Category Archives: Semiconductors

The International Data Corporation (IDC) is forecasting that semiconductor revenues worldwide will improve by 4.9% to $319 billion in 2013 and log a compound annual growth rate (CAGR) of 4.1% from 2011-2016, reaching $368 billion in 2016. Bright spots for the semiconductor market include smartphones, tablets, set-top boxes, and automotive electronics, which IDC expects will continue to be key drivers of growth over the coming years.

The group said that 2012 saw a nominal growth of less than 1% reaching $304 billion, due to weakness in PC demand, DRAM and overall memory price deterioration, and semiconductor inventory rationalization. This was coupled with continued global macroeconomic uncertainty from lower global GDP growth, a slowdown in China, the Eurozone debt crisis and recession, Japan’s recession, and ongoing fear of fiscal cliff negotiations’ impact on IT spending by corporations.

IDC expects semiconductor inventories to come into balance with demand in the second quarter of 2013 with growth to resume in the second half of 2013. "We expect lower, but positive global GDP growth in 2013. Semiconductors for smartphones will see healthy revenue growth as appetite for data, multimedia processing, and multitasking will drive high-end smartphone demand in developed countries while an ongoing transition to 3G networks will accelerate smartphone adoption in developing regions. PC demand will continue to remain in a period of transition next year until more technology and design innovation begin to change the course of demand," said Mali Venkatesan, research manager for semiconductors at IDC.

Regionally, Japan and Europe continue to be the two weakest regions. Although GDP growth has slowed in China, India, and Brazil, demand for smartphones, tablets, and automotive electronics remains strong. In the U.S., 4G phones, mobile consumer devices (tablets and e-readers), network infrastructure, and set-top box deployments will drive a healthy semiconductor growth cycle over the next five years.

Other key findings from IDC’s Semiconductor Application Forecaster include:

  • Semiconductor revenues for the Computing industry segment will log year-over-year growth of 1.7% for 2013 and will show a muted CAGR of only 1.7% for the 2011-2016 forecast period. Semiconductor revenues from mobile PC demand will register 5.5% year-over-year growth in 2013, after declining 7.7% in 2012.
  • Semiconductor revenues for the Communications segment will grow 6.5% year over year in 2013 with a five-year CAGR of 5.5%. Semiconductor revenues for 4G phones will experience annual growth of 140.1% in 2013 and a CAGR of 103.4% for 2011-2016.
  • Media tablets, e-Readers, set-top boxes, and blu-ray players, will continue to see above average semiconductor revenue growth. Sales of traditional devices such as DVD players, DVD recorders, DVD players, portable media players, and game consoles will continue to erode. Overall, semiconductor revenues for the Consumer segment will record year-over-year growth of 9.8% in 2013 and a 2011-2016 CAGR of 6.0%.
  • Driven by strong global demand for automobiles and increased semiconductor content (i.e. applications such as in-vehicle infotainment, automobile body electronics, and driver safety systems), semiconductor revenues for the Automotive segment is expected to grow 5.9% (CAGR) for the five-year forecast period.
  • Regionally, Asia/Pacific will continue to grow its share of semiconductor revenues, with year-over-year growth of 5.5% in 2013 and a five-year CAGR of 5.3%.

IDC’s Worldwide Semiconductor Applications Forecaster database serves as the basis for all IDC semiconductor supply-side documents, including market forecasts and consulting projects. This database contains revenue data collected from the top 100 semiconductor companies for 2006-2011 and market history and forecasts for 2006-2016. Revenue for over twelve semiconductor device areas, four geographic regions, six industries, and more than 80 end-device applications are also included in the database.

By Adrienne Downey, Director of Technology Research, Semico Research

In February 2012, Semico forecast 2012 semiconductor capex to reach $59.8 billion.  In December 2012, that forecast was virtually unchanged at $59.9 billion, down 5.6% from 2011.  After two years of double-digit growth (98% in 2010 and 26.2% in 2011), the semiconductor industry needed to back off and regroup.  Most concerning is that the gap between the big spenders and the small has expanded.  The top ten spenders for 2012 made up 81% of the total; this figure is up from the 76% of the total in 2011.  Overall, the top ten combined spent $48.2 billion, which is only 0.3% up from 2011.  Meanwhile, the rest of the companies went from spending $15.3 billion in 2011 to $11.7 billion in 2012, a decline of 24%.  Some of the decline can be attributed to companies like SanDisk, which, along with its partner Toshiba, delayed fab expansion projects until 2013.  Other companies like ST and TI made capacity improvements over the past few years, so spending in 2012 was mainly for maintenance.

