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SEMI, the global industry association representing the electronics manufacturing supply chain, today announced that in 2017 the global semiconductor materials market grew 9.6 percent while worldwide semiconductor revenues increased 21.6 percent from the prior year.

According to the SEMI Materials Market Data Subscription, total wafer fabrication materials and packaging materials totaled $27.8 billion and $19.1* billion, respectively, in 2017. In 2016, the wafer fabrication materials and packaging materials markets logged revenues of $24.7 billion and $18.2 billion, respectively, for 12.7 percent and 5.4 percent year-over-year increases.

For the eighth consecutive year, Taiwan, at $10.3 billion, was the largest consumer of semiconductor materials due to its large foundry and advanced packaging base. China solidified its hold on the second spot, followed by South Korea and Japan. The Taiwan, China, Europe and South Korea markets saw the strongest revenue growth, while the North America, Rest of World (ROW) and Japan materials markets experienced moderate single-digit growth. (The ROW region is defined as Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets.)

2016 and 2017 Regional Semiconductor Materials Markets (US$ Billions)

Region
2016**
2017
% Change
Taiwan
9.20
10.29
12%
China
6.80
7.62
12%
South Korea
6.77
7.51
11%
Japan
6.76
7.05
4%
Rest of World
5.39
5.81
8%
North America
4.87
5.29
9%
Europe
3.03
3.36
11%
Total
42.82
46.93
10%

Source: SEMI, April 2018

Note: Summed subtotals may not equal the total due to rounding.

* Includes ceramic packages and flexible substrates

** 2016 data have been updated based on SEMI’s data collection programs

The Materials Market Data Subscription (MMDS) from SEMI provides current revenue data along with seven years of historical data and a two-year forecast. The annual subscription includes four quarterly updates for the materials segment reports revenue for seven market regions (North America, Europe, ROW, Japan, Taiwan, South Korea, and China).

Technavio market research analysts forecast the global semiconductor assembly and packaging services market to grow at a CAGR of close to 5% during the period 2018-2022, according to their latest report.

In this report, Technavio highlights the advances in wafer size as one of the key emerging trends in the global semiconductor assembly and packaging services market. Since 2010, the semiconductor industry has seen a drastic transition in wafer size. To cut down costs by almost 20%-25%, the industry has shifted to large diameter wafers. Currently, the industry uses 300-mm wafers to manufacture ICs. As companies are investing a substantial amount in the construction and upgrading of fabs to manufacture 300-mm wafers, this trend is expected to continue during the forecast period.

However, the demand for 200-mm wafers will continue during the forecast period because semiconductor devices such as image sensors, microcontrollers, display drivers, and a few MEMS-based products like accelerometers still use 200-mm wafers for manufacturing. At the same time, the industry is planning to develop 450-mm wafer technology, which is expected to start during 2018-2019. This constant change in the wafer size will create the need for assembly and packaging services in the semiconductor industry.

In this report, Technavio analysts highlight the rising number of fabs as a key factor contributing to the growth of the global semiconductor assembly and packaging services market:

Rising number of fabs

Semiconductor fabs manufacture an array of semiconductor devices and components. These components are either designed in-house by IDMs or manufactured as per designs provided by the client to foundries. The need for silicon wafers to manufacture semiconductor components is increasing due to the rising application of these components in various emerging technologies such as IoT and AI. This will increase the need to develop more number of fabs. As the semiconductor foundry market is highly competitive, several companies are building new fabs.

According to a senior analyst at Technavio for semiconductor equipment, “The need for assembly and packaging services required for the timely manufacture of ICs is growing, due to the increasing demand for ICs in various emerging applications such as autonomous cars and robotics. Major foundries have announced various plans of constructing new fabs, which will be operational by 2019 onward.”

Global semiconductor assembly and packaging services market segmentation

This market research report segments the global semiconductor assembly and packaging services market into the following applications, including communication sector, computing and networking sector, industrial and automotive sector, and consumer electronics sector and key regions, including the Americas, APAC, and EMEA.

Of the four major applications, the communication sector held the largest market share in 2017, accounting for nearly 40% of the market. The market share for this application is expected to increase nearly 2% by 2022. The fastest growing application is industrial and automotive sector, which will account for nearly 24% of the total market share by 2022.

APAC was the leading region for the global semiconductor assembly and packaging services market in 2017, accounting for a market share of nearly 76%. By 2022, APAC is expected to continue dominating the market.

