SEMICON West takeaways: Seasonality over cyclicality, lithography and test trends

July 16, 2012 — SEMICON West kicked off with a surprise announcement regarding Intel’s strategic investment into ASML, but generally the event highlighted trends “as expected” in the semiconductor manufacturing supply chain, say Barclays Capital analysts.

Most semiconductor production equipment makers are seeing an order/shipment pull-back in Q3. Rising capital intensity, chip manufacturing complexities, Intel’s march to 14nm, and foundry’s 20nm investments contribute toward Q4 and 2013 capex optimism. Barclays investigates this trend further in Q3 semiconductor tool capex pull-back: Seasonal, expect Q4 uptick

Seasonality is now indeed winning over cyclicality, with Q3 drifting into a lull as it did in 2011 and 2010. Consensus estimates clearly are going to move lower given the cautious tone and the expectations for a near term pause in order.

Barclays is maintaining its wafer fab equipment capex estimate for 2012 at $31.5 billion (flattish over 2011) and for 2013 at $31.5 billion to 34.5 billion (flat to +10% over 2012).

Barclays is also keeping its lithography tool forecast for 2012 intact: immersion lithography demand is holding up with the lack of extreme ultraviolet (EUV) availability. Expect KrF lithography spending to taper in H2 2012.

SOC test is also going to taper in H2, but still tracking to be about $2.6 billion capex in 2012.

The surprise 450mm/EUV lithography tie up between ASML and Intel made a splash at SEMICON West. According to Bloomberg, sources reported that Samsung Electronics Co., Ltd. and TSMC are in talks to acquire about 10% stake in ASML as well. Look for more analysis on blogger Dick James’ page, in The Elephant Has Left the Room — 450 mm is a Go!

Intel continues to be the main driver of 450mm adoption, which could benefit more than ASML (look for Edwards Vacuum to also support the 450mm transisiton at Intel sometime in the 2018/2019 timeframe).

Cymer continues to the leader within the group of lithography light-source contenders, with Extreme/Ushio still experiencing reliability issues with its IMEC source and Gigaphoton yet to assemble an integrated source, Barclays concludes.

Read the full report at http://live.barcap.com/PRC/servlets/dv.search?contentPubID=FC1838914&bcllink=decode

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