SEMI Equipment and Materials Market Update
Dan Tracy, Sr. Director
SEMI Industry Research & Statistics
September 3, 2015
Outline
• 2015 Year-to-Date Trends
• Equipment and Materials Forecasts • Summary
Year-to-Date Trends
Interesting Year to Date…
• Growing uncertainty in the global economic condition
– Weak 1Q for US economy; Europe (Greek crisis); 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
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)
Region 2015 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-to-date bookings are flat
Impact of Exchange Rates on the Market
Source: SEMI and SEAJ
2013
2014
Y/Y % Change
SEAJ Billings (¥ B) 972 1,332 37%
SEAJ Billings (US $M) 9,993 12,012 26%
Conversion Rates: 2013=~98¥/US$, 2014=~106¥/US$
From SEAJ Book-to-Bill Report:
2013 2014
Wafer Shipments (MSI) 9,067 10,098
% Year-over-Year Change 11%
Wafer Revenues ($ M) 7,538 7,626
% Year-over-Year Change 1%
Source: SEMI Silicon Manufacturers Group
2013 2014
Leadframe Shipments (M) 339,133 370,617
% Year-over-Year Change 9%
Leadframe ($ M) 3,342 3,461
% Year-over-Year Change 4%
Source: SEMI/NEDIA
Impact Exchange Rates on the Market
Source: SEMI and SEAJ
~$900M higher ∆ through June assuming avg. 2014 exchange rate
2014=~106¥/US$ 2015=~120¥/US$
Equipment and Materials Forecasts
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
$60
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
F20
16F
An
nu
al G
row
th(%
)
Cap
ital
Eq
uip
men
t($
US
Bill
ion
)
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 $38.44 3%
Source: SEMI/SEAJ August 2015 update
Totals may not add due to rounding
Fab Equipment Spending- Driven by Memory and Foundry
Foundries- Ramping 200mm capacity in 2015 and 2016
2010 2011 2012 2013 2014E 2015F 2016F
Foundry only- 200mm 2.12 2.19 2.27 2.29 2.28 2.37 2.43
1.95
2.00
2.05
2.10
2.15
2.20
2.25
2.30
2.35
2.40
2.45
2.50
2010 2011 2012 2013 2014E 2015F 2016F
Inst
alle
d C
apac
ity
(Mill
ion
s w
pm
)
Installed 200mm Foundry Capacity
Source: SEMI World Fab Forecast
Worldwide Wafer Fab Materials Forecast
Totals may not add due to rounding Source: SEMI August 2015
Actual Forecast
2013 US$ M
2014 US$ M
2015 US$ M
2016 US$ M
Silicon Wafers1 $7,932 $7,990 $7,954 $8,278
Photomasks2 3,136 3,220 3,342 3,442
Photoresist 1,220 1,374 1,354 1,413
Photoresist Ancillaries3 1,428 1,711 1,777 1,850
Wet Chemicals4 995 1,059 1,121 1,104
Gases 3,319 3,481 3,577 3,721
Sputter Targets4 598 629 653 696
CMP Slurry & Pads5 1,436 1,569 1,618 1,722
Other/New Materials 2,588 2,945 3,178 3,415
Total $22,652 $23,977 $24,574 $25,641
% Growth 6% 2% 4%
Wafer Fab Materials Forecast Notes
1. Silicon wafers include merchant sales value only; includes SOI wafers; no reclaim wafers
2. Includes captive market
3. Includes resist removal chemicals, developers, anti-reflective coatings, contrast enhancers, edge bead removers, adhesion promoters, etc.
