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Spurred on by growing demand for innovative user experience in smartphones, shipments of foldable active-matrix organic light-emitting diode (AMOLED) panels are expected to reach 50 million units by 2025 for the first time since their launch in 2018, according to IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

The foldable AMOLED panels are expected to account for 6 percent of total AMOLED panel shipments (825 million), or 11 percent of total flexible AMOLED panel shipments (476 million) by 2025.

“As the conventional smartphone market has become saturated, smartphone brands have tried to come up with an innovative form factor for a smartphone,” said Jerry Kang, senior principal analyst of display research at IHS Markit. “A foldable AMOLED panel is considered to be the most attractive and distinguishable form factor at this moment.”

In October 2018, China’s Royole Corporation unveiled the world’s first foldable-screen smartphone with a 7.8-inch AMOLED panel. A few other brands are also expected to launch foldable-screen smartphones in 2019.

“Smartphone brands are cautious about launching foldable smartphones because the phones should be durable enough for repeated folding and thin and light enough even when supporting a larger display and battery,” Kang said. “Unit shipments of foldable AMOLED panels may not grow as fast for the first few years, but area per unit will be expected to be larger than that of conventional displays. Panel makers are forecast to see an increase in fab utilization.”

Due to lower demand for conventional flexible AMOLED panels, suppliers are hoping that smartphone brands release foldable devices as early as possible. With more optimism, some are even considering investing in another fab solely for foldable AMOLED panels.

“Panel suppliers should consider how much demand will increase for the foldable application before investing in additional fabs, because the supply of flexible AMOLED panels is forecast to exceed demand even as we move into 2019,” Kang said.

According to the AMOLED & Flexible Display Intelligence Service by IHS Markit, the supply capacity of flexible AMOLED panels will account for more than half of total AMOLED capacity in the fourth quarter of 2019.

By Serena Brischetto

SEMI spoke with Prof. Christoph Kutter, executive director, Fraunhofer EMFT, about trends and innovations in flexible hybrid electronics ahead of his presentation at the 2018 FLEX Europe – Be Flexible conference at SEMICON Europa 2018, 13-16, November 2018, in Munich, Germany. To register for the event, click here.

SEMI: Recent developments on thin semiconductors, new materials and cost-effective processing techniques have opened the door to a plurality of new applications and future products. What are the most innovative integration approaches?

Kutter: We have a variety of good examples, from medical to automotive. In his keynote, Philips Research Professor Ronald Dekker will present innovative approaches to integration as electronic devices find their way into the human body. Christian Neumann, head of Digital Printed Electronics at Heraeus, will discuss new markets like smart textiles and in-mold electronics, and Mike Hack, VP of Business Development at Universal Display Corporation, will explore the promise of OLED technology in giving rise to new, exciting products over the next few years.

SEMI: Can you share some details about the Fraunhofer EMFT roadmap?

Kutter: In his speech, Christof Landesberger, department manager at Fraunhofer EMFT will delve into the R2R Manufacture of Flexible Hybrid Electronics technology roadmap.  Flex Electronics allows for the hybrid integration of different functionalities and components for a broad variety of applications, which are needed in IoT scenarios. Christof will show a few examples of that.

SEMI: Are you currently working and experimenting on something particularly exciting?

Kutter: Thin chip foil packages with embedded microcontroller ICs were demonstrated successfully by Fraunhofer EMFT using single sheet film substrates. In order to achieve the next major step towards R2R manufacture, we are currently setting up a laser direct imaging (LDI) system for R2R lithographic patterning of interconnects and wiring schemes. A key advantage of such laser imaging system is its capability to correct the UV exposure process locally and, if necessary, individually at any chip position. Such adaptive lithographic patterning is supposed to bridge the gap between alignment requirements and geometric distortions in the web substrate. First results will be shown at the conference for the first time.

SEMI: What are your expectations for the future and why would you recommend attending the 2018 Flexible – Be Flexible conference at SEMICON Europa?

