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North America-based manufacturers of semiconductor equipment posted $1.38 billion in orders worldwide in March 2016 (three-month average basis) and a book-to-bill ratio of 1.15, according to the March Equipment Market Data Subscription (EMDS) Book-to-Bill Report published today by SEMI.  A book-to-bill of 1.15 means that $115 worth of orders were received for every $100 of product billed for the month.

SEMI reports that the three-month average of worldwide bookings in March 2016 was $1.38 billion. The bookings figure is 9.4 percent higher than the final February 2016 level of $1.26 billion, and is 0.9 percent lower than the March 2015 order level of $1.39 billion.

The three-month average of worldwide billings in March 2016 was $1.20 billion. The billings figure is 0.5 percent lower than the final February 2016 level of $1.20 billion, and is 5.3 percent lower than the March 2015 billings level of $1.27 billion.

“Order activity remains steady and is on par with both the previous quarter and one year ago,” said Denny McGuirk, president and CEO of SEMI. “3D NAND and advanced logic are the key drivers for investments.”

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

Billings
(3-mo. avg)

Bookings
(3-mo. avg)

Book-to-Bill
October 2015

$1,358.6

$1,325.6

0.98
November 2015

$1,288.3

$1,236.6

0.96
December 2015

$1,349.9

$1,343.5

1.00
January 2016

$1,221.2

$1,310.9

1.07
February 2016 (final)

$1,204.4

$1,262.0

1.05
March 2016 (prelim)

$1,198.5

$1,380.5

1.15

Source: SEMI (www.semi.org), April 2016

By Rania Georgoutsakou, director of Public Policy for Europe, SEMI

In a global industry, monitoring regulatory developments across different regions can be a challenge. Add to that the additional complexity of communicating with a (global) supply chain, then consider that each company has to individually reach out to its suppliers and customers. This results in numerous communications on the same issue up and down the supply chain, and the benefits of industry collaboration within associations such as SEMI become clear.

To help companies keep up with the latest developments in the EU, here’s a list of recent and upcoming regulatory initiatives and how SEMI member companies are collectively addressing these:

  • SEMI FAQ – EU F-Gas regulation and semiconductor manufacturing equipment
  • Review of EU Machinery Directive now underway
  • EU PFOA restriction under discussion
  • 2016 EU Blue Guide is available

A SEMI webcast on EU regulatory developments (March 2016) provided a more detailed overview of these and other developments and how companies should prepare – the webcast is available to view for SEMI member companies only, please click here and select the “EU Regulation Webcast”.

Manufacturing equipment containing pre-charged chillers – new SEMI FAQ provides guidance on how to comply with EU F-Gas law

The EU F-Gas regulation that entered into force in January 2014 creates new restrictions on placing on the EU market pre-charged chillers containing certain fluorinated gases (F-gases).

A new SEMI FAQ on the EU F-Gas regulation provides guidance on what this law is about, how it impacts semiconductor manufacturing equipment and what steps companies importing affected equipment should be taking to ensure compliance.

If your company is importing semiconductor manufacturing equipment containing pre-charged chillers into the EU, then you need to make sure you can account for the f-gases in the chiller under the new F-Gas quota system that the law has established, by obtaining an ‘authorisation’ from a ‘quota holder’ and registering in the ‘EU HFC Register’.

For more details and compliance timelines, check out the SEMI FAQ.

EU Machinery Directive – review now underway – have your say!

The EU Machinery Directive sets out the basic requirements machines must satisfy in order to be placed on the EU market and is a major piece of EU law for semiconductor manufacturing equipment.

The review is part of the regular EU regulatory review process to ensure legislation is ‘fit for purpose’ and does not automatically imply that the Machinery Directive will be revised. It is being run by an external consultant and a final report is expected in April 2017.

The focus of the review will be on 9 product categories, including machines for metal working, engines and turbines, robotics and automation and will also explore whether there are discrepancies in the interpretation of the directive between various member states and to what extent it is aligned to other pieces of legislation.

