Category Archives: Metrology

Cautious optimism


June 15, 2018

By Walt Custer

Updated global GDP forecast

The World Bank just updated its multiyear forecast for GDP growth both globally and by country (Chart 1).

It noted: “Despite recent softening, global economic growth will remain robust at 3.1 percent in 2018 before slowing gradually over the next two years, as advanced-economy growth decelerates and the recovery in major commodity-exporting emerging market and developing economies levels off.

“This outlook is subject to considerable downside risks. The possibility of disorderly financial market volatility has increased, and the vulnerability of some emerging market and developing economies to such disruption has risen. Trade protectionist sentiment has also mounted, while policy uncertainty and geopolitical risks remain elevated.”

Chart 1

Semiconductor growth outlook strong (Chart 2)

The WSTS updated its world semiconductor shipment forecast. This new forecast (endorsed by SIA) projects worldwide semiconductor sales will be a record $463 billion in 2018, a 12.4 percent increase from 2017. WSTS projects year-to-year increases across all regional markets for 2018.

Chart 2

This revised semiconductor forecast coupled with very robust global semiconductor capital equipment sales (Chart 3) paint a positive outlook for 2018.

Chart 3

Very strong end market growth in first quarter (Chart 4)

Based upon the combined 1Q’18 financial reports of 213 large, global OEMs, electronic equipment sales (consolidated into U.S. dollars) increased globally an estimated (and very robust) 10.6 percent in 1Q’18 vs. 1Q’17. While this world growth result is very heartening it was significantly inflated by exchange rate effects as stronger non-dollar currencies were converted into weaker dollars.

Chart 4

Looking at world electronic equipment sales consolidated into both dollars and euros, 1Q’18 growth rates are MUCH different (Chart 5). 1Q’18 vs.1Q’17 electronic equipment sales grew 10.6 percent in dollars but declined 4.3 percent in euros!

Chart 5

Certainly the first quarter was strong globally but the currency chosen for analysis can have a BIG effect.

U.S. supply chain expansion continues

Looking at the U.S. market (in dollars – therefore not distorted by exchange rates) domestic electronic equipment orders rose 6.7 percent in February-April 2018 versus the same three-month period in 2017. The U.S. electronic industry is doing reasonably well at present.

www.census.gov/manufacturing/m3/

Expect the recent exchange rate based amplification of dollar denominated global growth to taper off quickly.

Keep a careful watch on the geopolitical situation.

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

Originally published on the SEMI blog.

The semiconductor industry is nearing a third consecutive year of record equipment spending with projected growth of 14 percent (YOY) in 2018 and 9 percent in 2019, a mark that would extend the streak to a historic fourth consecutive growth year, according to the latest update of the World Fab Forecast report published by SEMI. Over the semiconductor industry’s 71-year history, only once before – in the mid 1990s – has the industry logged four consecutive years of equipment spending growth.

Korea and China are leading the growth, with Samsung dominating global spending and ascendant China on a fast, steep rise, surging ahead of all other markets. See Figure 1.

Figure 1 equipment spending by region (includes new and refurbished)

While Samsung is expected to reduce equipment investments in 2018, the company still accounts for a dominant 70 percent of all investment in Korea. At the same time, SK Hynix is increasing its equipment spending in Korea.

China’s equipment spending is forecast to increase 65 percent in 2018 and 57 percent in 2019.  Notably, 58 percent of investments in China in 2018 and 56 percent in 2019 stem from companies with headquarters in other regions such as Intel, SK Hynix, TSMC, Samsung, and GLOBALFOUNDRIES. Domestic, Chinese-owned companies – backed by large government initiatives – are building a considerable number of new fabs that will start equipping in 2018. The companies are expected to double their equipment investments in 2018 and again in 2019.

Other regions are also ramping up investments. Japan is increasing equipment spending by 60 percent in 2018, with the largest increases by Toshiba, Sony, Renesas and Micron.

The Europe and Mideastern region will boost investments by 12 percent in 2018, with Intel, GLOBALFOUNDRIES, Infineon and STMicroelectronics the largest contributors.

