Category Archives: Lithography

A ride on the business cycle


February 19, 2019

By Walt Custer

Global growth slows in fourth quarter

World electronic industry growth moderated (or contracted) in many sectors in late 2018.  Compare Chart 1 (3Q’18 vs.3Q’17) to Chart 2 (4Q’18 vs.4Q’17). The length and color of the bars tell the story. The semiconductor industry felt more of a fourth-quarter slowdown than the end markets.  Semiconductor-related products are typically much more volatile than the electronic equipment markets they serve.

In the third quarter of 2018 SEMI equipment shipments were up 10.6 percent and semiconductors grew 15.2 percent compared to the same quarter in 2017. By comparison, in 4Q’18 SEMI capital equipment shipments declined 1.6 percent and semiconductor shipments rose only 0.6 percent. For the month of December 2018 alone the results were even more sobering – SEMI equipment down 8.9 percent and semiconductors down 9.1 percent.

Such are the business cycles in the global electronics industry!

Electronic equipment, semiconductors and SEMI equipment – Historical growth comparisons

Chart 3 compares the quarterly growth of “end market” equipment to semiconductors and SEMI capital equipment for 2013 through 2018. Notice the much higher volatility of SEMI equipment in the peaks and troughs of the business cycle.

Leading indicators

Predicting the future performance of our very volatile electronics business cycle is an important challenge. Taiwan wafer fab sales and Purchasing Manager Indices are two useful tools.

Wafer foundries

Chart 4 compares the composite monthly sales of 14 Taiwan-listed wafer fabs to global semiconductor sales. The foundry composite predicts a further decline in chip sales short term.  Taiwan-listed companies report their monthly revenues about 10 days after month-close, so they can be a very timely indicator of industry performance.

Chart 5 compares the 3/12 growth of these wafer foundries to global semiconductor and SEMI equipment shipments. The data point to further slowing ahead.

This leading indicator methodology can be useful in forecasting individual company sales. For details contact [email protected].

Walt Custer of Custer Consulting Group is an analyst focused on the global electronics industry.

Source: SEMI Blog

IC Insights recently released its new Global Wafer Capacity 2019-2023 report that provides in-depth detail, analyses, and forecasts for IC industry capacity by wafer size, process geometry, region, and product type through 2023.  Figure 1 shows the world’s installed monthly wafer production capacity by geographic region (or country) as of December 2018.  Each number represents the total installed monthly capacity of fabs located in that region regardless of the headquarters location of the company that own the fab(s).  For example, the wafer capacity that South Korea-based Samsung has installed in the U.S. is counted in the North America capacity total, not in the South Korea capacity total.  The ROW “region” consists primarily of Singapore, Israel, and Malaysia, but also includes countries/regions such as Russia, Belarus, and Australia.

Figure 1

As shown, Taiwan led all regions/countries in wafer capacity with 21.8% share, a slight increase from 21.3% in 2017 (Taiwan first became the global wafer capacity leader in 2015.)  Taiwan’s capacity share was only slightly ahead of South Korea, which accounted for 21.3% of global wafer capacity in 2018, according to the Global Wafer Capacity 2019-2023 report.  TSMC in Taiwan and Samsung and SK Hynix in South Korea accounted for the vast share of wafer fab capacity in each country and were the top three capacity leaders worldwide. TSMC held 67% of Taiwan’s capacity while Samsung and SK Hynix represented 94% of the installed IC wafer capacity in South Korea at the end of 2018.

Japan remained firmly in third place with just over 16.8% of global wafer fab capacity.  Micron’s purchase of Elpida several years ago and other recent major changes in manufacturing strategies of companies in Japan, including Panasonic spinning off some of its fabs into separate companies, means that the top two companies (Toshiba Memory and Renesas) accounted for 62% of that country’s wafer fab capacity.

China showed the largest increase in global wafer capacity share in 2018, rising 1.7 percentage points from a 10.8% share in 2017 to a 12.5% share in 2018.  It nearly tied North America as the fourth-largest country/region with installed capacity.  A lot of buzz circulated about China-based startups and their new wafer fabs during 2018. Meanwhile, other global companies expanded their manufacturing presence in China last year so it would be expected that the country’s capacity share would show a significant increase.  China’s percentage gain came mostly at the expense of ROW and North America.  The share of capacity in the ROW region slipped 0.8 percentage points from 9.5% in 2017 to 8.7% in 2018. North America’s share of capacity declined 0.4 percentage points in 2018.

