Tag Archives: letter-dd-business

The 61st annual IEEE International Electron Devices Meeting (IEDM) has issued a Call for Papers seeking the world’s best original work in all areas of microelectronics research and development. The paper submission deadline is Monday, June 22, 2015 at 23:59 p.m. Pacific Time.

Overall, the 2015 IEDM is seeking increased participation in the areas of ‘Beyond CMOS’ devices, flexible devices, neuromorphic computing, power devices, sensors for the Internet of Things (IoT) and variation/reliability.

In addition, Special Focus Sessions will be held on the following topics: neural-inspired architectures; 2D materials and applications; flexible electronics and applications; power devices and reliability on non-native substrates; and silicon-based nanodevices for detection of biomolecules.

The 2015 IEDM will take place at the Washington, DC Hilton Hotel from December 7-9, 2015, preceded by a collection of 90-minute afternoon Tutorial sessions on Saturday, Dec. 5, and a full day of Short Courses on Sunday, Dec. 6. On Wednesday the conference will continue the successful Entrepreneurs Luncheon sponsored by IEDM and EDS Women in Engineering.

At IEDM each year, the world’s best scientists and engineers in the field of microelectronics from industry, academia and government gather to participate in a technical program of more than 220 presentations, along with a special Luncheon Presentation on Tuesday, Dec. 8 and a variety of panels, special sessions, Short Courses, IEEE/EDS award presentations and other events spotlighting more leading work in more areas of the field than any other conference.

Papers in the following areas are encouraged:
– Circuit and Device Interaction
– Characterization, Reliability and Yield
– Display and Imaging Systems
– Memory Technology
– Modeling and Simulation
– Nano Device Technology
– Power and Compound Semiconductor Devices
– Process and Manufacturing Technology
– Sensors, MEMS and BioMEMS

BY GREG SHUTTLEWORTH, Global Product Manager at LINDE ELECTRONICS

The market expectations of modern electronics technology are changing the landscape in terms of performance and, in particular, power consumption, and new innovations are putting unprecedented demands on semiconductor devices. Internet of Things devices, for example, largely depend on a range of different sensors, and will require new architectures to handle the unprecedented levels of data and operations running through their slight form factors.

The continued shrinkage of semiconductor dimensions and the matching decreases in microchip size have corresponded to the principles of Moore’s Law with an uncanny reliability since the idea’s coining in 1965. However, the curtain is now closing on the era of predictable / conventional size reduction due to physical and material limitations.

Thus, in order to continue to deliver increased performance at lower costs and with a smaller footprint, different approaches are being explored. Companies can already combine multiple functions on a single chip–memory and logic devices, for example–or an Internet of Things device running multiple types of sensor through a single chip.

We have always known that we’d reach a point where conventional shrinking of semiconductor dimensions would begin to lose its effect, but now we are starting to tackle it head on. A leading U.S. semiconductor manufacturer got the ball rolling with their FinFET (or tri–gate) design in 2012 with its 3D transistors allowing designs that minimize current leakage; other companies look set to bring their own 3D chips to market.

At the same time, there’s a great deal of experimentation with a range of other approaches to semiconductor redesign. Memory device manufacturers, for instance, are looking to stack memory cells vertically on top of each other in order to make the most of a microchip’s limited space. Others, meanwhile, are examining the materials in the hope of using new, more efficient silicon–like materials in their chips.

Regardless of the approach taken, however, this step change in microchip creation means new material demands from chip makers and new manufacturing techniques to go with them.

The semiconductor industry has traditionally had to add new materials and process techniques to enhance the performance of the basic silicon building blocks with tungsten plugs, copper wiring / CMP, high–k metal gates, for example. Now, however, it is beginning to become impossible to extend conventional materials to meet the performance requirements. Germanium is already added to Si to introduce strain, but its high electron mobility means Germanium is also likely to become the material of the Fin itself and will be complemented by a corresponding Fin made of III–V material, in effect integrating three semiconductor materials into a single device.

