Category Archives: Wafer Processing

Analog Devices, Inc. (NASDAQ: ADI), a developer of high-performance semiconductors for signal processing applications, today announced that Mark M. Little, former Senior Vice President, GE Global Research and Chief Technology Officer of General Electric Company, has been elected as a Director of the Company, and that the Board of Directors of the Company intends to elect Robert H. Swanson, Executive Chairman of Linear Technology Corporation, as a Director following the closing of the Company’s acquisition of Linear Technology Corporation. Richard Beyer and John Hodgson will retire from the Company’s Board of Directors, effective as of the Company’s 2017 Annual Meeting of Shareholders.

“We are very grateful to Rich and John for their years of dedicated service to ADI, and for their wise counsel as members of our Board,” said Ray Stata, ADI Chairman of the Board. “We are pleased to welcome Mark Little as a new Director, and we are also looking forward to Bob Swanson joining the Board following our acquisition of Linear Technology Corporation.”

Dr. Little is the former Senior Vice President, GE Global Research and Chief Technology Officer of General Electric Company, a global digital industrial company. Dr. Little joined GE in 1978, and during his 37-year tenure, held management positions in engineering and business, culminating with his most recent position, which he held from 2005 to 2015. In addition to his technology leadership, Dr. Little led several multi-billion dollar business units at GE including GE Energy’s power-generation segment. Dr. Little holds bachelor’s and master’s degrees in mechanical engineering from Tufts and Northeastern universities, respectively, and a Ph.D. in mechanical engineering from Rensselaer Polytechnic Institute.

Mr. Swanson, a founder of Linear Technology, has served as Executive Chairman of the Linear Technology board of directors since January 2005. Prior to that time, he served as Chairman and Chief Executive Officer of Linear Technology since its incorporation in 1981. Mr. Swanson has a B.S. degree in Industrial Engineering from Northeastern University.

On July 26, 2016, ADI and Linear Technology entered into an agreement and plan of merger that provides for the acquisition of Linear Technology by the Company. The Company and Linear Technology currently expect the acquisition to be completed by the end of the Company’s second fiscal quarter of 2017, subject to receipt of the remaining required regulatory approvals and subject to the satisfaction or waiver of the other conditions contained in the merger agreement. The Board of Directors of the Company intends to elect Mr. Swanson to the Board at the later of the completion of the acquisition or the Board of Directors meeting following the Company’s 2017 Annual Meeting of Shareholders, currently anticipated to be held on March 8, 2017.

The global market for power semiconductors used in cars and light passenger vehicles will grow by more in $3 billion USD in the next six years, according to new analysis released today by IHS Markit(Nasdaq: INFO).

In the report, entitled “Power Semiconductors in Automotive – 2017”, forecasts the total market for power semiconductors (discretes, power modules and power ICs) to increase from $5.5 billion in 2016 to more than $8.5 billion in 2022.  Revenue will grow at an annual rate of 7.5 percent from 2015 to 2022, the report predicts.

“Increasing electrification in vehicles generally – and in hybrid and electric vehicles specifically – is energizing the market for power semiconductors in vehicles”, said Richard Eden, senior analyst, power semiconductors for IHS Markit. “Staying connected via smartphones and tablets is the modern way of life and to this end, today’s car drivers are opting for Bluetooth, cellular technologies and other telematics functions. All these features require power semiconductors to distribute and control power through vehicles.”

Also contributing to the rise of power semiconductors, the report notes, is the automotive industry’s mission to offer self-driving, ‘green’ and connected cars in the next decade. According to IHS Markit, intermediate safety milestones such as automatic emergency braking (AEB) and platooning are necessary to realize a road system that will accommodate self-driving cars. Other factors in the trend toward more power semiconductors: the need for more fuel-efficient systems, a higher proportion of electric vehicles, and more electronic content per vehicle as required for improved vehicle emission levels.

Powertrain category to lead the way

In studying the automotive electronics market, IHS Markit categorizes five domains on a vehicle: Body and Convenience, Chassis and Safety, Infotainment, Powertrain and Advanced Driver Assistance Systems (ADAS). Of these, Powertrain accounted for 47 percent of the total market for automotive power semiconductors in 2015, the report indicated.