In December 2012, most companies have still not announced capex plans for the following year.  This year is no different.  However, a handful of companies have given some indication of what they might spend next year.  For example, TSMC is forecasting 2013 capex to be slightly up compared to 2012.  Most of the other companies that have given a hint of 2013’s capex have indicated flat to down spending compared to 2012.  These companies include GLOBALFOUNDRIES, Avago, Fairchild, Micron, ON Semiconductor, SMIC, Spansion, and STMicroelectronics.  GLOBALFOUNDRIES announced its “Vision 2015” initiative to expand 300mm capacity in Singapore, but no budget was announced for the project. 

That being said, there are several construction projects that may give some indication of spending in 2013.  Samsung is retrofitting its Austin fab to switch from NAND to logic production, with mass production beginning in the second half of next year.  This is a $4 billion project spread out over 2012-2013.  Intel’s D1X and Fab 42 construction will wrap up in 2013; the company will also begin production at 14nm by the end of this year.  Samsung, TSMC, and GLOBALFOUNDRIES are also working on the 14nm and 20/22nm nodes.  UMC has Fab 12A Phases 5 and 6 under construction, with production schedule to begin in 2014.  SanDisk and Toshiba will probably increase their spending to complete the ramp of Fab 5, which they said would be complete by the end of 2013. 

Based on current indications, capital spending would seem to be flat in 2013.  However, Semico predicts healthy revenue growth this year, which may encourage more spending, particularly in the second half of the year.  This may bring total capex for 2013 into the positive range. 

By Mark Thirsk, Managing Partner, Linx Consulting LLC.

Past contributors have often noted a correlation between the semiconductor market growth and global GDP.  With careful correction this correlation can be used to forecast future IC market trends, although the process is not straightforward.

The consensus forecast for global GDP 2013 is now below trend at 2.6%, only a slight improvement over 2012, and less than the 3.2% seen in 2011.  The US approach to solving fiscal Cliff is an excellent example of the difficulty governments are having in developing strategies to address unprecedented economic problems, although political solutions, however imperfect, helps to stabilize expectations, and solidify financial markets.  In Europe, mild recession will continue through most of 2013, and Asia (excepting Japan) will likely show the best overall growth rates in the coming 12 months as measures to cool the Chinese economy are relaxed.

These extraordinary conditions in the global economy lead to wide variations in economic forecasts with an upside as high as 3.5 % growth, and a pessimistic case as low as 1%.  Against this backdrop, meaningful macroeconomic demand-side forecasts are difficult to develop.

Linx has worked with Hilltop Consulting to implement a proven macroeconomic forecasting tool that takes into account the global economic shocks and volatility to develop an Silicon area forecast for the global semiconductor industry.  Predictions for 2013 show several notable trends: 

  1. Overall Si area growth for 2013 should average approximately 6%. 
  2. The first quarter and the second half are likely to show slower growth than the second quarter.  This trend is part of a seasonality which has been swamped by economic volatility over the last 3 to 4 years. 
  3. The modest growth forecast for 2013 is predominantly demand driven since inventory levels have not shown a significant spike in 2012.

The overall picture of Si area growth breaks down into the expected performance of device segments and technology nodes.  Despite the shift to consumer electronics and mobile platforms we expect growth to be concentrated in CMOS products at ≤ 65nm with a continuing slowing of unit growth and analog and discrete devices.  Strongest growth will remain with flash memories, and advanced foundry logic devices targeted at tablets and phones.

In contrast to advanced memory and logic processing, approximately 56% of the Si production continues at design dimensions in excess of 90 nm on wafer sizes of 200 mm or smaller.  This market segment is extremely sensitive to economic volatility and has declined somewhat in the last four years.  Manufacturers of these devices are often capital constrained and extremely cost sensitive, leading to little process innovation and limited capacity expansion.