Kutter:  We expect Flex Hybrid Integration to become more and more important, since it offers the best of each world: mass volume printing technologies integrated with high performance ultra-low power electronics. You will see many examples of hybrid integration approaches during the conference.

SEMICON Europa is a very important platform to highlight the latest developments in the semiconductor industry. During the 2018 Flexible – Be Flexible conference, themed “Innovations enabled by Flexible Electronics,” researchers, market analysts, material and product developers, and equipment suppliers will gather to provide insights into the latest Flexible Hybrid Electronics innovations. We are particularly proud to organize this platform with SEMI and FlexTech Alliance.

Prof. Dr. Christoph Kutter is the director of the Fraunhofer EMFT, focusing on sensing technologies based on silicon electronics and flexible hybrid integration technologies.

Kutter serves as a member of the board of trustees at Fraunhofer Institut Für Nachrichten – Heinrich-Hertz Institut HHI and has been a ember of Supervisory Board at First Sensor AG since May 24, 2017 He completed his physics studies at TU Munich. In 1995, he earned his doctorate in physics at the University of Konstanz.


Serena Brischetto is a marketing and communications manager at SEMI Europe.


The average revenue generated from processed wafers among the four biggest pure-play foundries (TSMC, GlobalFoundries, UMC, and SMIC) is expected to be $1,138 in 2018, when expressed in 200mm-equivalent wafers, which is essentially flat from $1,136 in 2017, according to a new analysis by IC Insights (Figure 1).  The average revenue per wafer among the Big 4 foundries peaked in 2014 at $1,149 and then slowly declined through last year, based on IC Insights’ extensive part-two analysis of the integrated circuit foundry business in the September Update to The 2018 McClean Report.

Figure 1

TSMC’s average revenue per wafer in 2018 is forecast to be $1,382, which is 36% higher than GlobalFoundries’ $1,014.  UMC’s average revenue per wafer in 2018 is expected to be only $715, about half of the projected amount at TSMC this year.  Furthermore, TSMC is the only foundry among the Big 4 that is expected to generate higher revenue per wafer (9% more) in 2018 than in 2013.  In contrast, GlobalFoundries, UMC, and SMIC’s 2018 revenue per wafer averages are forecast to decline by 1%, 10%, and 16%, respectively, compared to 2013.

Although the average revenue per wafer of the Big 4 foundries is forecast to be $1,138 this year, the amount generated is highly dependent upon the minimum feature size of the IC processing technology. Figure 2 shows the typical 2Q18 revenue per wafer for some of the major technology nodes and wafer sizes produced by pure-play foundries.  In 2Q18, there was more than a 16x difference between the 0.5µ 200mm revenue per wafer ($370) and the ≤20nm 300mm revenue per wafer ($6,050).  Even when using revenue per square inch, the difference is dramatic ($7.41 for the 0.5µ technology versus $53.86 for the ≤20nm technology).  Since TSMC gets such a large percentage of its sales from ≤45nm production, its revenue per wafer is expected to increase by a compound annual growth rate (CAGR) of 2% from 2013 through 2018 as compared to a -2% CAGR for the total revenue per wafer average of GlobalFoundries, UMC, and SMIC during this same timeperiod.

Figure 2

There will probably be only three foundries able to offer high-volume leading-edge production over the next five years (i.e., TSMC, Samsung, and Intel).  IC Insights believes these companies are likely to be fierce competitors among themselves—especially TSMC and Samsung—and as a result, pricing will likely be under pressure through 2022.

Global fab equipment spending will increase 14 percent this year to US$62.8 billion and is expected to rise 7.5 percent, to US$67.5 billion, in 2019, marking the fourth consecutive year of spending growth and the highest investment year for fab equipment in the history of the industry, according to the latest World Fab Forecast Report published today by SEMI. Investments in new fab construction are also nearing a record with a fourth consecutive year of growth predicted and capital outlays next year approaching US$17 billion.

Investments for fab technology and product upgrades, as well as for additional capacity, will grow as the emergence of numerous new fabs significantly increases equipment demand, the forecast shows. The World Fab Forecast Report currently tracks 78 new fabs and lines that have or will start construction between 2017 to 2020 (with various probabilities) and will eventually require more US$220 billion in fab equipment (Figure 1). Construction spending for these fabs and lines is expected to reach US$53 billion during this period.