Anticipated growth in sales of hybrid and electric vehicles in the next few years will spur power semiconductor sales to climb by CAGR 9.6 percent from 2015 to 2022 across all vehicles, taking Powertrain’s market share up to 54 percent of the total market, according to the report.  Discrete IGBT power transistors account for most of Powertrain power semiconductor revenue, but increased integration of discretes into modules will cause IGBT power module sales to increase at a much faster rate.

According to the IHS Markit report, the Chassis and Safety category represents the second most-valuable automotive domain for power semiconductors, accounting for 24 percent of the total market in 2015. In contrast with Powertrain, the use of power semiconductors in Chassis and Safety will only grow with CAGR of 3.1 percent from 2015 to 2022, the report says. The biggest user of power devices in this domain are applications such as electric power steering, anti-lock braking system and electronic stability control, airbags and tire pressure monitoring, which are already relatively well-established in vehicles.

The domains of Body and Convenience and Infotainment only accounted for 14 percent and 11 percent of the total automotive power semiconductor market in 2015, respectively. Both categories are expected to grow with a CAGR of around 4 to 5 percent from 2015 to 2022, the report predicts. At present, the smallest domain is ADAS, with only 5 percent of the total market in 2015. However, ADAS is forecast to see the fastest growth of all of the five domains, growing with a CAGR of 16 percent from 2015 to 2022. ADAS will see a rapid increase in the number of sensors, cameras and interconnectivity systems in cars, and all will need power semiconductors in their power control circuitry.

A closer look at value

Discrete power semiconductors, the report points out, provide the highest average value per car. This is not surprising as they have the lowest average sales price and are used in even the simplest, cheapest automotive electronic systems like engine, transmission control units, electrified oil pumps and power systems.

Power ICs provide slightly less average value per car. They are more expensive and newer, so are more prevalent in high-end vehicles and more modern car designs, which contain more features, like ADAS, for example. Power modules have the smallest average value per car because their use is restricted to larger, high-end vehicles and to hybrid and electric vehicles only.

Silicon crystals are the semiconductors most commonly used to make transistors, which are critical electronic components used to carry out logic operations in computing. However, as faster and more powerful processors are created, silicon has reached a performance limit: the faster it conducts electricity, the hotter it gets, leading to overheating.

Graphene, made of a single-atom-thick sheet of carbon, stays much cooler and can conduct much faster, but it must be into smaller pieces, called nanoribbons, in order to act as a semiconductor. Despite much progress in the fabrication and characterization of nanoribbons, cleanly transferring them onto surfaces used for chip manufacturing has been a significant challenge.

A recent study conducted by researchers at the Beckman Institute for Advanced Science and Technology at the University of Illinois and the Department of Chemistry at the University of Nebraska-Lincoln has demonstrated the first important step toward integrating atomically precise graphene nanoribbons (APGNRs) onto nonmetallic substrates. The paper, “Solution-Synthesized Chevron Graphene Nanoribbons Exfoliated onto H:Si(100),” was published in Nano Letters.

Researchers have made the first important step toward integrating atomically precise graphene nanoribbons (APGNRs) onto nonmetallic substrates. Credit: Adrian Radocea, Beckman Institute for Advanced Science and Technology

Researchers have made the first important step toward integrating atomically precise graphene nanoribbons (APGNRs) onto nonmetallic substrates. Credit: Adrian Radocea, Beckman Institute for Advanced Science and Technology

Graphene nanoribbons measure only several nanometers across, beyond the limits of conventional chip top-down patterning used in chip manufacturing. As a result, when carved from larger pieces of graphene by various nanofabrication approaches, graphene nanoribbons are neither uniform nor narrow enough to exhibit the desired semiconductor properties.

“When you’re going from the top-down, it’s very hard to get control over the width. It turns out that if the width modulates by just an atom or two, the properties change significantly,” said Adrian Radocea, a doctoral student in Beckman’s Nanoelectronics and Nanomaterials Group.

As a result, the nanoribbons must be made from “the bottom up,” from smaller molecules to create atomically precise nanoribbons with highly uniform electronic properties.

“It’s like molecular building blocks: kind of like snapping Legos together to building something,” said Radocea. “They lock in place, and you end up with the exact control over the ribbon width.”

