Tag Archives: letter-pulse-business

HEIDENHAIN announced the appointment of David Doyle as CEO of HEIDENHAIN CORPORATION, effective Oct. 1, 2018.  At that time, Doyle will assume full responsibility for the HEIDENHAIN CORPORATION customer-focused operations for the U.S., Canada and Mexico. This change will complete the succession plan for Rick Korte, current CEO of HEIDENHAIN CORPORATION who will be retiring at that time after more than 34 years of service.

“I am happy to announce the next phase of the succession plan for our North American operations, with the promotion of David Doyle to CEO,” said Korte. “I have the utmost confidence in David and trust he will continue to grow our business and support our customers with World Class service in all areas.”

Doyle started with HEIDENHAIN CORPORATION in 2016 as Vice President of Sales & Marketing, bringing with him more than twenty-five years of experience in international capital equipment business and technical support management.  He currently serves as its President and Managing Director.

“I want to thank Rick Korte for leading HEIDENHAIN CORPORATION in tremendous growth over these many years, and for the guidance he has provided to not only myself, but to the many staff members who have called HEIDENHAIN home for so long,” said Doyle.  “I am looking forward to leading the HEIDENHAIN CORPORATION team through the next phase of development and to reaching our growth objectives in North America by continuing to put our Customers First.”

DR. JOHANNES HEIDENHAIN GmbH, headquartered in Traunreut, Germany, develops and supports motion control feedback solutions for the machine tool, semiconductor, electronics assembly and test, metrology, automation, medical, energy, biotechnology and other global markets. HEIDENHAIN employs approximately 6,000 people worldwide in its core business activities.

Leti, a research institute of CEA Tech, and Soitec, a designer and manufacturer of innovative semiconductor materials, today announced a new collaboration and five-year partnership agreement to drive the R&D of advanced engineered substrates, including SOI and beyond. This agreement brings the traditional Leti-Soitec partnership to a whole new dimension and includes the launch of a world-class prototyping hub associating equipment partners to pioneer with new materials, The Substrate Innovation Center will feature access to shared Leti-Soitec expertise around a focused pilot line. Key benefits for partners include access to early exploratory sampling and prototyping, collaborative analysis, and early learning at the substrate level, eventually leading to streamlined product viability and roadmap planning at the system level.

Leading chip makers and foundries worldwide use Soitec products to manufacture chips for consumer applications targeting performance, connectivity, and efficiency with extremely low energy consumption. Applications include smart phones, data centers, automotive, imagers, and medical and industrial equipment, but this list is always growing, along with the need for flexibility to explore new applications starting at the substrate level. At the Substrate Innovation Center, located on Leti’s campus, Leti and Soitec engineers will explore and develop innovative substrate features, expanding to new fields and applications with a special focus on 4G/5G connectivity, artificial intelligence, sensors and display, automotive, photonics, and edge computing.

“Material innovation and substrate engineering make entire new horizons possible. The Substrate Innovation Center will unleash the power of substrate R&D collaboration beyond the typical product road maps, beyond the typical constraints,” said Paul Boudre, Soitec CEO. “The Substrate Innovation Center is a one-of-a-kind opportunity open to all industry partners within the semiconductor value chain.”

Whereas a typical manufacturing facility has limited flexibility to try new solutions and cannot afford to take risks with prototyping, the mission of the Substrate Innovation Center is to become the world’s preferred hub for evaluating and designing engineered substrate solutions to address the future needs of the industry, inclusive of all the key players, from compound suppliers to product designers. Using state of the art, quality-controlled clean room facilities, and the latest industry-grade equipment and materials, Leti and Soitec engineers will conduct testing and evaluation at all levels of advanced substrate R&D.

“Leti and Soitec’s collaboration on SOI and differentiated materials, which extends back to Soitec’s launch in 1992, has produced innovative technologies that are vital to a wide range of consumer and industrial products and components,” said Emmanuel Sabonnadière, Leti CEO. “This new common hub at Leti’s campus marks the next step in this ongoing partnership. By jointly working with foundries, fabless, and system companies, we provide our partners with a strong edge for their future products.”