Southeast Asia will boost investments by more than 30 percent in 2018, although total spending is proportionately smaller than in other regions owing to its size. The main contributors are Micron, Infineon and GLOBALFOUNDRIES, though companies including OSRAM and ams are also increasing investments.

The SEMI World Fab Forecast, which also includes information on other companies, covers data and predictions through the end of 2019, including milestones, detailed investments by quarter, product types, technology nodes and capacities down to fab and project level.

Learn more about the SEMI fab databases at:

www.semi.org/en/MarketInfo/FabDatabase and www.youtube.com/user/SEMImktstats.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced worldwide sales of semiconductors reached $37.6 billion for the month of April 2018, an increase of 20.2 percent from the April 2017 total of $31.3 billion and 1.4 percent more than last month’s total of $37.1 billion. Monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. Additionally, a newly released WSTS industry forecast projects annual global market growth of 12.4 percent in 2018 and 4.4 percent in 2019.

“The global semiconductor industry has posted consistently strong sales so far in 2018, and the global market has now experienced year-to-year growth of greater than 20 percent for 13 consecutive months,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Although boosted in part by impressive growth in the memory market, sales of non-memory products also grew by double digits in April on a year-to-year basis, and all major regional markets posted double-digit year-to-year gains. The global market is projected to experience significant annual growth this year, with more modest growth expected next year.”

Regionally, year-to-year sales increased in the Americas (34.1 percent), China (22.1 percent), Europe(21.4 percent), Japan (14.6 percent), and Asia Pacific/All Other (10.2 percent). Compared with last month, sales were up in China (3.2 percent), Japan (2.7 percent), Europe (1.4 percent), and the Americas (0.8 percent), but down slightly in Asia Pacific/All Other (-0.8 percent).

Additionally, SIA today endorsed the WSTS Spring 2018 global semiconductor sales forecast, which projects the industry’s worldwide sales will be $463.4 billion in 2018. This would mark the industry’s highest-ever annual sales, a 12.4 percent increase from the 2017 sales total. WSTS projects year-to-year increases across all regional markets for 2018: the Americas (14.0 percent), Europe (13.4 percent), Asia Pacific (including China) (12.3 percent), and Japan (8.6 percent). In 2019, growth in the semiconductor market is expected to moderate, with sales increases of between 4-5 percent expected across each of the regions. WSTS tabulates its semi-annual industry forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.

For comprehensive monthly semiconductor sales data and detailed WSTS Forecasts, consider purchasing the WSTS Subscription Package. For information about the global semiconductor industry and market, check out SIA’s free 2018 Factbook.

Apr 2018

Billions

Month-to-Month Sales                              

Market

Last Month

Current Month

% Change

Americas

8.10

8.16

0.8%

Europe

3.58

3.63

1.4%

Japan

3.21

3.30

2.7%

China

11.98

12.36

3.2%

Asia Pacific/All Other

10.23

10.15

-0.8%

Total

37.09

37.59

1.4%

Year-to-Year Sales

Market

Last Year

Current Month

% Change

Americas

6.08

8.16

34.1%

Europe

2.99

3.63

21.4%

Japan

2.88

3.30

14.6%

China

10.12

12.36

22.1%

Asia Pacific/All Other

9.21

10.15

10.2%

Total

31.28

37.59

20.2%

Three-Month-Moving Average Sales

Market

Nov/Dec/Jan

Feb/Mar/Apr

% Change

Americas

8.63

8.16

-5.5%

Europe

3.40

3.63

6.6%

Japan

3.21

3.30

2.8%

China

12.01

12.36

2.9%

Asia Pacific/All Other

10.35

10.15

-1.9%

Total

37.60

37.59

0.0%

Worldwide industrial semiconductor revenues grew by 11.8 percent year over year, reaching $49.1 billion in 2017, according to the latest analysis from IHS Markit (Nasdaq: INFO). Industrial electronics equipment demand was broad-based, with continued growth in commercial and military aircraft, LED lighting, digital signage, digital video surveillance, climate control, smart meters, traction, photovoltaic (PV) inverters, human machine interface and various medical electronics like cardiac equipment, hearing aids, endoscopy and imaging systems. The industry is expected to grow at a compound annual growth rate (CAGR) of 7.1 percent through 2022.