The “bottom-up” approach was first shown for graphene nanoribbons by Cai et al. in a 2010 Nature paper demonstrating the growth of atomically precise graphene nanoribbons on metallic substrates. In 2014, the research group of Alexander Sinitskii at the University of Nebraska-Lincoln developed an alternative approach for making atomically precise graphene nanoribbons in solution.

“The previously demonstrated synthesis on metallic substrates yields graphene nanoribbons of very high quality, but their number is rather small, as the growth it limited to the precious metal’s surface,” said Sinitskii, associate professor of chemistry at University of Nebraska-Lincoln and an author of the study. “It is difficult to scale this synthesis up. In contrast, when nanoribbons are synthesized in the unrestricted three-dimensional solution environment, they can be produced in large quantities.”

The difficulty in cleanly transferring nanoribbons stems from the high sensitivity to environmental contaminants. Both solution-synthesized and surface-grown nanoribbons are exposed to chemicals during the transfer process that can affect the performance of graphene nanoribbon devices. To overcome this challenge, the interdisciplinary team used a dry transfer in an ultra-high vacuum environment.

A fiberglass applicator coated in graphene nanoribbon powder was heated to remove contaminants and solvent residue and then pressed onto a freshly prepared hydrogen-passivated silicon surface. The nanoribbons were studied in great detail with ultra-high vacuum scanning tunneling microscope developed by Joseph Lyding, professor of electrical and computer engineering at Illinois and an author of the study. The researchers obtained atomic-scale images and electronic measurements of the graphene nanoribbons that were critical for confirming their electronic properties and understanding the influence of the substrate.

Computational expertise available at Beckman, Radocea explained, was instrumental in understanding the experimental results. “I was still collecting more data trying to figure out what was going on. Once the modeling results came in and we started looking at the data differently, it all made sense.”

Members of Beckman’s Computational Multiscale Nanosystems Group, Tao Sun, a doctoral student, and Narayana Aluru, professor of mechanical science and engineering, provided expertise in computational modeling via density functional theory to investigate the properties of the nanoribbons.

“Density functional theory calculations provided a deeper understanding of the electronic properties of the integrated system and the interactions between graphene nanoribbons and the silicon substrate,” said Sun. “It was exciting that the computational results could help explain and confirm the experimental results and provided a coherent story.”

“Atomically precise graphene nanoribbons (APGNRs) are serious candidates for the post-silicon era when conventional silicon transistor scaling fails,” said Lyding. “This demonstrates the first important step toward integrating APGNRs with technologically relevant silicon substrates.”

“I find the project very exciting because you are building things with atomic level control, so you try to put every atom exactly where you want it to go,” said Radocea. “There aren’t many materials out there where you can say you have that ability. Nanoribbons are exciting because there is a real need and a real application.”

Fire, rain, and M&A 


January 19, 2017

By SEMI staff

The expert panel, “The Future of M&A in the Semiconductor Industry,” was a hot topic at SEMI’s Industry Strategy Symposium (ISS) conference on January 11.  So hot, it seems, that midway through the panel discussion, a fire alarm triggered and the whole group stepped outside for a quick breather.  Fortunately, this came at a break in the almost nonstop rain – that felt as though the Ritz Carlton might wash off the bluffs of Half Moon Bay.

fire rain

The rain couldn’t put a damper on the mood, though.  Forecasters throughout the conference revised upwards their 2016 results and 2017 forecasts (http://www.semi.org/en/semi-iss-2017-uncovers-new-growth-forecast-upgrades-1) and Diane Bryant, EVP and GM of Intel’s Data Center Group sparked the audience with an amazing keynote that made clear this is the best time ever to be in the semiconductor manufacturing supply chain.

But, how that industry might look in the future was the business of the M&A panel moderated by Robert Maire of Semiconductor Advisors with experts:

  • Patrick Ho, senior research analyst, Semiconductor Capital Equipment at Stifel Nicolaus
  • John Ippolito, VP Corporate Development at MKS Instruments
  • Israel Niv, former CEO of DCG Systems
  • Tom St. Dennis, chairman of the Board of FormFactor.

Will the huge deals of 2015 and 2016 continue?