IC Insights will release its 200+ page Mid-Year Update to the 2018 McClean Report later this month. The Mid-Year Update revises IC Insights’ worldwide economic and IC industry forecasts through 2022 that were originally published in The 2018 McClean Report issued in January of this year.

Figure 1 compares the estimated required capex needed to increase NAND flash bit volume shipments 40% per year, sourced from a chart from Micron’s 2018 Analyst and Investor Event in May of this year, versus the annual capex targeting the NAND flash market segment using IC Insights’ data. As shown, Micron believes that the industry capex needed to increase NAND flash bit volume production by 40% more than doubled from $9 billion in 2015 to $22 billion only two years later in 2017! This tremendous surge in required capital was driven by the move to 3D NAND from planar NAND since 3D NAND requires much more fab equipment and additional cleanroom space to process the additional layers of the device as compared to planar NAND.

Most of the five major NAND flash suppliers have stated that they believe that NAND bit volume demand growth will average about 40% per year over the next few years. Figure 1 shows that the capex needed to support a 40% increase in NAND bit volume shipments was exceeded by 27% last year and is forecast to exceed the amount needed by another 41% this year (NAND bit volume shipments increased 41% in 2017 but 1H18/1H17 bit volume shipments were up only 30%). As a result, it is no surprise that NAND flash prices have already softened in early 2018. Moreover, the pace of the softening is expected to pick up in the second half of this year and continue into 2019.

Historical precedent in the memory market shows that too much spending usually leads to overcapacity and subsequent pricing weakness. With Samsung, SK Hynix, Micron, Intel, Toshiba/Western Digital/SanDisk, and XMC/Yangtze River Storage Technology all planning to significantly ramp up 3D NAND flash capacity over the next couple of years (with additional new Chinese producers possibly entering the market), IC Insights believes that the risk for significantly overshooting 3D NAND flash market demand is very high and growing.

Figure 1

SEMI yesterday honored two industry leaders at SEMICON West 2018 for their outstanding accomplishments in developing Standards for the electronics and related industries. The SEMI Standards awards were announced at the SEMI International Standards reception.

The Technical Editor Award recognizes the efforts of a member to ensure the technical excellence of a committee’s Standards. This year’s recipient is Sean Larsen of Lam Research. Mr. Larsen has led the North America EHS Committee and multiple EHS task forces for over a decade. His knowledge of the Regulations, Procedure Manual, and Style Manual, combined with his vast experience in the industry, ensures that complex safety matters are explained in a clear, consistent manner, and ballot authors frequently rely on him for his technical skills in preparing ballots.

In addition to co-chairing the North America EHS Committee, Mr. Larsen is currently the co-leader of the SEMI S22 (Electrical Design) Revision TF, the SEMI S2 Non-Ionizing Radiation TF, the SEMI S2 Korean High Pressure Gas Safety TF, and the Control of Hazardous Energy TF.

The Corporate Device Member Award recognizes the participation of the user community and is presented to individuals from device manufacturers. This year’s recipient is Don Hadder of Intel. Mr. Hadder has been actively involved in the Standards Program for several years, and currently leads the Chemical Analytical Methods Task Force and chairs the North America Liquid Chemicals Committee. He has successfully re-energized the committee, which is now focused on enabling continued process control improvements for advanced nodes. He recently drove the development of a critical new standard: SEMI C96, Test Method for Determining Density of Chemical Mechanical Polish Slurries, the first document in a series of SEMI Standards that will be devoted specifically to CMP slurry users, IDMs, slurry suppliers, metrology manufacturers and OEM equipment suppliers.

Mr. Hadder has worked at Intel for 23 years, where his experience and system ownership has been in Diffusion, Wet Etch, Planar-CMP, Ultra-Pure Water, Waste Treatment Systems, Abatement and Vacuum Systems, Bulk and Specialty Gas, Bulk Chemical Delivery and Planar Chemical Delivery.