Optical semiconductors delivered excellent performance, due to the continued strength of the general LED lighting market. Power discretes demand has ramped up in industrial motor drives, EV chargers, PV inverters, traction and lighting equipment. General purpose analog has a strong five-year growth in various industrial markets, especially in factory automation, power and energy, and lighting. Microcontrollers (MCUs) are also projected to experience broad-based growth in the long term, thanks to advances in power efficiency and integration features.

“The resilient economy in the United States, and strong demand in China, carried the lion’s share of industrial equipment demand in 2017,” said Robbie Galoso, associate director and principal analyst, industrial semiconductors, for IHS Markit. “A European resurgence also provided a strong tailwind for semiconductor growth.”

Global industrial semiconductor market share rankings

Strategic acquisitions continued to play a major role in shaping the overall semiconductor market rankings in key industrial semiconductor segments. All the following top 10 industrial semiconductor suppliers achieved revenue growth in 2017:

  1. Texas Instruments (TI) maintained its position as the largest industrial semiconductor supplier in 2017.
  2. The acquisition of Linear Technology catapulted Analog Devices into second position.  The combined Analog Devices and Linear Technology company generated $2.8 billion in industrial revenue in 2017. This acquisition boosted ADI’s industrial market shares in diversified segments within factory automation, military aerospace, video surveillance, test and measurement, medical, and power and energy applications.
  3. Intel ranked third, as the company’s Internet of Things (IoT) division continued to generate double-digit revenue growth attributed to innovation and strength in its factory automation, video surveillance and medical segments. Growth was also aided by the proliferation of smart and connected devices and a tremendous uplift in data analytics.
  4. Ranking fourth, Infineon’s strong revenue growth continued to be led by industrial applications, especially in factory automation, traction and various power and energy segments like PV, electric vehicle chargers and power supplies, where its leading discrete and power management devices are used.
  5. In fifth position, STMicroelectronics solid industrial revenue stream stems from a variety of applications, including factory and building automation, where its MCU, analog and discrete components are used.
  6. Micron’s organic revenue from industrial businesses continued to flourish in 2017, pushing the company into sixth place, driven by dynamic random-access memory (DRAM) growth in industrial IoT (IIoT) markets, spanning factory automation, video surveillance and transportation.
  7. Toshiba ranked seventh, with industrial electronics revenue growing to $1.5 billion in 2017. Growth was driven by power transistor discretes, MCU, optical and logic integrated circuit (IC) solutions in manufacturing and process automation, power and energy, and building and home control.
  8. Microchip Technology ranked eighth, and its revenue growth was primarily supported by MCU solutions in manufacturing and process automation, power and energy, and building and home control.
  9. ON Semiconductor was ranked ninth in 2017, driven by manufacturing and process automation, including machine vision, power and energy, building automation and hearing aids and other medical devices.
  10. NXP ranked tenth in the industrial market, with its strong presence in manufacturing and process automation, building and home control, medical electronics and other industrial applications.

Although not part of the top 10 ranking, China’s massive investments in LED manufacturing were especially noteworthy. Chinese firm MLS rose from 18th to 13th place, after posting 50 percent revenue growth and reaching $1 billion in 2017. MLS beat out other leading general lighting LEDs suppliers Nichia, Osram and Cree.

SEMI, the global industry association representing the electronics manufacturing supply chain, today reported that worldwide semiconductor manufacturing equipment billings reached a historic quarterly high of US$17.0 billion for the first quarter of 2018, surging 59 percent in March to end the quarter with an all-time monthly high of $7.8 billion.

