Category Archives: Wafer Processing

Worldwide silicon wafer area shipments increased 3 percent in 2016 when compared to 2015 area shipments according to the SEMI Silicon Manufacturers Group (SMG) in its year-end analysis of the silicon wafer industry, while worldwide silicon revenues increased by 1 percent in 2016 compared to 2015.

Silicon wafer area shipments in 2016 totaled 10,738 million square inches (MSI), up from the previous market high of 10,434 million square inches shipped during 2015. Revenues totaled $7.21 billion, one percent higher from the $7.15 billion posted in 2015. “Annual semiconductor silicon volume shipments reached record levels for the third year in a row,” said Chungwei (C.W.) Lee, chairman SEMI SMG and Corporate Development VP of GlobalWafers. “However, despite historical shipment highs, the same cannot be said about silicon revenue. The market remains well below pre-downturn levels.”

Annual Silicon* Industry Trends

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016
Area Shipments (MSI)

8,661

8,137

6,707

9,370

9,043

9,031

9,067

10,098

10,434

10,738
Revenues ($B)

12.1

11.4

6.7

9.7

9.9

8.7

7.5

7.6

7.2

7.2

*Shipments are for semiconductor applications only and do not include solar applications

Silicon wafers are the fundamental building material for semiconductors, which in turn, are vital components of virtually all electronics goods, including computers, telecommunications products, and consumer electronics. The highly engineered thin round disks are produced in various diameters (from one inch to 12 inches) and serve as the substrate material on which most semiconductor devices or “chips” are fabricated.

All data cited in this release is inclusive of polished silicon wafers, including virgin test wafers and epitaxial silicon wafers, as well as non-polished silicon wafers shipped by the wafer manufacturers to the end-users.

Kinetics Holding GmbH, a full-service process and mechanical contractor for high-technology markets worldwide, announced today the acquisition of Wafab International Inc., a global supplier of wet processing stations and components. Wafab’s line of specialized chemical deposition tools and established customer base immediately expands Kinetics’ current product portfolio and overall turnkey offering to broaden its global reach and better serve its semiconductor and solar customers from R&D to volume manufacturing.

Combining the two entities strengthens Kinetics’ U.S. capabilities and pushes it further into the equipment market with a deeper solution-based offering. In addition to its process media distribution systems, Kinetics can now offer customers a complete solution with an emphasis on process-driven applications that move business from the sub-fab into the cleanroom, resulting in higher margins and closer involvement with the end-customer. At the same time, Wafab’s core wet bench business will benefit from an international sales organization that can introduce Wafab products to customers around the globe.

“There is obvious synergy between our two companies, both in technology and business,” said Peter Maris, Kinetics CEO. “We’ve realized a good working relationship since we first began our cooperation in 2015, and this deal supports our vision for global expansion and continued leadership in providing turnkey process systems and sustaining services. Together with Wafab’s domestic equipment manufacturing capability and strength in wet bench technology, Kinetics is well positioned to benefit from its relationships within the university and research lab markets. Inheriting a solid customer base in conjunction with our newly combined service offering opens the doors to even further market penetration.”

In conjunction, as part of its overall turnkey strategy, Kinetics also announced that it has combined its equipment, facility management and equipment engineering businesses, including the Wafab products, into one global operating entity. This allows the company to provide a fully integrated solution to customers who want to simplify their supplier base. The newly established Kinetics Solutions Group (KSG) will have responsibility for all sales, product management, equipment engineering, manufacturing, startup and commissioning and technology innovation.

Wafab’s facility in Livermore, Calif will serve as the main hub for the U.S. equipment and facility management businesses. Wafab excels in developing process technology in a high purity environment; a niche market served by only a few equipment suppliers. Its core products comprise primarily new and refurbished wet benches for processing chemicals and etching wafers.

“Wafab has prided itself on delivering excellence in high purity chemical deposition tools to the R&D and university markets for 20-plus years,” said Jorge Freitas, Wafab general manager. “We are excited to become part of the Kinetics family and look forward to the exposure and opportunities that being part of this global organization will provide.”