BY PAUL VAN DER HEIDE, director of materials and components analysis, imec, Leuven, Belgium

To keep up with Moore’s Law, the semiconductor industry continues to push the envelope in developing new device architectures containing novel materials. This in turn pushes the need for new solid-state analytical capabilities, whether for materials characterization or inline metrology. Aside from basic R&D, these capabilities are established at critical points of the semiconductor device manufacturing line, to measure, for example, the thickness and composition of a thin film, dopant profiles of transistor’s source/drain regions, the nature of defects on a wafer’s surface, etc. This approach is used to reduce “time to data”. We cannot wait until the end of the manufacturing line to know if a device will be functional or not. Every process step costs money and a fully functional device can take months to fabricate. Recent advances in instrumentation and computational power have opened the door to many new, exciting analytical possibilities.

One example that comes to mind concerns the development of coherent sources. So far, coherent photon sources have been used for probing the atomic and electronic structure of materials, but only within large, dedicated synchrotron radiation facilities. Through recent developments, table top coherent photon sources have been introduced that could soon see demand in the semiconductor lab/fab environment.

The increased computational power now at our finger tips is also allowing us to make the most of these and other sources through imaging techniques such as ptychography. Ptychog- raphy allows for the complex patterns resulting from coherent electron or photon interaction with a sample to be processed into recognizable images to a resolution close to the sources wavelength without the requirement of lenses (lenses tend to introduce aberrations). Potential application areas extend from non-destructive imaging of surface and subsurface structures, to probing chemical reactions at sub femto-second timescales.

Detector developments are also benefiting many analytical techniques presently used. As an example, transmission electron microscopy (TEM) and scanning transmission electron microscopy (STEM) can now image, with atomic resolution, heavy as well as light elements. Combining this with increased computational power, allows for further devel- opment of imaging approaches such as tomography, holography, ptychography, differential phase contrast imaging, etc. All of which allow TEM/STEM to not only look at atoms in e.g. 2D materials such as MoS2 in far greater detail, but also opens the possibility to map electric fields and magnetic domains to unprecedented resolution.

The semiconductor industry is evolving at a very rapid pace. Since the beginning of the 21st century, we have seen numerous disruptive technologies emerge; technologies that need to serve is an increasingly fragmented applications space. It’s no longer solely about ‘the central processing unit (CPU)’. Other applications ranging from the internet of things, autonomous vehicles, wearable human-electronics interface, etc., are being pursued, each coming with unique requirements and analytical needs.

Looking ten to fifteen years ahead, we will witness a different landscape. Although I’m sure that existing techniques such as TEM/STEM will still be heavily used – probably more so than we realize now (we are already seeing TEM/STEM being extended into the fab). We will also see developments that will push the boundaries of what is possible. This would range from the increased use of hybrid metrology (combining results from multiple different analytical techniques and process steps) to the development of new innovative approaches.

To illustrate the latter, I take the example of secondary ion mass spectrometry (SIMS). With SIMS, an energetic ion beam is directed at the solid sample of interest, causing atoms in the near surface region to leave this surface. A small percentage of them are ionized, and pass through a mass spectrometer which separates the ions from one another according to their mass to charge ratio. When this is done in the dynamic-SIMS mode, a depth profile of the sample’s composition can be derived. Today, with this technique, we can’t focus the incoming energetic ion beam into a confined volume, i.e. onto a spot that approaches the size of a transistor. But at imec, novel concepts were intro- duced, resulting in what are called 1.5D SIMS and self-focusing SIMS (SF-SIMS). These approaches are based on the detection of constituents within repeatable array structures, giving averaged and statistically significant information. This way, the spatial resolution limit of SIMS was overcome.

And there are exciting developments occurring here at imec in other analytical fields such as atom probe tomography (APT), photoelectron spectroscopy (PES), Raman spectroscopy, Rutherford back scattering (RBS), scanning probe microscopy (SPM), etc. One important milestone has been the development of Fast Fourier Transform-SSRM (FFT-SSRM) at imec. This allows one to measure carrier distributions in FinFETs to unparalleled sensitivity.

Yet, probably the biggest challenge materials characterization and inline metrology face over the next ten to fifteen years will be how to keep costs down. Today, we make use of highly specialized techniques developed on mutually exclusive and costly platforms. But why not make use of micro-electro-mechanical systems (MEMS) that could simultaneously perform analysis in a highly parallel fashion, and perhaps even in situ? One can imagine scenarios in which an army of such units could scan an entire wafer in the fraction of the time it takes now, or alternatively, the incorporation of such units into wafer test structure regions.

