Category Archives: Metrology

North America-based manufacturers of semiconductor equipment posted $2.05 billion in billings worldwide in November 2017 (three-month average basis), according to the November Equipment Market Data Subscription (EMDS) Billings Report published today by SEMI.

SEMI reports that the three-month average of worldwide billings of North American equipment manufacturers in November 2017 was $2.05 billion. The billings figure is 1.6 percent higher than the final October 2017 level of $2.02 billion, and is 27.2 percent higher than the November 2016 billings level of $1.61 billion.

“November billings for North American equipment manufacturers increased modestly for the first time in four months,” said Dan Tracy, Senior Director, Industry Research and Statistics, at SEMI. “Year-to-date equipment spending is well on track to set a historical high, and we expect that positive momentum to continue into next year as new fabs in China begin to equip.”

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
June 2017
$2,300.3
34.1%
July 2017
$2,269.7
32.9%
August 2017
$2,181.8
27.7%
September 2017
$2,054.8
37.6%
October 2017 (final)
$2,019.3
23.9%
November 2017 (prelim)
$2,052.2
27.2%

Source: SEMI (www.semi.org), December 2017

 

Toshiba Corporation (TOKYO: 6502), Toshiba Memory Corporation and Western Digital Corporation (NASDAQ: WDC) have entered into a global settlement agreement to resolve their ongoing disputes in litigation and arbitration, strengthen and extend their relationship, and enhance the mutual commitment to their ongoing flash memory collaboration.

As part of this agreement, TMC and Western Digital will participate jointly in future rounds of investment in Fab 6, the memory fabrication facility now under construction at Yokkaichi, including the upcoming investment round announced by Toshiba in October 2017. Fab 6 will be entirely devoted to the mass production of BiCS FLASH, the next-generation of 3D flash memory, starting next year. TMC and Western Digital similarly intend to enter into definitive agreements in due course under which Western Digital will participate in the new flash wafer fabrication facility which will be constructed in Iwate, Japan.

The parties will strengthen their flash memory collaboration by extending the terms of their joint ventures. Flash Alliance will be extended to December 31, 2029 and Flash Forward to December 31, 2027. Flash Partners was previously extended to December 31, 2029.

The parties’ agreement to resolve all outstanding disputes ensures that all parties are aligned on Toshiba’s sale of TMC to K.K. Pangea, a special purpose acquisition company formed and controlled by a consortium led by Bain Capital Private Equity, LP (“Bain Capital”). The parties have agreed on mutual protections for their assets and confidential information in connection with the sale of TMC, and on collaborating to ensure the future success of TMC as a public company following an eventual IPO.

Commenting on the agreement reached today, Dr. Yasuo Naruke, Senior Executive Vice President of Toshiba Corporation and President and CEO of TMC said: “We are very pleased to have reached this outcome, which clearly benefits all involved. With the concerns about litigation and arbitration removed, we look forward to renewing our collaboration with Western Digital, and accelerating TMC’s growth to meet growing global demand for flash memory. Toshiba also remains on track to complete our transaction with the consortium led by Bain Capital by the end of March 2018. This will ensure that TMC has the resources it needs to continue to innovate and deliver for a fast-growing flash memory market, particularly in areas driven forward by advances in AI and IoT.”

Western Digital Chief Executive Officer Steve Milligan stated: “Western Digital’s core priorities have always been to protect the JVs and ensure their success and longevity, guarantee long-term access to NAND supply, protect our interests in the JVs, and create long-term value for our stakeholders. We are very pleased that these agreements accomplish these critical goals, allow Toshiba to achieve its objectives, and also enable us to continue delivering on the power of our platform. I want to thank the hardworking teams at Western Digital and TMC for the dedication they have exhibited over the past several months, operating the JVs without interruption, and we look forward to building upon the success of our 17 year partnership.”

Yuji Sugimoto, Managing Director, Head of Japan for Bain Capital said: “Bain Capital is pleased that Toshiba and Western Digital have resolved all outstanding legal disputes. The settlement represents the best possible outcome for all parties, clearing the way for the Bain Capital-led consortium to complete its acquisition of TMC as planned. We look forward to supporting TMC to achieve its strategic objectives while enhancing these important JVs with Western Digital.”

As part of the global settlement agreement, Toshiba, TMC and Western Digital have agreed to withdraw all pending litigation and arbitration actions.