Following economic leaders meeting in Switzerland for the World Economic Forum, electronics manufacturing executives will attend Europe’s SEMI Industry Strategy Symposium (ISS Europe) in Munich, Germany on 5-7 March. Hosted by SEMI Europe, the Symposium brings together leading analysts, researchers, economists, and technologists for critical insights on the forces shaping the electronics manufacturing supply chain. ISS Europe 2017 is the three-day flagship business event that discusses how to cope with the rapid changes and growing challenges of the digital revolution.

“ISS Europe is the leading European strategic platform where industry thought leaders across the electronics manufacturing value chain share the latest analysis and outlooks.  The conference covers global industry trends and challenges and opportunities from innovation, materials, design, and manufacturing – with a focus on end-applications in automotive, health care and smart manufacturing,” said Laith Altimime, president, SEMI Europe.

Twenty industry leaders will present insights into the current market developments, including:

  • AUDI AG: Berthold Hellenthal, Robust Design / Komponentenerprobung Elektronik, Cross-Industry Collaboration Networks Accelerate Innovations
  • Dresden University Hospital: Christopher Piorkowski, professor at the Heart Center, Digital Health in Cardiovascular Medicine: Patients, Sensors, and Clinical Care
  • Mentor Graphics: Wally Rhines, CEO, Semiconductor Consolidation versus Specialization: What’s the Driving Force for Mergers?
  • Imec: Ann Stegen, executive VP, Transformation into a 7nm Logic Node Solution with Fundamental Advantages
  • Robert Bosch: Birte Lübbert, senior VP, Smart Manufacturing by Bosch in Reutlingen Plant 2
  • TSMC Europe: Dan Kochpatarin, Senior Director, High Performance Applications to Drive Innovation and Collaboration

Join Europe’s strategic thinkers and business drivers at ISS Europe 2017 in Munich (Germany) from March 5-7, 2017!  Register here. For more information visit: www.semi.org/eu/iss-europe-2017

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, today announced the global semiconductor industry posted sales totaling $338.9 billion in 2016, the industry’s highest-ever annual sales and a modest increase of 1.1 percent compared to the 2015 total. Global sales for the month of December 2016 reached $31.0 billion, equaling the previous month’s total and bettering sales from December 2015 by 12.3 percent. Fourth quarter sales of $93.0 billion were 12.3 percent higher than the total from the fourth quarter of 2015 and 5.4 percent more than the third quarter of 2016. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Following a slow start to the year, the global semiconductor market picked up steam mid-year and never looked back, reaching nearly $340 billion in sales in 2016, the industry’s highest-ever annual total,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Market growth was driven by macroeconomic factors, industry trends, and the ever-increasing amount of semiconductor technology in devices the world depends on for working, communicating, manufacturing, treating illness, and countless other applications. We expect modest growth to continue in 2017 and beyond.”

2016 worldwide revenue

Several semiconductor product segments stood out in 2016. Logic was the largest semiconductor category by sales with $91.5 billion in 2016, or 27.0 percent of the total semiconductor market. Memory ($76.8 billion) and micro-ICs ($60.6 billion) – a category that includes microprocessors – rounded out the top three segments in terms of total sales. Sensors and actuators was the fastest growing segment, increasing 22.7 percent in 2016. Other product segments that posted increased sales in 2016 include NAND flash memory, which reached $32.0 billion in sales for a 11.0 percent annual increase, digital signal processors ($2.9 billion/12.5 percent increase), diodes ($2.5 billion/8.7 percent increase), small signal transistors ($1.9 billion/7.3 percent), and analog ($47.8 billion/5.8 percent increase).

Regionally, annual sales increased 9.2 percent in China, leading all regional markets, and in Japan (3.8 percent). All other regional markets – Asia Pacific/All Other (-1.7 percent), Europe (-4.5 percent), and the Americas (-4.7 percent) – saw decreased sales compared to 2015.

“A strong semiconductor industry is strategically important to U.S. economic growth, national security, and technological leadership,” said Neuffer. “We urge Congress and the new administration to enact polices in 2017 that spur U.S. job creation, and innovation and allow American businesses to compete on a more level playing field with our competitors abroad. We look forward to working with policymakers in the year ahead to further strengthen the semiconductor industry, the broader tech sector, and our economy.”