BY PETE SINGER

There’s an old proverb that the shoemaker’s children always go barefoot, indicating how some professionals don’t apply their skills for themselves. Until lately, that has seemed the case with the semiconductor manufacturing industry which has been good at collecting massive amounts of data, but no so good at analyzing that data and using it to improve efficiency, boost yield and reduce costs. In short, the industry could be making better use of the technology it has developed.

That’s now changing, thanks to a worldwide focus on Industry 4.0–more commonly known as “smart manufacturing” in the U.S. – which represents a new approach to automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of things, cloud computing, cognitive computing and the use of artificial intelligence/deep learning.

At SEMICON West this year, these trends will be showcased in a new Smart Manufacturing Pavilion where you’ll be able to see – and experience – data-sharing breakthroughs that are creating smarter manufacturing processes, increasing yields and profits, and spurring innovation across the industry. Each machine along the Pavilion’s multi-step line is displayed, virtually or with actual equipment on the floor – from design and materials through front-end patterning, to packaging and test to final board and system assembly.

In preparation for the show, I had the opportunity to talk to Mike Plisinski, CEO of Rudolph Technologies, the sponsor of the Smart Pavilion about smart manufacturing. He said in the past “the industry got very good at collecting a lot of data. We sensors on all kinds of tools and equipment and we’d track it with the idea of being able to do predictive maintenance or predictive analytics. That I think had minimal success,” he said.

What’s different now? “With the industry consolidating and the supply chains and products getting more complex that’s created the need to go beyond what existed. What was inhibiting that in the past was really the ability to align this huge volume of data,” he said. The next evolution is driven by the need to improve the processes. “As we’ve gone down into sub-20 nanometer, the interactions between the process steps are more complex, there’s more interaction, so understanding that interaction requires aligning digital threads and data streams.” If a process chamber changed temperature by 0.1°C, for example, what impact did it have on lithography process by x, y, z CD control. That’s the level of detail that’s required.

“That has been a significant challenge and that’s one of the areas that we’ve focused on over the last four, five years — to provide that kind of data alignment across the systems,” Plisinski said.

Every company is different, of course, and some have been managing this more effectively than others, but the cobbler’s children are finally getting new shoes.

SEMI today announced the re-election of 10 current members to the SEMI International Board of Directors in accordance with the association’s by-laws.

The 10 board members were re-elected for two-year terms:

  • Martin Anstice, CEO, Lam Research Corporation
  • Kevin Crofton, president, SPTS Technologies, and corp. V.P., Orbotech
  • Jon D. Kemp, vice president, DuPont
  • Mitsunobu Koshiba, president and representative director, JSR Corporation
  • Yong Han Lee, chairman, Wonik
  • Sue Lin, vice chairman, Hermes Epitek
  • Tadahiro Suhara, president, SCREEN Semiconductor Solutions Co., Ltd.
  • Tetsuo Tsuneishi, executive chairman of the board and representative director, TEL
  • Tien Wu, management director and chief operating officer, ASE Group
  • Guoming Zhang, senior V.P. and chief strategy officer, NAURA Technology Group Co., Ltd.

The SEMI Executive Committee confirmed Tetsuo Tsuneishi, chairman of the board of TEL, as chairman of the SEMI Executive Committee. SEMI also confirmed Bertrand Loy, president and CEO of Entegris, as vice-chairman.

The leadership appointments and the elected board members’ tenure become effective at the annual SEMI membership meeting on July 11, during SEMICON West 2018 in San Francisco, California.

“The SEMI Board of Directors is comprised of global business leaders who represent SEMI members and the industry, ensuring that SEMI develops and delivers member value in all regions,” said SEMI president and CEO Ajit Manocha. “We congratulate the re-elected members and greatly appreciate all of our board members’ contributions to the industry.”

SEMI’s 19 voting directors and 11 emeritus directors represent companies from Europe, China, Japan, Korea, North America, and Taiwan, reflecting the global scope of the association’s activities. SEMI directors are elected by the general membership as voting members of the board and can serve a total of five two-year terms.