SEMI is putting together a working group to contribute to review of the EU Machinery Directive. If you are a member company and want to get involved, please contact [email protected]

PFOA restriction under discussion – SEMI requests derogations for the industry

The EU is currently drafting a law to restrict the manufacture, use and placing on the market of PFOA, its salts and PFOA-related substances under EU REACH. The restriction would apply both to substances and mixtures and to articles containing these substances.

SEMI has been calling for a derogation for substances and mixtures used in photolithography processes and for articles contained in semiconductor manufacturing equipment.

SEMI has collected and submitted evidence to substantiate members’ recommendations for:

  • a derogation period of at least 10 years for semiconductor manufacturing equipment, to allow equipment manufacturers to communicate with their the supply chain, identify components potentially containing restricted substances, source substitute parts that are tested and validated and requalify the equipment.
  • non-time-limited derogation for spare parts for legacy semiconductor manufacturing equipment, i.e. equipment that was already on the EU market before the restriction entered into force and before the derogation for semiconductor manufacturing equipment expires.
  • non-time-limited derogation for second-hand semiconductor manufacturing equipment, to ensure that companies can still import used equipment from outside the EU or from another EU member state.

SEMI has also voiced its concerns around the proposed concentration limits and the non-availability today of standardized practicable analytical methods that can be applied to a variety of materials to test whether an article would comply with the restriction.

The EU proposed restriction will be published in the next month and the final decision on the restriction is expected by the end of 2016.

Product regulatory compliance in the EU – 2016 Blue Guide now published

The Blue Guide provides guidance on how to implement EU product rules, including for example the EU Machinery and EMC Directives. A 2016 revised version is now available to download – click here.

The Blue Guide addresses:

  • what constitutes placing a product on the EU market
  • obligations of the various actors in the supply chain (manufacturer, importer, authorized representative etc.)
  • product requirements
  • conformity assessment
  • accreditation
  • market surveillance carried out in the EU

For an overview of SEMI’s advocacy work in Europe, please click here.

To find out more and get involved, please contact [email protected]

Join us for the 10th SEMI Brussels Forum – the industry’s major annual event bringing together company executives and decision-makers to discuss opportunities for the micro/nano-electronics industry in Europe: www.semi.org/BrusselsForum

Whether it’s the Internet of Things (IoT), wearables, or industrial automation, new devices and applications are portable, battery-operated and require continuous power.  Wireless connectivity is required for connecting to the Internet.  Today’s devices collect and transmit data from sensors, are always or almost always on and require power.  The semiconductor industry has met the challenge to design devices for low power operation.  But eventually batteries still run out of energy and have to be replaced or recharged.  Energy harvesting can extend battery life or possibly replace batteries altogether for continuous operation.  The new Semico Research report “Energy Harvesting: The Next Billion Dollar Market for Semiconductors” projects semiconductor sales for this market will reach $3 billion by 2020.

An energy harvesting solution requires more than just the energy harvester or transducer.  The key components include a power converter, power management IC (PMIC), MCU, and energy storage.  “An ecosystem of semiconductor vendors is emerging for the nascent energy harvesting market,” says Tony Massimini, Semico Research’s Chief of Technology.  “The ecosystems are gravitating around the vendors of key power components.  They are forming partnerships with producers of energy harvesters, battery suppliers, and other components.”

This study examines the market opportunity for energy harvesting outside of large installations and commercial power generation.  A broad range of markets will employ energy harvesting to either replace batteries or extend battery life. These applications cover wireless sensor nodes (WSN) for bridges, infrastructure, building automation and controls, and home automation (including lighting, security and environmental). Energy harvesting will grow in automotive applications, cell phones, wearables and other consumer electronics.

“The vendors of MCUs, sensors, RF, analog and other components will continue to develop lower power devices”, according to Massimini. “While this puts less drain on a battery and will extend its life, it also lessens the load for an energy harvesting solution.  Energy harvesting solutions are also expected to improve during the forecast period.”

The ASPs for the semiconductor components continue to decline, lowering the costs for an energy harvesting solution.  This is driving higher penetration rates.