Figure 1: Shows the investment potential of new fabs and lines starting construction between 2017 and 2020.

Korea is projected to lead other regions in fab equipment investments with US$63 billion, US$1 billion more than second-place China. Taiwan is expected to claim the third spot at US$40 billon, followed by Japan at US$22 billion and the Americas at US$15 billion. Europe and Southeast Asia will share sixth place, with investments totaling US$8 billion each. Fully 60 percent of these fabs will serve the Memory sector (the lion’s share will be 3D NAND), and a third will go to Foundry.

Of the 78 fab construction projects starting construction between 2017 and 2020, 59 began construction in the first two years (2017 and 2018), while 19 are expected to begin in the last two years (2019 and 2020) of the tracking period.

Equipping a new fab typically takes one to one and a half years, though some fabs take two years and others longer, depending on various factors as such the company, fab size, product type and region. Approximately half of the projected US$220 billion will be spent from 2017 and 2020, with less than 10 percent invested in 2017 and 2018, nearly 40 percent in 2019 and 2020, and the rest after 2020.

While the US$220 billion estimate is based on current insights of known and announced fab plans, total spending could exceed this level as many companies continue to announce plans for new fabs. Since the last quarterly publication of the report published last quarter, 18 new records – all new fabs – have been added to the forecast. Up-to-date and detailed analysis, with a bottoms-up approach, is available by subscribing to SEMI’s World Fab Forecast Report.

Since its June 1 publication, more than 340 updates have been made to the World Fab Forecast. The report now includes more than 1,200 records of current and future front-end semiconductor facilities from high-volume production to research and development. The report covers data and predictions through 2019, including milestones, detailed investments by quarter, product types, technology nodes and capacities down to fab and project level.

Learn more about the SEMI fab databases at www.semi.org/en/MarketInfo/FabDatabase and www.youtube.com/user/SEMImktstats.

Tight supplies of display panel materials and components, such as driver integrated circuit (IC), glass substrate and polarizer, are expected to slow the decline rate of liquid crystal display panel costs, according to IHS Markit (Nasdaq: INFO).

Supply of driver IC is forecast to tighten throughout 2018, estimated to exceed demand by 4 percent, per the new Display Driver IC Market Tracker by IHS Markit. Foundries have cut their production capacity of cheap driver ICs while increasing production of high-profit ICs and large-scale integrations (LSIs), mainly to satisfy orders from industries producing Internet of Things (IoT) and automotive technologies.

In addition, large panel driver ICs are mainly produced using 8-inch wafers but no foundries are making further investments into these wafer sizes as a generational transition is making its way into 12-inch wafers. “It seems that panel makers can secure driver IC supplies only by offering higher prices,” said Tadashi Uno, senior analyst at IHS Markit.

The average driver IC price increased by about 10 percent during the first half of 2018. Tight supply of driver ICs has impacted the prices of IT panels, such as desktop monitors, notebook PC and tablet PC panels, and has also extended into TV and smartphone panel prices since the third quarter of 2018.

Glass substrates are also in a tight supply situation since the beginning of  third quarter2018, according to the Display Glass Market Tracker by IHS Markit. The supply-demand glut in the third quarter has been below 5 percent, which is considered a tight supply threshold, while taking into account later delivery times.

“Major glass makers are investing in glass-melting tanks in China, but the higher glass consumption of Chinese panel makers’ means it exceeds more than double the glass production capacity of the country,” Uno said. “Chinese panel makers also import products from Japan, South Korea and Taiwan but they are stymied by glass production delays and delivery.”

According to the Display Optical Film Market Tracker by IHS Markit, polarizers have been in a tight supply situation since the third quarter. In July, film makers, such as Dai Nippon Printing and Nitto Denko, stopped operations for more than a week due to heavy rain in Japan. The production facilities are not damaged directly, but damaged infrastructures, such as roads, waterworks and electric facilities, have caused delivery delays.