Further innovation is required in the areas of lithography and etch. This is due to the delay in production suitability of the EUV lithography system proposed to print the very fine structures required for future technology nodes. Complex multi-patterning schemes using conventional lithography are already underway to compensate for this technology delay, requiring the use of carbon hard masks and the introduction of gases such as acetylene, propylene and carbonyl sulphide to the semiconductor fab. Printing the features is only half of the challenge; the structures also need to be etched. The introduction of new materials always presents some etch challenges as all materials etch at slightly different rates and the move to 3D structures, where very deep and narrow features need to be defined through a stack of different materials, will be a particularly difficult challenge to meet.

The microchip industry has continuously evolved to deliver amazing technological advances, but we are now seeing the start of a revolution in microchip design and manufacturing. The revolution will be slow but steady. Such is the pattern of the microchip industry, but it will need a succession of new materials at the ready, and, at Linde, we’re prepared to make sure the innovators have everything they need.

Quantum dots are finally ready for prime time and will exceed traditional phosphor revenue by 2020 by allowing LCD to compete with OLED in the race for the next display generation.
Yole Développement (Yole), the “More than Moore” market research and strategy consulting company releases a LED downconverters technology & market report, entitled “Phosphors & Quantum Dots 2015: LED Downconverters for Lighting & Displays”. Under this new report, the company proposes a deep review of the industry, especially the impact of the quantum dots development on the display and traditional phosphors industry. Are the quantum dots a real competitor of OLEDs technology?

After the lukewarm reception of 3D and 4K, the display industry needs a new and disruptive experience improvement to bring consumers back to the store. Image quality perception increases significantly when color gamut and dynamic contrast ratio are improved. Leading movie studios, content providers, distributors and display makers gathered and formed the “UHD Alliance” to promote those features.

“OLED was believed to be the technology of choice for this next generation of displays. But production challenges have delayed the availability of affordable OLED TVs. LCD TVs with LED backlights based on quantum dots downconverters can deliver performance close to, or even better than OLED in some respects, and at a lower cost,” said Dr. Eric Virey, Senior Analyst, LEDs at Yole.

Until OLEDs are ready, QD-LCD have a unique window of opportunity to try to close enough of the performance gap that the majority of the consumers won’t perceive the difference between the two technologies and price would become the driving factor in the purchasing decision. Under this scenario, QD-LCD could establish itself as the dominant technology while OLED would be cornered into the high end of the market. OLED potentially offers more opportunities for differentiation but proponents need to invest massively and still have to resolve manufacturing yield issues. For tier-2 LCD panel makers who can’t invest in OLED, QDs offer an opportunity to boost LCD performance without additional CAPEX on their fabs. At the 2015 CES, 7 leading TV OEMs including Samsung and LG showed QD-LCD TVs.

With tunable and narrowband emissions, QDs offer unique design flexibility. But more is needed to enable massive adoption, including the development of further improved Cd-free compositions.

And traditional phosphors haven’t said their last word. If PFS could further improve in term of stability and decay time and a narrow-band green composition was to emerge, traditional phosphors could also be part of the battle against OLED.

“… LCD TVs with LED backlights based on quantum dots downconverters can deliver performance close to, or even better than OLED in some respects, and at a lower cost.” said Dr. E. Virey, Yole.

Yole’s analysis, “Phosphors & Quantum Dots 2015: LED Downconverters for Lighting & Displays”, presents an overview of the quantum dot LED market for display and lighting applications including quantum dot manufacturing, benefits and drawbacks, quantum dots LCD versus OLED and detailed market forecast.

A new study coauthored by Wellesley economist, Professor Daniel E. Sichel, reveals that innovation in an important technology sector is happening faster than experts had previously thought, creating a backdrop for better economic times ahead.

The Producer Price Index (PPI) of the United States suggests that the prices of semiconductors have barely fallen in recent years. The slow decline in semiconductor prices stands in sharp contrast to the rapidly falling prices reported from the mid-1980s to the early 2000s, and has been interpreted as a signal of sluggish innovation in this key sector.