On a technology basis, despite tight capital budgets, the introduction of devices at 28 and 22 nm half pitches continues apace, and significant process challenges are driving increased complexity and resultant challenges in patterning, cleaning, and deposition throughout the device manufacturing process.  2012 is forecast to have produced more silicon area at 32 nm than any other node, and the introduction of low 20 nm half pitches and flash has continued to grow startling rates.  Significant challenges also exist in the in the advanced device markets due to geometric constraints and physical limits in scaling planar devices.  At a time when lithography is unable to scale continuing device shrinks results in added complexity in critical patterning steps and demands the addition of multiple lithography steps to achieve a single pattern level.

Manufacturers of logic and memory alike are working to develop substitute technologies for planar transistors, MIM capacitors and floating gate structures.  The broad introduction of metal gate finFETs, new types of storage cells, and three-dimensional memory stacks is still several years away, and this is driving interest in the adoption of three-dimensional packaging technologies such as through silicon vias to continue delivering increasing functionality in a package.

Despite the headwinds of increasing layer counts to compensate for the lack of high resolution lithography, and the need for new deposition technologies needed for novel processes and device architectures, we expect a small group of wafer makers to continue to chase these advanced technologies, while also pushing to implement 450 mm wafers.  Few of these technologies will see implementation in 2013, but they will be the focus of headlines as new breakthroughs are made, while the semiconductor industry continues its trend of remarkable success.

 

By Jean-Christophe Eloy, President & CEO, Yole Développement

Sensors and optoelectronics will continue to grow faster than the mainstream semiconductor market. We currently expect 9%-13% growth in these sectors in 2013, accompanied by rapid changes in technology and  market structures as well, as the specialty markets become increasingly mature. 

MEMS and image sensors will continue to ride the smart phone and tablet wave, while declining LED bulb prices will start to push the technology towards wider adoption. Demand for power electronics will pick up after its 2012 plunge.

We expect the MEMS market to continue its steady double digit growth with an ~9-11% increase to around $12 billion in 2013, driven of course by increasing adoption of the sensors in the expanding smart phone and tablet business. We expect the penetration of accelerometers into mobile phones and tablets will approach 65% by the end of 2013, with magnetometers nearing 54% and gyroscopes flirting with 34%. Growth will begin to transition from discrete sensors to combinations of two sensors in one package with a single ASIC to reduce costs, and to increasingly sophisticated software solutions that translate the sensor data into usable functions.  These trends are driving changes in the competitive landscape, with a crowd of new players targeting the key 3-axis gyroscope market, others introducing other new MEMS applications for the mobile market, chipset and software suppliers taking over the sensor management tasks, and a diversification of business models as the industry evolves. Healthy increases in the smart phone applications—and in other consumer products increasingly enabled by these low cost, easy to integrate product—will be somewhat countered by slower growth in mature TV and printer applications.

The smart phone and tablet market is also driving healthy growth in CMOS image sensors.  We expect ~11-13% growth to $7.5B in 2013.  Backside illumination and 3D wafer-level packaging technologies will continue to rapidly gain market share, and new stacked sensor architectures will likely follow soon.  These technological changes are bringing changing business models as well, as IDMs who are not vertically integrated up through the systems level will increasingly turn to outsourcing production to foundries. 

In the high brightness LED market, the TV backlighting market has slowed and the solid state lighting market has yet to really take off, but we still expect respectable ~10% growth for packaged LED devices in 2013, as rapidly improving technology, and an excess supply of devices from the backlight side, will drive down LED bulb prices to start to drive wider adoption. We expect LED penetration of the lighting market across all segments  (residential, industrial, outdoor and commercial) to reach about 8% of all lamps sold in 2013, to occupy about 2% of all lamp sockets. As in most of these non CMOS chip sectors, however, demand for more die doesn’t necessarily translate into demand for more manufacturing equipment.  We expect sales of front end equipment in 2013 to recover about 30% from its 2012 dropoff, but not back to peak levels of the boom years. Companies will start adding capacity again in the second half of the year for the ramp up in wafer area needed for the volume lighting market.  But some of that capacity will come from stronger producers acquiring struggling suppliers and their underutilized equipment.