Logistics issues remain even though operations have resumed. “Non-TAC polarizers, especially acryl polarizers, were already in tight supply but the recent floods have made the situation worse,” said Irene Heo, senior principal analyst at IHS Markit. Polarizer supply-demand glut is expected to be 4 percent in the third quarter, below the 5 percent balance bar.

The cash cost of a typical 32-inch high-definition (HD) open cell is expected to decline 1.4 percent in third quarter2018 compared to a year ago, according to the Large Area Display Cost Model. The contraction rate has slowed from 2.9 percent in the same period last year. “The main reason for the slow cost reduction is the increasing price of driver ICs,” Uno said. “However, glass substrate and polarizer price reductions have been relatively stable.”

Large thin-film transistor liquid crystal display (TFT LCD) panel shipments hit a record monthly high in July 2018 in terms of unit and area shipment. Unit shipments increased by 10 percent in July compared to a year ago to reach 64.3 million units, while area shipments jumped 19 percent during the same period to 17 million square meters, according to IHS Markit (Nasdaq: INFO).

“New facilities from China, such as BOE’s Gen 10.5, CHOT’s Gen 8.6 and CEC-Panda’s Gen 8.6, started mass production in the first half of this year. The production at the fabs has increased since the second quarter of 2018 as their glass inputs and production yield rates have improved,” said Robin Wu, principal analyst at IHS Markit. “Despite the growing production, panel makers have maintained the utilization rate and instead tried to push out panel shipments by lowering panel prices in the first half of 2018. That’s one of the reasons that panel shipments are continuously growing.”

The LCD TV panel contributed to the record high shipments of larger-than-9-inch LCD panels in July. Unit shipments of LCD TV panels increased by 15 percent in July year on year to 24.6 million units and area shipments jumped 21 percent to 13.3 million square meters, according to the Large Area Display Market Tracker by IHS Markit.

Panel makers suffered from high TV panel inventories in the first half of 2018 due to growing production capacities. Panel prices have been weak for a year and panel makers’ profit margins have plunged. “Therefore, panel makers wanted to clear up the inventory before the third quarter, high-demand season, when they aim to raise the panel price back again,” Wu said. “That has led to the fast growth in TV panel shipments lately, which as a result pulled the total large panel shipments to a historical high in July.” As the panel makers hoped, LCD TV panel prices rebounded in July 2018.

Chinese panel maker BOE led the large TFT LCD market in July 2018 in terms of unit shipments with a stake of 24 percent, followed by LG Display with 19 percent. However, in terms of area shipments, South Korea’s LG Display continued to lead with a 20 percent share, followed by BOE with 18 percent.

The Trump administration’s consideration of tariffs on Chinese printed circuit assemblies and connected devices would cost the economy $520.8 million and $2.4 billion annually for the 10 percent and 25 percent tariffs, respectively, according to a new study commissioned by the Consumer Technology Association (CTA).

“With the economy thriving under President Trump – we’ve seen remarkably low unemployment and a booming stock market – the administration shouldn’t jeopardize America’s global standing with tariffs,” said Gary Shapiro, CEO and president, CTA. “Foreign governments don’t pay the cost of tariffs, Americans do – and for that reason, U.S. trade policy needs to steer clear of tariffs that act like taxes on American manufacturers and consumers. The danger we face – the unintended consequence – is that tariffs mean Americans will pay more for all the devices they use every day to access the internet.”

The economic impact study shows American shoppers will have to pay between $1.6 billion and $3.2 billion more for connected devices such as gateways, modems, routers, smart speakers, smartwatches and other Bluetooth enabled products. The price of connected devices from China will increase by between 8.5 and 22 percent. And prices for these products from all sources will rise between 3.2 and 6.2 percent.

Similarly, the price of printed circuit assemblies from China –– will increase by between nine and 23 percent, while an alternative supply from U.S. manufacturers will cost two to three percent higher. As a result of higher input costs, totaling an additional $900 million to $1.8 billion, American manufacturers of products that contain printed circuit assemblies will purchase between six and 12 percent less from suppliers overall.