With demand growing for active matrix organic light-emitting diode (AMOLED) TV panels, shipments of overall AMOLED panels by area is forecast to more than quadruple to 22.4 million square meters by 2024 from 5.0 million square meters in 2017, according to IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

Shipments of AMOLED TV panels had doubled to 1.6 million square meters in 2017 from about 800,000 square meters in 2016, resulting in total AMOLED panel shipments to grow more than 30 percent to 5.0 million square meters in 2017 from 3.8 million square meters in 2016. Share of TV panels in the total AMOLED panel shipments increased to 32 percent from 21 percent in 2016.

“Demand growth in AMOLED TV panels has accelerated since 2016 due to the increasing demand for wide color gamut TV,” said Jerry Kang, senior principal analyst of display research at IHS Markit. “Most TV brands have been promoting AMOLED TV as their super premium product, which has differentiated optical performance from LCD TV.”

While 10 global TV brands shipped OLED TVs in 2017, 15 are planning to launch them in 2018. TV brands are trying to expand share of OLED TVs in their portfolio to rebound their total TV revenues.

“In terms of unit shipments, the TV market has seen declines for three consecutive years since 2015,” Kang said. “Now, major TV brands are prioritizing their focus on revenues rather than just the growth in unit shipments, with the added value that AMOLED TV offering higher-resolution and wide color-gamut display.”

According to the AMOLED & Flexible Display Intelligence Service by IHS Markit, shipments of AMOLED TV panels will reach 12.5 million units by 2024. “Many panel makers are trying to develop various technology to manufacture OLED TV panels — not only with white OLED but also with ink-jet process or quantum-dot materials,” Kang said.

04.23.18_AMOLED_shipment_area_forecast

The AMOLED & Flexible Display Intelligence Service covers the latest market trend and forecast of AMOLED display industries (including shadow mask and  polyimide substrate), technology and capacity analysis, and panel suppliers’ business strategies by region.

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, this week presented its Congressional Leadership Awards to Senator Mike Crapo (R-Idaho) and Congressman Peter Roskam (R-Ill.) for their leadership in enacting tax reform legislation, the Tax Cuts and Jobs Act of 2017. The Semiconductor Industry Association believes the corporate provisions included in the new law will strengthen the U.S. semiconductor industry by making it easier for semiconductor companies to continue to grow and innovate in the United States.

“We applaud Senator Crapo and Congressman Roskam for their steadfast support of policies that strengthen the semiconductor industry, the tech sector, and the U.S. economy,” said John Neuffer, SIA President & CEO. “We especially appreciate the award winners’ resolute leadership in advancing critical corporate tax reform legislation that will help sustain U.S. leadership in semiconductor research, design, and manufacturing. The new law has helped modernize the corporate tax code and improve the competitiveness of the U.S. semiconductor industry.”

“Semiconductors are foundational to America’s economic strength, national security, and technology leadership,” Neuffer said. “Corporate tax reform was urgently needed to help the industry take the next innovative steps forward and promote America’s global competitiveness. We salute Senator Crapo and Congressman Roskam for their instrumental work in helping to push the final bill across the goal line.”

SIA presented the Congressional Leadership Award in recognition of efforts to support policies that are vital to sustaining a strong and vibrant U.S. semiconductor industry.

Demand for panels – both thin-film transistor liquid crystal display (TFT LCD) and active-matrix organic light-emitting diode (AMOLED) – using oxide backplane technology doubled in 2017, in terms of area, compared to a year ago, according to a latest report from business information provider IHS Markit (Nasdaq: INFO). The market is forecast to grow 30 percent in 2018 to 5.3 billion square meters from 2017.

Oxide backplane technology offers the benefit of higher resolution while consuming lower power, which are better suited to IT consumer products that require high mobility. With Apple’s increasing adoption of oxide TFT LCD panels for its tablet and notebook products in 2017, the demand surged 98 percent in 2017 year on year. Area demand for OLED TV panels using the oxide backplane technology also increased by 106 percent during the same period, according to the latest Display long term demand forecast tracker by IHS Markit.

“Demand for oxide panels will continue to grow in 2018 as demand particularly for OLED TV, with 55 inch or larger screens, increases,” said Linda Lin, principal analyst of display research at IHS Markit. “Increasing demand from IT products and rising penetration of OLED panels to major applications will help growing demand for LCD and OLED panels using oxide backplane technology in 2018, respectively.”

