Category Archives: Materials and Equipment

Fueled by heavy government investment, IC packaging and testing in China generated $29 billion in revenue in 2017, making China the world’s largest consumer of packaging equipment and materials, according to SEMI’s recent China Semiconductor Packaging Industry Outlook report. The report, based on research conducted between July 2017 through the end of January 2018, also revealed that China’s IC packaging and testing industry is more mature than its IC manufacturing and design sectors, though IC packaging and testing revenue growth has slowed in recent years.

SEMI surveyed 87 semiconductor packaging- and assembly-related companies for the research report, including key semiconductor packaging manufacturers in China. More than 100 companies compete in China’s packaging and assembly market, including leading multinational companies and emerging domestic players. More than half of China’s packaging companies are located in the Yangzi delta region, while midwestern China has emerged as a hotbed for packaging plants.

Additional report highlights:

  • Compared to other world regions, China’s investments in IC packaging and testing saw the fastest growth over the past decade, with domestic manufacturers securing strong support from both national and local governments to ramp capacity and technical capabilities.
  • The top three domestic packaging companies – JCET, Huatian, and TFME – all entered the top 10 global OSAT rankings following expansions and acquisitions from 2012 to early 2016.
  • Packaging companies such as SPIL, TFME, NCAP continue to build new plants.
  • As a major manufacturing region for LED products, China has become more prominent within the semiconductor packaging industry. China’s LED product sector grew to $13.4 billion (half of IC packaging) in 2017.
  • In 2017, China accounted for about 26 percent of the global packaging materials market, with China’s packaging materials revenue forecast to exceed $5.2 billion in 2018.
  • In 2017, the China assembly equipment market reached $1.4 billion in revenue, remaining the world’s largest with 37 percent share.
  • In 2017, assembly equipment manufactured in China (including assembly equipment made by foreign-owned companies and JVs) accounted for 17 percent of China’s assembly equipment market.
  • With the fast growth in the semiconductor packaging market, domestic packaging materials suppliers are expanding with the industry and now starting to serve leading international packaging houses.

The SEMI report also elucidates the importance of both central and local government support, guidelines and policies on China’s semiconductor industry. The National Fund and local IC funds, created in 2014, and the Made in China 2025 policy provided a second boost to China’s IC industry growth. For packaging and testing enterprises, maintaining strong communications and relations with relevant government bodies and industry associations is essential to securing both political and financial support, in part because China’s semiconductor manufacturers and IC assembly and packaging companies are expected to purchase equipment and materials made in China.

 

2D materials, which consist of a few layers of atoms, may well be the future of nanotechnology. They offer potential new applications and could be used in small, higher-performance and more energy-efficient devices. 2D materials were first discovered almost 15 years ago, but only a few dozen of them have been synthesized so far. Now, thanks to an approach developed by researchers from EPFL’s Theory and Simulation of Materials Laboratory (THEOS) and from NCCR-MARVEL for Computational Design and Discovey of Novel Materials, many more promising 2D materials may now be identified. Their work was recently published in the journal Nature Nanotechnology, and even got a mention on the cover page.

The first 2D material to be isolated was graphene, in 2004, earning the researchers who discovered it a Nobel Prize in 2010. This marked the start of a whole new era in electronics, as graphene is light, transparent and resilient and, above all, a good conductor of electricity. It paved the way to new applications in numerous fields such as photovoltaics and optoelectronics.

“To find other materials with similar properties, we focused on the feasibility of exfoliation,” explains Nicolas Mounet, a researcher in the THEOS lab and lead author of the study. “But instead of placing adhesive strips on graphite to see if the layers peeled off, like the Nobel Prize winners did, we used a digital method.”

More than 100,000 materials analyzed

The researchers developed an algorithm to review and carefully analyze the structure of more than 100,000 3D materials recorded in external databases. From this, they created a database of around 5,600 potential 2D materials, including more than 1,000 with particularly promising properties. In other words, they’ve created a treasure trove for nanotechnology experts.