The apparent slowdown puzzled Sichel and his coauthors, David M. Byrne of the Federal Reserve Board, and Stephen D. Oliner, of the American Enterprise Institute and UCLA–particularly in light of evidence that the performance of microprocessor units (MPUs), which account for about half of U.S. semiconductor shipments, has continued to improve at rapid pace. After closely examining historical pricing data, the economists found that Intel, the leading producer of MPUs, dramatically changed the way it priced these chips in the mid-2000s–roughly the same time when the slowdown reported by government data occurs. Prior to this period, Intel typically lowered the list prices of older chips to remain competitive with newly introduced chips. However, after 2006, Intel began to keep chip prices relatively unchanged over their life cycle, which affected official statistics.

To obtain a more accurate assessment of the pace of innovation in this important sector, Sichel, Byrne, and Oliner developed an alternative method of measurement that evaluates changes in actual MPU performance to gauge the rate of improvement in price-performance ratios. The economists’ preferred index shows that quality-adjusted MPU prices continued to fall rapidly after the mid-2000s, contrary to what the PPI indicates–meaning that worries about a slowdown in this sector are likely unwarranted.

According to Sichel, these results have important implications, not only for understanding the rate of technological progress in the semiconductor industry but also for the broader debate about the pace of innovation in the U.S. economy.

“These findings give us reason to be optimistic,” said Sichel. “If technical change in this part of the economy is still rapid, it provides hope for better times ahead.”

Sichel and his coauthors also acknowledge that their results raise a new puzzle. “In recent years,” they write, “the price index for computing equipment has fallen quite slowly by historical standards. If MPU prices have, in fact, continued to decline rapidly, why have prices for computers–which rely on MPUs for their performance–not followed suit?” The researchers believe it is possible that the official price indexes for computers may also suffer from measurement issues, and they are investigating this possibility in further work.

“How Fast Are Semiconductor Prices Falling,” coauthored by Daniel E. Sichel, Wellesley College and NBER; David M. Byrne, Federal Reserve Board; and Stephen D. Oliner, American Enterprise Institute and UCLA, is available as an NBER working paper and is online at http://www.nber.org/papers/w21074 and https://www.aei.org/publication/how-fast-are-semiconductor-prices-falling/.

The Semiconductor Industry Association (SIA) today announced worldwide sales of semiconductors reached $83.1 billion during the first quarter of 2015, an increase of 6.0 percent compared to the first quarter of 2014. Global sales for the month of March 2015 were $27.7 billion, 6.0 percent higher than the March 2014 total of $26.1 billion and 0.1 percent lower than last month’s total. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Despite macroeconomic challenges, first quarter global semiconductor sales are higher than they were last year, which was a record year for semiconductor revenue,” said John Neuffer, president and CEO, Semiconductor Industry Association. “The Americas region posted its sixth straight month of double-digit, year-to-year growth to lead all regional markets, and DRAM and analog products continue to be key drivers of global sales growth.”

Regionally, sales were up compared to last month in Asia Pacific/All Other (3.1 percent), Europe (2.7 percent), and China (1.0 percent), which is broken out as a separate country in the sales data for the first time. Japan(-0.4 percent) and the Americas (-6.9 percent) both saw sales decrease compared to last month. Compared to March 2014, sales increased in the Americas (14.2 percent), China (13.3 percent), and Asia Pacific/All Other (3.8 percent), but decreased in Europe (-4.0 percent) and Japan (-9.6 percent).

“Congress is considering a legislative initiative called Trade Promotion Authority (TPA) that would help promote continued growth in the semiconductor sector and throughout the U.S. economy,” Neuffer continued. “Free trade is vital to the U.S. semiconductor industry. In 2014, U.S. semiconductor company sales totaled $173 billion, representing over half the global market, and 82 percent of those sales were to customers outside the United States. TPA paves the way for free trade, and Congress should swiftly enact it.”