Industry enters the age of WOW


December 13, 2017

By Christian G. Dieseldorff, Industry Research & Statistics Group, SEMI, Milpitas, California

The semiconductor industry has been there before, with large increases in investments followed by dramatic downturns. While the most dramatic downturns, 2001 and 2009, were due to, in a large part, acro-economic factors, the industry has typically observed one to two years of increased investment spending followed by a down period. This time around, the industry will achieve a “WOW” with three consecutive years of fab investment growth, a pattern not observed since the mid-1990s.

Why are things different this time?  A diverse array of technology drivers promise more robust long-term growth, such as Mobile applications, Internet of Things (IoT), Automotive & Robotics, Industrial, Augmented Reality & Virtual Reality (AR&VR), Artificial Intelligence (AI), and 5G networking. Each of these new technologies inspires a big “WOW” as the industry embarks on the beginning of a promising journey of growth.

Driven by these technologies, on average the semiconductor revenue CAGR from 2016 to 2021 is forecasted to be 6 percent (in comparison to the previous 2011-2016 CAGR of 2.3 percent). For the first time in the industry’s history, semiconductor revenues will exceed the US$400 billion revenue milestone in 2017. Demand for chips is high, pricing is strong for memory, and the competition is fierce. All of this is spurring increased fab investments, with many companies investing at previously unseen levels for new fab construction and fab equipment. See Figure 1.

Figure 1

Figure 1

The World Fab Forecast report, published on December 4, 2017, by SEMI, is modeling that fab equipment spending in 2017 will total US$57 billion or 41 percent year-over-year (YoY) growth. In 2018, spending is expected to shoot up another 11 percent at US$63 billion. The two spending jumps in 2017 and 2018 are contributing to the “WOW” factor and to two consecutive years of record fab investments. Following historic large investments, some slowdown is expected for 2019.

Many companies, such as Intel, Micron, Toshiba (and Western Digital), and GLOBALFOUNDRIES, have increased fab investments in 2017 and 2018; however, the strong increases we see in both years are not caused by these companies but by one company and primarily one region. See Figure 2.

Figure 2

Figure 2

The first jump – a Big WOW – in 2017 is the surge of investments in Korea, due mainly to Samsung. Samsung is expected to increase its fab equipment spending by 128 percent in 2017 from US$8 billion to US$18 billion. No single company has invested so much in a single year in its fabs and much of its spending is in Korea. SK Hynix also increased fab equipment spending, by about 70 percent, to US$5.5 billion, its largest spending level in its history.  While the bulk of Samsung’s and SK Hynix’s spending remains in Korea, some will also go to China, and in the case of Samsung to the United States. Both Samsung and SK Hynix are expected to maintain high levels of investments for 2018.

The second jump – another WOW – is investment growth for 2018 in China. China is expected to begin equipping the many fabs that were constructed in 2017. In the past, non-Chinese companies made the majority of the fab investments in China but for the first time in 2018, Chinese-owned companies will approach parity, spending nearly as much on fab equipment as non-Chinese device manufacturers.

Between 2013 and 2017, fab equipment spending in China by Chinese-owned companies typically ranged between US$1.5 billion to US$2.5 Billion per year, while non-Chinese companies invested between US$2.5 billion to US$5 billion per year. In 2018, Chinese-owned companies are expected to invest about US$5.8 billion, while non-Chinese will invest US$6.7 billion. Many new companies such as Yangtze Memory Technology, Fujian Jin Hua, Hua Li, and Hefei Chang Xin Memory are investing heavily in the region.

New fabs being built

Historic highs in equipment spending in 2017 and 2018 reflect growing demand. This spending follows unprecedented growth in construction spending for new fabs also detailed in SEMI’s World Fab Forecast report. Construction spending will reach all-time highs with China construction spending taking the lead: US$6 billion in 2017 and US$6.6 billion in 2018, shattering another record – no region has ever spent more than US$6 billion in a single year for construction. More new fabs mean another wave of spending on equipping fabs in the next few years. See Figure 3.

Fab-forecast-Chart3

Figure 3

Considering all of these “WOW” factors, there is good reason to feel positive about the semiconductor industry. Even with a slowdown, the industry has and will continue to enjoy a positive outlook for long-term growth. In the meantime, hold on tight and enjoy the “WOW.”

More details are available in SEMI’s just-published World Fab Forecast, December 4, 2017, edition which covers quarterly data (spending, capacity, technology nodes, wafer sizes, and product types) per fab until end of 2018.

