SAN JOSE, CALIF. The semiconductor packaging equipment market dropped by 56 percent in 2001, according a report from Gartner Dataquest, making it the worst annual contraction in the industry's history. The revenue in 2001 was $2.98 billion.
The list of top 10 packaging equipment suppliers was still topped by Kulicke & Soffa, even though its revenue dropped by 71 percent from $610 million in 2000 to $179 million in 2001. Approaching the top spot was Tokyo Seimitsu, which finished in a virtual dead heat with K&S at $178 million, compared to $450 million in 2000. Tokyo Seimitsu, a diversified supplier of inspection, probing, dicing, and backgrinding equipment, still dropped by 61 percent. The figures for 2002, presumably a less anomalous year, should be a more solid indication of whether or not K&S is in danger of losing the top spot.
Nearly all of the top 10 equipment suppliers lost market share in 2001. For example, K&S dropped from 9 percent to 6 percent, Tokyo Seimitsu dropped from 6.7 to 6.0 percent, and ASM Pacific, number three on the list, dropped from 6.3 to 4.5 percent.
The market share loss from the largest suppliers indicate that equipment purchases that merely increase capacity were affected more than the “technology buys” in 2001, because the larger companies tend to be the source of the large quantities of equipment that fill up the factories. The smaller companies tend to supply a relatively larger fraction of new or specialty kinds of tools. For example, wire bonder revenue decreased by more than 70 percent, while packaging lithography equipment revenue dropped by only about 1 percent. The advanced equipment that is part of developing new technology rather than duplicating existing processes fared much better.
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The Gartner Dataquest data also noted the uniformity of the contraction. With only one exception among the top 10, the drop in revenue ranged from 54 percent (Advantest) to 74 percent (ESEC), indicating that the problems in the industry were unusually pervasive. The lone exception was the BE Semiconductor Fico division, which had a relatively good year, losing 30 percent of its revenue compared to 2000; this allowed the market share of the Dutch manufacturer of molding and trim-and-form equipment to increase from 2.1 to 3.3 percent.
Looking forward, Jim Walker, principal analyst at Gartner Dataquest, said “We believe that growth will return in the second half of 2002, but not enough to bring about a positive growth rate for the year.”
Walker noted that the upcoming demand for advanced packaging equipment such as flip chip bonders, wafer bumping equipment and solder deposition tools will drive growth in 2003.