Silicon Catalyst, the world’s only incubator focused exclusively on accelerating solutions in silicon, today announced Soitec (Euronext Paris), a designer and manufacturer of semiconductor materials, as its first European Strategic Partner. This agreement provides Soitec access to early-stage silicon technology innovation targeting consumer, IoT and automotive segments and applications.

Silicon Catalyst is a Silicon Valley-based incubator providing silicon-focused start-ups access to a world-class network of advisors, design tools, silicon devices, networking, access to funding and marketing acumen needed to successfully launch their businesses. Soitec will engage in this start-up ecosystem to gain insight into the newest technologies and applications across high-growth markets, and to guide nascent technologies to successful market penetration.

“As a Strategic Partner of Silicon Catalyst, Soitec has a unique opportunity to grow our visibility among early-stage semiconductor companies,” said Thomas Piliszczuk, Executive VP of Global Strategy for Soitec. “Engineered substrates give semiconductor related start-ups a competitive edge in developing new high-performance, energy-efficient solutions. We are looking forward to supporting emerging trends and technology advancements with Silicon Catalyst’s distinguished portfolio of semiconductor entrepreneurs.”

“We are pleased to welcome Soitec as our first European Strategic Partner. Soitec is creating technical advances that are enabling the next generation of products across many market segments. Their SOI technology is a key ingredient to meet the diverse challenges for breakthrough differentiated semiconductor products, combining ultra-low power with excellent analog / mixed-signal performance,” stated Pete Rodriguez, CEO of Silicon Catalyst. “Joining our other Strategic Partners, Texas Instruments and ON Semiconductor, Soitec will participate in the selection of applicants to our incubator and provide guidance for our Portfolio Companies, contributing to the growth of startups that are creating the next generations of semiconductor innovation.”

Soitec’s substrate solutions, most notably silicon-on-insulator (SOI), address the full range of applications for electronics. SOI substrates are designed to support ultra-low power signal processing, wireless connectivity, power, image sensors and silicon photonics applications. Radio-frequency silicon-on-insulator (RF-SOI) substrates are the foundation of the RF incumbent technology for RF Front-End modules used in all smart phones manufactured today. RF-SOI and fully depleted SOI (FD-SOI) material enable ultra-low power connectivity, mobility, distributed AI and edge computing. Adding our new compound and piezo-electric on insulator substrates, Soitec offers a wide range of engineered substrates addressing numerous and fast growing segments like automotive, AI-IoT (AIoT) and 5G.

Global electronics manufacturing pillars Smart manufacturing, IoT and workforce development will come into sharp focus at SEMICON Southeast Asia (SEA) 2019, scheduled May 7-9, at the Malaysia International Trade and Exhibition Centre (MITEC) in Kuala Lumpur. Industry experts from around the world will gather at the region’s premiere global electronics manufacturing supply chain for critical insights into the semiconductor ecosystem, new business opportunities and collaboration. SEMICON SEA 2019 registration is now open.

Themed “Think Smart, Make Smart,” SEMICON SEA will feature three themed pavilions, five global pavilions, insightful keynote presentations and a host of technology forums to address key issues in the electronics manufacturing supply chain.

The new Workforce Pavilion addresses the critical industry shortage of skilled workers by attracting the young talent critical to sustaining industry innovation and growth. College students will meet with industry experts to explore career paths in microelectronics as tutorials enhance university students’ understanding of semiconductor manufacturing and opportunities.

The World of IoT Pavilion showcases applications and technologies enabling the IoT revolution. Companies from across the region will demonstrate technologies that enable Smart lifestyles as start-ups showcase pioneering and disruptive products and applications powered by IoT.

At the Smart Manufacturing Pavilion, the Artificial Intelligence exhibition zone highlights critical capabilities including collaborative robots, automated guided vehicles, cybersecurity and manufacturing excellence systems. The Pavilion’s Supply Chain Management zone provides insights into key elements of manufacturing excellence such as automated material handling and automated storage and retrieval. The Pavilion also features an augmented reality (AR) interactive human-machine interface to give visitors an immersive experience in smarter manufacturing processes.