A team of scientists from the Nanoelectronic Materials Laboratory (NaMLab gGmbH) and the Cluster of Excellence Center for Advancing Electronics Dresden (cfaed) at the Dresden University of Technology have demonstrated the world-wide first transistor based on germanium that can be programmed between electron- (n) and hole- (p) conduction. Transistors based on germanium can be operated at low supply voltages and reduced power consumption, due to the low band gap compared to silicon. Additionally, the realized germanium based transistors can be reconfigured between electron and hole conduction based on the voltage applied to one of the gate electrodes. This enables to realize circuits with lower transistor count compared to state-of-the-art CMOS technologies.

Energy-efficient germanium nanowire transistor with programmable p- and n- conduction is shown. Transmission electron microscope image of cross section. Credit: NaMLab gGmbH

Energy-efficient germanium nanowire transistor with programmable p- and n- conduction is shown. Transmission electron microscope image of cross section. Credit: NaMLab gGmbH

Today´s digital electronics are dominated by integrated circuits built by transistors. For more than four decades transistors have been miniaturized to enhance computational power and speed. Recent developments aim to maintain this trend by employing materials having higher mobility than silicon in the transistor channel, like germanium and indium-arsenide. One of the limitations in using those materials is the higher static power loss in the transistor´s off-state, also originating from their small band gaps. The scientist team around Jens Trommer and Dr. Walter Weber from NaMLab in cooperation with cfaed succeeded in solving this issue by conceiving the germanium-nanowire transistor with independent gating regions. Dr. Weber who leads cfaed’s Nanowire Research Group points out: “For the first time the results demonstrate the combination of low operation voltages with reduced off-state leakage. The results are a key enabler for novel energy efficient circuits.”

The work has been published in the journal ACS Nano.

Full(erene) potential


February 3, 2017

In what could be called a classic “Eureka” moment, UC Santa Barbara materials researchers have discovered a simple yet effective method for mastering the electrical properties of polymer semiconductors. The elegant technique allows for the efficient design and manufacture of organic circuitry (the type found in flexible displays and solar cells, for instance) of varying complexity while using the same semiconductor material throughout.

“It’s a different strategy by which you can take a material and change its properties,” said Guillermo Bazan, a professor of chemistry and materials at UCSB. With the addition of fullerene or copper tetrabenzoporphyrin (CuBP) molecules in strategic places, the charge carriers in semiconducting materials — negative electrons and positive “holes” — may be controlled and inverted for better device performance as well as economical manufacture. The discovery is published in a pair of papers that appear in the journals Advanced Functional Materials and Advanced Electronic Materials.

In the realm of polymer semiconductors, device functionality depends on the movement of the appropriate charge carriers across the material. There have been many advances in the synthesis of high-mobility, high-performance materials, said lead author Michael Ford, graduate student in materials, but the fine control of the electrons and holes is what will allow these sophisticated polymers to reach their full potential.

“There’s been a large effort to make new materials, but a lot of them may not be appropriate in conventional low-power devices,” said Ford. Many of these materials exhibit “ambipolar” conduction, meaning that they transport both negative and positive charges, he explained. So, in situations where only a certain charge is required, the opposite charge is also conducting, which diminishes the utility of the material.

“They’re always ‘on’ so you always have a current running through the device,” Ford said. Conventional means of controlling the movement of charge carriers often involves more complex measures, such as multiple metal evaporation steps or depositing additional layers that are difficult to manage. These actions often require more complicated processing or fabrication, which could in the end defeat the purpose of low-cost flexible electronics.

This new development was actually a classic accidental scientific discovery, according to Ford, who was investigating, simultaneously, the properties of two materials. He observed that the use of fullerene additives limited conduction of one charge carrier (negative electrons), while allowing the other (positive holes) to remain mobile.

“In one experiment, we were just trying to do some extra measurements for a poster, and while making a measurement I noticed it solved the problem that I was having with my other material, which was this problem of never turning off,” Ford said. He decided to employ the fullerene additive from one experiment to address issues in the other and found it could be used to allow only positive charges to move, while adding operational stability.