04.18.18_Oxide_backplane_demand_in_OLED_and_LCD

Panels using oxide backplane technology are mainly supplied by Sharp and LG Display. While Sharp is focusing on the oxide backplane for TFT LCD for IT applications, LG Display is more targeting the oxide backplane for OLED panels for TVs. Both are planning to expand their oxide capacity in 2018.

Sharp’s Gen 6 fab in Kameyama, Japan, is solely dedicated to producing low temperature polysilicon (LTPS) panels. To grab more orders for the Apple iPad, the company is going to change 40 percent of its LTPS capacity to oxide at the end of 2018.

Its Gen 8 fab in Kameyama is also planning to gradually increase the oxide capacity beginning the first quarter of 2018, from 50 percent of its all capacity in the last quarter of 2017 to 75 percent by the end of 2018. On the other hand, oxide panel price would be a key point to increase Oxide panel’s market share and decide that Sharp can enlarge Oxide capacity continuously or not in the future.

LG Display also plans to increase oxide panel capacity to prepare for the OLED TV panel business in future. Its Gen 8.5 OLED fab in Guangzhou, China, plans to start mass production of oxide backplane using OLED panels in the second half of 2019, with a capacity of 60,000 units per month. In Paju of South Korea, the company is also working to build Gen 10.5 fabs for both a-Si and oxide backplane panels.

Getting better by design


April 18, 2018

By Ajit Manocha, President and CEO of SEMI

Mantra by Design

SEMI’s mantra is: Connect, Collaborate, Innovate. This mantra has delivered industry-enabling value to our members since SEMI’s beginnings in 1970. It has been essential for SEMI members to grow and prosper locally, while being synchronized globally. As the electronics manufacturing business has become more complex and interdependent, SEMI’s mantra has increasingly been applied across the full span of electronics manufacturing.

With the IC industry now worth over $400 billion in annual revenue, developing a single new chip can cost hundreds of millions of dollars. Consequently, industry players now connect, collaborate, and innovate in new, but more often, deeper ways. This is especially true with IC design – what’s possible in chip design is only possible if the manufacturing processes can be developed as projected. It makes sense, as complexity grows and the stakes get higher, that design and manufacturing are closely linked and apply the SEMI mantra together.

Where Electronics Begin

“Where Electronics Begin” is the tagline of the Electronics System Design Alliance, or the ESD Alliance. It aptly distills the fact that all IC manufacturing begins with design – and the design ecosystem. This week, SEMI announced it reached an agreement with the ESD Alliance to join SEMI as a SEMI Strategic Association Partner. The ESD Alliance will become part of the SEMI organization in 2018. With the ESD Alliance and its community joining SEMI, its membership will complete the full electronics design and manufacturing span.

This is a momentous step forward. The ESD Alliance’s ecosystem is vital and thriving and includes the world’s leading EDA and IP companies. Within the ESD Alliance community, Aart de Geus (Synopsys), Wally Rhines (Mentor, a Siemens Company), Simon Segars (Arm), and Lip-Bu Tan (Cadence), among others, are already familiar figures, having brought their thought leadership to SEMI platforms in the past. Now they, and the rest of the ESD Alliance members, will be able to more directly work with semiconductor equipment manufacturers, devices makers, and the rest of SEMI’s membership.

At events like SEMICON China, which recently concluded in March and attracted over 90,000 attendees, SEMI and the ESD Alliance members will be able to efficiently connect and engage the supply chain players and find new areas for collaboration. As SEMI’s membership looks out towards new applications and systems opportunities, having both ecosystems together will find possibilities faster and innovate approaches more practically.

The ESD Alliance will maintain its distinct community identity and governance while having access to, and the ability to augment, SEMI’s global platforms including seven regional offices, programs and expositions (including SEMICONs), advocacy (including trade, tax, talent, and technology), industry research and statistics, and other SEMI Strategic Association Partner and technology communities.

SEMI will gain direct access to the electronics design ecosystems to provide a deeper and wider value – to its combined membership – with SEMI’s mantra. SEMI and its more than 2,000 corporate members and more than 1.2 million stakeholders look forward to connecting, collaborating, and innovating with the ESD Alliance and its members. SEMI’s global reach and wide span of membership with ESD Alliance’s deep expertise in design and IP is truly the best of both worlds for all stakeholders.