March 2015
Billions
Month-to-Month Sales
Market Last Month Current Month % Change
Americas 6.23 5.80 -6.9%
Europe 2.88 2.95 2.7%
Japan 2.55 2.54 -0.4%
China 7.75 7.83 1.0%
Asia Pacific/All Other 8.33 8.59 3.1%
Total 27.74 27.71 -0.1%
Year-to-Year Sales
Market Last Year Current Month % Change
Americas 5.08 5.80 14.2%
Europe 3.08 2.95 -4.0%
Japan 2.81 2.54 -9.6%
China 6.91 7.83 13.3%
Asia Pacific/All Other 8.27 8.59 3.8%
Total 26.15 27.71 6.0%
Three-Month-Moving Average Sales
Market Oct/Nov/Dec Jan/Feb/Mar % Change
Americas 6.73 5.80 -13.8%
Europe 3.01 2.95 -1.7%
Japan 2.80 2.54 -9.1%
China 8.03 7.83 -2.5%
Asia Pacific/All Other 8.57 8.59 0.2%
Total 29.13 27.71 -4.9%

About SIA

C3nano, Inc. announced today that it has acquired the major supplier of silver nanowire (AgNW) in Asia, Aiden Co. Ltd. of Korea. Recognized as the quality and manufacturing leader in AgNWs, Aiden’s breakthroughs in synthesizing uniform AgNWs at large scale is fueling important innovations in touch sensor applications. In addition to establishing a vertically integrated AgNW supply, the acquisition provides C3nano a gateway to the critical display market in Korea and greater Asia.

“This deal positions C3nano with a global footprint to provide the industry’s highest performing transparent conductive ink at manufacturing volumes. We are at scale today,” said Cliff Morris, C3nano’s CEO. “Our partnership means C3nano’s Silicon Valley operations can continue to focus on ink production and R&D for advanced formulations while Aiden focuses on what they do better than anyone else—produce at volume the best AgNWs in the world.”

“Our two companies coming together is a perfect fit because of the clear synergies between Aiden’s production capacity and C3nano’s formidable IP on ink formulations, thin films, processing and devices,” said Mr. Jinhaeng Lee, founder and CEO of Aiden Co. Ltd. “Both of our companies share a commitment to maintain the highest standard of product excellence with a united vision to deliver new and unique technologies to the consumer electronics industry and beyond.”

The Aiden acquisition solidifies C3nano’s position as a complete solution provider of premium TCFs for the flexible display, touch sensor, photovoltaic and organic light-emitting diode (OLED) industries.

IHS Technology’s final market share results for 2014 reveal that worldwide semiconductor revenues grew by 9.2 percent in 2014 coming in just slightly below the growth projection of 9.4 percent based on preliminary market share data IHS published in December 2014. The year ended on a strong note with the fourth quarter showing 9.7 percent year-over-year growth.  IHS semiconductor market tracking and forecasts mark the fourth quarter of 2014 as the peak of the annualized growth cycle for the semiconductor industry.

Global revenue in 2014 totaled $354.5 billion, up from $324.7 billion in 2013, according to a final annual semiconductor market shares published by IHS Technology). The nearly double-digit percentage increase follows solid growth of 6.6 percent in 2013, a decline of 2.6 percent in 2012 and a marginal increase of 1.3 percent in 2011. The performance in 2014 represents the highest rate of annual growth since the 33 percent boom of 2010.

“While 2014 marked a peak year for semiconductor revenue growth, the health of both the semiconductor supply base and end-market demand, position the industry for another year of strong growth in 2015,” said Dale Ford, vice president and chief analyst at IHS Technology. “Overall semiconductor revenue growth will exceed 5 percent in 2015, and many component categories and markets will see improved growth over 2014.  The more moderate 2015 growth is due primarily to more modest increases in the memory and microcomponent categories.  The dominant share of semiconductor markets will continue to see vibrant growth in 2015.”

More information on this topic can be found in the latest release of the Competitive Landscaping Tool from the Semiconductors & Components service at IHS.

Top ten maneuvers

Intel maintained its strong position as the largest semiconductor supplier in the world followed by Samsung Electronics and Qualcomm at a strong number two and three position in the rankings.  On the strength of its acquisition of MStar, MediaTek jumped into the top 10 replacing Renesas Electronics at number 10.  The other big mover among the top 20, Avago Technologies, also was boosted by an acquisition, moving up nine places to number 14 with its acquisition of LSI in 2014.