The US$17.0 billion in quarterly billings shatters the previous record set in the fourth quarter of 2017. First quarter 2018 billings are 12 percent higher than the previous quarter and 30 percent higher than the same quarter a year ago. The data are gathered jointly with the Semiconductor Equipment Association of Japan (SEAJ) from over 95 global equipment companies that provide data on a monthly basis.

The quarterly billings data by region in billions of U.S. dollars, quarter-over-quarter growth and year-over-year rates by region are as follows:
1Q2018
4Q2017
1Q2017
1Q18/4Q17
(Qtr-over-Qtr)
1Q18/1Q17
(Year-over-Year)
Korea
6.26
4.64
3.53
35%
78%
China
2.64
1.77
2.01
49%
31%
Taiwan
2.27
2.89
3.48
-22%
-35%
Japan
2.13
1.96
1.25
9%
70%
Europe
1.28
1.04
0.92
23%
39%
Rest of World
1.27
1.22
0.63
4%
103%
North America
1.14
1.58
1.27
-28%
-10%
Total
16.99
15.10
13.08
12%
30%

Source: SEMI (www.semi.org) and SEAJ, June 2018

 

The Equipment Market Data Subscription (EMDS) from SEMI provides comprehensive market data for the global semiconductor equipment market. A subscription includes three reports: the monthly SEMI Billings Report, which offers a perspective of the trends in the equipment market; the monthly Worldwide Semiconductor Equipment Market Statistics (WWSEMS), a detailed report of semiconductor equipment billings for seven regions and 24 market segments; and the SEMI Semiconductor Equipment Forecast, which provides an outlook for the semiconductor equipment market. For more information or to subscribe, please contact SEMI customer service at 1.877.746.7788 (toll free in the U.S.) or 1.408.943.6901 (International Callers). More information is also available online: www.semi.org/en/MarketInfo/EquipmentMarket.

BISTel, a provider of intelligent, real-time data management, advanced analytics and predictive solutions for smart manufacturing announced today an innovative new Chamber Matching (CM) application that enables semiconductor manufacturers to better guard against events that negatively impact yield.

For semiconductor wafer manufacturers, optimizing wafer chamber performance is critical to ensuring high quality, high yield wafers. For customers to achieve this goal and maximize the performance of their fleet, analyzing variations in chamber performance and quickly recognizing which parameters are changing over time is critical to assuring the maximum possible yield from each chamber. BISTel’s new Chamber Matching (CM) application enables customers to quickly determine the best performing chamber – often referred to as the reference chamber or golden chamber. Customers can then compare the reference chamber to all other chambers to help maximize performance.

“CM is the second of four exciting new intelligent manufacturing solutions we have introduced to the market, and that will have an immediate impact on our customers wafer quality and yield,” noted W.K. Choi, Founder and CEO, BISTel. “With these advance new tools, we can perform real time monitoring and analysis to quickly identify the golden chamber and provide our customers the opportunity to maximize the performance of their equipment and processes.”

Key Features and Benefits

BISTel’s new Chamber Matching (CM) solution quickly identifies mis-matching and drifting sensors and it can analyze an unlimited number of chambers simultaneously. In addition, CM:

  • Provides real time monitoring to improve quality and yield.
  • Executes statistical analysis to quickly identify the best performing chamber or “Golden Chamber.”
  • Performs full trace analysis on all sensors and ranks chambers and parameters worse to best.
  • Enables customers to easily conduct time-based, chamber performance analysis.
  • Is completely FDC system independent

BISTel is a provider of real-time, intelligent manufacturing solutions that collect and manage big data, monitor the health of equipment, optimize process flows, analyze large data and quickly identify root cause failures to mitigate risk. BISTel solutions help customers reduce costs, improve quality, and increase yield. Founded in 2000, BISTel has more than 340 employees worldwide. The company is headquartered in South Korea, with offices in California, China, Singapore and Texas. BISTel has a deep customer following in semiconductor, FPD, and PCB/SMT manufacturing as well as automotive, Biotech and steel manufacturing. Its new A.I. based manufacturing intelligence platform will include new auto learning, predictive, self-healing, and continuous improvement features that accelerate smart manufacturing. For more information visit bistel.com

North America-based manufacturers of semiconductor equipment posted $2.69 billion in billings worldwide in April 2018 (three-month average basis), according to the April Equipment Market Data Subscription (EMDS) Billings Report published today by SEMI. The billings figure is 10.7 percent higher than the final March 2018 level of $2.43 billion, and is 26.0 percent higher than the April 2017 billings level of $2.13 billion.