Connect:  Design & Manufacturing

SEMI’s members have been reaching into the electronics design ecosystem and the ESD Alliance members have been reaching into SEMI’s ecosystem to optimize design and manufacturing process for lowest cost and highest yield. This week’s announcement is a step forward to directly and more intimately connect electronics design and manufacturing for the supply chain to work more closely together in full synchronization.

 

Connect-image1

Collaborate: From Beginning to End in Electronics Applications

With the ESD Alliance joining SEMI as a Strategic Association Partner, SEMI members can better collaborate across the full supply chain. Gone are the days when it was enough to collaborate only with one’s direct customer. Today, for example, components and c-subs suppliers frequently collaborate not just with their OEM equipment manufacturer customers, but with device manufacturers – and even system integrators. To be successful, companies are striving for connection to their customers’ customers.

The ESD Alliance, with its design ecosystem and linkage to the fabless community, will join three existing SEMI Strategic Association Partners: Fab Owners Alliance (FOA), MEMS & Sensors Industry Group (MSIG), and FlexTech (the association representing the flexible hybrid electronics ecosystem). These relationships now cover the entire span of electronics manufacturing.

To provide focused collaboration across the full supply chain, SEMI has developed five vertical application platforms: IoT, Smart Manufacturing, Smart Transportation, Smart MedTech, and Smart Data. These have been chosen because of unique and pressing needs to synchronize the supply chain and to engage and develop solutions collectively.

Collaborate-image1

Innovate:  Faster Future

With the confluence of emerging digital disruptions and new demand drivers, forecasts suggest the IC industry could grow to over $1 trillion in annual revenue by 2030. To deliver this growth, the supply chain must efficiently innovate together. SEMI’s value proposition is to speed the time to better business results for its members across the global electronics (design and) manufacturing supply chain. The addition of the ESD Alliance as a Strategic Association Partner is a key contributor to deliver this value proposition for the industry to grow and prosper now and in the future.

Global-Semi-Sales

Originally published on the SEMI blog.

Technavio market research analysts forecast the global lithography metrology equipment market to grow at a CAGR of around 8% during the period 2018-2022, according to their latest report.

This market research report segments the global lithography metrology equipment market into the following end-users (foundry, memory, and IDMs) and key regions (the Americas, APAC, and EMEA). It provides an in-depth analysis of the prominent factors influencing the market, including drivers, opportunities, trends, and industry-specific challenges.

In this report, Technavio analysts highlight the high demand for miniaturized electronic devices as a key factor contributing to the growth of the global lithography metrology equipment market:

High demand for miniaturized electronic devices

One of the key transformations in the global semiconductor industry is the emergence of miniaturized semiconductor components such as ICs. The vendors are concentrating on manufacturing miniaturized personal electronics that consume less power. The semiconductor components range from IC and chips to LED displays. The demand for miniaturized electronic devices has increased significantly. The vendors are focusing on reducing the size of the devices without compromising on their performance. Therefore, the IC chips installed in the system need to be small, while delivering better performance and consuming less power.

In case of equipment such as photolithography systems, they need to transfer the IC design from a photomask to a silicon wafer, which is smaller in size. The use of optimized and miniaturized electronic circuits made of semiconductor materials has increased due to the miniaturization of electronic devices. This aids in keeping the structure small while delivering the same performance.

According to a senior analyst at Technavio for semiconductor equipment, “The demand for small-sized ICs has been increasing due to the advances in technology and the emergence of compact devices such as smartphones, tablets, and wearable technology. The semiconductor device manufacturers have constantly been updating their offerings with more advanced and compact IC chips to suit their consumer requirements.”

Global lithography metrology equipment market geographical – segmentation analysis

The APAC region led the global lithography metrology equipment market in 2017. It contributed to more than 71% share of the global market. It was followed by EMEA and the Americas respectively. The market in the APAC region is expected to post significant growth by 2022. The APAC region will dominate the market through the forecast period. The market share of the Americas will decrease to some extent, and it will remain the least contributor to the market share through the forecast period.

Technavio is a global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

Edwards Vacuum, a manufacturer of vacuum and abatement solutions, following completion of the purchase of an eight-acre site located on NE Century Boulevard in Hillsboro, Ore., has begun the process of construction for a new Technology Innovation Center in Hillsboro. The land acquisition process was a collaborative effort between Edwards Vacuum and Avison Young.

