Category Archives: Metrology

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced that worldwide sales of semiconductors reached $25.87 billion for the month of August 2013, an increase of 6.4 percent compared to August 2012, marking the industry’s largest year-over-year growth since March 2011. Sales in the Americas increased by 23.3 percent compared to August 2012, while global sales in August were 1.3 percent higher than the previous month’s total of $25.53 billion. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Global semiconductor sales have now increased for six consecutive months, and the industry is well ahead of last year’s pace, thanks largely to sustained growth in the Americas,” said Brian Toohey, president and CEO, Semiconductor Industry Association. “Strong demand for memory products has driven sales in recent months, but sales were also up in August among non-memory products, demonstrating the breadth of the semiconductor market’s strength.”

Regionally, August sales topped sales from the same month last year in the Americas (23.3 percent), Asia Pacific (7.6 percent), and Europe (5 percent), but decreased in Japan (-16.4 percent), in large part because of the devaluation of the Japanese yen. Sales in August were up across all regions compared to the previous month.

“Semiconductor sales have demonstrated increasing momentum in recent months, thanks in part to stabilizing macroeconomic conditions, but this week’s government shutdown and a looming debate over the nation’s debt limit threaten to destabilize the economy and disrupt growth,” said Toohey. “Congress and the Administration should work together to avoid these self-inflicted wounds and get America’s fiscal house in order.”

Customers in the Americas region (primarily the U.S.) are expected to account for nearly two-thirds of pure-play foundry sales in 2013, a slight increase from 2012.  IC Insights forecasts that Americas region will represent 70 percent of TSMC’s sales, 67 percent of sales from GlobalFoundries, and 47 percent of sales from both UMC and SMIC (Figure 1).  The Americas region is forecast to account for $22.4 billion of the $36.3 billion worldwide pure-play foundry market in 2013, which is up from $19.2 billion (61 percent) of the total $31.7 billion pure-play foundry market in 2012.  The Asia-Pacific region is forecast to represent $10.7 billion (29 percent) of pure-play foundry sales in 2013; and Europe, $2.5 billion (seven percent).  Japan is by far the smallest market for pure-play foundry sales and is forecast to hold only a two percent share in 2013, with its foundry market expected to be worth less than $1.0 billion, which is one reason that UMC closed its Japanese foundry fabrication facility earlier this year.

Six of the 10 largest fabless/fab-lite semiconductor companies in the world—Qualcomm, AMD, Broadcom, Nvidia, Marvell, and LSI—are headquartered in the Americas region.  Each is a customer of TSMC.  Apple will soon be another significant customer for TSMC.  GlobalFoundries also counts Qualcomm, AMD, Broadcom, and LSI among its major customers.

In the next five years, IC Insights expects an increasing share of pure-play foundries sales to come from the Asia-Pac region as Taiwanese and Chinese IC design houses continue to advance.  Among the four large pure-play foundries, only China-based SMIC counts the Asia-Pac region as its largest market.

IC Insights believes that the Japanese market for pure-play foundry services also will increase in the future. The fabless IC company infrastructure in Japan is very small and not expected to increase much over the next five years.  Most of the increase in foundry demand in Japan is expected to be due to a greater number of Japanese IDMs (e.g., Renesas, Toshiba, Sony, etc.) utilizing leading-edge IC foundry services.

The number of semiconductor manufacturers in Europe has slowly eroded over the years.  Three large Europe companies—ST, NXP, and Infineon—have employed a fab-lite business model for some time.  Other significant fabless semiconductor suppliers in Europe include CSR, Dialog, and Lantiq.  IC Insights does not foresee Europe representing more than five to seven percent of pure-play foundry sales in the near future.

Figure 1

Figure 1

All of the increase in pure-play foundry sales in 2013 is expected to be due to ≤28nm feature size device sales. IC Insights continues to believe that the more profitable (i.e., successful) major pure-play foundries, which include TSMC, GlobalFoundries, UMC, and SMIC, will be those that keep at the leading edge of the process technology roadmap.

Gary Dickerson (L), president and CEO of Applied Materials and Tetsuro Higashi, chairman, president and CEO of Tokyo Electron.

Gary Dickerson (L), president and CEO of Applied Materials and Tetsuro Higashi (R), chairman, president and CEO of Tokyo Electron.