Setting up the panel, Maire observed that 2015 and 2016 were huge in transaction size (over $100 billion announced in 2015), but while the values of the deals have jumped, the number of deals has remained fairly consistent over the past several years. Also, China has more significantly moved into the M&A market in 2015, in the range $4 to $5 billion.

It appears that M&A will continue, but not at the same pace as 2015 and 2016 due to increasing political, regulatory, and industry pushback.  In the equipment space, while big deals such as Advantest and Verigy were possible in 2011, the current climate has seen big deals falter including Applied Materials and Tokyo Electron; Lam Research and KLA-Tencor; and Aixtron and Fujian Grand Chip.

However, Maire observed that the motivations for M&A continue; for instance, Intel needs to offset a declining PC market and ramp IoT, VR, and Cloud activity and will likely consider M&A as part of its approach.  Similarly, opportunities for equipment companies to increase scale and size exist for process control companies and in the back-end segment where further consolidation appears necessary.

China becomes a player

China’s ambitions in M&A may have been complicated by recent events, but with a $150 billion investment fund there are likely more opportunities ahead.  China has stated the intent to move from producing just 10 percent of its IC consumption to 70 percent in ten years and catching up technologically by 2030.  While some see concerns given China’s investment and later pricing collapses in FPD, PV, and LED, others see China’s efforts to increase its indigenous production of ICs as similar to what has happened as the industry spread from U.S. and Europe to Japan, Taiwan, and Korea.

The panel responded to questions from Maire, questions submitted from the audience, and live audience questions.  Ho noted that big deals in semiconductor equipment appear, for the time being, to be difficult or over.  However, there is still low-hanging fruit and smaller deals.  There is a need to focus on scale and size because customers (IC manufacturers) are bigger and fewer.  For example, Form Factor’s combination with Cascade brought size and scale and enabled Form Factor to be more competitive.

The future for semiconductor equipment consolidation

Several questions revolved around where M&A would happen in the semiconductor equipment space.  There was general consensus that M&A of any of the “big five” (not named, but likely ASML, Applied Materials, Lam Research, Tokyo Electron, and KLA-Tencor) were off the table in the short term due to both regulatory pressure and industry pushback given fears of overly strong supplier power.  Niv thought there were opportunities for consolidation in the metrology and process control space.  Ippolito thought there might be further consolidation opportunities in motion control.  St. Dennis thought there were opportunities throughout the whole supply chain.  He pointed out that the benefits of acquiring a good company were significant, including great talent (difficult and time consuming to develop organically), synergies in not just SG&A, but in technology and field organizations.

The role of private equity was raised.  Ippolito noted that the private market and private equity have roles to play in consolidation opportunities, noting the success of Atlas Copco with Edwards Vacuum and Oerlikon Leybold as an example.

Several questions focused on China.  Niv pointed out the industry needs to think about China similar to how they thought about Japan when Japan was emerging as an IC manufacturing power.  Partnering with Japanese companies was an effective strategy for many and brought long-term success in that market.  Ippolito thought that very large China deals might be off the table for a while, but smaller deals would likely go through.  He noted that $150 billion (the China investment fund) is a lot of money and that tends to find a way forward.

Size matters

The panel seemed to agree size matters.  Niv observed that deals have to be the right size to be digestible with a deal of 10 percent size ratios being easier than other ratios.  Niv noted that one cannot realistically aspire to be acquired by Applied Materials at a revenue of only $20 to $30 million.  For this size, he advised that you are better off getting there by first being an aggregator.  Ho expanded on this by noting that small cap equipment companies can’t attract the attention of the “big five.”  $200 million of revenue only gives the “big five” about a penny of accretion.  For MKS Instruments, the deal with Newport was positive because it added almost $1 in accretion and is an example of a better match in size.

It was a testament to the keen interest in the M&A panel that after the fire alarm evacuation, virtually everyone returned and the audience was nearly immediately again fully engaged in trying to understand what stamp M&A will next leave upon future of the industry.  If we learned anything in 2016, it is that surprises will happen (so it seems, fire alarms will ring when you least expect them).  And, predicting rain, like predicting which deals will go through in a fundamentally new geopolitical environment, will be a guessing game.  However, there’s no doubt that M&A will continue and the opportunities ahead of us will rewrite our industry map.

