SEMI Fab Investment and Secondary Equipment Market...

SEMI Fab Investment and Secondary Equipment Market Update

Clark Tseng, Sr. ManagerSEMI Industry Research & Statistics

October 2015

Outline

• 2015 Year-to-Date Trends

• 200mm Fab Capacity and Equipment Spending Outlook

• Summary

Year-to-Date Trends

2015 Semiconductor Revenue Forecasts

2.3%

5.0%

3.4%

3.0%

2.0%

4.3%

0% 1% 2% 3% 4% 5% 6%

WSTS (Aug 15)

IDC (Sep 15)

Cowan LRA (Aug 15)

TSMC (Jul 15)

IC Insights (Aug 15)

Semico Research (Sep 15)

Source: Compiled by SEMI

Interesting Year to Date…

• Growing uncertainty in the global economic condition – Slower growth from emerging markets; mediocre European

market; Japan 2Q GDP contraction; China stock market…global stock markets

• Semiconductor revenue forecasts lowered– Generally, from mid-single digit to low-single digit– PC market down, tablet market growth slowing, currency

effects…

• Some companies reduced capex for 2015• Declining DRAM pricing

Yet…

Unit Trends-Strong Year-over-Year growth for 1H

Source: SEMI and WSTS

Silicon Area Shipment Index

100

120

140

160

180

200

220

240

260

280

Jan-

12

Ap

r-12

Jul-

12

Oct

-12

Jan-

13

Ap

r-13

Jul-

13

Oct

-13

Jan-

14

Ap

r-14

Jul-

14

Oct

-14

Jan-

15

Ap

r-15

Jul-

15

Ind

ex V

alu

e

Worldwide Wafer Area Shipment Index(Three-month Moving Average)

Source: SEMI Silicon Manufacturers Group August 2015

Silicon shipments are up 7% year to date through July

0.90

0.95

1.00

1.05

1.10

1.15

Jan

-14

Fe

b-1

4

Ma

r-1

4

Ap

r-1

4

Ma

y-1

4

Jun

-14

Jul-

14

Au

g-1

4

Se

p-1

4

Oct

-14

No

v-1

4

De

c-1

4

Jan

-15

Fe

b-1

5

Ma

r-1

5

Ap

r-1

5

Ma

y-1

5

Jun

-15

(f)

Jul-

15

(p

)

15

-Au

gBo

ok

-to

-Bil

l Ra

tio

$800$1,000$1,200$1,400$1,600$1,800

Jan

-14

Feb

-14

Mar

-14

Ap

r-1

4

May

-14

Jun

-14

Jul-

14

Au

g-1

4

Sep

-14

Oct

-14

No

v-1

4

De

c-1

4

Jan

-15

Feb

-15

Mar

-15

Ap

r-1

5

May

-15

Jun

-15

(f)

Jul-

15

(p

)

Au

g-1

5US$

Mil

lio

ns

North American Headquartered Manufacturers Global Capital Equipment Book-to-Bill

(based on three month averages)

Bookings Billings

SEMI North America Book-to-Bill-Steady booking and billings trends thru July

Source: SEMI August 2015

Global Semiconductor Equipment Spending

Source: SEMI/SEAJ

2015 Worldwide Semiconductor Equipment Billings(U.S. Dollars in Millions)

Region2015 Year-to-

Date (July) 2014 Year-to-

Date (July)Y/Y % Change

Europe $1,318 $1,337 -1%

Japan $3,118 $2,286 36%

North America $3,474 $4,915 -29%

Korea $5,414 $4,065 33%

Taiwan $5,340 $5,841 -9%

China $2,613 $3,039 -14%

ROW $1,138 $1,120 2%

Total $22,415 $22,603 -1%

Year-date-bookings are flat

Semiconductor Industry Outlook

• Semiconductor industry growth is driven by the consumer

• As a result, industry growth is closely aligned with the overall economy

66%

14%

-7%5%

-9%

28%40%

66%

10%5%

-21%

17%

87%

-41%-30%

12%

67%

-11%

23%6%

-31%-46%

150%

9%

-15%-14%

18%3%

5%

-100%

-50%

0%

50%

100%

150%

200%

$0

$10

$20

$30

$40

$50

$60

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

F20

16F

An

nu

al G

row

th(%

)