BY PETE SINGER, Editor-in-Chief

Increasingly, the ability to stay on the path defined my Moore’s Law will depend on advanced packaging and heterogeneous integration, including photonics integration.

At The ConFab in May, Bill Bottoms, chair of the integrated photonics technical working group, and co-chair of the heterogeneous integration roadmap (HIR) spoke about the changing nature of the industry and specifically the needs of photonic integration.

Bottoms said the driving force behind photonics integration is pretty straightforward: “The technology we have today can’t keep up with the expanding generation of transport and storage of data,” he said. But doing so will be a challenge.

The integration of photonics, electronics and plasmonics at a system level is necessary.

“These require heteroge- neous integration by architecture, by device type, by materials and by manufacturing processes,” Bottoms said. “We’re changing the way we’re doing things.”
These kinds of changes are best thought of not as packaging but system level integration. “As we move the photons as close as to the transistors as possible, we’re going to be faced with integrating everything on a simple substrate,” he said.

There are a large number of devices that involve photons which share the common requirement of providing a photon path either into or out of the package or both. They include: Light emitting diodes (LEDs), laser diodes, plasmonic photon emitters, photonic Integrated circuits (PICs), MEMS optical switching devices, camera modules, optical modulators, active optical cables, E to O and O to E converters, optical sensors (photo diodes and other types), and WDM multiplexers and de‐multi- plexers. Many of these devices have unique thermal, electrical and mechanical characteristics that will require specialized materials and system integration (packaging) processes and equipment, Bottoms noted.

Of the biggest challenges might be thermal management: “We have things that make a lot of heat and things that can’t have their temperature change by more than a degree without losing their functionality,” Bottoms said.

The scope of the HIR Photonics Chapter includes defining difficult challenges and, where possible, potential solutions associated with: data systems and the global network, photonic components, integrating these components and subsystems into systems with the smallest size, lowest weight, smallest volume, lowest power and highest performance.

It will also address supply chain requirements, which may turn out to be the biggest challenge. “We will not beat the challenge of cost pressures unless we develop the supply chain that can justify high volume. It’s the only way we know how to bring down costs,” Bottoms said. Sounds like a great opportunity for today’s equipment and materials suppliers to me!

BY GRIGORI BOKERIA, MATTHIAS FRAHM, SASCHA RAHMAN, and XI BING ANG, Simon-Kucher

The semiconductor industry is facing key challenges. In recent years, M&A mega deals have led to consolidations within the market, while the industry continues to mature. This leaves rather moderate growth prospects for the next three years. Semiconductor companies will have to consistently farm limited organic growth sources whilst at the same time tapping into new and growing macrotrends. To be successful in the long term, they must recognize the potential of the disruptive technologies and new markets that the Internet of Things will bring.

How can companies relive the previous successes in the mobile consumer segment?

In the 1990s and even early 2000s, growth booms in the industry with annual sales growth of 30 to 40 percent were the norm. Thanks to the sharply increasing demand in the consumer market for PCs, laptops and mobile phones, many smaller technology companies were able to grow into giants in the semiconductor business (FIGURE 1). However, since 2011, the industry has had to manage its growth expectations for the consumer market. With an average annual growth rate of 3.4 percent expected from 2015 to 2020, the strong growth period seems to be over and the dynamic start-up atmosphere of the past appears to be more or less history. The entire industry already has a market size of over 350 billion euros, with intense rigid competition among existing players. M&A mega deals (FIGURE 2) such as Qualcomm-NXP, Avago-Broadcom, Softbank-ARM and Western Digital-SanDisk have severely consolidated the market and now these companies are deep in operations integration and rationalization mode.

Is this the end of the period of constant growth outperformance? Not at all. Simon-Kucher project experience tells us that even organic growth sources based on dynamic market trends can be tapped, meaning companies can relive the successes in the mobile consumer sector. However, two fundamental strategic questions need to be answered: Where will these new growth waves come from?

And how can the imminent stagnation be avoided? We have identified three sources of organic growth that will play a pivotal role in the future of the semiconductor industry.