From there, he and his collaborators worked to control negative charge conduction in the same way. A different additive — one that “likes” holes, CuBP — was introduced and turned off ambipolar transport in the opposite way from the fullerene. Now negative electrons remain mobile and hole transport is limited.

“We had two devices, both using the same polymer semiconductor but with different additives,” Ford explained. “One was a switch for holes, and the other was a switch for electrons. This enabled us to develop a complementary inverter, which is just like the building blocks that make up circuits in modern cell phones and computers.”

“So we have for the first time this ability to take these ambipolar semiconductors and design through solution processing a circuit where in certain parts only the electrons are moving, or only the holes are moving,” Bazan said, “but keep the same semiconductor material.” The additives create “traps” that can be used to master the properties of the semiconductor in a straightforward way, he added.

The potential uses of this method are many, particularly in situations where low-cost, low-power flexible electronics would be helpful, such as printable packaging labels that function as temperature sensors for foods and other sensitive items being shipped long distances.

“It’s this idea where we can have an additive that can be a small fraction of the total and which will allow us to master the electronic properties of the semiconductor,” said Bazan. “Once you have that under control, you can do all sorts of cool things.”

Samsung Electronics and Apple remained the top two semiconductor chip buyers in 2016, representing 18.2 percent of the total worldwide market, according to Gartner, Inc. (see Table 1). Samsung and Apple together consumed $61.7 billion of semiconductors in 2016, an increase of $0.4 billion from 2015.

“This is the sixth consecutive year that Samsung Electronics and Apple have topped the semiconductor consumption table,” said Masatsune Yamaji, principal research analyst at Gartner. “While both companies continue to exert considerable influence on technology and price trends for the wider semiconductor industry, their impact has lessened due to falling expectations for future growth.”

Although Samsung Electronics experienced intense competition from Chinese original equipment manufacturers (OEMs) in various markets including smartphones, LCD TV and LCD panel through 2016, the company increased its design total available market (TAM) and came back as the global top design TAM company in 2016 with 9.3 percent share. Apple decreased its design TAM in 2016 for the first time since Gartner started design TAM research in 2007, ending the year with 8.8 percent share of the market. The iPad did not sell well through 2016 and Apple also lost market share in the PC market.

Table 1. Preliminary Ranking of Top 10 Companies by Semiconductor Design TAM, Worldwide, 2016 (Millions of Dollars)

2015 Ranking

2016Ranking

Company

 2015

 2016

Growth (%) 2015-2016

2016 Market Share (%)

2

1

Samsung Electronics

30,343

31,667

4.4

9.3

1

2

Apple

30,885

29,989

-2.9

8.8

4

3

Dell

10,606

13,308

25.5

3.9

3

4

Lenovo

13,535

12,847

-5.1

3.8

6

5

Huawei

7,597

9,886

30.1

2.9

5

6

HP Inc.

8,673

8,481

-2.2

2.5

8

7

Hewlett Packard Enterprises

6,485

6,206

-4.3

1.8

7

8

Sony

6,892

6,071

-11.9

1.8

21

9

BBK Electronics

2,515

5,818

131.4

1.7

9

10

LG Electronics

5,502

5,172

-6.0

1.5

Others

211,736

210,238

-0.7

61.9

Total

334,768

339,684

1.5

100.0

Note: Numbers may not add to totals shown because of rounding.
Source: Gartner (February 2017)

Nine of the top 10 companies in 2015 remained in the top 10 in 2016. Cisco Systems dropped out of the top 10 in 2016 to be replaced by Chinese smartphone OEM, BBK Electronics, which grew rapidly in 2016. The top 10 now consists of four companies from the U.S., three companies from China, two from South Korea and one from Japan. This is the first time that three Chinese companies have ranked in the top 10, proving that even with the slowing macroeconomic situation in China, the importance of the Chinese electronics market is increasing.

“Even though the influence on the semiconductor industry of the top two strongest OEMs is weakening, the combined design TAM of the top 10 companies outperformed the average growth rate of the total semiconductor market in 2016,” said Mr. Yamaji. “However, semiconductor chip vendors can no longer secure their businesses by relying on a few strong customers because market share changes much faster these days. BBK Electronics grew very fast in 2016 and increased its design TAM, but this extraordinarily fast growth also underlines how volatile the businesses in China can be. Technology product marketing leaders at semiconductor chip vendors need to take the risks of their major customers into account, and always try to diversify their customer base.”

