July 10, 2012 — Michael A. Fury, Ph.D., reports from the pre-opening day (July 9) of SEMICON West at the Moscone Center in San Francisco, CA. The first day hosts SEMI’s press conference on semiconductor revenues and the SEMI/Gartner Market Symposium.

The day before the official opening of SEMICON West 2012 started as always with the SEMI press conference. Semiconductor revenue forecasts for 2012 range from 0.4% to 8.6% growth for the next 6 months, thus providing support for the scenario of your choice. The equipment forecast for 2012 is $42.4B, down 2.6% from 2011; 2013 is forecast to be back up to $46.7B. The current rank order for equipment spending by region is S. Korea, Taiwan, US, Japan, Europe, China and ROW. Fab and packaging materials are forecast to be $49.3B for 2012, up 2.9% over 2011 with another 4.1% growth expected for 2013. Since 2009, spending on packaging materials has been within 6% of the spending on fab materials. SEMI states that the 450mm transition will occur, with R&D cost estimates varying widely from $8B to $40B, depending on how efficiently the conversion is executed. Advance registration for this 42^nd SEMICON West of over 31,000 attendees is up slightly over 2011.

The remainder of the day was devoted to the SEMI/Gartner Market Symposium, another annual event that provides some high level insight into who is doing what to whom, and why, and at what cost in the realm of electronics manufacturing. Intel’s Senior Fellow Mark Bohr provided his perspectives on what is needed to maintain silicon technology leadership for the mobility era. Trigate FinFET devices are fully depleted, providing a steeper sub-threshold slope of ~70mV/decade compared to ~100mV/decade for the best planar devices. A family of devices is being based on the tri-gate concept, with single fins for low-power or low-performance applications and up to six fins in a single device for high-performance needs. The 22nm tri-gate operates 37% faster and 0.2V lower than the previous 32nm planar technology. Interconnects for 22nm range in pitch from 80nm to 360nm for M1-M8, with top metal M9 at 14µm. The 80nm pitch is used repeatedly as it is the tightest pitch that can be manufactured with single step patterning. The 22nm Ivy Bridge processor comprises 4 cores with integrated graphics and houses 1.4 billion transistors in 16mm². As to the oft-foretold end of Moore’s Law, Intel presently has teams working on 10nm and 7nm technologies, so the researchers in Hillsboro have not drunk the Kool-Aid of doubt.

Figure 1. Intel transistors.

Bob Johnson, Gartner’s VP of Semiconductor Manufacturing, continued the theme with an overview of semiconductor equipment investment for a mobile world. The market driver assumptions include 2012 growth rates of 4.9% for PCs, 6.5% for mobile phones, 7.6% for NAND, and a whopping 78% for media tablets. Over the next several years, 76% of the industry growth will be driven by solid state drives, media tablets, smart phones and mobile PCs. The 2016 projection of 1.4B smart phones per year is the equivalent of 1/7 of the world population, truly a staggering number. The top 5 fab capital spenders now account for 64% of the total industry spending on equipment; the top 10 extend that to only 76%. The current 5-year CAGR for capital spending is 0.6%. NAND spending surpassed DRAM in 2011, and will continue to lead for the foreseeable future. Allocation of industry R&D funding for 450mm is expected to be 50% in 2013 and 75% by 2016.

Figure 2. Gartner’s forecast for mobile semiconductors.

Dan Tracy of SEMI’s industry research & statistics program provided their mid-year update on the equipment and materials outlook. The equipment highlights were cited above. Silicon wafer shipments for 2013 are forecast to be up 7%, with all other sizes flat or declining. Photoresist for 193nm makes up ~45% of the total market, and is expected to grow 10.3% in 2013 to $610M. On a 2011 $24.2B base, wafer fab materials overall are projected to grow 3.4% in 2012 and 5.0% in 2013. The lead news (pun shamelessly intended) for packaging materials is the shift from gold to copper for wire bonding. Volumes are increasing even as revenue declines, reflecting the lower cost of copper. On a 2011 $23.6B base, packaging materials are forecast to grow 2.4% in 2012 and 3.2% in 2013. Another hot area is underfill materials, with a current $220M market expected to grow to $300M by 2015. TSV is a ~$7M materials market today, but is expected to grow dramatically to $450M by 2016, about half of which will be for the temporary bonding adhesives needed for wafer handling.

Figure 3. SEMI’s wafer fab materials forecast.

Ken Dulaney, VP & Distinguished Analyst at Gartner, continued the mobile device theme with perspectives on pocket power: mobile devices migrating to hand held size. At the other extreme, picture the replacement of conference room white boards with 80” touch screens. Several major airlines have placed two tablet computers in every cockpit to replace about 40 pounds of mandated safety procedure documentation. Android has risen rapidly to dominance in mobile operating systems, with the Windows phone system the only credible threat on the horizon. Unlike Apple, Microsoft and Intel, Google continues to resist engaging in TV advertising to build brand identification with Android and customer loyalty, and thus may have an Achilles heel. Apple mobile products represent 9% of the volume but 75% of the profits. Corporate users are driving their IT departments toward replacing Blackberry with iPhone, but this requires an ‘Apple-way or the highway’ commitment for the corporate enterprise system. Enterprise clients are expected to largely skip Windows 8 because the conversion to Win7 was so recent, many custom applications are still being ported to Win7, and Windows 9 is already anticipated for 2014.

Figure 4. Gartner’s forecast for mobile OS.

Christian Dieseldorff of SEMI’s market research program brought us up to date on the world fab forecast for 2012-2013 and the near-term trends for fab spending and capacity. Fabs that are increasing capital spending in 2012 are Intel, Samsung, TSMC, Hynix and UMC. Despite hard economic times, Japan continues to host the greatest number of fabs in the world, and will remain in the lead through 2017. However, only Taiwan and China are expected to have a significant increase in the number of fabs over this period, with other regions closing fabs. In 2000, the top 5 IDMs accounted for 12% of the global installed capacity, excluding discretes; in 2013, they will be 54%. In contrast, the top 4 foundries moved from 43% to 57% over the same period.

Figure 5. SEMI’s fab equipment spending predictions.

Figure 6. SEMI’s capacity trends data.

Samuel Wang, Research Director at Gartner, concluded the event with a presentation on the implications of mobile device proliferation for foundries. Foundry revenue will grow 9.9% in 2012 to $32.7B, fueled in part by a tight supply of 40nm and a shortage of 28nm devices. And yet, 40nm is already expected to peak and begin its decline in 2013. In effect, looking forward, 28nm and 20nm have become mainstream, displacing 32nm and 40nm. In the next 5 years, 70% of the foundry revenue growth will be attributable to mobile devices. The combination of device sales projections and wafer production carries the implication that 300mm wafers are being produced with an average defect density of 0.15/in². The large die size for leading 32/28nm mobile processors is a significant contributor to the current ship shortage in these technologies; smaller chips yield better. Given their manufacturing maturity, historic precedence says that these should be operating at a defect density of 0.10/in².

Figure 7. Gartner’s estimation of revenue by nodes.

Michael A. Fury is a contributing blogger for Solid State Technology and director and senior technology analyst, Techcet Group.

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