The 75,000 square foot facility will serve as the U.K.-based company’s North American semiconductor headquarters. Edwards held a ground-breaking ceremony at the Century Boulevard site attended by company officials and local dignitaries, including Hillsboro City Mayor, Steve Callaway, and President of the Hillsboro Chamber of Commerce, Deanna Palm.

“Edwards has many options for global investment, and our community greatly appreciates Edwards and its commitment to Hillsboro,” stated Mayor Callaway. “As a city, we will continue to support Edwards employees when the new high-tech facility opens.”

Scott Balaguer, vice president & general manager, Semiconductor Division North America, stated, “Our state-of-the-art innovation center and manufacturing facility is strategically located close to some of our key accounts in the Pacific Northwest, and will enable us to work closely with them, as well as other customers in North America, on R&D and continuous improvement programs. This proximity will also enable us to provide rapid service & support, as well as serve as our regional training center.

Edwards has approximately 100 employees at its current Hillsboro locations, and with consolidation expects to double in size at the new facility, which is scheduled to open in Q2 2019.

“We are excited about opening our innovation center here in Hillsboro,” said Balaguer. “Edwards is fully committed to the Northwest Region, creating jobs and participating in the local growth, as environmentally conscious corporate stewards in the neighborhood. We anticipate continued expansion on site, as we plan to design & manufacture our integrated vacuum & abatement production solutions, as well as other world-class products in our portfolio.

Ed English, senior vice president at Avison Young, whose team worked closely with Edwards to lead the real estate strategy and implementation said, “This project spanned two years of due diligence, analysis, and negotiation that included the collaboration of half a dozen firms and experts. Edwards’ consistent mission throughout the process was made clear to all parties; they wanted to position the company to best serve their customers and support their growth.” English added, “Edwards originally planned to lease the facility, but ultimately chose to purchase it. They ‘put their money where their mouth is’, proving their definitive commitment to Hillsboro.”

Worldwide PC shipments totaled 61.7 million units in the first quarter of 2018, a 1.4 percent decline from the first quarter of 2017, according to preliminary results by Gartner, Inc. The PC market experienced a 14th consecutive quarter of decline, dating back to the second quarter of 2012.

Asia/Pacific and the U.S. experienced declining shipments, while other regions saw some minimal growth, but it was not enough to drive overall growth for the PC industry. In the first quarter of 2018, PC shipments in Asia/Pacific declined 3.9 percent compared with the same period last year, while shipments in the U.S. decreased 2.9 percent.

“The major contributor to the decline came from China, where unit shipments declined 5.7 percent year over year,” said Mikako Kitagawa, principal analyst at Gartner. “This was driven by China’s business market, where some state-owned and large enterprises postponed new purchases or upgrades, awaiting new policies and officials’ reassignments after the session of the National People’s Congress in early March.

“In the first quarter of 2018, there was some inventory carryover from the fourth quarter of 2017,” Ms. Kitagawa said. “At the same time, vendors were cautious in overstocking due to the upcoming release of new models in the second quarter of 2018 with Intel’s new eighth-generation core processors.”

The top three vendors — HP, Lenovo and Dell — accounted for 56.9 percent of global PC shipments in the first quarter of 2018, compared with 54.5 percent of shipments in the first quarter of 2017 (see Table 1). Dell experienced the strongest growth rate among the top six vendors worldwide, as its shipments increased 6.5 percent.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 1Q18 (Thousands of Units)

Company

1Q18 Shipments

1Q18 Market Share (%)

1Q17 Shipments

1Q17 Market Share (%)

1Q18-1Q17 Growth (%)

HP Inc.

12,856

20.8

12,505

20.0

2.8

Lenovo

12,346

20.0

12,305

19.7

0.3

Dell

9,883

16.0

9,277

14.8

6.5

Apple

4,264

6.9

4,199

6.7

1.5

Asus

3,900

6.3

4,458

7.1

-12.5

Acer Group

3,828

6.2

4,189

6.7

-8.6

Others

14,609

23.7

15,637

25.0

6.6

Total

61,686

100.0

62,569

100.0

-1.4

Notes: Data includes desk-based PCs, notebook PCs and ultramobile premiums (such as Microsoft Surface), but not Chromebooks or iPads. All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels. Numbers may not add up to totals shown due to rounding.
Source: Gartner (April 2018)

HP Inc.’s worldwide PC shipments increased 2.8 percent in the first quarter of 2018 versus the same period last year. In EMEA, HP Inc. recorded double-digit growth in both desktop and mobile PCs. This was contrasted with a small decline in other regions. HP Inc. was adversely impacted by declining demand in the U.S., which generally accounts for one-third of its total shipments.