As the demand for smaller, faster, and more functional electronics continues to grow, so does the challenge of reliability. DfR Solutions, a leader in quality, reliability, and durability (QRD) solutions for the electronics industry, and Ops A La Carte, a professional reliability engineering firm, today announced that they have joined forces to host a free symposium on design reliability for the electronics industry. The Silicon Valley Reliability Symposium will be held on Thursday, February 9th, 2017 at the Biltmore Hotel and Suites in Santa Clara, CA from 8:00 AM until noon. Attendees will hear from leading reliability experts on product design and testing topics that can improve performance, productivity, and profit, not to mention customer satisfaction.

DfR Solutions is the creator of Sherlock Automated Design Analysis software, an innovative design reliability analysis tool that streamlines new product development by providing greater insights earlier, eliminating test failures due to design flaws, and accelerating product qualification. Ops A La Carte offers end-to-end reliability solutions that help companies around the world meet their product reliability goals. Together, their insightful presentations will empower the design of better, more reliable products in Internet of Things (IoT), Wearables, Consumer, and other innovative markets.

“In today’s competitive marketplace, you can’t afford to deliver an unreliable product,” said DfR Solutions CEO Craig Hillman. “We’re excited to show electronics developers how to use Reliability Physics to decrease product development time and increase product integrity and profitability.”

According to Jay Muns, Owner & Managing Director at Ops A La Carte, “Product reliability is a critical part of the product development process.  The ROI is confirmed again and again by assigning resources up front in the design of a reliable product.”  “Our goal with this symposium is to demonstrate how sound reliability design practices, from conception to product introduction, have a dramatic effect on decreasing the costs associated with warranty, customer service, and customer satisfaction/retention,” stated Muns.

Scheduled symposium topics and speakers include:

Physics of Failure Based Reliability Simulation
Dr. Gil Sharon, Senior Application Engineer
DfR Solutions

Design for Reliability
Fred Schenkelberg, Senior Reliability/Quality Consultant
Ops A La Carte

Test Plan Development
Dr. Craig Hillman, CEO
DfR Solutions

Reliability Test Methods and Applications 
Fred Schenkelberg, Senior Reliability/Quality Consultant
Ops A La Carte

The Biltmore Hotel and Suites is located at 2151 Laurelwood Rd. in Santa Clara, CA. Attendance is free. Breakfast will be served.

To register for the Silicon Valley Reliability Symposium, visit: http://www.dfrsolutions.com/upcoming-events/2017-silicon-valley-reliability-symposium

(Note: This is Part 2 of a two-part article; Part 1 is here)

By Denny McGuirk, president and CEO, SEMI

“Do not go where the path may lead, go instead where there is no path and leave a trail,” was how I started last week’s article.  In that article we looked back on 2016 and the incredible progress of the industry and how it continually cuts new trail and keeps moving at the speed of Moore’s Law.  In this week’s follow up, I would like to talk about where the industry is going and how SEMI is changing to keep up with it.  As not everyone is aware of all SEMI does, the following is a quick reminder on how SEMI works to represent the industry before looking ahead to 2017, specifically, and beyond.

SEMI, the global non-profit association connecting and representing the worldwide electronics manufacturing supply chain, has been growing with the industry for 47 years.  SEMI has evolved over the years, but it has remained as the central point to connect.  Whether connecting for business, connecting for collective action, or connecting to synchronize technology, SEMI connects for member growth and prosperity.

Our industry is in the midst of a vast change.  To deal with the escalating complexity (making a semiconductor chip now uses the great majority of the periodic table of the elements) and capital cost, many companies have had to combine, consolidate, and increasingly collaborate along the length of the electronics manufacturing supply chain.

Some companies have broadened their businesses by investing in adjacent segments such as Flexible Hybrid Electronics (FHE), MEMS, Sensors, LEDs, PV, and Display.  Lines are blurring between segments – PCBs have morphed into flexible substrates, SiP is both a device and a system.  Electronics integrators are rapidly innovating and driving new form factors, new requirements, and new technologies which require wide cooperation across the length of the electronics manufacturing supply chain and across a breadth of segments.