Applied Materials Inc. and Tokyo Electron Limited today announced Applied Materials agreed to merge with Tokyo Electron in a deal valuing the Japanese semiconductor production equipment maker at $9.3 billion, creating a giant in the chip and display manufacturing-tools sector. An all-stock combination values the new combined company at approximately $29 billion. The companies expect the transaction to close in mid to second half of 2014.

“Today, we are launching a new company and taking a bold step forward for our industry,” said Tetsuro Higashi, chairman, president and CEO of Tokyo Electron.

Under the terms of the agreement, Tokyo Electron shareholders will receive 3.25 shares of the new company for every Tokyo Electron share held. Applied Materials shareholders will receive 1 share of the new company for every Applied Materials share held. After the close, Applied Materials shareholders will own approximately 68 percent of the new company and Tokyo Electron shareholders approximately 32 percent.

Gary Dickerson, president and CEO of Applied Materials, said he believes they are creating a global innovator in precision materials engineering and patterning.

“We believe the combination will accelerate our momentum for profitable growth, increase the value we deliver to shareholders and create great opportunities for our employees,” said Dickerson.

The new company will have a shared leadership team. Tetsuro Higashi will serve as chairman, and Gary Dickerson will serve as chief executive officer.  The board will be made up of eleven directors with five directors appointed by each company and one additional director to be mutually agreed upon. Seven of the eleven directors will be independent. Bob Halliday of Applied Materials will serve as chief financial officer. The company will also have a new name, dual headquarters in Tokyo and Santa Clara, a dual listing on the Tokyo Stock Exchange and the NASDAQ, and will be incorporated in The Netherlands.

This merger could give the new company control of as much as a quarter of the entire market. Other top Applied Materials rivals include Veeco Instruments, KLA-Tencor, Lam Research Corp and ASM International.

In its official release, Applied Materials said the combined organization is intended to accelerate the existing strategic visions of Applied Materials and Tokyo Electron and increase the new company’s opportunity to enable major, future technology inflections and advance customers’ roadmaps in both semiconductor and display, citing the market growth in personal mobile electronics, such as smartphones and tablets, as a driver in the company’s strategic plans.

“We are building this new company in the spirit of a merger of equals,” said Dickerson. “For five decades, we have each made significant contributions to the semiconductor industry and we have deep respect for the capabilities that the other brings to this combination. Both companies have a strong heritage of customer service and an enduring commitment to push the boundaries of technology and engineering.  We share many common values and are confident we will execute together to achieve our strategic and financial goals.”

The companies expect to achieve $250 million in annualized run-rate operating synergies by the end of the first full fiscal year and $500 million in run-rate operating synergies realized in the third full fiscal year.  In addition, the new company expects to realize meaningful savings as a result of the new corporate structure. The new company intends to commence a $3.0 billion stock repurchase program targeted to be executed within 12 months following the close of the transaction. On a non-GAAP basis, taking into account the buyback, the transaction is expected to be EPS accretive at the end of the first full fiscal year after transaction close.

Goldman, Sachs & Co. acted as Applied Materials’ exclusive financial advisor, and Weil, Gotshal & Manges LLP, Mori, Hamada & Matsumoto, and De Brauw Blackstone Westbroek acted as legal counsel to Applied Materials.  Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. acted as Tokyo Electron’s exclusive financial advisor, and Jones Day, and Nishimura & Asahi acted as legal counsel to Tokyo Electron.

Worldwide semiconductor manufacturing equipment spending is projected to total $34.6 billion in 2013, an 8.5 percent decline from 2012 spending of $37.8 billion, according to Gartner, Inc. Gartner said that capital spending will decrease 6.8 percent in 2013, due to diminishing 28nm investment from a softening in the mobile phone market.

“Weak semiconductor market conditions that continued into the first quarter of 2013 generated downward pressure on new equipment purchases,” said Dean Freeman, research vice president at Gartner. “However, semiconductor equipment quarterly revenue is beginning to improve, and positive movement in the book-to-bill ratio indicated that spending for equipment will pick up in the remainder of 2013. Looking beyond 2013, we expect that the current economic malaise will have worked its way through the industry, and spending will follow a generally increasing pattern in all sectors throughout the rest of the forecast period.”

Logic spending has been the key driver of capital spending in 2013; however, a softening in the mobile phone markets has dampened investment in 28nm during the third quarter, and this is projected to continue into the fourth quarter of 2013. Memory spending has picked up some of the slack and the total spending in the second half of 2013 should outpace the first half of the year.