Lenovo’s global PC shipments remained flat in the first quarter of 2018. Lenovo achieved 6 percent growth in EMEA and double-digit shipment growth in Latin America. However, in Asia/Pacific (its largest market), PC shipments declined 4 percent.

After record holiday sales for consumer and gaming products in the fourth quarter of 2017, Dell continued to perform well in the first quarter of 2018. With double-digit shipment increases in EMEA, North America and Latin America, Dell grew in all regions except Asia/Pacific. Desktop and mobile PCs grew in equal measures, showing Dell’s strength in the business segment.

Rising ASPs

The average selling prices (ASPs) of PCs continue to rise. Acknowledging deceleration in the smartphone market, and uncertainty in PC replacement demand, component companies remain cautious about expanding their production capabilities. Therefore, persistent component shortages and a rising bill of materials continue to create an environment conductive to higher prices.

“In contrast to other DRAM-related price spikes, PC vendors are not reacting by reducing DRAM content. Rather they have passed the cost increase to consumers,” Ms. Kitagawa said. “With fewer people buying new machines, manufacturers need to get the highest profit margin from each sale. To do that, they are raising the selling points and focusing on customer experience or perception of value.”

Regional Overview

In the U.S., PC shipments totaled 11.8 million units in the first quarter of 2018, a 2.9 percent decrease from the first quarter of 2017. Dell moved into the No. 1 position in the U.S. based on shipments, as its market share increased to 29.1 percent. HP Inc. moved into the No. 2 position as its shipments declined 4.8 percent, and its market share totaled 28.4 percent in the first quarter of 2018 (see Table 2).

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 1Q18 (Thousands of Units)

Company

1Q18 Shipments

1Q18 Market Share (%)

1Q17 Shipments

1Q17 Market Share (%)

1Q18-1Q17 Growth (%)

Dell

3,440

29.1

3,198

26.2

7.6

HP Inc.

3,363

28.4

3,532

29.0

-4.8

Lenovo

1,632

13.8

1,714

14.1

-4.8

Apple

1,491

12.6

1,484

12.2

0.5

Acer Group

321

2.7

429

3.5

-25.1

Others

1,586

13.4

1,836

15.1

-13.6

Total

11,833

100.0

12,193

100.0

-2.9

Notes: Data includes desk-based PCs, notebook PCs and ultramobile premiums (such as Microsoft Surface), but not Chromebooks or iPads. All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels. Numbers may not add up to totals shown due to rounding.
Source: Gartner (April 2018)

PC shipments in EMEA totaled 18.6 million units in the first quarter of 2018, a 1.7 percent increase year over year. Enterprise shipments increased as many Windows 10 projects that were put on hold in 2017 began to be implemented. The fast approach of the compliance deadline for the General Data Protection Regulation (GDPR) in Europe, as well as earlier reports of cybersecurity breaches, made security a strong priority in the hardware refresh cycle among enterprises. Eurasia continued to be a bright spot for EMEA, as several countries, such as Russia, Ukraine and Kazakhstan, saw strong demand in the first quarter of 2018.

PC shipments in Asia/Pacific totaled 21.9 million units in the first quarter of 2018, a 3.9 percent decline from the first quarter of 2017. As previously mentioned, the PC market in China drove the decline in Asia/Pacific. There is no significant sign of strong upgrading to the special version of Windows 10 from the Chinese government institutions. Consumer demand was weak as most buyers already took advantage of the aggressive promotions offered in the fourth quarter of 2017.

These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.

 

By Emir Demircan, Senior Manager Advocacy and Public Policy, SEMI Europe

With its leading research and development hubs, materials and equipment companies and chipmakers, the EU is in a strategic position in the global electronics value chain to support the growth of emerging applications such as autonomous driving, internet of things, artificial intelligence and deep learning. Underpinning the European electronics industry’s competitive muscle requires a new EU-wide strategy aimed at strengthening the value chain and connecting various players. Specializing and investing in key application segments, such as automotive where the EU enjoys a central place at global level, is crucial to help European electronics industry hold its ground.  In parallel, Europe’s production capabilities need bolstered, requiring effective use of Important Projects of Common European Interest (IPCEI).