1.Exploit new disruptive technologies such as silicon carbide

Semiconductors based on silicon carbide (SiC) represent a strong area for future growth. Compared to semiconductors made of regular silicon, SiC-based semiconductors can operate at much higher frequency and temperature and convert electric power at lower losses, promising increased speed, robustness and efficiency. SiC devices are capable of managing the same power level as Si devices at half the size, boosting power density and reliability.

While a handful of players have already secured a favorable starting position in the market, there continues to be strong medium-term growth forecasts which means that the current market volume in this emerging product segment (~$200 million) still offers attractive entry potential for second and third movers. Several suppliers such as Dow Corning and Nippon Steel have entered and increased activity in the SiC market while companies such as Wolfspeed/Cree are experiencing decline in market share. This goes to show that there is still room to wrangle for territory.

We anticipate that hype will become mass reality within the next five to eight years, particularly driven by the growing demand in hybrid and electric mobility, regener- ative power generation and industrial applications. Notably, SiC may have a huge impact on the automotive industry, in particular on electric vehicles and e-mobility due to the high efficiency levels. In each of these markets, customers continue to demand and expect smaller wafers and devices with increasingly better performance profiles than Si-based devices, made possible by SiC technology. According to a recent Simon-Kucher study, global demand in the SiC technology segment and its sister technology gallium nitride (GaN) will amount to more than three billion euros by 2025, with double-digit annual growth rates. Industry analysts note that SiC has gradually emerged as “mainstream” material since 2016 which will result in drop in prices for devices from 2018 onwards. This would translate to possibly large increases in volume demand.

At the moment, the technology is still relatively cost-intensive and more complex in production primarily due to lack of scale. As such, SiC and GaN remain niche markets for now. However, having achieved first significant design-wins, first-moving companies are proof of the future market potential. The remaining semiconductor companies need to adapt their innovation strategies or risk trailing the pack. To successfully implement SiC and GaN system solutions, it is essential to closely orient new product development towards emerging market needs, starting from initial development phases.

Here, semiconductor companies have to identify the appli- cations where customers already demand high switching voltage and speed, low switching losses, and a small size and weight. Only in doing so can they expect customer- oriented market success from design-in to design-win.

2. Anticipate and seize new markets materializing from the Internet of Things

The Internet of Things (IoT) has now become the catch-all phrase that encapsulates an enormous spectrum of potential applications and markets revolving around interconnected physical devices and appliances. As it continues to evolve and numerous markets around it become commercially viable, semiconductor companies have a huge opportunity to capture the underlying profit pools. By some accounts, something like 3 billion new IoT-enabled devices are manufactured per year; at the most rudimentary level, each of these devices require microcontrollers, sensors, actuators and a whole host of other semiconductor-enabled parts. Another indirect area of growth for semiconductor companies will likely emerge from the fact that the exponentially increasing amount of data generated by IoT products need to be processed and stored. This will lead to demand for more server farms and greater storage capacities.

IoT products and applications would not be possible without the continued advancements in semiconductor technology, and the demand for inexpensive chips that can be mass- produced will only continue to increase. Rather than spectating and reacting to this market macrotrend from the sidelines, semiconductor companies should see the IoT as an integral part of the future market’s DNA.

The current challenge is the fragmented nature of the market, with no clear “killer application” or common platform; rather, there is a multitude of smaller niche opportunities that in its entirety promise overall attractive growth potential. No player has yet been able to establish a market-dominant position in this highly diversified market. There are, however, specific end-markets that have taken the lead (for now) in terms of showing promise of growth, such as smart home applications, consumer wearables (e.g. fitness bracelets, smart watches), medical electronics, and connected cars (FIGURE 3). The IoT will turn these individual niche segments into potential game-changers for the semiconductor industry.

Amid these fast-evolving segments, critical for the success of semiconductor companies is their agility in swiftly responding to emerging trends and integrating hardware and software components along the value chain and ultimately, offering a seamless IoT solution. Semiconductor companies already focusing on seamless security, communication intel- ligence and user-friendliness are a step ahead in strength- ening their position. To not be left behind, semiconductor companies need to make the strategic decision of prioritising resources and investments into IoT-related growth sources and resist the inertia and temptation to solely rely on existing “bread and butter” revenue streams, regardless of how healthy the current margins are. Related to this, to get serious about this emerging opportunity, semiconductor companies should not view the IoT markets as a nebulous concept with opportunistic revenue streams, but rather conduct in-depth analyses of their current position within the changing value chains and competitive landscape to formulate concrete go-to-market plans.