To build their database, the researchers used a step-by-step process of elimination. First, they identified all of the materials that are made up of separate layers. “We then studied the chemistry of these materials in greater detail and calculated the energy that would be needed to separate the layers, focusing primarily on materials where interactions between atoms of different layers are weak, something known as Van der Waals bonding,” says Marco Gibertini, a researcher at THEOS and the second author of the study.

A plethora of 2D candidates

Of the 5,600 materials initially identified, the researchers singled out 1,800 structures that could potentially be exfoliated, including 1,036 that looked especially easy to exfoliate. This represents a considerable increase in the number of possible 2D materials known today. They then selected the 258 most promising materials, categorizing them according to their magnetic, electronic, mechanical, thermal and topological properties.

“Our study demonstrates that digital techniques can really boost discoveries of new materials,” says Nicola Marzari, the director of NCCR-MARVEL and a professor at THEOS. “In the past, chemists had to start from scratch and just keep trying different things, which required hours of lab work and a certain amount of luck. With our approach, we can avoid this long, frustrating process because we have a tool that can single out the materials that are worth studying further, allowing us to conduct more focused research.”

It is also possible to reproduce the researchers’ calculations thanks to their software AiiDA, which describes the calculation process for each material discovered in the form of workflows and stores the full provenance of each stage of the calculation. “Without AiiDA, it would have been very difficult to combine and process different types of data,” explains Giovanni Pizzi, a senior researcher at THEOS and co-author of the study. “Our workflows are available to the public, so anyone in the world can reproduce our calculations and apply them to any material to find out if it can be exfoliated.”

BY AJIT MANOCHA, President and CEO of SEMI

2017 was a terrific year for SEMI members. Chip revenues closed at nearly $440B, an impressive 22 percent year- over-year growth. The equipment industry surpassed revenue levels last reached in the year 2000. Semicon- ductor equipment posted sales of nearly $56B and semiconductor materials $48B in 2017. For semiconductor equipment, this was a giant 36 percent year-over-year growth. Samsung, alone, invested $26B in semiconductor CapEx in 2017 – an incredible single year spend in an incredible year.

MEMS and Sensors gained new growth in telecom and medical markets, adding to existing demand from automotive, industrial and consumer segments. MEMS is forecast to be a $19B industry in 2018. Flexible hybrid electronics (FHE) is also experiencing significant product design and functionality growth with increasing gains in widespread adoption.

No longer isa single monolithic demand driver propelling the electronics manufacturing supply chain. The rapidly expanding digital economy continues to foster innovation with new demand from the IoT, virtual and augmented reality (VR/AR), automobile infotainment and driver assistance, artificial intelligence (AI) and Big Data, among others. With the explosion in data usage, memory demand is nearly insatiable, holding memory device ASPs high and prompting continued heavy investment in new capacity.

2018 is forecast to be another terrific year. IC revenues are expected to increase another 8 percent and semiconductor equipment will grow 11 percent. With diverse digital economy demand continuing, additional manufacturing capacity is being added in China as fab projects come on line to develop and increase the indigenous semiconductor supply chain.

So, why worry?

The cracks starting to show are in the areas of talent, data management, and Environment, Health, and Safety (EH&S).

Can the industry sustain this growth? The electronics manufacturing supply chain has demonstrated it can generally scale and expedite production to meet the massive new investment projects. The cracks starting to show are in the areas of talent, data management, and Environment, Health, and Safety (EH&S).

Talent has become a pinch point. In Silicon Valley alone, SEMI member companies have thousands of open positions. Globally, there are more than 10,000 open jobs. Attracting new candidates and developing a global workforce are critical to sustaining the pace of innovation and growth.
Data management and effective data sharing are keys to solving problems faster and making practical novel but immature processes at the leading edge. It is ironic that other industries are ahead of semiconductor manufac- turing in harnessing manufacturing data and leveraging AI across their supply chains. Without collaborative Smart Data approaches, there is jeopardy of decreasing the cadence of Moore’s Law below the 10 nm node.

EH&S is critical for an industry that now uses the majority of the elements of the periodic table to make chips – at rates of more than 50,000 wafer starts per month (wspm) for a single fab. The industry came together strongly in the 1990s to develop SEMI Safety Standards and compliance methodologies. Since then, the number of EH&S profes- sionals engaged in our industry has declined while the number of new materials has exploded, new processing techniques have been developed, and manufacturing is expanding across China in areas with no prior semicon- ductor manufacturing experience.