Gartner said that capital spending is highly concentrated among a handful of companies. The top three companies (Intel, TSMC and Samsung) account for more than half of 2013 spending. Spending by the top five semiconductor manufacturers exceeds 65 percent of total 2013 spending, with the top 10 accounting for 76 percent of the total. 2013 spending will be back-half-loaded, with capacity increases occurring as memory market conditions improve, and Intel prepares for initial 14nm production late in the year.

Gartner predicts that 2014 semiconductor capital spending will increase 14.1 percent, followed by 13.8 percent growth in 2015. The next cyclical decline will be a mild drop of 2.8 percent in 2016, followed by a return to growth in 2017 (see Table 1).

Table 1

Worldwide Semiconductor Manufacturing Equipment Spending Forecast, 2012-2017 (Millions of Dollars)

 

2012

2013

2014

2015

2016

 

 

 

2017
Semiconductor Capital Spending ($M)

58,742.8

54,768.2

62,485.5

71,107.8

69,134.8

74,637.4
Growth

-11.9

-6.8

14.1

13,8

-2.8

8.0
Capital Equipment ($M)

37,833.2

34,631.4

40,119.0

46,948.4

44,436.1

49,129.4
Growth

-16.1

-8.5

15.8

17.0

-5.4

10.6
Wafer Fab Equipment ($M)

29,644.2

26,953.7

30,979.7

37,049.2

35,982.0

39,606.5
Growth

-18.5

-9.1

14.9

19.6

-2.9

10.1
Electronic Equipment Production ($M)

1,474,834.0

1,512,256.2

1,576,024.1

1,646,942.1

1,714,129.4

1,781,194.9
Growth

3.6

2.5

4.2

4.5

4.1

3.9
Semiconductor Revenue (excluding solar) ($M)

299,912.4

315,392.8

332,998.9

343,764.0

362,508.7

382,516.0
Growth

-2.6

5.2

5.6

3.2

5.5

5.5

Source: Gartner (September 2013)

“In 2013, the wafer fab equipment (WFE) picture is one of continuous quarter-over-quarter growth as major manufacturers come out of a period of high inventories and a generally weak semiconductor market,” said Mr. Freeman. “Early in the year, the book-to-bill ratio passed 1-to-1 for the first time in months, signaling that the need for new equipment is strengthening because demand for leading-edge devices is improving.”

Gartner predicts that wafer fab manufacturing capacity utilization will hover in the high-70 percent to low-80 percent range during the first half of 2013 and building to the mid-80 percent range at the beginning of 2014. Leading-edge utilization will move into the low-90 percent range by the end of 2013, providing for a positive capital investment environment.

The capital spending forecast estimates total capital spending from all forms of semiconductor manufacturers, including foundries and back-end assembly and test services companies. This is based on the industry’s requirements for new and upgraded facilities to meet the forecast demand for semiconductor production. Capital spending represents the total amount spent by the industry for equipment and new facilities.

The WFE forecast estimates market revenue based on future global sales of the equipment needed to produce the wafers on which semiconductor devices are fabricated. WFE demand is a function of the number of fabs in operation, capacity utilization, their size and their technology profile.

More detailed analysis is available in the report ” Forecast: Semiconductor Manufacturing Equipment, Worldwide, 3Q13 Update.” The report is available on Gartner’s website at http://www.gartner.com/resId=2591324.

Entegris, Inc. and SEMATECH announced they have partnered to move forward the development of advanced nanoscale particle removal processes and cleaning technologies for next-generation wafers and devices.

This collaboration will address some of the profound changes taking place in the semiconductor industry that are impacting fundamental aspects of process and equipment design—such as integration of new materials and process technology for sub-20nm node manufacturing, next-generation lithography requirements and the progression to 450mm wafers. One key issue relates to the preparation of critical surfaces through the entire semiconductor manufacturing process. Entegris will work with experts from SEMATECH’s Nanodefect Center to develop new technologies and solutions to reduce nano-scale particle contamination during wafer processing.

“We are pleased to partner with SEMATECH to provide early solutions for wafer surface cleaning,” said Bertrand Loy, president and CEO of Entegris. “Our goal is to leverage our contamination control expertise to develop filtration and particle detection methods for the most advanced cleaning processes.”