SEMICON SEA 2019 will also feature an exclusive Hosted Buyer Programme. Hosted by SEMI, the customised business matching platform connects buyers in the electronics manufacturing supply chain with international solution providers for collaboration and business opportunities.

SEMICON Southeast Asia 2019 sponsors include ADLINK, Applied Materials, Cimetrix®, Evatec, GLOBALFOUNDRIES, Kanken Techno Co Ltd, Kulicke & Soffa, First Derivatives, Lam Research, Tokyo Electron and UPS.

For more information about SEMICON SEA is available on the event website.

Maryam Cope joins SIA

The Semiconductor Industry Association (SIA) announced Maryam Cope has joined the association as government affairs director. In this role, Cope will help advance the U.S. semiconductor industry’s key legislative and regulatory priorities related to semiconductor research and technology, high-skilled immigration, and product security, among others. She also will serve as a senior representative of the industry before Congress, the White House, and federal agencies.

“The U.S. semiconductor industry is at the heart of the technologies driving America’s economic strength, national security, and global technology leadership,” said John Neuffer, SIA president and CEO. “Maryam Cope’s impressive skills and extensive experience in the tech policy arena make her an ideal advocate for semiconductor industry priorities in Washington. We’re excited to welcome her to the SIA team and look forward to her help advancing initiatives that promote growth and innovation in our industry and strengthen the U.S. economy.”

Cope most recently served as managing partner of GoldsteinCope Policy Solutions, a public policy consulting firm focused on technology issues. Prior to that role, she led the creation of a tech-policy practice at the American Hotel and Lodging Association, positioning the industry as a leading voice on tech policy related to consumer issues. Cope also served as director of government affairs at the Information Technology Industry Council, helping to guide the association’s advocacy efforts on cybersecurity, encryption, and supply chain security.

Cope began her career on the staff of Sen. Kay Bailey Hutchison (R-Texas) and later served as professional staff on the U.S. Senate Committee on Commerce, Science, and Transportation, serving a key role in drafting science, innovation, and cybersecurity legislation. She holds a bachelor’s degree in biology from Northwestern University and a graduate certificate from Stanford’s Graduate School of Business Executive Program for Women Leaders.

Noting the startling advances in semiconductor technology, Intel co-founder Gordon Moore proposed that the number of transistors on a chip will double each year, an observation that has been born out since he made the claim in 1965. Still, it’s unlikely Moore could have foreseen the extent of the electronics revolution currently underway.

Today, a new breed of devices, bearing unique properties, is being developed. As ultra-miniaturization continues apace, researchers have begun to explore the intersection of physical and chemical properties occurring at the molecular scale.

Advances in this fast-paced domain could improve devices for data storage and information processing and aid in the development of molecular switches, among other innovations.

Nongjian “NJ” Tao and his collaborators recently described a series of studies into electrical conductance through single molecules. Creating electronics at this infinitesimal scale presents many challenges. In the world of the ultra-tiny, the peculiar properties of the quantum world hold sway. Here, electrons flowing as current behave like waves and are subject to a phenomenon known as quantum interference. The ability to manipulate this quantum phenomenon could help open the door to new nanoelectronic devices with unusual properties.

“We are interested in not only measuring quantum phenomena in single molecules, but also controlling them. This allows us to understand the basic charge transport in molecular systems and study new device functions,” Tao says.

Tao is the director of the Biodesign Center for Bioelectronics and Biosensors. In research appearing in the journal Nature Materials, Tao and colleagues from Japan, China and the UK outline experiments in which a single organic molecule is suspended between a pair of electrodes as a current is passed through the tiny structure.

The researchers explore the charge transport properties through the molecules. They demonstrated that a ghostly wavelike property of electrons–known as quantum interference– can be precisely modulated in two different configurations of the molecule, known as Para and Meta.

It turns out that quantum interference effects can cause substantial variation in the conductance properties of molecule-scale devices. By controlling the quantum interference, the group showed that electrical conductance of a single molecule can be fine-tuned over two orders of magnitude. Precisely and continuously controlling quantum interference is seen as a key ingredient in the future development of wide-ranging molecular-scale electronics, operating at high speed and low power.