Key findings of the report include:

  • The number of energy harvesting solutions will grow to 777 million units by 2020 (CAGR ’15 to ’20 = 80.6%).
  • Smartphone market will become the largest by volume by 2020.
  • WSN in commercial and industrial applications, including bridges, will be the second largest market by 2020
  • Semiconductor revenues in Energy Harvesting will reach $3 billion by 2020(CAGR ’15 to ’20 = 71.4%).

In its recent report “Energy Harvesting: The Next Billion Dollar Marketfor Semiconductors” (MP112-16), presents the market for energy harvesting by key end use markets and the semiconductor content.  Readers will see which market segment is growing fastest and which semiconductor components account for sales potential.  The report discusses the latest trends in energy harvesting, the growing ecosystem, and technical innovations.  Included are profiles of silicon vendors involved with energy harvesting and other key vendors in the ecosystem. The report is 70 pages long and includes 11 tables and 24 figures.

Companies cited in the report: Analog Devices, Atmel, Audience, Cherry Switches, Cymbet, Cypress, enOcean, Linear Technology, Maxim Integrated, Microchip Technology, NXP, Powercast, Renesas, Semtech, Silicon Labs, Silicon Reef, STmicroelectronics, Texas Instruments, Imprint Energy, Sakti3, Solid Power, Apple, Laird, MicroGen, Micropelt, Thermo Life, Thermogen Technologies, Sanyo, EnerBee, Energy Harvesters, K3OPS, Nikola Labs and Imec.

This report is part of Semico Research’s IoT and MEMS portfolios, which also include:

The Smart Economy: The Internet of Everything

IoT Security: At What Cost?

Sensors in Wearables and Mobile: The Many Players

The Smart Home: Big Brother or Swarm Intelligence?

Leading innovators in today’s integrated electronics supply chain are preparing to showcase their products and services at SEMICON West 2016 on July 12-14 in San Francisco, Calif.  Attendees will discover new international partners and suppliers, learn about the latest start-ups, and view cutting-edge, critical manufacturing technologies.

The industry has seen dramatic changes since last year’s exposition. Consolidation, IoT, and system integrators increasingly calling the shots have transformed the landscape. Engaging customers and finding new ones have never been more important. SEMICON West 2016 reflects this major realignment — it’s not “business as usual” anymore.

The expanded show floor has been re-engineered to feature megatrend programs and displays, including: the Innovation Theater and four new Exhibit Zones — Advanced Substrate Engineering, Advanced Packaging, Sustainable Manufacturing, and 3D Manufacturing. International Pavilions include Europe, Silicon Saxony, and Malaysia.

SEMICON West 2016 also features three new forums: Advanced Manufacturing, Flexible Hybrid Electronics, and the World of IoT.  Popular recurring programs include the SEMI/Gartner Market Symposium, “Bulls & Bears,” Connect Executive Summit, plus forums addressing wearables, Big Data, mobile, automotive, and other areas of interest to players in these supply chains.

SEMICON West 2016 will attract a broader roster of market makers in today’s globally interconnected semiconductor supply chain, including many of the world’s leading electronics companies as well as their customers and suppliers. To exhibit, visit: www.semiconwest.org.

Samco, a Japan-based semiconductor process equipment developer and manufacturer, is employing around 20 more people at its locations in North America, China, Taiwan and Singapore, as well as its subsidiary Samco-UCP in Liechtenstein, in order to better provide services and support to overseas customers.

“Increasing the number of Samco employees abroad is part of the company’s larger strategy to optimize our current sales structure while actively growing our customer base across the globe,” says Osamu Tsuji, Samco’s President, Chairman and CEO.

Samco offers systems and services that revolve around three major technologies, namely thin film deposition with PECVD, MOCVD and ALD systems; microfabrication with ICP etching, RIE and DRIE systems; and surface treatment with plasma cleaning and UV ozone cleaning systems.

“We’ve seen an increase in laser diode, MEMS and power device-related inquiries from abroad,” says Tsuji. “Systems for research and development at universities and research institutions, which is an area Samco specializes in, are also in high demand.”

This includes India, where the growing economy is expected to accelerate in the future. The Indian Institute of Technology Bombay recently installed one of Samco’s DRIE systems and collaborated with Samco to host the company’s first thin-film technology workshop in the country.