Today, SEMI, the global industry association representing the electronics manufacturing supply chain, released its Year-end Forecast at the annual SEMICON Japan exposition. SEMI projects that worldwide sales of new semiconductor manufacturing equipment will increase 35.6 percent to US$55.9 billion in 2017, marking the first time that the semiconductor equipment market has exceeded the previous market high of US$47.7 billion set in 2000. In 2018, 7.5 percent growth is expected to result in sales of US$60.1 billion for the global semiconductor equipment market – another record-breaking year.

The SEMI Year-end Forecast predicts a 37.5 percent increase in 2017, to $45.0 billion, for wafer processing equipment. The other front-end segment, which consists of fab facilities equipment, wafer manufacturing, and mask/reticle equipment, is expected to increase 45.8 percent to $2.6 billion. The assembly and packaging equipment segment is projected to grow by 25.8 percent to $3.8 billion in 2017, while semiconductor test equipment is forecast to increase by 22.0 percent to $4.5 billion this year.

In 2017, South Korea will be the largest equipment market for the first time. After maintaining the top spot for five years, Taiwan will place second, while China will come in third. All regions tracked will experience growth, with the exception of Rest of World (primarily Southeast Asia). South Korea will lead in growth with 132.6 percent, followed by Europe at 57.2 percent, and Japan at 29.9 percent.

SEMI forecasts that in 2018, equipment sales in China will climb the most, 49.3 percent, to $11.3 billion, following 17.5 percent growth in 2017. In 2018, South Korea, China, and Taiwan are forecast to remain the top three markets, with South Korea maintaining the top spot at $16.9 billion. China is forecast to become the second largest market at $11.3 billion, while equipment sales to Taiwan are expected to approach $11.3 billion.

The following results are in terms of market size in billions of U.S. dollars:

equipment forecast

SEMI, the global industry association representing the electronics manufacturing supply chain, today reported that worldwide semiconductor manufacturing equipment billings reached US$14.3 billion for the third quarter of 2017.

Quarterly billings of US$14.3 billion set an all-time record for quarterly billings, exceeding the record level set in the second quarter of this year. Billings for the most recent quarter are 2 percent higher than the second quarter of 2017 and 30 percent higher than the same quarter a year ago. Sequential regional growth was mixed for the most recent quarter with the strongest growth in Europe. Korea maintained the largest market for semiconductor equipment for the year, followed by Taiwan and China. 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.

Quarterly Billings Data by Region in Billions of U.S. Dollars
Quarter-Over-Quarter Growth and Year-Over-Year Rates by Region
3Q2017
2Q2017
3Q2016
3Q2017/2Q2017
3Q2017/3Q2016
Korea
4.99
4.79
2.09
4%
139%
Taiwan
2.37
2.76
3.46
-14%
-32%
China
1.93
2.51
1.43
-23%
35%
Japan
1.73
1.55
1.29
11%
34%
North America
1.50
1.23
1.05
22%
43%
Europe
1.06
0.66
0.53
61%
100%
Rest of World
0.74
0.62
1.13
20%
-34%
Total
14.33
14.11
10.98
2%
30%

Source: SEMI (www.semi.org) and SEAJ (http://www.seaj.or.jp)

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. More information is also available online: www.semi.org/en/MarketInfo/EquipmentMarket.

By Walt Custer, Custer Consulting

SEMICON Europa 2017 and productronica were co-located November 14 to 17 at Messe Munchen in Munich, Germany. Attendance was very good and the mood was upbeat.

The third quarter of this year has seen broad growth both globally and also for the European electronic supply chain.

Chart 1 shows 3Q’17/3Q’16 growth by electronic sector for the world. SEMI and PCB process equipment and semiconductors stand out but almost all key sectors expanded.

Custer-Chart-1-Global-Elec-

Chart 2 shows third quarter growth for Europe.  SEMI equipment leads but the third quarter Eurozone expansion was broad based.

Custer-Chart-2-EUropean-Ele

At productronica, Custer Consulting presented at the “Business Outlook for the Global Electronic Supply Chain” event (with emphasis on Europe).  For a copy of Walt’s charts, please email [email protected].

GLOBALFOUNDRIES and Ayar Labs, a startup bringing optical input/output (I/O) to silicon chips, today announced a strategic collaboration to co-develop and commercialize differentiated silicon photonic technology solutions. The companies will develop and manufacture Ayar’s novel CMOS optical I/O technology, using GF’s 45nm CMOS fabrication process, to deliver an alternative to copper I/O that offers up to 10x higher bandwidth and up to 5x lower power. This cost-effective solution is integrated in-package with customer ASICs as a multi-chip module, and improves data speed and energy efficiency in cloud servers, datacenters and supercomputers. As part of the agreement, GF has also invested an undisclosed amount in Ayar Labs.