3. Shift from component-centric sales to supplying system solutions

Finally, a third dimension of growth beyond new products and new markets for semiconductor companies is to move up the value chain. Increasingly, leading market players are integrating chips, drivers, software and sensors to offer partial system solutions, with the ultimate objective of being ecosystem enablers. Naturally, this requires the capability to not only sell hardware (semiconductors, wafers, etc.) but an entire system and services around it that several entities from different industries can utilise to establish their own IoT products. However, for companies traditionally built around selling components, doing this successfully is not a straightforward undertaking. Many sales forces are finding themselves lacking the organizational setup and solution-selling approach critical for success. In addition, in order to integrate products in the portfolio into systems solutions, companies have to establish effective cross-industry channel management on the sales front and at the same time develop strong alliances with partners along the value chain to ensure a stable ecosystem. Successful players will be those in the market with the capability to provide modular solutions that can readily interlink products with security, software and system consulting services.

As a result, we believe that the desire of companies to move towards being system suppliers and ecosystem enablers will further increase M&A activity due to the need to acquire specialised knowledge. Notably, Intel has acquired three companies within the space of a year from different parts of the industry to assimilate specific expertise related to IoT i.e. Altera (designer and manufacturer of program- mable logic devices), Nervana Systems (artificial intelligence software developer) and Itseez (specialist in computer vision technology and algorithms).

In summary, despite some notions otherwise, we are bullish about the imminent growth potential in the semiconductor market driven by very powerful macrotrends in product technology, emerging applications and also value chain shifts. Semiconductor companies thirsty for new waves of exponential growth would do well to heed the signposts from these trends and re-orient their product development, industry alliances and sales approaches rapidly in order to capitalise on these opportunities before the winner takes all.

Grigori Bokeria is a Partner in Simon-Kucher’s Cologne office, where Sascha Rahman is a Director; Matthias Frahm is a Senior Director in the Bonn office and Xi Bing Ang is a Director based in the London office. All four authors work within Simon-Kucher’s Global Technology & Industrial practice.

Market shares of semiconductor equipment manufacturers shifted significantly in Q1 2018 as Applied Materials, the top supplier dropped, according to the report “Global Semiconductor Equipment: Markets, Market Shares, Market Forecasts,” recently published by The Information Network, a New Tripoli-based market research company.

The chart below shows shares for the first quarter (Q1) of calendar year 2017 and 2018. Market shares are for equipment only, excluding service and spare parts, and have been converted for revenues of foreign companies to U.S. dollars on a quarterly exchange rate.

Applied Materials lost significant market share YoY, from 18.4% of the $13.1 billion Q1 2017 market to 17.7% of the $17.0 billion Q1 2018 market. This drop follows a 1.8 share-point loss by Applied Materials for CY 2017 compared to 2016. The company competes with Lam Research and TEL in the deposition and etch market, and both gained share at the expense of Applied Materials.

At the other end of the spectrum, smaller semiconductor companies making up the “other” category lost 2.4 share points as a whole.

Much of the equipment revenue growth was attributed to strong growth in the DRAM and NAND sectors, as equipment was installed in memory manufacturers Intel, Micron Technology, Samsung Electronics, SK Hynix, Toshiba, and Western Digital. The memory sector, which grew grown 61.5% in 2017, is forecast to add another 28.5% in 2018 according to industry consortium WSTS (World Semiconductor Trade Statistics).

TEL recorded growth of 120.3% YoY in Korea, much of it on NAND and DRAM sales to Samsung Electronics and SK Hynix, and 69.5% YoY in Japan, much of it on NAND sales to Toshiba at its Fab 6 in Kitakami, Japan. Lam Research gained 42.2% and 70.5% YoY, respectively, in Korea and Japan.

Following the strong growth in the semiconductor equipment market, The Information Network projects another 11.5% growth in 2018 for semiconductor equipment.