronic, display and photovoltaic industries, established a SEMI Special Interest Group — Secondary Equipment, Services and Technology Group (SESTG). The SESTG special interest group provides a worldwide focus for the secondary market – OEMs, equipment refurbishers, resellers, users, and service providers.
As part of its mission, SEMI/SESTG joined with Semico Research Corp. to embark on a research study to provide ongoing data and analysis that defines the secondary equipment, services and technology markets. Semico Research Corp. is a marketing and consulting research company founded in 1994 by a group of semiconductor industry experts who have improved the validity of semiconductor product forecasts via technology roadmaps in end-use markets.
This study collected information from a wide variety of market players around the world, both large and small, from dealers to refurbishers to OEMs to IDMs. We embarked on this study knowing that the semiconductor secondary equipment market is complex and disaggregated. Needless to say, gathering and analyzing the data was challenging, however the results are interesting and are expected to play a dynamic and significant role for this market segment.
Complex, disaggregated markets are inefficient. Information is not consistently available causing duplication of effort, disparate pricing, variation in quality and often unsatisfactory experiences. This study attempts to shed some light on this multifaceted market. The report includes data on the size of the market, with breakouts by vendor type, regions and type of equipment. Reaching $6 billion, secondary equipment sales represent approximately 13% of total semiconductor equipment sales and increased over 77% in 2010 over 2009.
Although the semiconductor industry transitioned from 100mm wafers to 125mm wafers to 150mm wafers to 200mm wafers, the transition from 200mm to 300mm wafers marked the first time that a significant market for secondary equipment emerged. Brokers, dealers, refurbishers and other IDMs entered this market to take advantage of a need that this industry never experienced before. Currently the largest equipment vendors sell less than 50% of the secondary equipment. Interviews with IDMs revealed that most companies prefer to purchase equipment that is ready to install and yet the market is still supported by a variety of players in the supply chain.
In most cases, as markets mature, clear winners emerge, eliminating a number of inefficient players. That is not the case with the secondary equipment market, yet.
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