Modern data centers and cloud applications require high-performance, power-hungry chips to process and analyze huge volumes of data in real time. Growth in chip I/O capabilities has not matched exponential increases in computing power, because of physical limitations in electrical data transmission. Optical I/O, which leverages optical components on the CMOS die to transmit data at rapid speeds, will be a key enabler to overcoming the limitations of today’s data center interconnects. In addition, Ayar’s technology reduces power consumption at both the network and processor level.

“GF has demonstrated true technology leadership in recognizing optical I/O as the inevitable next step as we move into a More than Moore world,” said Alex Wright-Gladstein, CEO at Ayar Labs. “This collaboration between Ayar and GF could improve chip communication bandwidth by more than an order of magnitude and at lower power, and is a validation of Ayar’s viability in the current semiconductor ecosystem. This collaboration will unlock a larger market opportunity, expanding both our and GF’s customer base. We look forward to working with GF to help solve the interconnect problems of today’s chips and create greater value for our customers than if both companies worked independently.”

“The Ayar Labs team has been designing cutting-edge silicon photonics components on GF’s technology for the past eight years and has achieved exceptional results,” said Mike Cadigan, senior vice president of global sales and business development at GF. “Our strategic collaboration builds on our relationship, leveraging GF’s silicon photonics IP portfolio and our world-class manufacturing expertise to enable faster and more energy-efficient computing systems for data centers.”

The collaboration brings together Ayar Labs’ patented IP in optical technology with GF’s best-in-class expertise in silicon photonics to co-develop optical solutions that will be fabricated using GF’s process technology. The availability of this technology, including certain Design IP cores, will enable internet service providers, system vendors and communication systems to push data capacity to 10 Tera bits per second (Tbps) and beyond, while maintaining the low energy and cost of optical-based interconnects.

The semiconductor industry continued its upward trend in the third quarter of 2017, notching 12 percent sequential growth with strength across all application markets, according to IHS Markit (Nasdaq: INFO). Global revenue totaled $113.9 billion, up from $101.7 billion in the second quarter of 2017.

As memory prices remain high and the wireless market continues to see strong demand through the fourth quarter, 2017 is shaping up to be a record-breaking year for the semiconductor industry. IHS Markit projects that semiconductor revenue will reach a record-high $428.9 billion in 2017, representing a year-over-year growth rate of 21 percent.

Key growth drivers

All application end markets posted sequential growth over the prior quarter, with wireless communications and data processing categories leading the pack.

Revenue from wireless applications grew faster sequentially in the third quarter of 2017 than any of the other high-level application markets. Semiconductor revenue from wireless applications was a record high $34.8 billion in the third quarter, representing nearly 31 percent of the total semiconductor market. IHS Markit anticipates an even bigger fourth quarter for wireless applications, projecting $37.5 billion in revenue — and more than $131 billion for the full-year 2017.

As the wireless market evolves, this growth can be attributed to a number of factors. ”More complex and comprehensive smartphone systems on a chip are supporting applications such as augmented reality and computational photography,” said Brad Shaffer, senior analyst for wireless semiconductors and applications at IHS Markit. “Premium smartphones have increasing amounts of memory and storage. The radio frequency content in these smartphones has also grown considerably over the past few product generations, with many high-end smartphones now supporting gigabit LTE mobile broadband speeds.”

The memory markets proved once again to be the driving force and highest-growing segment for semiconductors in the third quarter of 2017. “The DRAM industry had another record quarter with $19.8 billion in revenue, exceeding the prior record by more than $3 billion,” said Mike Howard, director for DRAM memory and storage research at IHS Markit. “Prices and shipments were up during the quarter as strong demand for mobile and server DRAM continued to propel the market.”

Top_5_memory

The NAND industry had another record quarter as well, growing 12.9 percent in the third quarter of 2017, with total revenue reaching $14.2 billion. “Pricing was flat in the quarter, as seasonally strong demand driven by the mobile and solid-state drive segments was able to offset moderate shipment growth,” said Walter Coon, director for NAND flash technology research at IHS Markit. “The market is expected to soften exiting 2017 and into early next year, as the industry transition to 3D NAND technology continues to progress and the market enters a traditionally slower demand period.”