HTU has been a very effective program with over 218 sessions run to date, over 7,000 students engaged, and over 70 percent of respondents pursuing careers in the STEM field.

To ensure we don’t slow growth, the industry will need to work together in 2018 in these three key areas:

Talent development needs to rapidly accelerate by expanding currently working programs and adding additional means to fill the talent funnel. The SEMI Foundation’s High Tech University (HTU) works globally with member companies to increase the number of high school students selecting Science, Technology, Engineering, and Math (STEM) fields – and provides orientation to the semiconductor manufacturing industry. HTU has been a very effective program with over 218 sessions run to date, over 7,000 students engaged, and over 70 percent of respondents pursuing careers in the STEM field. SEMI will increase the number of HTU sessions in 2018.

Plans have already been approved by SEMI’s Board of Directors to work together with SEMI’s membership to leverage existing, and pioneer new, workforce development programs to attract and develop qualified candidates from across the age and experience spectrum (high school through university, diversity, etc.). Additionally, an industry awareness campaign will be developed and launched to make more potential candidates attracted to our member companies as a great career choice. I’ll be providing you with updates on this initiative – and asking for your involvement
– throughout 2018.

Data management is a broad term. Big Data, machine learning, AI are terms that today mean different things to different people in our supply chain. What is clear is that to act together and take advantage of the unimaginable amounts of data being generating to produce materials and make semiconductor devices with the diverse equipment sets across our fabs, we need a common understanding of the data and potential use of the data.

In 2018, SEMI will launch a Smart Data vertical application platform to engage stakeholders along the supply chain to produce a common language, develop Standards, and align expectations for sharing data for mutual benefit. Bench- marking of other industries and pre-competitive pilot programs are being proposed to learn and, here too, we need the support and engagement of thought leaders throughout SEMI’s membership.

EH&S activity must intensify to maintain safe operations and to eliminate business interruptions from supply chain disruptions. There is potential for disruptions from material bans such as the Stockholm Convention action on PFOA and arising from the much wider range of chemicals and materials being used in advanced manufacturing. Being able to reliably identify these in time to guide and coordinate industry action will take a reinvigorated SEMI EH&S stewardship and membership engagement.

As China rapidly develops new fabs in many provinces – some with only limited prior experience and infrastructure – SEMI EH&S Standards orientation and training will accelerate the safe and sustainable operation of fabs, enabling them to keep pace with the ambitious growth trajectory our industry is delivering. In 2018, we’ll be looking for a renewed commitment to EH&S and sustainability for the budding challenges of new materials, methods, and emerging regions.

Remarkable results from a remarkable membership

Thank you all for a terrific 2017 and let’s work together on the key initiatives to ensure that our industry’s growth and prosperity will continue in 2018 and beyond.

In a quick review of 2017, I would like to thank SEMI’s members for their incredible results and new revenue records. Foundational to that, SEMI’s members have worked together with SEMI to connect, collaborate, and innovate to increase growth and prosperity for the industry. These founda- tional contributions have been in expositions, programs, Standards, market data, messaging (communications), and workforce development (with HTU).

The infographic below captures these foundational accom- plishments altogether. SEMI strives to speed the time to better business results for its members across the global electronics manufacturing supply chain. To do so, SEMI is dependent upon, and grateful for, the support and volunteer efforts of its membership. Thank you for a terrific 2017 and let’s work together on the key initiatives to ensure that our industry’s growth and prosperity will continue in 2018 and beyond.

A global gathering of more than 650 industry and academic experts, including 140 speakers and 56 exhibitors, shared the latest advancements in both flexible hybrid electronics (FHE) and in microelectromechanical systems (MEMS) and sensors at 2018FLEX and MEMS & Sensors Technical Congress (MSTC). Hosted by SEMI strategic association partners, FlexTech and MEMS & Sensors Industry Group (MSIG), the events presented technologies, integration strategies and packaging/process methodologies that are advancing human-machine interaction in health monitoring and the treatment of illness, automotive systems, consumer electronics, Internet of Things (IoT) and industrial applications.