Samco is currently considering offering internships to students at IIT Bombay and has started gathering a team that will focus on cultivating the Indian market, Tsuji adds.

Future goals include doubling its on-site staff by July 2018, discussing the possibility of new locations in the future, and ensuring its overseas sales encompass at least 50% of the company’s total net sales within the next two or three years.

“Semiconductor equipment manufacturers’ overseas sales generally account for around 70 or 80 percent of their total net sales,” Tsuji says. “Samco has great potential for growth in the future. With these markets, we’ll actively expand and reach our goal of at least 10 billion yen in total net sales.”

The global semiconductor materials market decreased 1.5 percent in 2015 compared to 2014 while worldwide semiconductor revenues decreased 0.2 percent. The impact of exchange rate changes, coupled with lower overall semiconductor unit growth, contributed to the year-over-year revenue decline.

According to the SEMI Material Market Data Subscription, Total wafer fabrication materials and packaging materials were $24.1 billion and $19.3 billion, respectively. Comparable revenues for these segments in 2014 were $24.2 billion for wafer fabrication materials and $19.8 billion for packaging materials. The wafer fabrication materials segment decreased 1 percent year-over-year, while the packaging materials segment decreased 2 percent. However, if bonding wire were excluded from the packaging materials segment, the segment would have remained flat relative to last year. The continuing transition to copper-based bonding wire from gold is negatively impacting overall packaging materials revenues. The depreciation of the Yen further impacted the total materials market due to the importance of materials suppliers based in Japan.

For the sixth consecutive year, Taiwan was the largest consumer of semiconductor materials due to its large foundry and advanced packaging base, totaling $9.4 billion. Korea rose in the rankings to claim the second spot during the same time. Annual revenue growth was the strongest in the Korean and Chinese markets. The materials market in North America and Europe experienced nominal growth of 1 percent, while the materials markets in Taiwan, Rest of World and Japan contracted. (The ROW region is defined as Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets.)

2014 and 2015 Regional Semiconductor Materials Markets (US$ Billions)

Region 2014 2015 % Change
Taiwan

9.60

9.41

-2%
South Korea

7.03

7.16

2%
Japan

7.01

6.57

-6%
Rest of World

6.39

6.05

-5%
China

6.01

6.12

2%
North America

5.00

5.04

1%
Europe

3.01

3.05

1%
Total

44.04

43.40

-1%

Source: SEMI, April 2016

With the semiconductor industry in Vietnam expected to grow at a compound annual growth rate (CAGR) of 14.3% over the period of 2014 to 2019, momentum is growing in this emerging market. The electronics supply chain will convene at SEMICON Southeast Asia (SEA) from 26-28 April at the Subterranean Penang International Convention and Exhibition Centre (SPICE) in Penang, Malaysia to explore new opportunities and technology.

The increase in Vietnam is driven by the recent increase in demand for devices. Electronics accounted for 23% of all Vietnam exports in 2014, up from only 5% in 2010, making it a key development focus of the Vietnamese government (Vietnam Trade Promotion Agency). “Foreign direct investment” manufactured goods make up a large portion of the electronics export market, with only a small percentage contributed by local Vietnam companies. The electronics industry in Vietnam increased its market share of the electronics industry to 38% in 2014, and with the increasing number of electronic items, Vietnam finds itself at the cusp of being an important electronics exporter within the region.

SEMI, the global industry association serving the electronics manufacturing supply chain, will include programs pertinent to Vietnam’s semiconductor industry at the upcoming SEMICON SEA 2016, the region’s premier showcase for microelectronics innovation.

According to Ng Kai Fai, president of SEMI Southeast Asia, “Forums and discussion sessions during SEMICON SEA 2016 benefit electronic players from Vietnam in terms of technology development as well as the bigger picture of Vietnam’s market segment. The conference is an ideal platform for local semiconductor companies and start-ups to learn more about the technology trends that can be applied to Vietnam’s electronics growing importance. At the same time, multinational corporations use this event to learn about the Vietnam supply chain, assisting the build-up of a local ecosystem over the long run.”

