Category Archives: Wafer Processing

CVD Equipment Corporation (NASDAQ:CVV), a provider of chemical vapor deposition systems, announced today that its CVD Materials Corporation subsidiary plans to open a US facility for expansion of the corrosion resistant coating services currently offered through its Tantaline CVD ApS subsidiary in Nordborg, Denmark. Tantaline A/S was originally founded in 2007 as a spin off from The Danfoss Group and is an established leader in the commercialization of tantalum-treated parts for corrosion resistance. CVD acquired the assets and IP of Tantaline A/S in December 2016 and established in Nordborg a new and wholly-owned CVD subsidiary operating under the name Tantaline CVD ApS (“Tantaline”).

This innovative tantalum chemical vapor coating technology, called Tantaline® treatment, is used to create a tantalum alloy surface on high performance parts including valves, fittings, autoclaves, process chambers, flow reactors, fasteners, mixers, flowmeters, and medical devices, as well as other parts that are prone to corrosion in harsh environments. A broad range of industries including chemical processing, oil & gas, mining, pharmaceutical, and medical use these parts. Tantaline® treated parts outperform most high priced specialty alloys and perform nearly at the level of solid tantalum parts in hot corrosive acidic environments (>150° C) such as those exposed to sulfuric, nitric, and hydrochloric acids as part of their production process. Tantaline® treatment therefore provides corrosion resistance at a much lower cost than solid tantalum parts.

Leonard Rosenbaum, President and CEO stated “We are extremely pleased with the pace of integration and early performance of Tantaline CVD ApS. This planned expansion will further CVD’s corrosion resistant technology and applications base and provide additional services and capabilities to new and existing customers. We are now considering where in the US to locate the new facility. Our equipment know-how and proven ability to scale up deposition processes will be leveraged into offering high value added materials, as well as our traditional products and services to our current and new customers. This is the first step in our combined organic and acquisition growth initiative for 2017.”

Commodity prices, supplier viability, and geopolitical concerns top the list of risks sourcing professionals face in 2017, according to survey from IHS Markit (Nasdaq: INFO).

Findings from the Trends in Global Sourcing Survey, the fifth annual survey of global procurement and purchasing executives which assesses the risk environment and sourcing trends, indicate that support for China as a low-cost sourcing destination is waning.

“The share of respondents who agree that China is a low-cost sourcing destination dipped below 50 percent for the first time in 2016,” said Paul Robinson, economist at IHS Markit. “This was down markedly from 70 percent in the 2012 survey.”

“Taken together with continued support for the country as a sourcing destination, the survey signals the arrival of China as a hub, or even the hub, of global supply chains rather than a mere cheap outsourcing destination,” Robinson continued.

China, India, and other nations in Asia continue to be the biggest winners in insourcing, with each showing strong increases. The developed world, particularly the European Union and the United States, show the weakest results, with less than a quarter of respondents planning to increase sourcing in either region. A rare bright spot outside of Asia was the continued growth in Mexico, where 26 percent of respondents are looking to increase sourcing, up from 20 percent a year ago.

chinas role

The survey respondents see the financial costs of supply chain disruptions increasing, with 19 percent of respondents saying that it was significantly increasing. This represents a reversal of the 2015 results when just one percent of respondents had that view. Less than two percent of respondents in the 2016 survey viewed the risk as decreasing at all.

Research and Markets has announced the addition of the “Semiconductor Epi’ (Epitaxy) Wafer Manufacturing Market: By Application (IDMs, Memory manufacturers, and Foundries) & By Region (North America, Europe, Asia-Pacific, RoW)-Forecast (2016-2022)” report to their offering.

Epitaxy is the process of deposition of a crystalline layer over a crystalline-based semiconductor substrate or surface. Globally, development of efficient and advanced technology, rising demand for electronic devices including laptops, tablets, gaming consoles, smartphones, flourishing electronics and semiconductor industry, and advantageous properties of semiconductor Epi’ (Epitaxy) wafer are the prime growth drivers of the semiconductor Epi’ (Epitaxy) wafer manufacturing market.