Speakers offered fascinating views of emerging FHE applications, including:

  • Cortera Neurotechnologies Co-founder and CTO Rikky Muller described how her company is replacing existing large wired sensors with small, minimally invasive thin biomaterials that interact more naturally with the neural cortex. Cortera Neurotechnologies’ devices will be used to treat neurological disease and psychiatric illnesses such as major depressive disorder. “I think we need biological invisibility,” said Muller. “We need materials and form factors that cause no reaction in the human body at all. We need stability and longevity, since we need these devices to outlive us.”
  • Auburn University MacFarlane Endowed Professor & Director Pradeep Lall called his department’s AU-CAVE3 Biometric Sensor Band with LifeSaver App a “guardian angel” that autonomously monitors patients without human interaction and can even call 9-1-1.
  • NASA Ames Research Center Chief Scientist for Exploration Technology Meyya Meyyappansaid that 3D printed electronics will support a multi-material “FabLab” on the International Space Station for repairing or replacing failed devices. “This will free scientists from having to send living supplies back and forth between the ISS and earth at a cost savings of up to $10,000 per pound,” he said.

Synergies and Integration Potential

SEMI for the first time co-located 2018FLEX with MSTC, which allowed attendees to explore potential synergies between the component-level technologies of MEMS/sensors and the more wide-reaching integration technologies of FHE. Longtime MSIG Members Mary Ann Maher, CEO of SoftMEMS, and Chip Spangler, president of Aspen Microsystems, offered a popular short-course on the integration of MEMS sensors and actuators with FHE electronics (FHE). “MEMS integrated with FHE offers distinct advantages for wearables and implantable devices, for example, which require conformal and flexible substrates and interconnections and small, accurate form-factor sensors,” said Maher.

Spangler gave the example of a prosthetic eye, saying, “Because the device must fit the form factor of an eyeball, flex circuits are used to make the antenna that connects to an external camera — which is outside the field of view — as well as to the optic nerve. FHE both facilitates the manufacture of the prosthetic eye and allows it to fit within the confined space of the eye socket.”

Awards and Recognitions

SEMI announced the recipients of its annual FLEXI Awards on February 13, 2018, lauding innovators in categories of R&D Achievements, Product Innovation and Commercialization, Education Leadership, and Industry Leadership. (See press release, “2018 FLEXI Awards Innovation and Leadership in Flexible Hybrid Electronics, February 13, 2018.)

SEMI announced the appointment of Frank A. Shemansky, Jr., Ph.D., as executive director and chief technology officer (CTO) of MSIG. Shemansky brings more than 25 years’ experience in microelectronics to MSIG, where he will now direct global activities. (See press release, Frank Shemansky to Lead SEMI’s MEMS & Sensors Industry Group, February 13, 2018.)

SEMI also recognized the “Innovators of Tomorrow” with its student poster session competition: Jonathan Ting, UC Berkeley: “Fully Screen-printed NiO Thermister Arrays;” Telha Alcagyazi, North Carolina State University: “Multi-modal Array Sensing with Textiles;” and Levent E. Ayguh, Princeton University: “Sound Identification Using Physically Expansive Sensing System.”

Siemens announced it has entered into an agreement to acquire Oulu, Finland-based Sarokal Test Systems Oy, a provider of test solutions for fronthaul networks that are comprised of links between the centralized radio controllers and the radio heads (or masts) at the “edge” of a cellular network. Sarokal products are used by chipset vendors, fronthaul equipment manufacturers, and telecom operators to develop, test and verify their 4G and 5G network devices from the early design stages through implementation and field-testing.

“The planned acquisition of Sarokal reinforces our ongoing commitment to EDA and the IC industry,” said Tony Hemmelgarn, president and CEO of Siemens PLM Software. “Building on our acquisition of Mentor Graphics, we continue to make strategic investments which leverage Mentor’s existing strengths and enable Siemens to expand its offerings to the IC industry.”