“SEMICON SEA 2016 offers a complete platform for engaging customers, suppliers, engineers and decision-makers from across the industry. With the objective to champion regional collaboration, the showcase will open new business opportunities for customers and foster stronger cross-regional engagement. The event is sold-out for exhibitors for the first-time ever. With 200 global exhibitors and more than 60 industry luminaries presenting at the event, it offers a compelling reason why Vietnamese semiconductor stakeholders should attend this “don’t miss” electronics event,” Ng Kai Fai added.

SEMICON SEA 2016 will focus on the key trends and solutions in semiconductor design and manufacturing, including emphasis on serving the needs of expanding applications markets many of which require development of specialised materials, packaging, and test technologies, as well as new architectures and processes.

To register for SEMICON SEA 2016 or to explore exhibiting opportunities, visit http://www.semiconsea.org/ or contact Ms. Shannen Koh at [email protected].

Sponsors for SEMICON SEA 2016 include Advantest, Applied Materials, AMEC, ASE, Chip Shine, Edward Technologies, GLOBALFOUNDRIES, EV Group, Indium, KLA-Tencor, Kulicke & Soffa, Lam Research, SCREEN, Siemens, Tokyo Electron and Xcerra Corporation. Partners include Invest Penang, LEDExpo Thailand 2016, VLSI Consultancy, MATRADE, Malaysia Investment & Development Authority (MIDA), Ministry of Tourism and Culture Malaysia, Malaysia Convention & Exhibition Bureau (MyCEB), Penang Tourism, SAMENTA and Singapore Manufacturing Federation.

Worldwide semiconductor wafer-level manufacturing equipment revenue totaled $33.6 billion in 2015, a 1 percent decline from 2014, according to final results by Gartner, Inc. The top 10 vendors accounted for 77 percent of the market, down slightly from 78 percent in 2014.

“Slowing demand for key electronics end markets, combined with looming oversupply in memory, prompted semiconductor manufacturers to adopt conservative capital spending plans in 2015, which impacted spending on WFE,” said Bob Johnson, research vice president at Gartner. “Strength in memory spending was not sufficient to overcome caution in logic markets as major producers focused on logic process upgrades instead of adding new capacity.”

Applied Materials retained the No. 1 position in the WFE market with 1.3 percent growth (see Table 1). The industry’s investments in 3D device manufacturing, fin field-effect transistor (FinFET) and 3D NAND were the main drivers for the company’s growth in 2015. Lam Research experienced the strongest growth of the top 10 vendors in 2015, moving into the No. 2 position. The move of the industry to 3D device manufacturing pushed the company to 24.7 percent growth. Lam continues to be the dominant conductor etch manufacturer, but competition in the etch and deposition segment is expected to be fierce moving forward.

Table 1. Top 10 Companies’ Revenue From Shipments of Total Wafer-Level Manufacturing Equipment, Worldwide (Millions of U.S. Dollars)

Rank 2015

Rank 2014

Vendor

2015

Revenue

2015 Market Share (%)

2014

Revenue

2014-2015 Growth (%)

1

1

Applied Materials

6,420.2

19.1

6,335.1

1.3

2

4

Lam Research

4,808.3

14.3

3,857.0

24.7

3

2

ASML

4,730.9

14.1

5,634.5

-16.0

4

3

Tokyo Electron

4,325.0

12.9

4,666.7

-7.3

5

5

KLA-Tencor

2,043.2

6.1

2,129.2

-4.0

6

6

Screen Semiconductor Solutions

971.5

2.9

1,128.0

-13.9

7

10

Hitachi High-Technologies

788.3

2.3

937.3

-15.9

8

7

Nikon

724.2

2.2

818.1

-11.5

9

9

Hitachi Kokusai

633.8

1.9

599.3

5.7

10

13

ASM International

582.5

1.7

557.2

4.5

Others

7,576.7

22.5

7,271.2

4.2

Total Market

33,604.3

100

33,933.6

-1.0

Source: Gartner (April 2016)

“Capital spending in 2015 was selective, with logic manufacturers focused on upgrades and the latest technology buys, while memory added new capacity in response to increased demand and favorable pricing,” said Mr. Johnson. “However, there was another factor at work: Both the yen and euro declined significantly against the dollar in 2015. In a market which was essentially flat over the previous year, the changes in these exchange rates had a noticeable effect, especially in the lithography segment, where all tools are priced in either euros or yen.”