We expect recovering demand for discrete power devices to drive ~10%  growth in power electronics to some $20 billion in 2013, after what we estimate was a ~20% drop  in 2012 as China cut back on its big investments in railroad, solar power and wind power systems.  Going forward, green tech demand from hybrid/electric vehicles, wind and PV systems should again help spur sales in 2014-2015, and then support stable 6%-7% long term growth after 2016. 

2013: The New New York


January 3, 2013

By Alain E. Kaloyeros, Ph.D., Professor, Senior Vice President and CEO, College of Nanoscale Science and Engineering

 “The world as we have created it is a process of our thinking,” said Albert Einstein. “It cannot be changed without changing our thinking.”

Those words ring especially true in today’s nanoelectronics industry, amid a sea of challenges: global economic unrest; rising pressure on corporate bottom lines; the exploding cost, complexity and pace of innovation; and the escalating demand for better, faster, and cheaper technologies.

Guided by the vision and leadership of Governor Andrew Cuomo, New York represents Exhibit A of a new way of thinking; a true 21st century model for technology, workforce and economic development. The Governor’s strategy, which utilizes publicly led industry-university partnerships, is being deployed to build the modern-day equivalent of the Erie Canal: a vibrant high-tech corridor that allows companies to accelerate innovation at a reduced cost through a unique “burden-sharing” model, while also preparing the next generation of highly trained scientists, researchers, and engineers demanded by industry.

The establishment of the Global 450mm Wafer Consortium (G450C) at the College of Nanoscale Science and Engineering is proof positive that this is the right strategy at the right time. It’s led Intel, IBM, Samsung, TSMC and GLOBALFOUNDRIES to decide that New York is the world’s best location to develop the next generation of computer chips. G450C will generate thousands of highly paid jobs and billions of dollars in private investment in the Empire State, but just as importantly, it demonstrates the model through which the United States can recapture its identity as the world’s leader in high-tech innovation. 

The intellectual and research power that drew G450C to CNSE is being leveraged to enable a technological superhighway across the state: in the Hudson Valley, growing green energy jobs at Ceres Technologies; in Utica, building IT jobs at SUNYIT; in Syracuse, anchoring and growing defense jobs at Lockheed Martin; in Rochester, where CNSE’s STC Center is driving opportunities in green energy and defense; and in Buffalo, through a developing nanobiomedical and pharmaceutical cluster.

Importantly, New York is supporting this growth by cultivating the world-class workforce demanded by industry. CNSE students are being educated and trained on equipment available nowhere else in the world, while educational outreach programs engage thousands more each year, from K-12 students to former manufacturing workers being retrained for the cleanroom.

Excelsior, or “Ever Upward,” is New York’s official motto. Courtesy of Governor Andrew Cuomo, that is also its strategy for innovation-driven high-tech growth.

By Joe Cestari, President, Total Facility Solutions

A major challenge facing the industry in the coming year is how to deliver products faster without affecting budgets or compromising safety and quality. The continued technology innovations will still support investment, and the ongoing move to mobile computing is a major driver in everyone’s forecast. The bottom line is that the industry will continue to advance, with Moore’s Law and economics driving market opportunity. From a US standpoint, we must continue to invest in emerging technologies and maintain our leadership status as an R&D center of excellence — driving investment is important. We can’t continue to afford to just innovate here then provide incentives to drive manufacturing overseas. We must find a way to keep heavily IP-weighted manufacturing in the US. What has happened in New York is a great example. Previously known for high labor rates, now some of the top manufacturers in the industry are bringing their manufacturing there, proving the US is not only an innovator, but a viable producer of a quality product at a lower total cost.

Most notably, in semiconductor manufacturing, 450mm is the next big opportunity. Issues of economic scale and complexity will force fab designers, OEMs and process integrators to investigate all open avenues in the search for solutions to the huge challenges that accompany 450mm. Next generation fabs present new challenges with respect to the design of the facilities, substrate handling, tool connection, chemical distribution, water and electrical systems and other areas. A transition to a bigger wafer size will bring many opportunities – some of which include helping to evolve the way we fabricate devices, introducing different chemistries, supporting greener, more sustainable builds and improving the efficiency of the entire process infrastructure.