Such single-molecule devices could potentially act as transistors, wires, rectifiers, switches or logic gates and may find their way into futuristic applications including superconducting quantum interference devices (SQUID), quantum cryptography, and quantum computing.

For the current study, the molecules–ring-shaped hydrocarbons that can appear in different configurations–were used, as they are among the simplest and most versatile candidates for modeling the behavior of molecular electronics and are ideal for observing quantum interference effects at the nanoscale.

In order to probe the way charge moves through a single molecule, so-called break junction measurements were made. The tests involve the use of a scanning tunneling microscope or STM. The molecule under study is poised between a gold substrate and gold tip of the STM device. The tip of the STM is repeatedly brought in and out of contact with the molecule, breaking and reforming the junction while the current passes through each terminal.

Thousands of conductance versus distance traces were recorded, with the particular molecular properties of the two molecules used for the experiments altering the electron flow through the junction. Molecules in the ‘Para’ configuration showed higher conductance values than molecules of the ‘Meta’ form, indicating constructive vs destructive quantum interference in the molecules.

Using a technique known as electrochemical gating, the researchers were able to continuously control the conductance over two orders of magnitude. In the past, altering quantum interference properties required modifications to the charge-carrying molecule used for the device. The current study marks the first occasion of conductance regulation in a single molecule.

As the authors note, conductance at the molecular scale is sensitively affected by quantum interference involving the electron orbitals of the molecule. Specifically, interference between the highest occupied molecular orbital or HOMO and lowest unoccupied molecular orbital or LUMO appears to be the dominant determinant of conductance in single molecules. Using an electrochemical gate voltage, quantum interference in the molecules could be delicately tuned.

The researchers were able to demonstrate good agreement between theoretical calculations and experimental results, indicating that the HOMO and LUMO contributions to the conductance were additive for Para molecules, resulting in constructive interference, and subtractive for Meta, leading to destructive interference, much as waves in water can combine to form a larger wave or cancel one another out, depending on their phase.

While previous theoretical calculations of charge transport through single molecules had been carried out, experimental verification has had to wait for a number of advances in nanotechnology, scanning probe microscopy, and methods to form electrically functional connections of molecules to metal surfaces. Now, with the ability to subtly alter conductance through the manipulation of quantum interference, the field of molecular electronics is open to a broad range of innovations.

Critical subsystems for the IC equipment market continued to grow to a new record of $11 billion in 2018. While 2019 is expected to be a downturn year, the long-term outlook remains unchanged with an average growth rate of 3 percent.

Last year may have been a new high for revenues, but it will be remembered as a year of two parts: record quarterly revenues in Q1, followed by rapidly falling orders in Q3 and Q4. Normally, this would not be a problem as suppliers are used to managing volatility in their businesses. However, encouraged by solid end market drivers and optimistic customers, the timing of this downturn was particularly bad as it coincided with the addition of significant new manufacturing capacity for critical subsystems that will be needed to supply the industry into the next decade. The resulting step change in costs against the backdrop of falling revenues has put strain on the financials of these suppliers. Although current visibility is poor, the order decline appears to be stabilising and the worst is nearly over. Revenues are expected to recover in the second half of 2019 followed by a promising outlook for the following three years.

Critical Subsystems for IC equipment history and forecast to 2022. After a pause in 2019, the trend is expected to continue to reach new industry records.

Suppliers of subsystems used in vacuum process tools, such as deposition and etch, have benefited the most from critical subsystems growth since 2012. Vacuum intensity of semiconductor processing continues to grow and in 2018 the value of vacuum process tools exceeded the value of non-vacuum process tools for the first time. This trend is expected to continue with vacuum based semiconductor process equipment accounting for over 60 percent of wafer fab equipment revenues by 2023.

In summary, 2019 is expected to be down 10 percent to 20 percent as the industry digests the recent large additions to semiconductor manufacturing capacity, followed by a new cycle starting in 2020.

Julian West is a technical and marketing analyst at VLSI Research Europe.