Geographically, Asia Pacific dominated the semiconductor ‘Epi’ (Epitaxy) wafer manufacturing market, followed by North America. Asia Pacific is projected to have the fastest growth, owing to a rapidly increasing demand for semiconductor devices like logic, analog, opto, and sensor devices, rise in industrial sector, and presence of several semiconductor foundries, such as Samsung and TSMC in developing nations such as China, and India in this region. Among all the applications, foundries segment has the highest market share in the semiconductor ‘Epi’ (Epitaxy) wafer manufacturing market due to a spur in consumption of laptops, tablets, gaming consoles, smartphones.

In addition, emergence of memory devices like 3D NAND and DRAM, increase in adoption of semiconductor Epi’ (Epitaxy) wafer manufacturing for application in new industrial verticals, and emerging economies such as China, India and others, will create new opportunities for the semiconductor Epi’ (Epitaxy) wafer manufacturing market. However, higher initial cost of manufacturing, complex government approval processes, and higher cost of semiconductor Epi’ (Epitaxy) wafer as compared to conventional mineral oils are the key restraints for the semiconductor Epi’ (Epitaxy) wafer manufacturing market.

This report identifies the semiconductor Epi’ (Epitaxy) wafer manufacturing market size for the years 2014-2016, and forecast of the same till the year 2022. It also highlights the market drivers, restraints, growth indicators, challenges, and other key aspects with respect to the semiconductor Epi’ (Epitaxy) wafer manufacturing market.

This report identifies all the major companies operating in the semiconductor ‘Epi’ (Epitaxy) wafer manufacturing market. Some of the major companies’ profiles in detail are as follows:

Applied Materials
Tokyo Electron
Hitachi Kokusai Electric
Canon Anelva Corporation
Sillicon Valley Microelectronics

Understanding breakups


January 30, 2017

As interest and demand for nanotechnology continues to rise, so will the need for nanoscale printing and spraying, which relies on depositing tiny drops of liquid onto a surface. Now researchers from Tsinghua University in Beijing have developed a new theory that describes how such a nanosized droplet deforms and breaks up when it strikes a surface.

The model, discussed in their publication appearing this week in Physics of Fluids, from AIP Publishing, could help researchers improve the quality of nanoscale printing and coating, important to everything from printing and coating tiny devices and structures to 3-D printing machines and robots.

These figures show how a nanodroplet breaks up when it impinges on the solid wall through molecular dynamic simulation in computer. There are 12,195 water molecules represented by the green particles in this figure (the droplet originally has a diameter of 8.6 nm). Credit: Li, Li and Chen

These figures show how a nanodroplet breaks up when it impinges on the solid wall through molecular dynamic simulation in computer. There are 12,195 water molecules represented by the green particles in this figure (the droplet originally has a diameter of 8.6 nm). Credit: Li, Li and Chen

When it comes to spraying coatings, for example, the smaller and faster the droplets are when they hit the surface, the better the quality of the coating, said Min Chen, a professor in the Engineering Mechanics Department at Tsinghua University. However, at certain impingement speeds, the droplets will break up and splatter, ruining the coating.

So to improve printing and spraying techniques, we need to better understand the conditions that cause droplets to deform when they hit a surface, as well as how they break. But because experimenting with nanosized droplets is very difficult, researchers often rely on computer simulations.

Bu-Xuan Li and Xin-Hao Li, along with Chen, used a technique called molecular dynamics simulation, in which they simulated every molecule that makes up a droplet of water. Each droplet, consisting of about 12,000 molecules, is about 8.6 nanometers in diameter and hits the surface at speeds of a few hundred meters per second. The computer simulates what happens when the collection of water molecules hits a flat surface.

“We developed an analytical model to describe the deformation process and another to describe the breakup process,” Chen said. The deformation model improves upon the team’s previous work, “but the breakup model is totally new.”

The breakup model combines theory with the results from the simulations, providing a formula that researchers can use to calculate when a droplet will breakup. According to Chen, the model is ready for use in applications.

One limitation is that the model is only verified to work for droplets at the nanoscale, and not for bigger droplets. “The reason is that the way a droplet breaks up is different in macro and nanoscale,” Bu-Xuan Li said.