Sarokal’s products are used to test transmission specifications across multiple domains. Its tester product family addresses the entire development and maintenance flow for cellular and wired transmission system testing. The technology is especially designed to detect radio frequency (RF) problems. With Sarokal’s foresight into the requirements of 5G testing, their testing models were created from the beginning for both the virtual (digitalization) environment as well as the physical testing environment.

“Sarokal has been on the forefront of the development of the 5G specification and its requirements for fronthaul networks since its inception. The 5G specification aims to greatly enhance performance for mobile broadband, network operation and Internet of Things (IoT) communication, and this requires new test methodologies,” said Harri Valasma, CEO at Sarokal. “Becoming part of Siemens and integrating our technology into the Veloce emulation platform will give us greater visibility into early customer adoption of 5G, which can help us maintain our leadership as this segment is forecasted to grow rapidly.”

“The addition of Sarokal’s one-of-a-kind fronthaul testing expertise is expected to provide our Veloce emulator customers with a unique advantage,” said Eric Selosse, vice president and general manager, Mentor Emulation Division, a Siemens business. “Sarokal’s tester technology in conjunction with Mentor’s Veloce emulation platform will enable customers to “shift left” the validation of 4G and 5G designs for accurate and timely pre- and post-silicon testing.”

The transaction is expected to close during the first quarter of calendar 2018, subject to receipt of regulatory approvals and other customary closing conditions. The terms of the transaction were not disclosed.

Siemens PLM Software, a business unit of the Siemens Digital Factory Division, is a global provider of software solutions to drive the digital transformation of industry, creating new opportunities for manufacturers to realize innovation. With headquarters in Plano, Texas, and over 140,000 customers worldwide, Siemens PLM Software works with companies of all sizes to transform the way ideas come to life, the way products are realized, and the way products and assets in operation are used and understood.

Market shares of top semiconductor equipment manufacturers for the full year 2017 indicate large gains by Tokyo Electron and Lam Research while top supplier Applied Materials dropped, according to the report “Global Semiconductor Equipment: Markets, Market Shares, Market Forecasts,” recently published by The Information Network, a New Tripoli-based market research company.

The chart below shows shares for the entire years of 2016 and 2017. Market shares are for equipment only, excluding service and spare parts, and have been converted for revenues of foreign companies to U.S. dollars on a quarterly exchange rate.

market shares

Market leader Applied Materials lost 1.8 share points among the top seven companies, dropping from 28.8% in 2016 to 27.0% in 2017. Gaining share are Tokyo Electron Ltd., which gained 2.1 share points while rising from 17.4% in 2016 to 19.1% in 2017, and Lam Research, which gained 1.5 share points and grew from a 19.4% share in 2016 to a 20.9% share in 2017.

In third place ASML gained 0.6 share points, growing from an 18.8% share in 2016 to a 19.4% share in 2017.

Fifth place KLA-Tencor is the dominant supplier in the process control sector (inspection and metrology) and competes against Applied Materials and Hitachi High-Technologies, as well as several other companies including Nanometrics, Nova Measuring Instruments, and Rudolph Technologies. KLA-Tencor gained market share against each of its competitors in this sector in 2017.

Much of the equipment revenue growth was attributed to strong growth in the DRAM and NAND sectors, as equipment was installed in memory manufacturers Intel, Micron Technology, Samsung Electronics, SK Hynix, Toshiba, and Western Digital. The memory sector is expected to have grown 60.1% in 2017 and another 9.3% in 2018 according to industry consortium WSTS (World Semiconductor Trade Statistics).

Following the strong growth in the semiconductor equipment market, The Information Network projects another 11% growth in 2018. for semiconductor equipment.

Boston Semi Equipment (BSE), a global semiconductor test handler manufacturer and provider of test automation technical services, today announced that it has started shipping units of its new strip load/unload module to a top 10 semiconductor manufacturer. The automation modules handle magazines containing strips holding semiconductor devices. The freestanding modules dock to strip-processing equipment via a SMEMA-compliant interface. Operators set up and control the modules using a color touch-screen monitor.

“BSE’s custom engineering group works with semiconductor companies to provide them the exact automation solutions they require,” said Kevin Brennan, vice president of marketing for BSE. “Our multidisciplined team started with our customer’s specification for the strip automation module, and handled the project from concept through to manufacturing of final units. With our global service organization, we can support these modules anywhere in the world.”