4. Source is Linx Consulting LLC, Sputter Targets includes precious metals
5. Estimates for IC applications only
6. Includes low k dielectrics, copper plating solutions, dielectric precursors, organometallic precursors, etc.
7. All forecasts in current dollars
8. Source for all data is SEMI, unless otherwise indicated
Photomask Market
15/05: Photomask CAGR 1%, Semiconductor CAGR of 4% for the same period
Source: SEMI March 2015
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2005 2007 2010 2015F 2016F
US$
Mil
lio
n
Taiwan ROW North America Korea Japan Europe China
0%
20%
40%
60%
80%
100%
2005 2015F
Per
cen
t of
Mar
ket
Merchant Captive
Source: SEMI March 2015
Regional Fab Materials Markets
Region 2015F $US B
2016F $US B
% Change
China $1.77 $1.89 6%
Europe 2.49 2.57 3%
Japan 4.39 4.50 2%
Korea 4.65 4.95 6%
North America 4.46 4.59 3%
Taiwan 5.47 5.73 5%
SEA/ROW 1.34 1.42 7%
Total $24.57 $25.64 4%
Source: SEMI August 2015
Totals may not add due to rounding
Worldwide Packaging Materials Forecast
Totals may not add due to rounding Source: SEMI August 2015
Actual Forecast
2013 US$ M
2014 US$ M
2015 US$ M
2016 US$ M
Leadframes $3,342 $3,461 $3,350 $3,346
Organic Substrates1 7,408 7,612 8,196 8,586
Ceramic Packages 2,006 2,075 2,157 2,174
Encapsulation Resins 2,451 2,712 2,922 3,187
Bonding Wire2 4,151 3,385 3,176 3,099
Die Attach Materials3 666 704 734 752
Others 374 409 451 500
Total $20,398 $20,358 $20,986 $21,644
% Growth -0.2% 3% 3%
Packaging Materials will be 46% of the 2015 Total Semiconductor Materials Market
Major update coming in November
Semiconductor Packaging Materials Forecast Notes
1. Source is TechSearch International. Includes PBGA, PPGA, LGA, and CSP laminate substrates and flex BGA and CSP substrates
2. Assume gold value of $1,480/trz for 2013; $1,260/trz for 2014; $1,190/trz for 2015 - 2016
3. Includes die attach film (tape) materials
4. Other includes solder balls and wafer level package dielectrics
5. Source for all data is SEMI, unless otherwise indicated
6. All forecasts in current dollars
Packaging Material Market Trends
• CSP laminate substrates, CSP leadframes, and WLP are driven by explosive growth in mobile computing and communications
• Flip chip and copper pillar continue to expand the market for underfill materials.
• Need more development for WLP dielectrics used in multi-layer structures
• Mold compounds- warpage control/package reliability (MSL1); withstand
high flexing for wearable applications • QFN- cost optimization through design (including strip size) and reduced
plating area (also improves MSL); higher lead counts (routable); improved power dissipation
• Transition from gold wire to copper and silver
Source: SEMI and TechSearch International- Global Semiconductor Packaging Materials Outlook
Regional Packaging Materials Markets
China21%
Europe3%
Japan13%
Korea13%
North America
3%
SEA/ROW26%
Taiwan21%
2015F = $21.0 billion
Region 2015F $US B
2016F $US B
% Change
China $4.34 $4.54 5%
Europe 0.72 0.75 3%
Japan 2.69 2.82 4%
Korea 2.66 2.72 2%
North America 0.66 0.66 0%
Taiwan 4.43 4.56 3%
SEA/ROW 5.50 5.60 2%
Total $20.99 $21.64 3%
Source: SEMI August 2015
Totals may not add due to rounding
Summary
Summary
• Uncertainty with the near-term outlook
• Year-to-Date Trends Silicon shipments are up through July Equipment bookings and billings are comparable to 2014 levels
Exchange rates—weaker Yen & Euro—will dampen 2015 revenue growth
• Memory (Flash) and Foundry will lead fab investment this year
and next
• Semiconductor Equipment & Materials Outlook Materials market is expected to increase 3% in 2015 and 4% in 2016 Equipment market is expected to increase 3% in 2015 and 5% in 2016
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