Source: SEMI Blog

China has been the largest consuming country for ICs since 2005, but large increases in IC production within China have not immediately followed, according to data presented in the new 500-page 2019 edition of IC Insights’ McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry (released in January 2019).  As shown in Figure 1, IC production in China represented 15.3% of its $155 billion IC market in 2018, up from 12.6% five years earlier in 2013.  Moreover, IC Insights forecasts that this share will increase by 5.2 percentage points from 2018 to 20.5% in 2023.

Figure 1

Currently, China-based IC production is forecast to exhibit a very strong 2018-2023 CAGR of 15%.  However, considering that China-based IC production was only $23.8 billion in 2018, this growth is starting from a relatively small base.  In 2018, SK Hynix, Samsung, Intel, and TSMC were the major foreign IC manufacturers that had significant IC production in China.  In fact, SK Hynix’s 300mm China fab had the most installed capacity of any of its fabs in 2018 at 200,000 wafers per month (full capacity).

Intel’s 300mm fab in Dalian, China (Fab 68 that started MCU production in late October 2010), was idled in 3Q15 as the company switched the fab to 3D NAND flash manufacturing.  This conversion was completed in late 2Q16.  Intel’s China fab had an installed capacity of 70,000 300mm wafers per month in December of 2018 (full capacity).

In early 2012, Samsung gained approval from the South Korean government to construct a 300mm IC fabrication facility to produce NAND flash memory in in Xian, China.  Samsung started construction of the fab in September of 2012 and production began in 2Q14.  The company invested $2.3 billion in the first phase of the fab with $7.0 billion budgeted in total.  This facility was the primary fab for 3D NAND production for Samsung in 2017 with an installed capacity of 100,000 wafers per month as of December 2018 (the company plans to expand this facility to 200,000 wafers per month).

Significant increases in IC sales over the next five years are also expected from existing indigenous Chinese companies including pure-play foundries SMIC and Huahong Group and memory startups YMTC and ChangXin Memory Technologies (CXMT, formerly Innotron). DRAM startup JHICC is currently on hold pending the sanctions imposed on the company by the U.S.  Moreover, there are likely to be new companies looking to establish IC production in China like Taiwan-based Foxconn, which announced in December of 2018 that it intended to build a $9.0 billion fab in China to offer foundry services as well as produce TV chipsets and image sensors.

If China-based IC production rises to $47.0 billion in 2023 as IC Insights forecasts, it would still represent only 8.2% of the total forecasted 2023 worldwide IC market of $571.4 billion.  Even after adding a significant “markup” to some of the Chinese producers’ IC sales figures (since many of the Chinese IC producers are foundries that sell their ICs to companies that re-sell these products to the electronic system producers), China-based IC production would still likely represent only about 10% of the global IC market in 2023.

Even with new IC production being established by China-based startups such as YMTC and CXMT, IC Insights believes that foreign companies will continue to be a large part of the IC production base in China.  As a result, IC Insights forecasts that at least 50% of IC production in China in 2023 will come from foreign companies with fabs in China such as SK Hynix, Samsung, Intel, TSMC, UMC, GlobalFoundries, and Foxconn.

Given the sheer size of China’s investment plans over the next five years, it is likely that China will achieve some level of success with their strategy to become less reliant on IC imports.  However, given increased government scrutiny of Chinese attempts at purchasing foreign technology companies and the legal challenges that the Chinese startups are likely to face in the future, IC Insights believes that China’s current strategy with regard to the IC industry will fall far short of the level of success that China’s government has targeted with its “Made in China 2025” plan (i.e., 40% self-sufficiency by 2020 and 70% by 2025).

Governor Andrew M. Cuomo today announced that IBM (NYSE: IBM), a long-time anchor tenant at the SUNY Polytechnic Institute campus in Albany, plans to invest over $2 billion to grow its high-tech footprint at the campus and throughout New York State. This includes the establishment of an “AI Hardware Center” at SUNY Poly for artificial intelligence-focused computer chip research, development, prototyping, testing and simulation. Once established, the AI Hardware Center will be the nucleus of a new ecosystem of research and commercial partners, and further solidify the Capital Region’s position as “Tech Valley” – a global hub for innovative research and development.

“New York has always been at the forefront of emerging industries, and this private sector investment to create a hub for artificial intelligence research will attract world-class minds and drive economic growth in the region,” Governor Cuomo said. “Artificial intelligence has the potential to transform how we live and how businesses operate, and this partnership with IBM will help ensure New York continues to be on the cutting edge developing innovative technologies.”