On research, development and innovation (RD&I), the upcoming Framework Programme 9 (FP9) must provide unprecedented collaboration and funding opportunities to Europe’s electronics players. Concerning small and medium enterprises (SMEs) and startups, it is vital that EU policies are aligned with global trends and small and young companies benefit from a business-friendly regulatory framework. And as an overarching action, building a younger, bigger and more diverse talent pipeline is paramount for Europe to innovate in the digital economy.

Laith Altimime, President at SEMI Europe, opening speech at ISS Europe 2018

Laith Altimime, President at SEMI Europe, opening speech at ISS Europe 2018

These were the clarion messages that emerged from the Industry Strategy Symposium (ISS) Europe organized by SEMI in March, an event that brought together more than 100 industry, research and government representatives for in-depth discussions on strategies and innovations for Europe to compete globally. Here are the key takeaways:

1) Build a strong electronics value chain with a focus on emerging demands

In recent years the EU has focused on beefing up semiconductor production in Europe within the 2020-25 window, starting with the EU 10|100|20 Electronic Strategy of 2013. The strategy aims to secure about 20 percent of global semiconductor manufacturing by 2020 with the help of € 10 billion in public and private funding and € 100 billion investment from the industry. Today, Europe is not nearly on track to achieving this target. Supply-side policies have done little to help grow the EU semiconductor industry. Now is the time to change our thinking.

To nourish the electronics industry in Europe, we need to shift our focus to demand. Semiconductors are a key-enabling technology for autonomous driving, wearables, healthcare, virtual and augmented reality (VR/AR), artificial intelligence (AI) and all other internet of things (IoT) and big data applications. To become a world leader in the data economy and energize its semiconductor industry, Europe needs to start by better understanding the evolution of data technologies and their requirements from electronics players, then design and implement an EU-wide strategy focused on strengthening collaboration within the value chain.

2) Specialize and invest in Europe’s strengths that are enabled by electronics

Jens Knut Fabrowsky, Executive VP Automotive Electronics at Bosch

Jens Knut Fabrowsky, Executive VP Automotive Electronics at Bosch

Fueled by increasing demand for smaller, faster and more reliable products with greater power, the global electronics industry has developed a sophisticated global value chain. Europe brings to this ecosystem leading equipment and materials businesses, world-class R&D and education organizations, and key microelectronics hubs throughout Europe that are home to multinationals headquartered both in and outside of the EU. Nevertheless, global competition is growing ever fiercer in the sectors where the European microelectronics industry is most competitive: automotive, energy, healthcare and industrial automation. In the future, Europe is likely to be more challenged between the disruptive business models of North America and the manufacturing capacity of East Asia. The European electronics industry must re-evaluate its strengths and set a strategic direction.

Make no mistake: Europe is in a strong position to advance its microelectronics industry. The EU already boasts leading industries that rely on advances made by electronics design and manufacturing. Take the automotive industry – crucial to Europe’s prosperity. Accounting for 4 percent of the EU GDP and providing 12 million jobs in Europe, according to the European Commission, the EU automotive industry exerts an important multiplier effect in the economy. Automotive is essential to both upstream and downstream industries such as electronics – a level of importance not lost on the EU’s GEAR 2030 Group. Since the 1980s, automotive industry components have increasingly migrated from mechanical to electrochemical and electronics.

Today, electronic components represent close to a third of the cost of an automobile, a proportion that will grow to as high as 50 percent by 2030 with the rise of autonomous and connected vehicles. Automotive experts anticipate that over the next five to 10 years, new cars will feature at least some basic automated driving and data exchange capabilities as electronics deepen their penetration into the automotive value chain. Europe’s leadership position and competitive edge in automotive are under threat by competitors across the world as they invest heavily in information and communications technologies (ICT) and electronics for autonomous driving and connected vehicles. Investing in next-generation cars will help the European electronics industry retain its strong competitive position, as will investments in other key application areas such as healthcare, energy and industrial automation where Europe is a global power.