“When our government begins to charge its own companies and people with more taxes in the form of tariffs, we have put in jeopardy not just the American Dream of many small and mid-size businesses, but you put in jeopardy the people that work for them too,” said Win Cramer, CEO, JLab Audio, a California based company and CTA member. “These people support a growing economy, support a growing business and, most importantly, pay taxes. Pre-tariffs, JLab Audio was planning to scale up with new hires and programs to push our company’s growth to another level, but now we’ve put all of that on hold as we need to see how everything shakes out.”

Based on CTA’s most recent U.S. Consumer Technology Sales and Forecasts report, if the administration enacts tariffs of 10 and 25 percent, CTA projects 2019 U.S. unit shipments of connected devices such as fitness trackers, smartwatches, wireless headphones, modems/broadband gateways, wireless earbuds and smart speakers would decline by as much as 12 percent. Also, U.S. shipment revenues for these devices would decrease by as much as 6.5 percent in 2019.

Amid growing demand for active matrix organic light-emitting diode (AMOLED) panels for smartphones, shipments of flexible AMOLED panels are expected to account for more than 50 percent of total AMOLED panel shipments by 2020.

According to IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, shipments of flexible AMOLED panels are expected to reach 335.7 million units by 2020, topping those of rigid AMOLED panels at 315.9 million units. Flexible AMOLED panels are predicted to make up 52.0 percent of total AMOLED panel shipments, up from 38.9 percent in 2018.

“Growth in demand for smartphones with flexible AMOLED panels has accelerated since 2016 as demand increased for curved form or full screen displays,” said Jerry Kang, senior principal analyst of display research at IHS Markit. “Major smartphone brands have been promoting flexible AMOLED screens for their premium products, which allow a differentiated form factor from ones with rigid AMOLED and low-temperature polycrystalline silicon (LTPS) liquid crystal display (LCD) panels.”

Apple has applied flexible AMOLED panels first in 2017 to the iPhone X. It is expected to launch its second phone with a flexible AMOLED panel, slightly larger than the first one, in 2018. Demand for the new iPhone is expected to contribute to boost the shipments of flexible AMOLED panels.

“Another factor is that high-end smartphone brands are now planning to launch foldable applications using flexible AMOLED panels, which is not possible using rigid AMOLED or LTPS LCD panels. Foldable AMOLED panels will be key in changing the demand situation from mobile devices in the foreseeable future,” Kang said.

Shipments of flexible AMOLED panels are expected to reach 157.6 million units in 2018, more than triple compared to 46.5 million units in 2015, with a compound annual growth rate of 50 percent.

By Jay Chittooran, Public Policy Manager, SEMI 

Two months after opposing $34 billion in U.S. trade tariffs on behalf of the U.S. semiconductor manufacturing industry, Jonathan Davis, global vice president of industry advocacy at SEMI, this week spoke out against an additional $16 billion duties on Chinese goods. Testifying before the same U.S. interagency panel mulling the merits of the tariffs, Davis called for the removal of 29 tariff lines covering items critical to semiconductor manufacturing including machines and spare parts used to make, wafers, flat panel displays and masks.

In his testimony to the panel, Davis stressed that while SEMI supports stronger protections against the theft of valuable intellectual property (IP), tariffs do little to address U.S. concerns over IP loss. Over the past month, SEMI has also submitted written comments and opposed the tariffs in public testimony. The panel includes representatives from the U.S. Trade Representative (USTR), Departments of Treasury, Commerce, State and Defense, and the Council of Economic Advisers.

Also testifying, Joe Pon, corporate vice president at Applied Materials, explained that the proposed tariffs will harm small and midsized companies and other U.S. business interests. Describing the tariffs as a tax on exports of high-value U.S. goods, Pon said the duties give non-U.S. firms an unfair competitive advantage.