“SEMATECH’s Nanodefect Center aims to build industry participation in detecting, modeling, characterizing, and providing solutions for defect issues as geometries shrink below the 10nm node,” said Michael Lercel, senior director of Nanodefectivity and Metrology. “Our partnership with Entegris brings additional expertise to SEMATECH, and in turn will raise the level of our research efforts and further strengthen SEMATECH’s commitment in identifying the challenges of future technology nodes.”

Built on more than a decade of technical expertise in surface cleaning, particle removal and cleaning technology development, SEMATECH’s Nanodefect Center provides a suite of metrology and analysis capabilities to investigate the generation, propagation, removal, and impact of defects generated by equipment, equipment components, and materials used in advanced semiconductor processes such as lithography, etch, CMP, deposition, and cleaning.

The worldwide semiconductor market is expected to grow three percent from 2012 to 2013. There has been sequential market growth from 1Q13 to 2Q13 and the vast majority of the top 20 vendors are expecting 3Q13 to grow revenues again.

“It has been a tough few years for the semiconductor industry. While we haven’t seen a dramatic decline in overall revenues since the 2008/2009 period the market has been pretty stagnant since 2010,” comments Peter Cooney, practice director. “We will see some growth in 2013 as the wider economic environment improves but major market growth is not expected until later in 2014/early 2015.”

Consolidation continues to be rife in the industry: a number of major mergers and acquisitions are expected to take place in the second half of 2013. These include the merger of Fujitsu and Panasonic semiconductor divisions and the acquisition of Elpida by Micron. There have also been many smaller M&A transactions such as Intel’s acquisition of ST-Ericsson GPS business and Broadcom’s acquisition of Renesas Mobile’s LTE assets as major vendors exit the mobile device semiconductor market.

“As the semiconductor market has been squeezed we have seen an increase in consolidation amongst the major players,” adds Cooney. “Margins are falling and the competitive environment is tough—especially in the mobile device market—this is driving vendors to re-evaluate their overall strategy and pull out of some of their once major markets. We have seen a number of major vendors exit the mobile device market – Freescale, TI, STMicroelectronics, and Renesas and we expect there are more to come.”

ABI Research’s new “Worldwide Semiconductor Market – 2Q13” Market Data provides semiconductor vendors with an updated top level view of the worldwide semiconductor market and tracks market shares for the top 20 suppliers.

SEMI, the global industry association for companies that supply manufacturing technology and materials to the world’s chip makers, today reported that worldwide semiconductor manufacturing equipment billings reached US$ 7.55 billion in the second quarter of 2013. The billings figure is 3 percent higher than the first quarter of 2013 and 27 percent lower than the same quarter a year ago. The data is gathered jointly with the Semiconductor Equipment Association of Japan (SEAJ) from over 100 global equipment companies that provide data on a monthly basis.

Worldwide semiconductor equipment bookings were $9.17 billion in the second quarter of 2013. The figure is five percent lower than the same quarter a year ago and 18 percent higher than the bookings figure for the first quarter of 2013.

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:

second quarter semiconductor equipment billings

Click to view full screen.

Applied Materials, Inc. announced today that its board of directors has appointed Gary E. Dickerson as president and chief executive officer and Michael R. Splinter as executive chairman of the board of directors, effective September 1, 2013. Dickerson also was elected a member of the board of directors, effective at the same time. Dickerson is currently president of Applied Materials and succeeds Splinter who has served as the company’s CEO since 2003.

Applied Materials’ Mike Splinter (L) will become executive chairman of the Board of Directors and Gary Dickerson (R) will become president and CEO and a member of the board of directors, effective Sept. 1, 2013. Dickerson has served as president since June 2012 and was previously CEO of Varian Semiconductor Equipment Associates Inc., which was acquired by Applied Materials in 2011.  Splinter has been CEO since 2003.

"As president, Gary has proved to be an outstanding leader and partner, focusing Applied on new strategies for profitable growth through our unmatched strength in precision materials engineering," said Mike Splinter.  "I welcome him to the Board and have every confidence that his vision and personal drive will translate into remarkable success in leading Applied Materials as our next CEO."

"Today, Applied Materials enjoys a stronger foundation than ever before on which to build momentum for growth," said Gary Dickerson.  "We have better and broader technology, very deep talent and the passion to drive the materials innovation that will provide the device performance and yield solutions our customers need to advance and win.  Our opportunities have never been greater and I am grateful to Mike and the board for the privilege to lead Applied into a new era of growth and success."