The business is changing and SEMI’s members are changing.  When SEMI’s members change, SEMI must change, too – and SEMI has, and is.  SEMI developed a transformation plan, SEMI 2020, which I wrote about at the beginning of 2016.  We’re well on our way on this path and I’d like to update you on what we’ve accomplished and what’s to come.

SEMI 2020: “The Only Time You Should Look Back is to See How Far You’ve Come”

SEMI organized its SEMI 2020 transformation into three basic pillars of the SEMI 2020 strategy.  First, “reenergizing the base,” where SEMI focuses on enriching delivered value for the present day needs of its traditionally engaged membership base.  Second, “building communities and collaboration,” where SEMI works to develop specific forums and groups to meet specific needs and focus on specific technologies and products.  Third, “evolving SEMI value propositions for 2020,” which is the work of changing and innovating SEMI products and services for the needs of the industry in the future.

To date, SEMI has made great progress on these three pillars, here are a few examples:

1. Reenergize Base

  • Grew membership to ~2,000 global SEMI member companies
  • Growth in SEMICON expositions:
    • 248,738 global exhibition visitors in 2016 (up 8 percent year-over-year)
    • 4,410 global exhibitors in 2016 (up 5 percent in m2 of exhibition space sold)
  • Realignment of SEMI with organization changes in Americas, China, Europe, and HQ

2. Build Communities and Collaboration

 

  • FlexTech joined SEMI as Strategic Association Partner: SEMI FLEX conferences and programs are now in America, Europe, Korea, SEA and Japan
  • MEMS and Sensors Industry Group (MSIG) joined SEMI as Strategic Association Partner
  • SEMI Special Interest Groups developed and globalized — Chemical and Gases Manufacturers Group (CGMG), SEMI integrated Packaging and Test (SiPAT), Semiconductor Components, Instruments & Subsystems (SCIS), etc. — integrating broad areas of the supply chain
  • Development of SEMI Collaborative Technology Platforms with initial activities in Interconnect, Heterogeneous Integration Roadmap (partnered with IEEE CPMT, EDS, & Photonics Societies), etc.
  • Introduction and co-sponsoring of special interest programs such as FUTURECAR and regional SMC conferences

 

3. Evolve SEMI Value Propositions for 2020

  • SEMI (automation) Standards adapted for Smart Manufacturing (Industry 4.0)
  • Improved channels: new SEMI Global Update, new website, social media (follow SEMI on LinkedIn and Twitter), infographics
  • New data products such as 200mm report, packaging report, mobile version of fab database (FabView)
  • New programs such as SEMI European MEMS conference
  • SEMI Foundation widening scope on Workforce Development
  • Advocacy activities leveraging collective action on trade, industry funding, export control, taxation, and sustainable manufacturing (including regulation of safety, materials, and environmental impact).

 

SEMI 2020: “The Road to Success is Always Under Construction”

 

SEMI continues to conduct surveys, uses multiple means of gathering the voice of the customer, and constantly aligns with guidance from its various committees, regional advisory boards, and International Board of Directors.  Despite its name, SEMI 2020 is a journey and not a destination.  SEMI will continue to evolve, develop, and add critical communities, services, products, and industry advocacy as SEMI’s members evolve.

While many of the SEMI activities captured above will continue, the following provides a sampling of activities more specific to SEMI’s work in 2017.

1. Reenergize Base

  • Increase frequency and depth of SEMI outreach and grow SEMI’s global membership and engagement
  • Launch SEMICON Europa 2017 co-location with productronica in Munich to connect to electronics manufacturing supply chain while preserving SEMI’s core community within its own show
  • Launch new engagement and experiential components at SEMICON West and SEMICON Japan
  • Move HQ headquarters to more member-suited, collaborative, efficient, and smaller building in Milpitas

 

2. Build Communities and Collaboration

 