Right now, with 450mm in its infancy, no one really knows what to expect, especially with regards to tool installation and hook up as design packages aren’t ready yet and in some cases the tools don’t even exist. The switch faces numerous challenges, as is the nature of the business. Competing vendors will no longer have to work only with the manufacturer, but with each other to settle a standard platform, an approach that could be challenging, yet beneficial all around. There has been a need for closer collaboration throughout the semiconductor industry for some time, starting from the facility construction process. The entire industry would benefit if suppliers were more integrated in the supply chain; and our goal of delivering products faster without affecting budgets or compromising safety and quality could be better realized.

By Mario M. Pelella, VP of Engineering, sp3 Diamond Technologies

Interest in diamond continues to grow within traditional thermal and wear applications (packaging, tool coating) and beyond into new applications (semiconductor, MEMS/NEMS, optical, interposers, electrodes, sensors, wastewater treatment, acoustic) that were previously difficult to exploit.

Diamond’s unique physical and electrical properties, which include the highest known thermal conductivity, highest Young’s modulus (diamond is the hardest substance man has ever discovered), a wide band gap, excellent electrical insulator properties, very low thermal expansion, very high breakdown voltage, very high carrier mobility, high radiation hardness, chemical and biochemical inertness and the broadest electromagnetic transmission spectrum, makes this remarkable technology a key enabler to break through current limitations and extend the performance and scalability of existing products well into the future.

For the currently available diamond-deposition systems, hot-filament chemical vapor deposition (HFCVD) growth technology provides the most reliable, safest and most cost effective solution that enables high throughput and good uniformity, control, repeatability and ease of scaling over large areas. Although current deposition areas are in the 350 mm x 375 mm range, scaling the HFCVD technology deposition area to 1000mm x 1000mm is viable, unlike other diamond-growth technologies.

The next step in the evolution of the semiconductor industry is to establish an SOD (silicon-on-diamond) substrate platform that mitigates the thermal impact of ever increasing power densities and suppresses local hot spots that influence peak performance and reliability (FIT rates) specifications, especially for RF power circuits and 3D-ICs. Moreover, incorporating diamond solutions into the MtM (more-than-Moore) technology roadmap will help extend electronic device and sensor performance metrics for a broad array of applications. All the process integration pieces to fully embrace SOD technology have been demonstrated, although productizing a 200mm (or larger) SOD substrate platform for high volume is still an elusive goal for the industry. Government agencies and corporate research and development funding continue to champion the maturity and advancement of diamond technology, which will help shorten the commercialization cycle of this exceptional material.

Recent advances in diamond applications (diamond-on-silicon, MEMS, optical), including record folded-beam RF resonator performance with a Q value of 146,580 at 232.4 kHz, IR transmission values nearing the theoretical limit of 71 percent, brighter, more energy-efficient LED lamps, exceptional figure-of-merit for RF power devices that are 40-50 times better than Si substrates, and demonstrated diamond-based diodes, BJTs, FETs, SAW filters, and field-emission devices, suggest that its utilization into a broader scope of commercial products is not far away.

By Julian Gates, Managing Director, AG Semiconductor Services

The multibillion-dollar secondary or used semiconductor equipment market has gone through significant changes over the past five years and has become increasingly sophisticated in its approach, with industry leaders offering a full range of services well beyond the tool purchase itself. The days of a broker trying to sell a piece of chipmaking gear of uncertain condition and provenance out of a crate on a warehouse floor are numbered. IC manufacturers trying to balance cost considerations with the need to upgrade or expand their production capability can now partner with secondary equipment services firms that offer economical turnkey solutions combining tool configuration, refurbishment, installation, start-up and support with a risk-reducing warranty package that largely mirrors that of an original equipment manufacturer.

Since most OEMs have focused their efforts on the development and proliferation of their 300mm equipment suites and have either reduced or eliminated their 200mm offerings, many semiconductor companies need support in enhancing their existing 200mm production lines, or with converting from 150 to 200mm wafer size operations. Some firms lack the internal human resources or technical proficiency to handle the equipment aspects of the ramp by themselves. With dedicated expertise in 200mm systems, the full-service secondary equipment firm can provide a project management team to the customer site that will work with the device-maker to help get the facility’s toolset up and running.  