For information on SEMI, visit www.semi.org and follow SEMI on LinkedIn and Twitter. For the SEMI event calendar, visit www.semi.org/en/events.

Research managed by SUNY Polytechnic Institute (SUNY Poly) and conducted by a number of collaborating institutions has led to findings that have been named a top ten 2016 breakthrough in physics by Physics World. The publication recently named the SUNY Poly-led Institute for Nanoelectronics Discovery and Exploration’s (INDEX) “Theme I” work on the negative refraction of electrons in graphene p-n junctions as “a top ten breakthrough,” as it supports the physics for p-n junctions in graphene, which could lead to more powerful and energy efficient computing capabilities in the future.

“SUNY Poly’s position as a world class research institution is unmatched, and our faculty and students should be proud to be a part of that success,” said Dr. Bahgat Sammakia, Interim President of SUNY Polytechnic Institute. “It’s an incredible honor to have research managed by the talented people here at SUNY Poly recognized among the top ten physics breakthroughs of this past year, and I salute the SUNY Poly INDEX team and the researchers at partnering institutions who, collectively, enabled this fascinating research.”

As part of the research, scientists created a p-n junction, a building block of many modern day semiconductor-based electronic devices, in graphene, a two-dimensional honeycomb-shaped form of carbon that is incredibly strong and conductive. By ensuring that the p-n junction interface was smooth, the researchers minimized reflections, which enabled them to measure the negative refraction of electrons, an accomplishment that could one day form the basis of a new type of electronic switch, potentially replacing the transistor, which is currently the basis of computers worldwide. While this research shows that this new type of switch is possible, it could still take many years for any practical applications to result.

“We are excited that this great work of physics has been recognized by Physics World, and as part of the SUNY Poly team, we are thrilled to have solidified INDEX’s funding and look forward to continuing this important work, ” said SUNY Poly Vice President for Research Dr. Michael Liehr. “This acknowledgement is a testament not only to SUNY Poly’s ability to lead collaborations that can have significant research impact, but also to working collaboratively as research partners with other leading institutions such as Columbia University.”

The research that led to the notable findings was specifically conducted at Columbia University, the University of Virginia, and Harvard University, and was managed by SUNY Poly; Cornell University, the National Institute for Materials Science in Japan, and IBM were also recognized by Physics World for their teams’ contributions.

“This work is significant for proving the fundamental physics of the graphene p-n junction, and we are excited that the research of ‘Theme I’ of INDEX has resulted in this recognition,” SUNY Poly Interim Dean of the College of Nanoscale Science and Empire Innovation Professor of Nanoscale Science Dr. Alain Diebold said. “This is a credit to researchers Cory Dean and Jim Hone of Columbia University, who fabricated and measured the test structures using a method called magnetic steering, as well as Avik Ghosh of the University of Virginia, who modeled and simulated the data enabling the interpretation and helping to design new test structures. SUNY Poly was proud to play an enabling role.”

The research was conducted under the SUNY Poly-led umbrella of INDEX, which is one of three active centers in the Semiconductor Research Corporation’s Nanoelectronics Initiative leveraging faculty and students across ten universities. INDEX has three research areas, or themes: graphene p-n junction devices, spintronic devices, and fabrication – with a goal to develop a new switch to replace the transistor. Currently, Dr. Alain Diebold serves as INDEX’s Director, following the tenure of Dr. Michael Liehr, who had previously served as director at the Nanoelectronics Research Institute-funded center. In addition, INDEX is a Semiconductor Research Corporation (SRC) program sponsored by the Nano-Electronics Research Corporation (NERC) and the National Institute of Standards and Technology (NIST).

Mentor Graphics Corporation (NASDAQ: MENT) today announced that company chairman and CEO Dr. Walden C. Rhines has been named a Fellow of the Institute of Electrical and Electronics Engineers (IEEE). Dr. Rhines is being recognized for leadership and technology innovation in integrated circuit design and automation.

The IEEE Grade of Fellow is conferred by the IEEE Board of Directors upon a person with an outstanding record of accomplishments in any of the IEEE fields of interest. The total number selected in any one year cannot exceed one-tenth of one percent of the total voting membership. IEEE Fellow is the highest grade of membership and is recognized by the technical community as a prestigious honor and an important career achievement.