“This investment by IBM will continue to grow New York’s high-tech industry in the Capital Region and across the state,” said Lieutenant Governor Kathy Hochul. “The artificial intelligence hardware center will expand research and partnerships at SUNY Polytechnic Institute, and ensure Tech Valley attracts innovative business and development that drives economic development in the region.”

IBM’s expected $2 billion investment will be made at SUNY Poly and other IBM facilities in New York State. IBM plans to provide at least $30 million in cash and in-kind contributions for artificial intelligence research across the SUNY system, with SUNY matching up to $25 million for a combined total of $55 million. Empire State Development will provide a $300 million capital grant over five years, to the Research Foundation for SUNY to purchase, own and install tools necessary to support the AI Hardware Center.

IBM also plans to expand and extend its partnership with SUNY Poly for the Center for Semiconductor Research (CSR), which is set to expire at the end of 2021, through at least 2023, with an option to extend the CSR for an additional five years through 2028.

The AI Hardware Center will attract new AI industry companies and federal research to the state, while fostering economic development and working to create several hundred new jobs and retain hundreds of other existing jobs at the SUNY Poly campus and at IBM’s and its collaborators’ facilities.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced the global semiconductor industry posted sales of $468.8 billion in 2018, the industry’s highest-ever annual total and an increase of 13.7 percent compared to the 2017 total. Global sales for the month of December 2018 reached $38.2 billion, a slight increase of 0.6 percent over the December 2017 total, but down 7.0 percent compared to the total from November 2018. Fourth-quarter sales of $114.7 billion were 0.6 percent higher than the total from the fourth quarter of 2017, but 8.2 percent less than the third quarter of 2018. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Global demand for semiconductors reached a new high in 2018, with annual sales hitting a high-water mark and total units shipped topping 1 trillion for the first time,” said John Neuffer, SIA president and CEO. “Market growth slowed during the second half of 2018, but the long-term outlook remains strong. Semiconductors continue to make the world around us smarter and more connected, and a range of budding technologies – artificial intelligence, virtual reality, the Internet of Things, among many others – hold tremendous promise for future growth.”

Several semiconductor product segments stood out in 2018. Memory was the largest semiconductor category by sales with $158.0 billion in 2018, and the fastest growing, with sales increasing 27.4 percent. Within the memory category, sales of DRAM products increased 36.4 percent and sales of NAND flash products increased 14.8 percent. Logic ($109.3 billion) and micro-ICs ($67.2 billion) – a category that includes microprocessors – rounded out the top three product categories in terms of total sales. Other fast-growing product categories in 2018 included power transistors (14.4 percent growth/total sales of $14.4 billion) and analog products (10.8 percent growth/total sales of $58.8 billion). Even without sales of memory products, sales of all other products combined increased by nearly 8 percent in 2018.

Annual sales increased substantially across all regions: China (20.5 percent), the Americas (16.4 percent), Europe (12.1 percent), Japan (9.2 percent), and Asia Pacific/All Other (6.1 percent). For the month of December 2018, year-to-year sales increased in China (5.8 percent), Europe (2.8 percent), and Japan (2.3 percent), but fell in Asia Pacific/All Other (-0.7 percent) and the Americas (-6.2 percent). Sales in December 2018 were down compared to November 2018 across all regions: Japan (-2.2 percent), Asia Pacific/All Other (-3.1 percent), Europe (-4.9 percent), China (-8.1 percent), and the Americas (-12.4 percent).

“A strong semiconductor industry is critical to America’s economic strength, national security, and global technology leadership,” said Neuffer. “We urge Congress and the Trump Administration to enact polices in 2019 that promote continued growth and innovation, including robust investments for basic scientific research, long-overdue high-skilled immigration reforms, and initiatives that promote free and open trade, such as the U.S.-Mexico-Canada Agreement (USMCA). We look forward to working with policymakers in the year ahead to further strengthen the semiconductor industry, the broader tech sector, and our economy.”

For comprehensive monthly semiconductor sales data and detailed WSTS Forecasts, consider purchasing the WSTS Subscription Package. For detailed historical information about the global semiconductor industry and market, consider ordering the SIA Databook.