Another trend in the used equipment space we’re seeing is the synergistic combination of dedicated remarketing services with turnkey solution capabilities. Done well, these services increase the amount and diversity of a secondary equipment company’s inventory and provide customers more flexibility and velocity in their ability to buy and sell surplus equipment.

Analysts forecast that wafer fab utilization will increase in 2013 and gain momentum into 2014, which means that chipmakers will soon begin to invest in production equipment to meet the demand curve of the emerging upcycle in the market. For those seeking to gain the most out of their capital budgets, the availability of more high-quality pre-owned 200 and 300mm equipment backed by comprehensive service and support packages offers a financially attractive, low-risk path to fulfilling their capacity requirements.

Jim Mello, Vice President, Sales and Marketing, Entrepix, Inc.

The global economic difficulties are impacting the semiconductor industry more now than ever because the world has become increasingly interconnected and more consumer driven. The financial crisis in Europe, the "fiscal cliff" in the US and the slow down in China’s growth have made it more difficult for any one catalyst to push the markets in a positive direction. Ultimately, the semiconductor industry is caught up in this environment and its outlook continues to be mixed, which points towards a flat 2013. While smart phones and tablets will continue to drive the markets for communication chips, CMOS image sensors and many other types of sensors, the semiconductor industry will not be able to overcome the stagnation of the PC market. The momentum for more powerful, smaller and faster portable devices will dominate the PC market, continuing to drive smaller system packaging technologies and less power consumption while creating more functionality and memory capacity. Technology investments will continue for the advanced nodes and leading edge packaging development, but until the confidence of the economy comes back, the capacity investments will be selective based on individual markets. 

One of the biggest challenges for the industry is that 80 percent of the devices used for portable and mobile applications are currently manufactured on 200mm or smaller wafers. How this plays out going forward could change who the dominant players will be and therefore could drive consolidation. As the communications market advances, design wins play a large role in the uncertainty. The secondary equipment market provides ongoing opportunities throughout the entire market, especially during periods of economic difficulty, and is extremely well positioned to capitalize on the continued strength of the 200mm market. Remanufactured equipment continues to demonstrate its viability within the industry, often being sold with guaranteed reliability and shorter lead times that allow for capacity investments that can accommodate changes in short term demand. Additional value-add can be found in the secondary market from a subset of suppliers who are specialized in specific processes. These vendors provide process development and fully qualified processes to customers to accelerate the manufacturing ramp and further enhance the cost of ownership benefits of refurbished equipment.

By Rudy Kellner, VP & GM, Electronics Business Unit, FEI

Consumer demand for more power, speed and functionality in less space seems to be insatiable. Yet semiconductor manufacturers have reached the end of the era when this demand could be satisfied by simply shrinking the dimensions of fundamental planar device technologies. Now they must accommodate complex, three-dimensional (3D) device architectures and a plethora of new materials. At the package level they must develop and produce 3D designs that stack and interconnect multiple die without sacrificing yield or performance. The net result of all this innovation is a sharp increase in R&D capital intensity. In order to maintain profitability manufacturers must increase the productivity and return from their R&D investments. Moreover, time-to-market has become the new battle ground where the first to market enjoy a brief period of premium pricing and higher margins, before the battle begins again.

The decreasing size and increasing complexity of devices has driven demand for high-power transmission electron microscopes (TEMs) required to visualize and analyze structures with critical dimensions of a few tens of nanometers. Equally important, it has also driven demand for the focused ion beam/scanning electron microscope (FIB/SEM) systems needed to create ultrathin samples from precise locations on a die. We have invested heavily to improve the speed and throughput of these systems, reducing sample preparation times to less than 90 minutes with recipe-based automation and hardware innovations that streamline difficult and time-consuming sample manipulations. At the packaging level we have introduced a plasma-based FIB system with milling rates fast enough to permit package-scale edits that can save weeks in the assembly process.

As the industry continues to consolidate, the battle ground will continue to shift. Production excellence and efficiency will remain a requirement, but the spoils will go to the first to market. Accelerating R&D turns and decreasing time to yield will be the keys to success.