The model also only applies to so-called Newtonian fluids like water. The researchers are now working on developing a model for non-Newtonian fluids, such as crude oil or the gooey mixture of cornstarch and water sometimes known as Oobleck. For example, a non-Newtonian model would be needed for 3-D printing polymers and biomaterials, such as human tissue and organs.

The model is also applicable for describing how water droplets collide with aircraft and form ice, which is a safety hazard. These water droplets, suspended in clouds, typically range from 20 to 50 micrometers — bigger than those in the simulations. Still, Chen said, their model is useful because not much is known about how those water droplets impinge on aircraft.

A new beam pattern devised by University of Rochester researchers could bring unprecedented sharpness to ultrasound and radar images, burn precise holes in manufactured materials at a nano scale — even etch new properties onto their surfaces.

These are just a few of the items on the “Christmas tree” of possible applications for the beam pattern that Miguel Alonso, professor of optics, and Kevin Parker, the William F. May Professor of Engineering, describe in a recent paper in Optics Express.

The pattern results from what Parker calls “an analytically beautiful mathematical solution” that Alonso devised. It causes a light or sound wave to collapse inward, forming — during a mere nanosecond or less — an incredibly thin, intense beam before the wave expands outward again.

“All the energy fits together in time and space so it comes together — BAM! — like a crescendo,” says Parker, explosively clapping his hands for emphasis. “It can be done with an optical light wave, with ultrasound, radar, sonar — it will work for all of them.”

Most traditional beam patterns maintain a persistent shape as long as the source is operating. However, they are not as intense as the beam created by Parker and Alonso, which the researchers call a “needle pulse beam.” “It is very localized, with no extensions or side lobes that would carry energy away from the main beam,” says Alonso.

Side lobes, radiating off a beam like the halos sometimes seen around a car headlight, are especially problematic in ultrasound. “Side lobes are the enemy,” Alonso says. “You want to direct all of your ultrasound wave to the one thing you want to image, so then, whatever is reflected back will tell you about that one thing. If you’re also getting a diffusion of waves elsewhere, it blurs the image.”

Because it is incredibly narrow, the new beam “makes it possible to resolve things at exquisite resolutions, where you need to separate tiny things that are close together,” Parker says, adding that the beam could have applications not only for ultrasound, but microscopy, radar, and sonar.

According to Alonso, industrial applications might include any form of laser materials processing that involves putting as much light as possible on a given line.

The idea for the needle pulse beam originated with Parker, an expert in ultrasound, who for inspiration often peruses mathematical functions from a century or more ago in the “ancient texts.”

“I could see a general form of the solution; but I couldn’t get past the equation,” he says “So I went to the person (Alonso) who I consider the world’s leading expert on optical theory and mathematics.”

They came up with various expressions that were “mathematically correct,” Alonso says, but corresponded to beams requiring an infinite amount of energy. The solution–“a particular mathematical trick” that could apply to a beam with finite energy — came to him while swimming with his wife in Lake Ontario.

“Many of the ideas I have do not happen at my desk,” Alonso says. “It happens while I’m riding my bicycle, or in the shower, or swimming, or doing something else–away from all the paperwork.”

Parker says this discovery continues an international quest that began at the University of Rochester. In 1986 — in the face of worldwide skepticism — a University team including Joseph Eberly, the Andrew Carnegie Professor of Physics and professor of optics, offered evidence of an unexpected new, diffraction-free light form. The so-called Bessel beam is now widely used.

“It had been decades since anyone formulated a new type of beam,” Parker says. “Then, as soon as the Bessel beam was announced, people were thinking there may be other new beams out there. The race was on.

“Finding a new beam pattern is a like finding a new element. It doesn’t happen very often.”

MACOM Technology Solutions Holdings, Inc. (NASDAQ: MTSI), a supplier of high-performance RF, microwave, millimeterwave, and lightwave semiconductor products, today announced that it has successfully completed its previously announced acquisition of Applied Micro Circuits Corporation (NASDAQ: AMCC).

John Croteau, MACOM’s President and Chief Executive Officer stated, “I am pleased to announce the completion of this transaction. AppliedMicro’s leadership in MACsec and 100G to 400G single-Lambda PAM4 positions MACOM as a preferred supplier to major Enterprise and Cloud Data Center providers, many of whom are adopting the technologies this year. MACOM will now be able to support customers with all of the requisite semiconductor content for optical networks—analog, photonic and mixed signal PHY—from the switch to fiber for long haul, metro, access, backhaul and data centers.”