Strategic acquisitions continue to play a major role in shaping both the overall semiconductor market rankings and establishing strong leaders in key semiconductor segments.  NXP and Infineon will be competing for positions among the top 10 semiconductor suppliers in 2015 with the boost from their mergers/acquisitions of Freescale Semiconductor and International Rectifier, respectively.

Among the top 25 semiconductor suppliers, 21 companies achieved growth in 2014.  Out of the four companies suffering declines, three are headquartered in Japan as the Japanese semiconductor market and suppliers continue to struggle.

Broad-based growth

As noted in the preliminary market share results, 2014 was one of the healthiest years in many years for the semiconductor industry.  Five of the seven major component segments achieved improved growth compared to 2013 growth. All of the major component markets saw positive growth in 2014.  Out of 128 categories and subcategories tracked by IHS, 73 percent achieved growth in 2014.  The combined total of the categories that did not grow in 2014 accounted for only 8.1 percent of the total semiconductor market.

Out of more than 300 companies included in IHS semiconductor research, nearly 64 percent achieved positive revenue growth in 2014.  The total combined revenues of all companies experiencing revenue declines accounted for only roughly 15 percent of total semiconductor revenues in 2014.

Semiconductor strength

Memory still delivered a strong performance driven by continued strength in DRAM ICs. However, memory market growth declined by a little more than 10 percent compared to the boom year of 2013 with over 28 percent growth in that year.  Growth in sensors & actuators came in only slightly lower than 2013.

Microcomponents achieved the strongest turn around in growth moving from a -1.6 percent decline in 2013 to 8.9 percent growth in 2014.  It also delivered the best growth among the major segments following memory ICs.  Even Digital Signal Processors (DSPs) achieved positive growth in 2014 following strong, double-digit declines in six of the last seven years.  MPUs lead the category with 10.7 percent growth followed by MCUs with 5.4 percent growth.

Every application market delivered strong growth in 2014 with the exception of Consumer Electronics.  Industrial Electronics lead all segments with 17.8 percent growth.  Data Processing accomplished the strongest improvement in growth as it grew 13.7 percent, up nearly 10 percent from 2014.  Of course, MPUs and DRAM played a key role in the strength of semiconductor growth in Data Processing.  The third-strongest segment was Automotive Electronics which was the third segment with double-digit growth at 10 percent.  Only Wireless Communications saw weaker growth in 2014 compared to 2013 as its growth fell by roughly half its 2013 level to 7.8 percent in 2014.

The recently released Samsung Galaxy S6 Edge is the most expensive Galaxy S line smartphone yet built, but has a lower retail price than a comparable iPhone 6 Plus, according to a preliminary estimate by IHS and its Technology Mobile Handsets Intelligence Service.

The Samsung Galaxy S6 Edge smartphone with 64GB of NAND memory carries a bill of materials (BOM) of $284.85 with the cost rising to $290.45 when the $5.60 manufacturing cost is added, according to results from the IHS teardown of a phone purchased from Verizon. The retail price at Verizon for the Galaxy S6 Edge is $799.99.

A comparable Apple iPhone 6 Plus 64GB has a BOM of $236.04, which rises to $240.05 after the $4.01 manufacturing cost is added, and a retail price from the Apple online store of $849.00, $50 higher than the S6 Edge.

“Overall, this is the priciest Samsung Galaxy S series bill of materials to date. In fact, Samsung seems to have consistently packed more features and cost into their flagship Galaxy S line of phones over the last three generations of product, now producing a BOM cost that is notably higher than comparable iPhones,” said Andrew Rassweiler, senior director of research and analysis for IHS.

Preliminary Samsung Galaxy S6 Edge Teardown Cost
Analysis vs. iPhone 6 Plus 64GB
iPhone 6 Plus Galaxy S6 Edge
64GB 64GB
Direct Materials Costs $236.04 $284.85
Conversion Costs $4.01 $5.60
Total Costs $240.05 $290.45
Retail $849.99 $799.99

Source: IHS Technology iPhone 6 Plus analysis December 2014. S6 analysis April 2015.