A long-time industry leader, Gary Dickerson, 56, has a demonstrated track record of delivering growth in revenue and profits while achieving recognition for outstanding customer satisfaction and gaining market share. Dickerson served for seven years as CEO of Varian Semiconductor Equipment Associates, Inc. until its acquisition by Applied Materials in 2011 and spent 18 years at KLA-Tencor Corporation where he held a variety of operations and product development roles before serving as president and chief operating officer.  He earned a BS degree in Engineering Management from the University of Missouri, Rolla and an MBA from the University of Missouri, Kansas City.

Mike Splinter, 62, was named president and chief executive officer of Applied Materials and a member of its board of directors in 2003, and became chairman of the board in 2009. Splinter is a 40-year veteran of the semiconductor industry and has led Applied to record revenue and profits during his tenure as CEO. This fall, he will receive the Semiconductor Industry Association’s 2013 Robert N. Noyce Award for his outstanding achievements and leadership in support of the semiconductor industry.

Read more: Applied Materials CEO receives 2013 SIA Robert N. Noyce Award

Maxim Integrated Products, Inc. announced it has entered into a definitive agreement to acquire Volterra Semiconductor Corp. for $23 per share, which represents a 55 percent premium to Volterra Semiconductor’s closing share price on August 14, 2013. The transaction value is approximately $605 million equity value or $450 million net of Volterra’s cash position of approximately $155 million.

Volterra is a provider in high-current, high-performance, and high-density power management solutions. The company develops highly integrated solutions primarily for the enterprise, cloud computing, communications, and networking markets. Volterra’s portfolio of highly integrated products enables better performance, smaller form factors, enhanced scalability, improved system management, and lower total cost of ownership.

"Maxim Integrated is known for its highly integrated solutions. With Volterra, we will strengthen our position in the enterprise and communications markets," said Tunç Doluca, Maxim’s president and chief executive officer. "We add a very talented team and leading-edge proprietary technology in high-current power management solutions, which further diversifies our business model."

"This is an attractive transaction for our employees, customers, and investors," said Jeffrey Staszak, Volterra’s president and chief executive officer. "The Volterra team will build upon Maxim’s scale and market leadership to expand our ability to deliver innovative and differentiated products to our customers.”

At $9 billion, power management is currently the largest and fastest-growing product segment in the analog market, according to Databeans. Maxim offers a broad portfolio of products for power conversion: switching regulators, linear regulators, charge pumps, digital Point-of-Load (POL) converters, and Power Management Integrated Circuits (PMICs), primarily in medium-to-low current applications.

Pending regulatory approvals, Maxim’s acquisition of Volterra is expected to close early in the December quarter.

View Inc. today announced Harold Hughes, a semiconductor industry veteran, is joining the company’s board of directors. Hughes previously held positions of CEO of Rambus and CFO of Intel and brings extensive experience driving global commercialization of innovative technology-oriented products.

"We are excited to welcome Harold to the View board of directors," said Dr. Rao Mulpuri, CEO of View Inc. "View is rapidly expanding its commercial capability and manufacturing operations to support the strong market momentum for our dynamic glass product.  Harold has held key leadership positions in innovative technology companies, and brings broad financial, operating and business strategy credentials to our board at this important juncture."

Hughes brings to View more than 30 years of experience in the high technology industry, including service as a corporate officer in major multi-national companies.  Hughes served as a director of Rambus Inc., a chip interface company from 2003 to 2012 and as its chief executive officer and president from 2005 to 2012.  He started his career as a United States Army Officer before starting his private sector career at Intel.  He held a variety of positions within Intel including treasurer, vice president of Intel Capital, chief financial officer, and vice president of planning and logistics. Following his tenure at Intel, Hughes was the chairman and chief executive officer of Pandesic, LLC. Hughes currently also serves on the board of directors of Cortina Systems and Cresta Tech.  He holds a B.A. in Liberal Arts from the University of Wisconsin and an M.B.A. from the University of Michigan.

"I’m excited to join View to help scale the company and its game-changing dynamic glass technology," Hughes said.  "I believe View has the right product and a world-class management team dedicated to bringing this technology into the mainstream.  I look forward to supporting View’s continued success."