February 2, 2010 – Continuing with our running theme of industry outlooks for 2010 and beyond, here are three viewpoints recently expressed: Bill McClean from IC Insights with strong optimism macroeconomically all the way down to semiconductors; Terry Brewer from Brewer Science outlining the opportunities for materials suppliers; and Craig Ramsey from CyberOptics Semiconductor, relating how his company withstood a tough 2009 and what it’s doing to ensure 2010 growth.
For a view of 2010 rebound, look in the mirror says IC Insights
Speaking at IC Insights’ 2010 forecast seminar, president Bill McClean told the audience that 2010 will be a mirror image of 2009. However, the equipment suppliers are being squeezed — the capex cycles are so large with a 41% decline in capex in 2009, and now a 45% increase in capex expected in 2010, peak to trough, in two years (see figure), "the equipment guys are at the tail-end of the whip," observed McClean.
Projecting a 60% probability of occurrence, IC Insights sees the IC industry growth rate at between 10%-20%, with several assumptions: worldwide GDP growth between 3.2%-3.8%, a 90%-92% capacity utilization, a 12%-18% growth in IC unit volume shipments, a 6%-8% increase in worldwide electronic system sales, and a change in IC ASP ranging from -2% to +2%.
The industry rebound is unfolding amid stimulus plans being implemented worldwide. McClean pointed out that the bulk of worldwide stimulus packages — which total a little more than $2T — will actually be used in 2010 (55%) with 35% having been used in 2009 and 10% expected to be left over for use in 2011. "The stimulus isn’t running out — we’re just getting started," said McClean.
Specific changes to the supply base noted by McClean include the fab-lite movement gaining momentum, record low capex as a % of sales budgets, and delays in moving production to 450mm. The end result of these trends will be conservative foundry spending leading to a better pricing for the foundries, increased pricing power for IC manufacturers, and overall, long-term stable-to-increasing IC ASPs and IC market CAGRs of 8%-10%. — Debra Vogler, senior technical editor, Solid State Technology
A decade of new materials enabled by robust IP
by Terry Brewer, president/CEO, Brewer Science Inc., Rolla, MO USA
The large wheel of change, as opposed to the smaller wheels of shorter cycles, is turning. This change bodes well for materials in general, and energy-enabling materials in particular. The decade of new materials is upon us, and it will be the driver for the next generation of semiconductor products. The last 30 years have seen exponential increases in the complexity and use of materials in the electronics industry. Innovative hardmask and double pattern materials using immersion lithography, and other materials such as EUV and electron beam will begin the wave of the future to meet specifications in the logic and memory segments below 32nm.
The economic downturn this past year provided an opportunity for materials suppliers to deliver innovative solutions that benefit multiple markets in terms of cost reduction and greater efficiencies. For example, organic materials in support of the solar cell industry, as well as materials to enable advanced packaging, such as temporary and permanent bonding, offer material suppliers innumerable opportunities to develop unique market spaces. Dedicated investment in research and development must be continuous in order for the industry to design these new market spaces.
The US government will again become a major partner and customer in the creation of new products and market spaces. While we are still in a period of economic transition, governments across the globe will play a critical role in positioning nations for long-term growth and competitiveness. In the next decade, US leaders should foster an innovation economy to enable domestic companies to be globally competitive and allow them to protect valuable intellectual property.
A key element that contributes to a country’s global competitiveness is the robustness of its IP. The US must step up to strengthen and safeguard IP rights in the global economy — the domestic economy is driven by innovation and creativity, and nearly one-half of all exports are from IP-based industries. With more than $5 trillion of its GDP based upon IP, the US should be setting the gold standard for IP rights and protection. Much more can be done in the next few years to regain a competitive edge in this country and to send a clear message that the US will persist in its efforts to ensure the integrity of US IP.
Buckling down in the downturn — now buckle up for the rebound
by Craig C. Ramsey, general manager, CyberOptics Semiconductor Inc., Wilsonville, OR USA
The global recession was tough overall and particularly challenging for suppliers to this industry, including CyberOptics Semiconductor. As in previous down cycles, we maintained our technology development initiatives and increased the efficiency of our production systems. During 2009, we expanded our WaferSense product line by developing a sensor for airborne particles and software that reduces the end-user skills needed to solve vibration-related yield loss and downtime. We also consolidated our final assembly and test activities into our parent company’s ISO-9001 registered facility. Finally, we sampled 450mm wafer-like sensors to support the industry’s push for enhanced productivity in the next-generation fab through ISMI’s 450mm program.
Semiconductor technology improves the efficiency and quality of human life. Advancements in device capability and power efficiency coupled with ongoing reductions in economic and environmental cost underpin long-term increases in global prosperity. In 2010, the economy and our industry will be boosted by a variety of forces: continued innovation and growth among smartphone and netbook manufacturers; adoption of Windows 7; growth in the display market; investment in alternative energy; and adoption of hybrid vehicles. Our industry will leverage the recovering demand and embrace technologies that raise production and yield during a time of margin pressure, shrinking tolerances, and reduced infrastructure. Happy New Year, indeed!