Commenting further Mr. Croteau noted, “With the transaction now closed, MACOM plans to promptly engage with previously identified potential buyers toward a near-term divestment of AppliedMicro’s well-positioned Compute business. As previously stated, this portion of the business does not strategically align with our long-term product focus, but we feel confident a successful transaction can be consummated.”

By Denny McGuirk, SEMI president and CEO

“Do not go where the path may lead, go instead where there is no path and leave a trail.”  Attributed to Ralph Waldo Emerson, this could be the credo of our industry.  Moore’s Law has created $13 trillion of market value and we’ve been pioneering the way forward – since even before Gordon Moore made the famous “observation” that became Moore’s Law more than 50 years ago.  Our industry paved the road forward with advancements in design, materials, processing, equipment, and integration, traveling at the speed of exponential growth number in transistors per chip (doubling approximately every two years).

Today, globally, we’re shipping more than one trillion ICs per year!  Leading-edge chips boast more than 10 billion transistors at the advanced 10nm (gate length) technology node and are made with 3D FinFET architectures formed by 193nm wavelength immersion multi-patterning lithography.  It’s become a very challenging – and very expensive – road (a single lithography tool alone costs in the tens of millions of dollars).  The companies building the road ahead are bigger and fewer as massive bets now need to be placed on new fabs costing more than $5 billion and even $10 billion and where a new single chip design alone costs more than $150 million to bring into production.

What follows, in Part 1 of this two-part article, is a quick look back at the industry in 2016 and the road ahead in 2017 followed by what SEMI achieved in 2016 and where SEMI’s road will lead in 2017 to keep pace our industry charging forward where there is no path. Part 2 (next week’s Global Update) will focus on SEMI 2020 initiatives.

A look back at 2016: “Straight roads do not make skillful drivers”

2016 was definitely not a straight road; truly it was a wild ride – so, SEMI members have become extremely skilled drivers. The semiconductor manufacturing industry had a slow first half with pessimism building throughout the first quarter, but by April semiconductors bottomed and NAND investment and a slate of new China projects drove a strong second half.  For semiconductor equipment, SEMI’s statistics indicate global sales in 2015 were $36.5 billion and 2016 came in at $39.7 billion, ultimately ending up about 9 percent.  For reference semiconductor materials in 2015 was $24.0 billion and 2016 came in at $24.6 billion, up nearly 2.6 percent year-over year (YoY).

But, it turns out, that’s not half the story.  2016 was full of surprises.  At the geopolitical level, Brexit, an impeachment in South Korea, and a Trump win were wholly unanticipated and leave a lot of questions as to how that road ahead might look.  In technology, the Galaxy Note 7 mobile phone became an airline hazard announcement and stalwarts like Yahoo! faded into the background (now part of Verizon).  In part due to challenges of the road ahead (and because the cost of capital remained low) M&A fever continued in semiconductors with more than $100B in deals announced in 2016.

It was an astonishing year for combinations with huge deal announcements such as Qualcomm buying NXP for $47 billion and SoftBank buying ARM for $32 billion.  Meanwhile, mergers in the equipment and materials space continued, to name a few notables ASML’s acquisition of Hermes Microvision, DuPont and Dow announcing the intent to merge (announced December 2015, but still in the works), and Lam Research and KLA-Tencor ultimately calling off their deal due to complications of regulatory pushback.  The extended supply chain was mixing things up, too, with acquisitions like the announcement by Siemens to acquire Mentor Graphics.  It has been very active, overall.  This was the second year of semiconductor M&A deals valued at more than $100 billion, a signal that size and scale is critical to build the road ahead.

A look ahead: “Difficult roads often lead to beautiful destinations”

With all the talk about roads, it’s no surprise that the automotive segment is gathering momentum as a strong growth driver for the electronics supply chain.  Not only is there increasing electronics content in cars for comfort and infotainment, but also for assisted and autonomous driving and electric vehicles which are ushering in a new era of electronics consumption.