During Dr. Rhines’ tenure at Mentor Graphics, revenue has nearly quadrupled, enterprise value increased by 8X and Mentor has grown the industry’s number one market share solutions in four of the ten largest product segments of the electronic design automation (EDA) industry. At Mentor Graphics, he has built leading industry positions in areas outside of traditional EDA, including system design, embedded software, automotive and hardware emulation. This has led to innovation and growth of the entire EDA industry.

Prior to joining Mentor Graphics, Rhines was executive vice president of Texas Instruments (TI) Semiconductor Group, sharing responsibility for TI’s Components Sector, and having direct responsibility for the entire semiconductor business with more than $5 billion of revenue and over 30,000 people.

During his 21 years at TI, Rhines managed TI’s thrust into digital signal processing and supervised that business from inception with the TMS 320 family of DSPs through growth to become the cornerstone of TI’s semiconductor technology. He also supervised the development of the first TI speech synthesis devices (used in “Speak & Spell”) and is co-inventor of the GaN blue-violet light emitting diode (now important for DVD players and low energy lighting). He was president of TI’s Data Systems Group and held numerous other semiconductor executive management positions.

Dr. Rhines received the 2015 Phil Kaufman Award for Distinguished Contributions to EDA, presented by the Electronic System Design Alliance (ESDA), formerly the Electronic Design Automation Consortium, and the IEEE Council on EDA (CEDA). The award honors individuals who have had demonstrable impact on the field of EDA through technology innovations, education/mentoring, or business or industry leadership. Dr. Rhines was recognized for growing the EDA and integrated circuit (IC) design industries through his efforts as a leading voice of EDA and for pioneering the evolution of IC design to system-on-chip (SoC) design.

Rhines has served five terms as ESDA chairman and is currently serving as a director. He is also a board member of the Semiconductor Research Corporation. He has previously served as chairman of the Semiconductor Technical Advisory Committee of the Department of Commerce and as a board member of the Computer and Business Equipment Manufacturers’ Association (CBEMA), SEMI-Sematech/SISA, University of Michigan National Advisory Council, Lewis and Clark College and SEMATECH.

Dr. Rhines holds a Bachelor of Science degree in metallurgical engineering from the University of Michigan, a Master of Science and Ph.D. in materials science and engineering from Stanford University, a master of business administration from Southern Methodist University and Honorary Doctor of Technology degrees from the University of Florida and Nottingham Trent University.

This week, Future Market Insights (FMI) releases its latest report on the semiconductor assembly and testing services market. The global market for semiconductor assembly and testing services (SATS) will continue to be primarily driven by the surging demand for high-end packaging solutions. The global semiconductor assembly and testing services market will possibly reach a value of US$ 24.72 Bn by 2016 end. The market will gain continued traction communication vertical. Asia Pacific will remain the most attractive market for semiconductor assembly and testing services.

Increased demand for outsourced SATS or OSAT services will be a remarkable trend favoring the growth of the global SATS market. With the rapidly thriving consumer electronics industry, the demand for connectivity and mobility is also on the rise, which is foreseen to be an important booster to the demand for connected devices, eventually fostering the semiconductor assembly and testing services market. Rising adoption of multimedia technology devices is identified to be another factor bolstering the demand for SATS. A number of SATS providers offer value added services, such as in-house testing and high-end packaging, which will remain an important driver to the market growth. Several integrated design manufacturers are increasingly prioritising semiconductor assembly and testing services as a time-efficient alternative.

Moreover, rising demand for automotive safety systems is expected to be a strong factor providing impetus to the SATS market. Due to higher costs associated with larger wafer fabrication factory, manufacturers are largely inclined toward outsourcing semiconductor assembly and testing services to third party providers. Leading fabless companies will continue to outsource everything, including testing, assembly, and packaging of semiconductor. This will favour the market growth. Rising adoption of automotive electronics and promising emergence of next-generation electronic vehicles are likely to boost the market growth further.

However, high capital costs related to high-end packaging solution provision, volatility of prices in the market, and uncertainty in exchange rates will continue to pose a negative impact on the global SATS market growth.

By service, assembly and packaging segment will continue to be dominant over the testing segment, prominently driven by the rising demand for consumer electronics and advanced packaging solutions.