BSE’s custom engineering group helps companies accelerate their internal product development activities. Working with BSE, companies can implement cost savings and productivity improvement solutions sooner, helping to grow their market share and improve profits.

 

Alpha and Omega Semiconductor Limited (AOS) (Nasdaq:AOSL), a designer, developer and global supplier of a broad range of power semiconductors and power ICs, today introduced AONE36132, a 25V N-Channel MOSFET in a dual DFN 3.3×3.3 package which is ideal for synchronous buck converters. The AONE36132 is an extension to the XSPairFET™ lineup.  Designed with the latest bottom source packaging technology, the AONE36132 has lower switch node ringing due to lower parasitic inductance. This new XSPairFET™ offers a higher power density compared to existing solutions and is ideally suited for computing, server and telecommunication markets.

AONE36132 has an integrated high-side and low-side MOSFETs (7mOhms and 2mOhms maximum on-resistance, respectively) within a DFN 3.3×3.3 XSPairFET™ package.  The low-side MOSFET source is connected directly to the exposed pad on PCB to enhance thermal dissipation.  Using an existing notebook design under typical conditions, 19V input Voltage, with 1.05V output Voltage, and a 21A output load condition, the AONE36132 had more than a two percent efficiency improvement when compared to a single DFN 5×6 high side and single DFN 5×6 low side configuration.

“The AONE36132 is the latest addition to the XSPairFET™ family which incorporates innovative technology to increase power density and improve efficiency for today’s demanding applications,” said Peter H. Wilson, Marketing Director of MOSFET product line at AOS.

Technical Highlights

The new product family offers various RDS(ON) levels in combination with multiple package options.

Part
Number		 Package VIN
(V)		 VGS
(±V)		 RDS(ON) (mΩ max)
at VGS =		 VGS (±V)
(max V)		 Ciss
(pF)		 Coss
(pF)		 Crss
(pF)		 Qg
(nC)		 Qgd
(nC)
10V 4.5V
AONE36132 DFN 3.3×3.3 High Side (Q1) 25 12 4.6 6 1.8 880 250 55 6.5 2.5
Low Side (Q2) 25 12 1.8 1.7 1.9 3125 860 200 25 6

Pricing and Availability

The AONE36132 is immediately available in production quantities with a lead-time of 12-14 weeks. The unit price for 1,000 pieces is $0.91.

 

GLOBALFOUNDRIES today announced that its 45nm RF SOI (45RFSOI) technology platform has been qualified and is ready for volume production. Several customers are currently engaged for this advanced RF SOI process, which is targeted for 5G millimeter-wave (mmWave) front-end module (FEM) applications, including smartphones and next-generation mmWave beamforming systems in future base stations.

As next-generation systems move to frequencies above 24GHz, higher performance RF silicon solutions are required to exploit the large available bandwidth in the mmWave spectrum. GF’s 45RFSOI platform is optimized for beam forming FEMs, with features that improve RF performance through combining high-frequency transistors, high-resistivity silicon-on-insulator (SOI) substrates and ultra-thick copper wiring. Moreover, the SOI technology enables easy integration of power amplifiers, switches, LNAs, phase shifters, up/down converters and VCO/PLLs that lowers cost, size and power compared to competing technologies targeting tomorrow’s multi-gigabit-per-second communication systems, including internet broadband satellite, smartphones and 5G infrastructure.

“GF’s leadership in RF SOI solutions makes the company a perfect strategic partner for Peregrine’s next generation of RF SOI technologies,” said Jim Cable, Chairman and CTO of Peregrine Semiconductor. “It enables us to create RF solutions that provide our customers with new levels of product performance, reliability and scalability, and it allows us to push the envelope of integrated RF front-end innovation for evolving mmWave applications and emerging 5G markets.”

“To bring 5G into the future, mmWave innovations are needed for allocating more bandwidth to deliver faster, higher-quality video, and multimedia content and services,” Bob Donahue, CEO of Anokiwave. “GF’s RF SOI technology leadership and 45RFSOI platform enables Anokiwave to develop differentiated solutions designed to operate between the mmWave and sub-6GHz frequency band for high-speed wireless communications and networks.”