Along with automotive, IoT (Internet of Things), 5G, AR/VR (Augmented Reality and Virtual Reality), and AI (Artificial Intelligence) round out a set of powerful IC and electronics applications drivers (see figure).  Per an IHS Study, 5G alone may enable as much as $12.3 trillion in goods and services in 2035. Gartner’s most recent forecast is cause for optimism further down the electronics manufacturing supply chain.  Gartner see IC revenue growing from 2016’s $339.7 billion to 2017’s $364.1 billion up 7.2 percent and growing further in 2018 at $377.9 billion up 3.8 percent.  For semiconductor equipment, SEMI’s forecast indicates 2015 was $36.5 billion, 2016 will come in at $39.7 billion, and 2017 is projected to be $43.4 billion, pointing to both 2016 and 2017 experiencing approximately 9 percent YoY growth.

In 2017, China investment is projected to continue as a major driver, likely consuming over 16 percent of the total global equipment investment (second only to South Korea).  SEMI is currently tracking 20 new fab projects.  Investments come from both multinationals and local Chinese ventures.  A sign of the rise of China is China’s upward production share trend of its own IC consumption market (IC Insights): 8 percent in 2009, 13 percent in 2015, and 21 percent in 2020. Further down in the electronics supply chain, fab equipment related spending in China will rise to more than $10 billion per year by 2018 and remain at that level or above for subsequent years.

NAND will continue to be a major driver with 3D NAND investment leading the way.  Silicon in Package (SiP) and heterogeneous integration will increasingly be solutions to augment traditional feature scaling to fit more transistors into less space at lower costs.  Materials innovations will be relied upon to solve front-end and packaging challenges while standard materials will be the focus of increased efficiencies and cost reduction. 200mm fab capacity will grow and stimulate new 200mm investment with upside driven by power devices and MEMS segments.  Investment in foundry MEMS will grow by an estimated 285 percent (2015 to 2017).

“There are far better things ahead than any we leave behind”

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.

As a reminder, here are SEMI’s mission, vision, and 2020 strategic focus areas.

  • Mission — our focus for the next five years
    • SEMI provides industry stewardship and engages our members to advance the interests of the global electronics manufacturing supply chain.
  • Vision — what we stand for
    • SEMI promotes the development of the global electronics manufacturing supply chain and positively influences the growth and prosperity of its members.  SEMI advances the mutual business interests of its membership and promotes a free and open global marketplace.
  • Members’ Growth — 2020 strategic focus
    • SEMI enables member growth opportunities by evolving SEMI communities and building new communities across the global electronics manufacturing supply chain via cooperation, partnerships, and integration.
  • Members’ Prosperity — 2020 strategic focus
    • SEMI enables members to prosper by building extended supply chain collaboration forums providing opportunities to increase value while optimizing the supply chain for SEMI members.

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 in next week’s e-newsletter Global Update, I’d like to update you on what we’ve accomplished and what’s to come.

Each year, Solid State Technology turns to industry leaders to hear viewpoints on the technological and economic outlook for the upcoming year. Read through these expert opinions on what to expect in 2017.

Driving the industry forward with materials engineering

Raja_Prabu_fullPrabu Raja, vice president and general manager, Patterning and Packaging Group, Applied Materials, Inc.

Over the past few years, the industry has made remarkable progress in bringing 3D chip architectures to volume production. In 2017, we will continue to see exciting technology innovations for scaling 3D NAND devices to 64 layers, ramping the 10nm process node into volume manufacturing and increasing the adoption of highly integrated chip packages.

With the transition to the 3D and sub-10nm era, the semiconductor world is changing from lithography-based scaling to materials-enabled scaling. This shift requires multiple new materials and capabilities in selective processing.

The magnitude and pace of these changes are truly disruptive. For example, with 3D NAND materials innovations for hard mask deposition and hard mask etch are essential. The challenge is to build high aspect ratio vertical structures with uniform profiles from the top to the bottom as more layers are added. Selective removal processes can remove targeted materials in vertical and horizontal structures without damage or residue throughout the stack.