Cost/Pricing Approach Similar to Apple

The Edge model retails for $100 more than the regular version of the S6. Additionally, the Galaxy S6 and S6 Edge both are priced $100 more at retail for each increment of memory from 32GB to 64GB and from 64GB to 128GB. “It only costs Samsung around $13 for 32GB in memory and less than $26 for an additional 64GB in memory,” Rassweiler said. “So Samsung generates an additional $87 or so in profit on the 64GB model when compared to the 32GB model. Apple has also been structuring their iPhone offering like this for years. It boosts margins.”

SAMSUNG GALAXY S6 EDGE SM-G925V Top Cost Drivers
Itemized Components MfgName Description Total Cost
Display SAMSUNG Display / Touchscreen Module, 5.1″
Quad HD Super AMOLED,
2560×1440 Pixels, 577PPI, Dual Edge		 $85.00
IC Content
Apps Processor SAMSUNG Apps Processor – Octa-Core, 64-Bit, 14nm, PoP $29.50
Baseband IC QUALCOMM Baseband Processor – Multi-Mode, 28nm, PoP $15.00
Memory
NAND (eMMC, MLC, …) SAMSUNG Flash – UFS NAND, 64GB, PoP $25.00
DRAM SAMSUNG SDRAM – LPDDR4, 3GB, PoP $27.50
Power Management Ics $5.40
RF / PA Section $12.50
User Interface Ics $9.95
Sensors $4.80
Modules
Primary Camera Module Rear Camera Module – 16MP, BSI CMOS, OIS $18.50
Secondary Camera Module Front Camera Module – 5MP, BSI CMOS $3.00
BT / WLAN Module(s) MURATA BT / WLAN Module $4.00
Battery Pack(s) ITM Li-Polymer, 3.85V, 2600mAh, 10.01Wh $3.50
Other Noteworthy Items
Box Contents $6.20
Enclosure elements Die-Cast Aluminum Center Piece &
Machined Aluminum Bottom Piece		 $12.00
Other Mechanical / Electro-Mechanicals $23.00

Source: IHS Technology April 2015

Pricey Display

Samsung has been using the Galaxy line to showcase its Super AMOLED technology in previous Galaxy S series generations, and the Galaxy S6 and S6 EDGE are no exceptions to this rule. The displays on the Galaxy S6 and S6 Edge offer higher resolution (2560×1440 pixels, known as Quad HD) than the iPhone 6 Plus which features 1920×1080 (1080p) resolution. The IHS teardown also showed that the unique Edge curved display screen costs $85, about $24 more than the display for the regular version of the S6. Furthermore, when compared with the iPhone 6 Plus, the display on the Galaxy S6 Edge is more than double the cost of the TFT/IPS display and touchscreen on the iPhone 6 Plus, which IHS estimated at $41 in November 2014.

Predominantly Samsung Silicon

The S6 Edge features predominantly Samsung silicon, but there are several variations of the Galaxy S6 and S6 Edge that also feature Samsung modem chips rather than those from Qualcomm found in the Verizon sample torn down by IHS. “There are other versions of the S6 sold by different carriers in different markets that do not use the Qualcomm chip set. We have procured another model so we can compare the models and look at the cost differences,” Rassweiler said.

The apps processor in the Edge torn down by IHS is a Samsung Octa-Core, 64-Bit, built in 14nm, and is one of the first (but not only) 14nm processors the IHS team has seen, with a cost of $29.50. The baseband integrated circuit (IC) is a Qualcomm MDM9653M multi-mode baseband processor, which has an estimated cost of $15.

The NAND memory is a Samsung (KLUCG8G1BD), 64GB UFS NAND, PoP, and the DRAM is a Samsung (K3RG3G30MM-DGCH), 3GB LPDDR4, PoP.

“Package on Package” Reduces Size

“This is the first time we have seen NAND Flash memory in package-on-package (PoP) format. In this case the flash memory is mounted directly on top of the Qualcomm MDM9653M processor. That’s usually something we have only seen when DRAM memory is placed on top of the applications processor,” Rassweiler said. “‘PoP packaging is used to reduce the overall footprint, and in this case is being used in more than one place in the design.