“GF continues to expand its RF capabilities and portfolio to provide competitive RF SOI advantages and manufacturing excellence that will enable our customers to play a critical role in bringing 5G devices and networks to real-world environments,” said Bami Bastani, senior vice president of the RF Business Unit at GF.  “Our 45RFSOI is an ideal technology for customers that are looking to deliver the highest- performing mmWave solutions that will handle demanding performance requirements in next-generation mobile and 5G communications.”

GF’s RF SOI solutions are part of the company’s vision to develop and deliver the next wave of 5G technology aimed at enabling connected intelligence for next-generation devices, networks and wired/wireless systems. GF has a successful track record in manufacturing RF SOI solutions at its 300mm production line in East Fishkill, N.Y.  Customers can now start optimizing their chip designs to develop differentiated solutions for high performance in the RF front end for 5G and mmWave applications.

By Jay Chittooran, Manager, Public Policy, SEMI

International trade is one of the best tools to spur growth and create high-skill and high-paying jobs. Over 40 million American jobs rely on trade, and this is particularly true in the semiconductor supply chain. Over the past three decades, the semiconductor industry has averaged nearly double-digit growth rates in revenue and, by 2030, the semiconductor supply chain is forecast to reach $1 trillion. Trade paves the way for this growth.

Unfortunately, despite its importance to the industry, trade has been transformed from an economic issue into a political one, raising many new trade challenges to companies throughout the semiconductor industry.

GHz-ChinaChina’s investments in the industry will continue to anchor the country as a major force in the semiconductor supply chain. China’s outsized spending has spawned concern among other countries about the implications of these investments. According to SEMI’s World Fab Forecast, 20 fabs are being built in China – and construction on 14 more is rumored to begin in the near term – compared to the 10 fabs under construction in the rest of the world. China is clearly outpacing the pack.

The Trump Administration has levied intense criticism of China, citing unfair trade practices, especially related to intellectual property issues. The U.S. Trade Representative has launched a Section 301 investigation into whether China’s practice of forced technology transfer has discriminated against U.S. consumers. Even as the probe unfolds, expectations are growing that the United States will take action against China, raising fears of not only possible retaliation in time but rising animosity between two trading partners that rely deeply on each other.

A number of other open investigations also cloud the future. The Administration launched two separate Section 232 investigations into steel and aluminum industry practices by China, claiming Chinese overproduction of both items are a threat to national security. The findings from these investigations will be submitted to the President, who, in the coming weeks, will decide an appropriate response, which could include imposing tariffs and quotas.

Another high priority area is Korea. While U.S. threats to withdraw from the U.S.-Korea Free Trade Agreement (KORUS) reached a fever pitch in August, rhetoric has since tempered. Informal discussions between the countries on how best to amend the trade deal are ongoing. The number of KORUS implementation issues aside, continued engagement with Korea – instead of scrapping a comprehensive, bilateral trade deal – will be critically important for the industry.

Lastly, negotiations to modernize the North American Free Trade Agreement (NAFTA) will continue this year. The United States wants to conclude talks by the end of March, but with the deadline fast approaching and the promise of resolution waning, tensions are running high. Notably, the outcome of the NAFTA talks will inform and set the tone for other trade action.

What’s more, a number of other actions on trade will take place this year. As we wrote recently, Congress has moved to reform the Committee on Foreign Investment in the United States (CFIUS), a government body designed to review sales and transfer of ownership of U.S. companies to foreign entities. Efforts have also started to revise the export control regime – a key component to improving global market access and making international trade more equitable.

SEMI will continue its work on behalf of its members around the globe to open up new markets and lessen the burden of regulations on cross-border trade and commerce. In addition, SEMI will continue to educate policymakers on the critical importance of unobstructed trade in continuing to push the rapid advance of semiconductors and the emerging technologies they enable into the future. If you are interested in more information on trade, or how to be involved in SEMI’s public policy program, please contact Jay Chittooran, Manager, Public Policy, at [email protected].