  • Develop four vertical application collaborative forums:  World of IoT, Smart Automobile, Smart Manufacturing, and Smart MedTech
  • Fully integrate FlexTech and MSIG into SEMI’s global infrastructure and develop regional communities and events for these distinct adjacent communities
  • Provide association services to the Fab Owners Association as a SEMI Strategic Association Partnership
  • Continue to develop and increase global participation in SEMI Special Interest Groups such as SCIS, CGMG, and SiPAT to provide the specific and current needs of SEMI’s members

 

3. Evolve SEMI Value Propositions for 2020

  • Provide greater inbound and outbound member visibility and member services for fast-developing China region
  • Further develop SEMI Standards for Smart Manufacturing including a focus on big data and security
  • Advocate for funding for SEMI member pre-competitive projects in all global regions
  • Develop and improve industry training and education capabilities in all regions
  • Raise visibility for SEMI in securing unrestricted trade for semiconductor manufacturing and extended supply chain

“Roads Were Made for Journeys, Not Destinations”  

This quotation, generally attributed to Confucius, ties the themes of the road of this year’s annual update to my personal journey.  As you may know, at the end of 2016, I announced my intention to retire and while I’ll remain until a successor is identified, this will be my last SEMI update.

My personal journey has definitely not been a straight line and that’s made it all the more interesting – and, I hope, made me a “more skillful driver.”  Instead of the road, the sky used to be my home (although, with trips to Asia and Europe, sometimes it still feels like I’m still there!), with many years flying with the United States Air Force.  After that, my path led to the world of non-profit leadership and eventually, prior to SEMI, leading IPC, the interconnect trade association.  As the industry has blurred the borders of PC boards and substrates and semiconductor packages, maybe it was natural that I would also shift from IPC to SEMI.

I’ve been at SEMI for over five years and have constantly been amazed by the speed of the industry, the exceptional professionals and their astounding innovations, and the tight global cooperation and support.  When I started, there was a flashpoint in the potential jump to pursue the 450mm wafer size.  I got to know our industry and our members very quickly!  But, I almost immediately learned, this is a unique industry where collaboration across the electronics manufacturing supply chain is critical, where global stakeholders are well connected, and where – with Moore’s Law as precedent – industry leaders are used to working together, no matter if collaborators or competitors, for the good of the industry.

I am grateful to call many in our industry friends.  It is with regret that I won’t be seeing these friends as frequently as before, certainly.  However, I am pleased to be leaving behind a sound a valued SEMI organization with the professionals and plans in place to carry SEMI 2020 forward and deliver more valued services, products, and above all connections for its members.  I am happy for my time at SEMI and am grateful to the SEMI staff, SEMI International Board of Directors, and SEMI Members for the opportunity to serve the amazing association

The newly released 2017 20th anniversary edition of The McClean Report contains an analysis of the three phases of China’s attempt to gain a stronger presence in the IC industry (Figure 1).  The analysis of Phase 3 includes a long list of the successes and setbacks that the Chinese have faced since initiating this strategy in 2014.

China’s government has a long-term goal to become self-sufficient with regards to IC devices.  Its “Made in China 2025” (MIC 2025) plan was published by the China State Council in May of 2015. The milestones in MIC 2025 are for China to be 40% self-sufficient in IC devices in 2020 and 70% in 2025.  In reality, it is naive to believe that being 40%, 70%, or whatever percentage less than 100%, is even close to being self-sufficient in the IC industry. In just about every case, the lack of just one low-value IC (e.g., a mixed-signal analog device), process material (e.g., a specific chemical or gas used in fabricating ICs), or package type will stop the entire electronic system from being produced and shipped.

Figure 1

Figure 1

As an example, in the early 1980s, the U.S. government attempted to make sure that every wafer processing and packaging material as well as every piece of semiconductor processing equipment that was used to make military ICs have at least one U.S. source. Even more than 30 years ago, when IC processing was much less complex than it is now, this program had to be abandoned due to the impossible task of making sure there was a U.S. source for literally thousands of items. The bottom line is that anything less than 100% self-sufficiency in the IC industry is not self-sufficient.

The success of MIC 2025 is fundamentally dependent upon two things—funding and technology. The goals of MIC 2025 have almost no chance of success without strong results in both of these areas. IC Insights considers each one to have equal weight on the potential final outcome.