“It also is our first sighting in all teardowns of mobile (low power) DDR4 DRAM,” he added. “The iPhone 6 employs 1GB of Mobile DDR3 by comparison while 3GB of DDR3 DRAM has been a predominant configuration in several flagship Android phones in the last year.”

Regarding the RF/PA components in the Edge, Rassweiler said that both Apple and Samsung have focused much attention to integrating various radio frequency modules. “This integration is being done to help reduce the number of different SKUs needed to support multiple wireless operators worldwide,” Rassweiler said. “The approach to support multiple wireless operators with, ideally, a single model has been a big part of the LTE design efforts by both Apple and Samsung.”

By Lara Chamness, senior market analyst manager, SEMI

Semiconductor Market Trends

2014 was the second record breaking year in a row in terms of semiconductor device revenues; the industry grew a robust 10 percent to total $336 billion, according to the WSTS. The strong momentum of the device market was enough to drive positive growth for both the equipment and materials markets. After two successive years of revenue decline, both the equipment and materials markets grew 18 percent and 3 percent, respectively last year, according to SEMI (www.semi.org). Even though the semiconductor materials market did not enjoy the same magnitude of recovery as the equipment market last year, the materials market has been larger than the equipment for the past seven years.

Just like last year, the weakened Yen negatively impacted total revenues for semiconductor materials and equipment (refer to Dan Tracy’s March 2014 article for more detail). The Table (below) shows the impact of the weakened Yen on Semiconductor Equipment Association of Japan’s (SEAJ) book-to-bill data. SEMI reveals that if the data was kept in Yen, the 2014 market for Japan-based suppliers would be up 37 percent. However, when the Yen are converted to dollars the 2014 equipment market for Japan-based suppliers only increased 26 percent. When silicon semiconductor shipment volumes are compared year-over-year, shipments were up 11 percent. By comparison, silicon revenues only increased one percent. SEMI also tracks leadframe unit shipments. In 2014, leadframe shipments were up 9 percent year-over-year; however, leadframe revenues increased only 4 percent. Silicon and leadframe revenues were adversely impacted by intense price down pressure exasperated by the weakened Yen. Given that Japan-headquartered suppliers represent a significant portion of the equipment and materials markets; this has the effect of muting the growth of the global equipment and materials markets as well.

Semiconductor Equipment

Worldwide sales of semiconductor manufacturing equipment totaled $37.5 billion in 2014, representing a year-over-year increase of 18 percent and placing spending on par with 2004 levels. According to SEMI, looking at equipment sales by major equipment category, 2014 saw expansions in all major categories — Wafer Processing equipment increased 15 percent, while the Assembly and Packaging and Test equipment segments grew 32 and 31 percent, respectively. The Other Front-end segment (Other Front End includes Wafer Manufacturing, Mask/Reticle, and Fab Facilities equipment) increased 15 percent.

Taiwan retained its number one ranking last year at $8.2 billion, even though it was the only region to experience a year-over-year contraction in spending. The equipment market in North America maintained second place at $8.2 billion for the second year as its market grew a robust 55 percent due to investments in excess of a billion dollars each from Intel, GLOBALFOUNDRIES, and Samsung.  Spending levels of $6.8 billion in South Korea remain significantly below their market high set in 2012 resulting in South Korea maintaining the third spot for the second year in a row. China moved up in the rankings to hit a market high and displacing Japan to claim the fourth position in the market. Strong investments by Samsung, SK Hynix, SMIC, and back-end companies are driving the equipment market in China. Equipment sales to Europe and Rest of world increased 24 and 4 percent, respectively in 2014. Rest of World region aggregates Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets.

Semiconductor Materials
SEMI reports that the global semiconductor materials market, which includes both fab and packaging materials, increased 3 percent in 2014 totaling $44.3 billion. Looking at the materials market by wafer fab and packaging materials, the wafer fab materials segment increased 6 percent, while the packaging materials segment was flat.  However if bonding wire were excluded from the packaging materials segment, the segment increased more than 4 percent last year. The continuing transition to copper-based bonding wire from gold is negatively impacting overall packaging materials revenues.