On the basis of packaging solution, the copper wire and gold wire bonding segment is expected to retain the leading segment position with over 53% market value share, accounting for the revenues of around US$ 13.24 Bn in 2016. However, the growth of this segment is likely to witness sluggish growth post-2016. The flip chip segment is foreseen to exhibit a robust growth rate, contributing around 18% share to the entire market revenues in 2016. This segment will witness an impressive Y-o-Y growth of 8.6% in 2017 over 2016.

Based on application, communication segment is projected to remain dominant, whereas consumer electronics application segment is likely to register a stellar growth rate in terms of Y-o-Y.

By regional analysis, the global semiconductor assembly and testing services market is segmented into four key markets viz. North America, Europe, Asia Pacific, and Middle East and Africa. APAC will remain the dominant market with over 84% market value share in 2016 but is anticipated to witness a consistent Y-o-Y decline post-2016. On the other side, North America is likely to see a consistent gain in the Y-o-Y growth post-2016. This region will account for over 31% share of the market in 2016, in terms of revenues.

Some of the key companies operating in the global marketplace for semiconductor assembly and testing services (SATS), include Amkor Technologies Inc., ASE Group, Silicon Precision Industries Co. Ltd., STATS ChipPAC Ltd. (JCET), Psi Technologies Inc. (IMI), Powertech Technology Inc., Global Foundries, CORWIL Technology corporation, and Chipbond Technology Corporation.

Long-term Outlook: By 2021 end, the global semiconductor assembly and testing services (SATS) market is expected to account for US$ 39.05 Bn in terms of revenues.

Worldwide semiconductor capital spending is projected to increase 2.9 percent in 2017, to $69.9 billion, according to Gartner, Inc. This is down from 5.1 percent growth in 2016 (see Table 1).

“The stronger growth in 2016 was fueled by Increased spending in late 2016 which can be attributed to a NAND flash shortage which was more severe in late 2016 and will persist though most of 2017. This is due to a better-than-expected market for smartphones, which is driving an upgrade of NAND spending in our latest forecast,” said David Christensen, senior research analyst at Gartner. “NAND spending increased by $3.1 billion in 2016 and several related wafer fab equipment segments showed stronger growth than our previous forecast. The thermal, track and implant segments in 2017 are expected to increase 2.5 percent, 5.6 percent and 8.4 percent, respectively.

Compared with early 2016, the semiconductor outlook has improved, particularly in memory, due to stronger pricing and a better-than-expected market for smartphones. An earlier-than-anticipated recovery in memory should lead to growth in 2017 and be slightly enhanced by changes in key applications.

Table 1: Worldwide Semiconductor Capital Spending and Equipment Spending Forecast, 2015-2020 (Millions of Dollars)

2016

2017

2018

2019

2020

Semiconductor Capital Spending ($M)

 67,994.0

 69,936.6

 73,613.5

 78,355.6

 75,799.3

Growth (%)

5.1

2.9

5.3

6.4

-3.3

Wafer-Level Manufacturing Equipment ($M)

35,864.4

38,005.4

38,488.7

41,779.7

39,827.0

Growth (%)

7.9

6.0

1.3

8.6

-4.7

Wafer Fab Equipment ($M)

 34,033.2

 35,978.6

 36,241.1

 39,272.8

 37,250.4

Growth (%)

8.1

5.7

0.7

8.4

-5.1

Wafer-Level Packaging and Assembly Equipment ($M)

1,831.2

2,026.8

2,247.6

2,506.9

2,567.7

Growth (%)

3.9

10.7

10.9

11.5

2.8

Source: Gartner (January 2017)

Foundries continue to outgrow the overall semiconductor market with mobile processors from Apple, Qualcomm, MediaTek and HiSilicon as the demand driver on leading-node wafers. In particular, fast 4G migration and more-powerful processors have resulted in larger die sizes than previous-generation application processors, requiring more 28 nanometer (nm), 16/14 nm and 10 nm wafers from foundries. Nonleading technology will continue to be strong from the integrated display driver controllers and fingerprint ID chips and active-matrix organic light-emitting diode (AMOLED) display driver integrated circuits (ICs).