In dollar terms, lithography dropped 13 percent, the largest decline of any of the major segments. Two segments were especially strong: The ion implant segment grew 24 percent, and the material removal and clean segment grew 6 percent. Process control overall declined 2.5 percent, with the optical patterned wafer inspection segment dropping 15 percent as manufacturers held back on purchases of new inspection tools.

Additional information is provided in the Gartner report “Market Share: Semiconductor Wafer-Level Manufacturing Equipment, Worldwide, 2015.” The report provides rankings and market share for the top 10 vendors. In 2015, Gartner changed the segment reporting to focus on wafer-level manufacturing and is no longer providing segment details for die-level packaging or automatic test. This report is limited to wafer-level manufacturing equipment.

IC Insights recently released its March Update to the 2016 McClean Report. The Update includes a review of IC company sales by headquarters location. In this example, Samsung’s sales from its fabrication facility in Austin, Texas, are counted as sales from South Korean companies. Intel’s sales from its fabs in China, Ireland, and Israel are included among U.S. companies, etc. As shown, U.S. companies held a 54% share of the total worldwide IC market in 2015, which includes sales from IDMs and fabless IC companies. The total does not include foundry sales. South Korean companies captured a 20% share of total IC sales and Japanese companies placed third with only an 8% share. Chinese companies accounted for just 3% of total IC sales last year (Figure 1).

The Taiwanese companies, on the strength of their fabless company IC sales, first surpassed the European companies in total IC sales share in 2013. However, although the European companies had about $1.4 billion less in total IC sales as compared to the Taiwanese companies last year, the European companies could surpass the Taiwanese companies in IC sales this year as Europe-headquartered NXP absorbs Freescale’s $3.7 billion in IC sales as a result of their merger in December 2015.

As depicted in Figure 1, the South Korean and Japanese companies are extremely weak in the fabless IC segment with the Taiwanese and Chinese companies displaying a noticeable lack of presence in the IDM (i.e., companies with IC fabrication facilities) portion of the IC market. Overall, U.S.-headquartered companies show the most balance with regard to IDM, fabless, and total IC industry marketshare.

Figure 2 depicts the 2015 fabless company share of IC sales by company headquarters location. As shown, at 62%, the U.S. companies held the dominant share of fabless IC sales last year, although this share was down from 69% in 2010. Since 2010, the largest increase in fabless IC marketshare has come from the Chinese suppliers, which held a 10% share last year as compared to only 5% in 2010.

In contrast to the situation in the IDM segment, in which the European companies are expected to gain marketshare through acquisitions, the European fabless IC companies lost marketshare in 2015. The reason for this loss was the acquisition of U.K.-based CSR, the second largest European fabless IC supplier, by U.S.-based Qualcomm and the purchase of Germany-based Lantiq, the third largest European fabless IC supplier, by U.S.-based Intel in early 2015. These acquisitions left Dialog as the only Europe-headquartered fabless IC supplier in the top 50-company ranking and subtracted about $1.2 billion from the total European-headquartered fabless IC sales total, dropping their share to only 2% last year.

Figure 1

Figure 1

Figure 2

Figure 2

ON Semiconductor Corporation announced that it has extended its previously announced tender offer to purchase all of the outstanding shares of common stock of Fairchild Semiconductor International Inc. for $20.00 per share in cash. The offer will now expire one minute following 11:59 p.m., New York City time, on April 14, 2016, unless further extended as required or permitted by the merger agreement. All other terms remain unchanged.

In January, Fairchild said an unsolicited offer of $21.70 a share from China Resources Microelectronics Ltd. and Hua Capital Management Co would likely constitute a “superior proposal.” By labeling the bid from the Chinese investment group as “superior,” Fairchild was able to engage in discussions with the company, though the company rejected the proposal in February. ON Semiconductor extended its offer without raising the bid.