There is near-unanimous consensus that funding will not be a hindrance for the potential success of MIC 2025. China’s National Government has approved approximately $20 billion of funding support for its IC industry programs with almost another $100 billion of possible support coming from local Chinese governments, provinces, and private investors. In total, the tens of billions of dollars of funding now targeting the IC industry is probably sufficient to construct at least 10 high-volume 300mm IC production fabrication facilities. It should be noted that regardless of what happens with China-based IC production in the long run, IC equipment companies are in prime position to benefit from this massive spending spree over the next few years.

IC Insights believes that the huge roadblock standing in the way of the success of MIC 2025 is the ability of the Chinese to acquire the IC technology to be used in the newly funded fabs. Beginning in 2014, the Chinese sought to acquire technology by acquiring existing IC suppliers. The Chinese had some early success in acquiring companies like ISSI and OmniVision, but most governments are now on “high alert” with regard to China’s IC industry ambitions and future foreign IC company acquisitions will be very difficult to complete. Essentially, the window of opportunity for the Chinese to attain IC technology through foreign company acquisitions is now closed.

Although the amount of money reported to be allocated toward constructing the new indigenous Chinese company IC fabs has been massive, the technology announced to be used in these fabs has in every case been at least two generations behind what the market leaders in that segment are currently using or will be using when the fab opens. Some examples are shown below.

  • XMC (purchased by Tsinghua Unigroup in July 2016 and put in a holding company called Yangtze
  • River Storage Technology)—32-layer 3D NAND technology.
  • Fujian Jin Hua Integrated Circuit—32nm DRAM technology.
  • Shanghai Huali (HLMC)—28nm foundry logic capability.

While all of the currently announced China IC fabs seem to be more than adequately funded, none of them appear to possess the IC technology needed to compete with the leaders in their respective product segments.

There have recently been reports that the Chinese companies building the new fabs discussed above are hiring IC engineers from Samsung, SK Hynix, and Intel’s China-based IC facilities. This method has been mentioned as one way for Chinese companies to “develop their own” IC technology as these engineers bring IC process knowledge/experience acquired at their former employer with them. In IC Insights’ opinion, this is a very dangerous way to “develop” IC process technology.

In 2003, in China-based pure-play foundry SMIC’s second year of production, TSMC filed a lawsuit alleging that SMIC hired more than 100 former TSMC employees and asked them to provide SMIC with TSMC trade secrets. Moreover, TSMC alleged that SMIC infringed on five of TSMC’s IC process technology patents (later expanded to eight patents). In early 2005, SMIC and TSMC settled the lawsuit with SMIC paying TSMC $175 million and TSMC gaining an 8% stake in SMIC. Prior to the settlement, a California jury returned a verdict against SMIC in a U.S. lawsuit filed by TSMC.

With the stakes so high, once the newly opened Chinese-owned memory fabs begin production, expect the reverse engineering teams at Samsung, SK Hynix, Micron, Intel, Toshiba, and Western Digital (SanDisk) to shift into high gear by taking apart the new Chinese DRAM and 3D NAND devices to determine which of their patents are being infringed upon by these new memory players. IC Insights believes that with the decades of high-volume DRAM and NAND flash production history of the major memory suppliers, it will be almost impossible to develop new DRAM and NAND flash technology without infringing on numerous patents within these companies’ extensive portfolios.

In 2016, IC production in China (including foreign companies) represented 11.6% of its $112 billion IC market, up less than two percentage points from 9.8% five years earlier in 2011. Moreover, China-based IC production is forecast to exhibit a very strong 2016-2021 CAGR of 18%. However, considering that China-based IC production was only $13.0 billion in 2016, this growth will start from a relatively small base.

Given the sheer size of the expected expenditures for new Chinese IC facilities, as well as an expanding presence of foreign IC producers (e.g., Intel, Samsung, etc.), IC Insights believes there will be a significant improvement in the share percentage of China-based IC production through 2025 (Figure 2), but nowhere near the levels forecast in the MIC 2025 plan. As shown, IC Insights forecasts that this share will increase to 17.0% in 2020 and to 25.0% in 2025, each less than half of the original MIC 2025 goals.

Figure 2

Figure 2