Manufacturer moves

Samsung officially passed Intel to become the number-one semiconductor supplier in the world in the third quarter of 2017, growing 14.9 percent sequentially. Intel now comes in at number two, with SK Hynix securing the third rank in terms of semiconductor revenue for the third quarter.

top_5_semiconductor

Among the top 20 semiconductor suppliers, Apple and Advanced Micro Devices (AMD) achieved the highest revenue growth quarter over quarter by 46.6 percent and 34.3 percent, respectively.

There was a good deal of market share movement within the top 10 suppliers throughout the third quarter as well. In terms of semiconductor revenue, Qualcomm surpassed Broadcom Limited to secure the number-five spot, while nVidia made its way into the top 10 ranking for the first time ever. At this time last year, the top five semiconductor companies controlled 40 percent market share of the entire industry. The top five gained 4.2 percent more market share this year over last year, while comprising three memory companies instead of the previous two.

More information on this topic can be found in the latest release of the Semiconductor Competitive Landscaping Tool (CLT) from the IHS Markit Semiconductor Competitive Landscape CLT Intelligence Service.

North America-based manufacturers of semiconductor equipment posted $2.02 billion in billings worldwide in October 2017 (three-month average basis), according to the October Equipment Market Data Subscription (EMDS) Billings Report published today by SEMI.

SEMI reports that the three-month average of worldwide billings of North American equipment manufacturers in October 2017 was $2.02 billion.The billings figure is 1.8 percent lower than the final September 2017 level of $2.05 billion, and is 23.7 percent higher than the October 2016 billings level of $1.63 billion.

“Equipment billings dipped in October, the fourth consecutive monthly decline during this record spending year,” said Ajit Manocha, president and CEO of SEMI. “In spite of this seasonal weakness, we expect equipment spending to increase by 30 percent or more this year and are positive about growth in 2018.”

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
May 2017
$2,270.5
41.8%
June 2017
$2,300.3
34.1%
July 2017
$2,269.7
32.9%
August 2017
$2,181.8
27.7%
September 2017 (final)
$2,054.8
37.6%
October 2017 (prelim)
$2,017.0
23.7%

Source: SEMI (www.semi.org), November 2017

 

SkyWater Technology Foundry announces that it has been assigned the Specialty Foundry customer relationships from Cypress Semiconductor Corporation. The customer relationships were already being serviced within SkyWater’s 200mm semiconductor wafer manufacturing facility when purchased from Cypress earlier this year. Through the transaction, SkyWater assumes ownership of Cypress’ current embedded Specialty Foundry customer engagements and adds associated business management personnel.

“This transaction builds upon the concept of a Technology Foundry, which enables customers to design, build, and scale their products by simplifying the realization of complex technologies through access to semiconductor technology, experienced personnel and volume manufacturing capabilities,” said SkyWater Chairman of the Board Gary Obermiller. “The addition of the Specialty Foundry customers is synergistic with our pure-play Technology Foundry model; customers come to us with their ideas and we transform them into practice through the application of our differentiated semiconductor technology and operational expertise.”

The Technology Foundry Business model enables customers to design and optimize their product concepts. In tandem with SkyWater’s advanced wafer manufacturing facility, customers are able to prototype and rapidly scale to production volumes, all inside of a high-yield production fab.

“The Specialty Foundry Business was created in 2008 with the vision of providing advanced development access to a high-volume production-scale fab, building on the site’s proven track record of success in bringing new technologies to production,” said Michael Moore, executive vice president of Sales and Marketing at SkyWater. “It’s in our DNA. We’ve been doing development work at this site for decades, right alongside production.  This move is a natural next step for the company and our customers.  We have successfully diversified the customer base this way, by serving new and unique markets that are poised for rapid growth.”

As part of the assignment, which closed October 2, SkyWater will now have direct responsibility for all Specialty Foundry Business customers, eliminating the prior Cypress interface. Because of the existing working relationship between all parties, there will be a seamless transition for all current projects; the same team will continue working with all existing customers, the only difference being that they are now SkyWater employees.

Within SkyWater’s manufacturing facility there are a wide variety of unique technologies currently being developed and manufactured – from superconducting quantum computers to advanced technology Readout IC’s (ROIC), MEMS-based infrared imagers, DNA sequencing and fabrication platforms, and photonic integrated circuit (PIC) devices.

According to SkyWater’s Senior Director of Sales Brad Ferguson, “These types of Technology engagements just start with a simple conversation about our capabilities, and once Customers see the potential of our Technology Foundry solution, they realize this is the right place to transform their concepts into a manufactured product.”

SkyWater is a U.S.-based technology foundry specializing in the development and manufacturing of a wide variety of semiconductor based solutions.