“April 2018 monthly billings for North American equipment manufacturers surpassed the October 2000 record high of $2.6 billion,” said Ajit Manocha, president and CEO of SEMI. “Storage, artificial intelligence and big data are driving strong demand for semiconductors, offsetting smartphone sales that have lagged expectations this year.”

The SEMI Billings report uses three-month moving averages of worldwide billings for North American-based semiconductor equipment manufacturers. Billings figures are in millions of U.S. dollars.
Billings
(3-mo. avg)
Year-Over-Year
November 2017
$2,052.3
27.2%
December 2017
$2,398.4
28.3%
January 2018
$2,370.1
27.5%
February 2018
$2,417.8
22.5%
March 2018 (final)
$2,431.8
16.9%
April 2018 (prelim)
$2,691.4
26.0%

Source: SEMI (www.semi.org), May 2018

SEMI, the global industry association representing the electronics manufacturing supply chain, today announced that the WT | Wearable Technologies Conference 2018 USA will co-locate July 11-12 with SEMICON West 2018 in San Francisco. The electronics industry’s premier U.S. event, SEMICON West — July 10-12 at Moscone North and South — will highlight engines of industry expansion including smart transportation, smart manufacturing, smart medtech, smart data, big data, artificial intelligence, blockchain and the Internet of Things (IoT). Click here to register.

“We are excited that the WT | Wearables Technologies Conference has joined SEMICON West to co-locate in 2018,” said David Anderson, president of SEMI Americas. “Our strategic partnership brings new content and more value to our extended supply chain. Every day the semiconductor industry makes chips smaller and faster with ever-higher performance. These innovations enable new wearable applications for smart living, smart medtech and healthcare that are continuously improving our lives. The WT | Wearable Technologies Conference speakers at SEMICON West 2018 will demonstrate just how they use semiconductor technology to deliver leading-edge wearables.”

“It is a great pleasure to collaborate with the leading global electronics manufacturing association and its successful SEMICON West event,” said Christian Stammel, CEO of WT | Wearables Technologies. “Since the beginning of our platform in 2006, the semiconductor industry has been a major driver of wearables and IoT innovation. All major developments in the WT application markets like healthcare (smart patches), safety and security (tracking solutions), lifestyle and sport (smartwatches and wristbands) and in the industrial field (AR / VR) were driven by semiconductor and MEMS innovations. Our program of expert speakers at SEMICON West will share the latest insights in the wearables market as the SEMI and WT ecosystems explore collaboration and innovation opportunities.”

IC Insights recently released its May Update to the 2018 McClean Report.  This Update included a look at the top-25 1Q18 semiconductor suppliers, a discussion of the 1Q18 IC industry market results, and an update of the 2018 capital spending forecast by company.

Overall, the capital spending story for 2018 is becoming much more positive as compared with the forecast presented in IC Insights’ March Update to The McClean Report 2018 (MR18).  In the March Update, IC Insights forecast an 8% increase in semiconductor industry capital spending for this year. However, as shown in Figure 1, IC Insights has raised its expectations for 2018 capital spending by six percentage points to a 14% increase.  If this increase occurs, it would be the first time that semiconductor industry capital outlays exceeded $100 billion.  The worldwide 2018 capital spending forecast figure is 53% higher than the spending just two years earlier in 2016.

Although Samsung says it still does not have a full-year capital spending forecast for this year it did say it will spend “less” in semiconductor capital outlays in 2018 as compared to 2017, when it spent $24.2 billion.  However, as of 1Q18, with regard to its capex, its “foot is still on the gas!”  Samsung spent $6.72 billion in capex for its semiconductor division in 1Q18, slightly higher than the average of the previous three quarters.  This figure is almost 4x the amount the company spent just two years earlier in 1Q16!  Over the past four quarters, Samsung has spent an incredible $26.6 billion in capital outlays for its semiconductor group. Wow!