In a parallel push to Davis’s testimony, SEMI, with more than 10 representatives from six member companies, met with 16 congressional offices this week to underscore the damage the tariffs would wreak on the U.S. semiconductor industry. The fallout would include higher operating costs, fewer exports and slower innovation. The tariffs would also curb industry growth and put thousands of high-paying, high-skill jobs at risk. SEMI pressed congressional leaders to reject the tariffs and support a push for congress to re-assert itself on trade policy.

Tariffs to cost U.S. SEMI members more than $500 million

SEMI estimates that the second list of proposed tariffs, covering about $16 billion in Chinese goods, will cost its 400 U.S. members more than $500 million annually in additional duties.

The tariffs on $34 billion in Chinese goods, which took effect July 6, impact products such as test and inspection equipment as well as spare parts that enter the U.S. from China. That round of tariffs will cost SEMI member companies and estimated tens of millions of dollars annually.

SEMI public policy team asks members to review tariff list

Looking ahead, SEMI encourages members to review the newly released $200 billion tariff list, determine any impact to their businesses and share their findings with SEMI’s public policy team.

The U.S. Trade Representative (USTR) has published the exclusion process for products subject to the China 301 tariffs. If your company’s products are subject to tariffs, you can request an exclusion.

In evaluating product exclusion requests, the USTR will consider whether a product is available from a source outside of China, whether the additional duties would cause severe economic harm to the requestor or other U.S. interests, and whether the product is strategically important or related to Chinese industrial programs (such as “Made in China 2025”).

The deadline for submitting product exclusion requests to USTR is October 9, 2018. Approved exclusions will be effective for one year upon approval and retroactive to July 6, 2018.

More information including the process for submitting the product exclusion request can be found here.

Any SEMI members with questions should contact Jay Chittooran, Public Policy Manager at SEMI, at [email protected].

Large thin-film transistor liquid crystal display (TFT LCD) panel makers are expected to reduce production of comparatively smaller sized 32-, 40- and 43-inch panels, helping to stabilize panel prices in the third quarter of 2018. In the longer term, however, the oversupply issue still remains, eventually causing older TFT LCD fabs to be restructured, according to IHS Markit (Nasdaq: INFO).

According to the latest AMOLED and LCD Supply Demand & Equipment Tracker by IHS Markit, currently planned new factories will increase large display panel production capacity by 31 percent or 77.7M square meters from 2018 to 2021. However, based on the current demand forecast, there will be about 49 million square meters of capacity in the pipeline more than the market requires in 2021. The supply/demand glut level is expected to continue to increase from 12 percent in 2018 to 23 percent in 2021, remaining well above 10 percent or what is modeled to be a balanced market.

Between 2019 and 2021, there will be a great amount of LCD TV panel capacity built, mainly from generation Gen10.5/11 factories in China, according to IHS Markit.

“Some panel makers may be forced to reduce utilization rates, while some planned capacity may never be built,” said David Hsieh, senior director of displays at IHS Markit. “Furthermore, in the next few years, legacy factory restructuring will likely accelerate. For the TFT LCD industry to return to a balanced supply/demand level, multiple Gen 5, Gen 6 and even Gen 8 factories will likely need to be shut down.”

For example, shutting down half of all Gen 5 and Gen 6 amorphous silicon (a-Si) capacity in Taiwan would remove about 18 million square meters of production capacity, according to IHS Markit. Larger glass substrate capacity, such as Gen 8, will also likely need to be closed to bring the market back toward balance.

Possible restructuring of legacy factories may include fab shutdown, facility consolidation, or conversion to other technologies, such as active-matrix organic light-emitting diode (AMOLED) panels, ePaper backplanes and sensors.

According to the Display Production & Inventory Tracker by IHS Markit, fab restructuring can be attributed to multiple reasons, such as no longer competitive, old equipment, shifts in panel makers’ business focus, excessive overhead from under-utilized facilities and pressure on profitability.

“Oversupply is not the end of the crystal cycle. The industry has a long history of dynamically adjusting itself to balance supply and demand,” Hsieh said. “The process may create many challenges for supply chain companies. However, the delayed expansion of new factories, the restructuring of legacy fabs and the potential for faster demand growth spurred by lower panel prices will help the LCD industry to eventually return to equilibrium.”