3) Make better use of Important Projects of Common European Interest (IPCEI)

Microelectronics is capital-intensive, with a state-of-the-art fab easily costing billions of euros. That’s why countries around the world are making heavy government-backed investments to build domestic fabs. For instance, China’s “Made in China 2025” initiative, which establishes an Integrated Circuit Fund to support the development of the electronics industry, calls for 150 billion USD in funding to replace imported semiconductors with homegrown devices. In 2014, the European Commission adopted new rules to IPCEI, giving Member States a tool for financing large, strategically important transnational projects. IPCEI should help Member States fill funding gaps to overcome market failures and reinvigorate projects that otherwise would not have taken off. To fully benefit from the IPCEI, the industry requires Member States involved in a specific IPCEI to work in parallel and at the same pace and faster approvals of state-supported manufacturing projects.

4) Use FP9 to strengthen Europe’s RD&I capabilities

Panel Discussion on growing Europe in the global value chain. (L-R) Bryan Rice, GLOBALFOUNDRIES; James Robson, Applied Materials Europe; Joe De Boeck, imec; Leo Clancy, IDA Ireland; James O’Riordan, S3; Colette Maloney, European Commission; Moderator: Andreas Wild

Panel Discussion on growing Europe in the global value chain. (L-R) Bryan Rice, GLOBALFOUNDRIES; James Robson, Applied Materials Europe; Joe De Boeck, imec; Leo Clancy, IDA Ireland; James O’Riordan, S3; Colette Maloney, European Commission; Moderator: Andreas Wild

A top EU priority in recent years has been to enhance Europe’s position as a world leader in the digital economy. Fulfilling this mission requires an innovative electronics industry in Europe. To this end, FP9 should encourage greater collaboration between large and small companies to leverage their complementary strengths – the dynamism, agility and innovation of smaller companies and the ability of larger companies to mature and scale new product ideas on the strength of their extensive private funding instruments and testing and demonstration facilities. Also, future EU-funded research actions should prioritize electronics projects involving players across the value chain, starting with materials and equipment providers and spanning chipmakers, system integrators and players from emerging “smart” verticals such as automotive, medical technology and energy. FP9 should also play the pivotal role of setting clear objectives, increasing investments, and easing rules for funding. These measures would help expand the European electronics ecosystem, accelerate R&D results and defray the rising costs of developing cutting-edge solutions key to the growth of emerging industry verticals.

5) Support high-tech SMEs, entrepreneurship and startups to become globally competitive

European SMEs, the backbone of EU’s manufacturing, are already strong players in the global economy, making outsize contributions to Europe’s innovation. Yet more of Europe’s small and young businesses with limited resources are challenged in Europe’s regulatory labyrinth. Only by improving the European regulatory environment in a way that supports young and small businesses can Europe fulfill its vision of a dynamic electronics ecosystem and digital economy. Access to finance must also be easier, particularly as underinvested startups struggle under a European venture capital apparatus that is smaller and more fragmented than those in North America and Asia. Early-stage funding instruments such as bank loans are essential for young businesses but they often face barriers to finance due to the sophistication of their proposed business models that are difficult to be understood and supported by banks.

One answer is to better familiarize Europe’s financial sector with industrial SMEs and startups so they can co-develop financial tools that support the growth of small and young businesses. Also, the narrow European definition of SME with staff headcount limited to 250 block innovative companies from access to financial tools exclusively provided to SMEs. By contrast, the United States defines SMEs as businesses with as many as 500 employees, placing their EU counterparts at distinct funding disadvantage. EU should ensure that its SME policy is aligned with global trends and industry needs.

6) Create a bigger and more diverse talent pipeline with a hybrid skills set 

Europe’s world-class education and research capabilities help supply the electronics industry with skilled workforce. Yet the blistering pace of technology innovation calls for rapidly evolving skills sets, a trend that has led to worker shortages at electronics companies and left the sector fighting to diversify its workforce and strengthen its talent pipeline. The deepening penetration of electronics in AI, IoT, AR/VR, high-performance computing (HPC), cybersecurity and smart verticals is giving rise to a new set of skills that blend production technologies, software and data analytics. As more technologies converge, the gap between university education and business needs continues to widen.

One solution is work-based learning – allowing students to build job skills in a setting related to their career pathway. Encouraging higher female participation in STEM education programs at the high school and university levels is also a must to overcome the traditionally low number of females entering high technology. To build on its reputation as “a place to work” in the eyes of the international job seekers, Europe also needs a more flexible immigration framework to attract skilled labour to high-tech jobs.

Save the Date: Industry leaders, research and government representatives will meet again next year at the ISS Europe organized by SEMI on 28-30 April 2019 in Milan, Italy. More details regarding the event will be published soon on www.semi.org/eu.