IC Insights has estimated Samsung’s semiconductor group capital spending will be $20.0 billion this year, $4.2 billion less than it spent in 2017.  However, given the strong start to its spending this year, it appears there is currently more upside than downside potential to this forecast.

With the DRAM and NAND flash memory markets still very strong, SK Hynix is expected to ramp up its capital spending this year to $11.5 billion, 42% greater than the $8.1 billion it spent in 2017. The increased spending by SK Hynix this year will primarily focus on bringing on-line two large memory fabs—M15, a 3D NAND flash fab in Cheongju, South Korea and its expansion of its huge DRAM fab in Wuxi, China.  The Cheongju fab is being pushed to open before the end of this year.  The Wuxi fab is also targeted to open by the end of this year, a few months earlier than its original planned start date of early 2019.

Figure 1

After strong year-over-year growth of 24% in 2017, worldwide semiconductor revenue is forecast to grow for the third consecutive year in 2018 to $450 billion, up 7.7% over 2017, according to a new Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC). The SAF also forecasts that semiconductor revenues will log a compound annual growth rate (CAGR) of 2.9% from 2017-2022, reaching $482 billion in 2022.

The overall memory market was the key story of last year, due to strong demand, limited supply, and product mix constraints. The DRAM and NAND memory markets grew to $73 billion and $49 billion respectively, reflecting year-over-year growth rates of 77% and 52% for 2017. Excluding DRAM and NAND, the overall semiconductor market grew by 12% year over year. For 2018, non-memory semiconductors are forecast to grow $11 billion to $302 billion. Both DRAM and NAND will continue to grow this year, but are expected to decline from 2019-2021 before recovering slightly in 2022.

The strong memory market resulted in Samsung Electronics capturing the top semiconductor manufacturer spot away from Intel and raised the profile of all the memory manufacturers, which now represent three of the top five semiconductor companies compared to only two the previous year. Revenue concentration continued to increase for the overall market with the top 10 companies making up 60% of the semiconductor market compared to 56% in 2016 and 53% in 2015.

“Market consolidation in the semiconductor industry over the past five years continues to shape the competitive landscape for semiconductor suppliers as each company continues to refine its core markets and make acquisitions to find new and emerging sectors for growth. The pace of change and technology is expected to accelerate as machine learning and autonomous systems enable a more diverse set of architectures to address the opportunity. This will fuel the engine of growth for semiconductor technology over the next decade,” said Mario Morales, program vice president, Semiconductors at IDC.

The automotive market and the industrial markets will continue to be the leading areas of growth for the semiconductor market throughout the forecast period, growing at a 9.6% and 6.8% CAGR from 2017-2022. “The key drivers of electrification, connectivity and infotainment, advanced driver assistance (ADAS), and autonomous driving features will continue to drive the growth of semiconductor content on a per vehicle basis,” said Nina Turner, research manager for Semiconductors at IDC.

Other key findings from IDC’s Semiconductor Application Forecaster (excluding memory) include:

  • Semiconductor revenue for the computing industry segment will decline 4.0% this year and will show a negative CAGR of -0.7% for the 2017-2022 forecast period. Two bright spots for the computing segment are computing and enterprise SSDs, growing in high double digits and 9.8% CAGR respectively for 2017-2022.
  • Semiconductor revenue for the mobile wireless communications segment will grow 5.5% year over year this year with a CAGR of 5.8% for 2017-2022. Semiconductor revenue for 4G mobile phones will experience an annual growth rate of 10.9% in 2018 and a CAGR of 3.1% for 2017-2022. 5G will also drive growth in the later part of the forecast as the technology becomes mainstream by the middle of the next decade.
  • Communications infrastructure semiconductors are forecast to grow at a 1.7% CAGR from 2017-2022 with the strongest growth coming from consumer networks.