For logic/foundry, the introduction of the 10nm process node in volume manufacturing brings significant growth in the number of patterning steps. This trend will increase even more for 7nm and below designs. Patterning these advanced nodes requires innovative etch capabilities to deliver feature-scale uniformity with low line edge roughness. Selective processes and alternative manufacturing schemes will also be needed as the industry seeks solutions for layer-to-layer vertical alignment. We expect this to result in a two-fold increase in the number of materials to be deposited and removed.

Finally, the industry will continue to adopt new and improved packaging schemes for enabling increased device performance, lower power consumption and to deliver desired form factors. In 2016, we saw the volume adoption of Fan-Out packaging in mobile devices and this trend is expected to grow further in 2017. The high performance computing segment will pursue 2.5D interposer and/or 3D TSV packaging schemes for higher memory bandwidth, lower latency and better power efficiency.

Applied Materials is focused on delivering game-changing selective process technologies and materials innovations to help solve the industry’s toughest challenges.

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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 in automotive, smart manufacturing, and health, including:

  • TSMC Europe: Maria Marced, president, High Performance Applications to Drive Innovation and Collaboration
  • Mentor Graphics: Wally Rhines, CEO, Semiconductor Consolidation versus Specialization: What’s the Driving Force for Mergers?
  • 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
  • Bosch: Birte Lübbert, senior VP, Smart Manufacturing by Bosch in Reutlingen Plant 2
  • Imec: Ann Stegen, executive VP, Transformation into a 7nm Logic Node Solution with Fundamental Advantages

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

More than two dozen acquisition agreements were announced by semiconductor companies worldwide in 2016 with a combined value of $98.5 billion compared to the record-high $103.3 billion in purchases struck in 2015, when over 30 deals were reached, according to a summary and analysis in IC Insights’ new 2017 McClean Report.  The dollar value of merger and acquisition agreements in 2015 and 2016 were both about eight times greater than the $12.6 billion annual average of M&A announcements in the five previous years (2010-2014), says the new report, which becomes available in January 2017. Nearly half of the 15 largest semiconductor acquisitions in history were announced in the 2015 2016 period, according to a ranking of M&A transactions over $2 billion in the 2017 McClean Report (Figure 1). A total of 27 semiconductor acquisition agreements have had dollar values of $2 billion or more since 1999.

Figure 1

Figure 1

IC Insights’ ranking and acquisition data cover semiconductor suppliers, wafer foundries, and businesses licensing intellectual property (IP) for integrated circuit designs, but excludes transactions for fab equipment and material companies, chip packaging and testing operations, and design automation firms. Overall, seven of the industry’s $2 billion-plus semiconductor acquisitions occurred in 2015 and five took place in 2016, with three each being announced in 2014, 2011, and 2006, two in 2012, and one each in 2013, 2009, 2000, and 1999.

Semiconductor M&A greatly accelerated in 2015 and continued to be high in 2016 as companies turned to acquisitions to offset slow growth in major end-use applications (such as smartphones, personal computers, and tablets). In the last two years, acquisitions have been driven by companies aiming to expand into huge new markets, especially the Internet of Things, wearable electronics, and highly intelligent embedded systems, such as automated driver-assist features in cars and autonomous vehicles in the future. China’s goal of boosting its domestic semiconductor industry has added fuel to the M&A movement.

While Chinese moves to buy foreign semiconductor suppliers and assets grabbed a great deal of attention and scrutiny by governments wanting to protect national security and industries, U.S. businesses acquiring other companies, product lines, technologies, and assets accounted for 52% of the 2015-2016 M&A value, or about $104.5 billion (Figure 2). Asia-Pacific companies were second among those making semiconductor acquisitions with 23% of the $201.5 billion two-year total, or $46.4 billion. Within the Asia-Pacific region, China represented 4% of the total, or $8.3 billion.

Figure 2

Figure 2

Figure 2 also shows a breakdown the 2015-2016 acquisition agreements by semiconductor business types with the purchase of IDMs or parts of those companies being nearly 39% of the two-year total and takeovers of fabless chip suppliers, their product lines, and/or assets representing 45%. Acquisitions of semiconductor-design intellectual property suppliers and IP assets accounted for nearly 16% of the 2015-2016 M&A value while purchase agreements for wafer-foundry businesses and assets represented just 0.2% of the total.