Ca

pit

al E

qu

ipm

en

t($

US

Bil

lio

n)

Capital Equipment Annual Growth

Capital Equipment Cycles

Source: SEMI/SEAJ. SEMI 2015 Mid-Year Forecast, August update

Regional Semiconductor Equipment Markets

China12% Europe

6%

Japan11%

Korea18%

North America

22%

ROW6%

Taiwan25%

2014 = $37.50 billion

Region 2014$US B

2015F$US B

%Change

China $4.37 $4.56 4%

Europe 2.38 2.50 5%

Japan 4.18 5.29 27%

Korea 6.84 8.13 19%

North America 8.16 6.26 -23%

SEA/ROW 2.15 2.14 -1%

Taiwan 9.41 9.56 2%

Total $37.50 $38.44 3%

Source: SEMI/SEAJ August 2015 update

Totals may not add due to rounding

Fab Equipment Spending-Driven by Memory and Foundry

200mm Fab Capacity & Equipment Outlook

Global Silicon Wafer Shipment Trends

Source: Rose Associates 1991to 1994; SEMI SMG 1995 to 2013; SEMI Forecast

Steady 200mm Capacity Addition to 2018

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2,013 2,014 2,015 2,016 2,017 2,018

200mm Capacity by Regions

Americas China Europe & Mideast Japan Korea SE Asia Taiwan

Source: SEMI World Fab Forecast

200mm WPM

The Return of 200mm Capacity

7% 7%

New 200mm Fabs Emerged from China

Foundries-Ramping 200mm capacity in 2015 and 2016

2010 2011 2012 2013 2014E 2015F 2016F

Foundry only- 200mm 2.12 2.19 2.27 2.29 2.28 2.37 2.43

1.95

2.00

2.05

2.10

2.15

2.20

2.25

2.30

2.35

2.40

2.45

2.50

2010 2011 2012 2013 2014E 2015F 2016F

Inst

alle

d C

apac

ity

(Mill

ion

s w

pm

)

Installed 200mm Foundry Capacity

Source: SEMI World Fab Forecast

200mm Fab Capacity-Foundry share is expanding

Volume fabs only, excluding LED and EPI

Larger share for Foundriesand Analog/Discrete

Source: SEMI World Fab Forecast

200mm Secondary Fab Equipment

Foundry Spending,

32%

Other than

Foundry, 68%

2013

Foundry Spending

51%

Other than Foundry

49%

2014

Source: SEMI Secondary Fab Equipment Report

200 mm Specific Trends/Issues

As identified by IDMs and Foundries:• Driven by costs and the fact that some new equipment is often

no longer available as the OEM discontinued the product line. • OEM support for some 200 mm systems is “starting to dry up”

– thus the need to partner with third party

• A number of 200 mm tools are currently available on the market, but– Tool conditions are often an unknown. – Equipment may be stored in a warehouse, thus operating conditions

cannot be evaluated– No or poor data exist about equipment shutdown.

Source: SEMI Secondary Fab Equipment Report

Equipment Preparation

Challenge: how secondary tools have been prepped for sale

Ways to address this issue include:• Lower cost and rapid tool inspections• Third party equipment services with global scale• Long range visibility into equipment availability —“everything is

reactive now to when a fab closure is announced”• Consolidation or defragmentation of the parts market• Establish industry make/model/application taxonomy

– “Standardize” legacy parts, part numbering, and other

Source: SEMI Secondary Fab Equipment Report

Summary

Summary

• Year-to-Date Trends Silicon shipments are up through July Equipment bookings and billings are comparable to 2014 levels

• Outlook to 2019– 3% to 5% CAGR for semiconductor revenues

• Investment in “legacy” fabs are important in manufacturing many semiconductor products– 200mm fab capacity has been on the rise, led by foundries

• Issues impacting secondary equipment sector include the availability of production worthy systems, the availability of parts and spares for legacy systems, OEM support for legacy equipment, and others.

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