This research is produced by Gartner’s Semiconductor Manufacturing program. This research program, which is part of the overall semiconductor research group, provides a comprehensive view of the entire semiconductor industry, from manufacturing to device and application market trends. Gartner clients can see more in “Forecast Analysis: Semiconductor Capital Spending and Manufacturing Equipment, Worldwide, 4Q16 Update.”

The pure-play foundry market is forecast to play an increasingly stronger role in the worldwide IC market during the next five years, according to IC Insights’ new 2017 McClean Report, which becomes available later this month.  The 20th anniversary edition of The McClean Report forecasts that the 2016-2021 pure-play IC foundry market will increase by a compound annual growth rate (CAGR) of 7.6%; growing from $50.0 billion in 2016 to $72.1 billion in 2021.

IC foundries have two main customers—fabless IC companies (e.g., Qualcomm, Nvidia, Xilinx, AMD, etc.) and IDMs (e.g., ON, ST, TI, Toshiba, etc.).  The success of fabless IC companies as well as the movement to more outsourcing by existing IDMs has fueled strong growth in IC foundry sales since 1998.  Moreover, an increasing number of mid-size companies are ditching their fabs in favor of the fabless business model.  A few examples include Fujitsu, IDT, LSI Corp. (now part of Avago), Avago (now Broadcom Ltd.), and AMD, which have all become fabless IC suppliers over the past few years.

Figure 1 shows the ranking of the top 10 pure-play foundries in 2016.  In 2016, the “Big 4” pure-play foundries (i.e., TSMC, GlobalFoundries, UMC, and SMIC) held an imposing 85% share of the total worldwide pure-play IC foundry market.  As shown, TSMC held a 59% marketshare in 2016, the same as in 2015, and its sales increased by $2.9 billion last year, more than double the $1.4 billion increase it logged in 2015.  GlobalFoundries, UMC, and SMIC’s combined share was 26% in 2016, the same as in 2015.

The three top-10 pure-play foundry companies that displayed the highest growth rates in 2016 were X Fab (54%), which specializes in analog, mixed-signal, and high-voltage devices and acquired pure-play foundry Altis in 3Q16 to move into the top 10 for the first time, China-based SMIC (31%), and analog and mixed-signal specialist foundry TowerJazz (30%).  In contrast to X-Fab’s 2016 growth spurt, TowerJazz and SMIC have been on a very strong growth curve over the past few years.  TowerJazz went from $505 million in sales in 2013 to $1,249 million in 2016 (a 35% CAGR) while SMIC more than doubled its revenue from 2011 ($1,220 million) to 2016 ($2,921 million) and registered a 19% CAGR over this five-year period.

Seven of the top 10 pure-play foundries listed in Figure 1 are based in the Asia-Pacific region.  Europe-headquartered specialty foundry X-Fab, Israel-based TowerJazz, and U.S.-headquartered GlobalFoundries are the only non-Asia-Pacific companies in the top 10 group.

Figure 1

Figure 1

Further trends and analysis relating to the IC market are covered in the 400-plus page 2017 edition of The McClean Report.

NXP Semiconductors N.V. (NASDAQ:NXPI) today announced that Clarivate Analytics, formerly the Intellectual Property & Science business of Thomson Reuters, has listed NXP in its highly anticipated list of 2016 Top 100 Global Innovators. The report honors the most innovative corporations and institutions in the world determined by analyzing proprietary data including volume and success rates of patents, global reach and invention influence.

NXP was selected, among other attributes, for its strong patent portfolio, which currently includes more than 9,000 patent families. In 2016 alone, the company was granted nearly 1,700 individual national patents and nearly 5,000 other national patent applications are in progress. The impressive volume of patent activity truly reflects the magnitude and scope of the innovative products that NXP brings to market, as well as its strength and leadership in the electronics industry. An example of this innovation can be seen in NXP’s recent product announcements at the 2017 Consumer Electronics Show in Las Vegas (Jan 4-8, 2017).

“Creating secure connections for the smarter world starts with true innovation and a passion for changing lives through technology – it’s in our DNA,” said Richard Clemmer, CEO of NXP Semiconductors. “We believe that our place in this list is the result of the continuing efforts of R&D, our dedicated engineers, and the teams responsible for actively endorsing our IP in the marketplace. I am very proud of what we have accomplished to date and thank Clarivate Analytics for this recognition.”