Taiwan maintained the top spot for the fifth year in a row, followed by Japan, South Korea, Rest of World, and China. Driving the materials market in Taiwan are advanced packaging operations and foundries. Japan still claims a significant installed fab base and has a tradition in domestic-based packaging, although many companies in Japan have rapidly adopted a fab lite strategy and have consolidated their fab and packaging plants. South Korea passed Rest of World (primarily SE Asia) as the third largest market for semiconductor materials given the dramatic increase in advanced fab capacity in the region in recent years.

Outlook

Most analysts predict mid- to high single-digit growth for the semiconductor device market for 2015. Initial monthly data for silicon shipments and semiconductor equipment are proving to be encouraging. In light of growth expectations for the device market, SEMI projects that the semiconductor materials market will increase 4 percent this year. Given current CapEx announcements, the outlook for semiconductor equipment is optimistic as well, with current projections of the equipment market showing another year of growth, which would place the equipment market on par with the last market high set in 2011.

2014 was a much welcomed year for equipment and materials suppliers as device manufacturers easily exceeded revenues of $300 billion. Even with the weakened Yen, both the semiconductor and equipment segments experienced growth. 2015 is promising to be another growth year for the entire market with device, materials and equipment suppliers poised to experience increases for the year.

Portions of this article were derived from the SEMI Worldwide Semiconductor Equipment Market Statistics (WWSEMS), the Material Market Data Subscription (MMDS) and the World Fab Watch database. These reports are essential business tools for any company keeping track of the semiconductor equipment and material market. Additional information regarding this report and other market research reports is available at www.semi.org/marketinfo

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today announced worldwide sales of semiconductors reached $27.8 billion for the month of February 2015, an increase of 6.7 percent from February 2014 when sales were $26.0 billion. Global sales from February 2015 were 2.7 percent lower than the January 2015 total of $28.5 billion, reflecting seasonal trends. Regionally, sales in the Americas increased by 17.1 percent compared to last February to lead all regional markets. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“The global semiconductor industry maintained momentum in February, posting its 22nd straight month of year-to-year growth despite macroeconomic headwinds,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Sales of DRAM and Analog products were particularly strong, notching double-digit growth over last February, and the Americas market achieved its largest year-to-year sales increase in 12 months.”

Regionally, year-to-year sales increased in the Americas (17.1 percent) and Asia Pacific (7.6 percent), but decreased in Europe (-2.0 percent) and Japan (-8.8 percent). Sales decreased compared to the previous month in Europe (-1.6 percent), Asia Pacific (-2.2 percent), Japan (-2.3 percent), and the Americas (-4.4 percent).

“While we are encouraged by the semiconductor market’s sustained growth over the last two years, a key driver of our industry’s continued success is free trade,” Neuffer continued. “A legislative initiative called Trade Promotion Authority (TPA) has paved the way for opening markets to American goods and services for decades, helping to give life to nearly every U.S. free trade agreement in existence, but it expired in 2007. With several important free trade agreements currently under negotiation, Congress should swiftly re-enact TPA.”

February 2015
Billions
Month-to-Month Sales
Market Last Month Current Month % Change
Americas 6.51 6.23 -4.4%
Europe 2.95 2.90 -1.6%
Japan 2.62 2.56 -2.3%
Asia Pacific 16.47 16.10 -2.2%
Total 28.55 27.79 -2.7%
Year-to-Year Sales
Market Last Year Current Month % Change
Americas 5.32 6.23 17.1%
Europe 2.96 2.90 -2.0%
Japan 2.81 2.56 -8.8%
Asia Pacific 14.96 16.10 7.6%
Total 26.04 27.79 6.7%
Three-Month-Moving Average Sales
Market Sep/Oct/Nov Dec/Jan/Feb % Change
Americas 6.53 6.23 -4.6%
Europe 3.19 2.90 -9.2%
Japan 2.93 2.56 -12.7%
Asia Pacific 17.12 16.10 -6.0%
Total 29.77 27.79 -6.7%