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 marketglobal 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 TrendsStrong Year-over-Year growth for 1H

Source: SEMI and WSTS

Silicon Area Shipment Index

Worldwide Wafer Area Shipment Index
(Three-month Moving Average)
280

260

Index Value

240

220

Silicon shipments
are up 7% year to
date through July

200

180
160

140

Source: SEMI Silicon Manufacturers Group August 2015

Jul-15

Apr-15

Jan-15

Oct-14

Jul-14

Apr-14

Jan-14

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

100

Jan-12

120

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

Source: SEMI August 2015

Global Semiconductor Equipment Spending

2015 Worldwide Semiconductor Equipment Billings
(U.S. Dollars in Millions)
2015 Year-to2014 Year-toRegion
Y/Y % Change
Date (July)
Date (July)
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

Source: SEMI/SEAJ

Impact of Exchange Rates on the Market

From SEAJ Book-to-Bill Report:

SEAJ Billings ( B)
SEAJ Billings (US $M)

2013

2014

Y/Y %
Change

972

1,332

37%

9,993

12,012

26%

Conversion Rates: 2013=~98/US$, 2014=~106/US$

Source: SEMI and SEAJ

Wafer Shipments (MSI)

2013

2014

9,067

10,098

% Year-over-Year Change

Wafer Revenues ($ M)
% Year-over-Year Change
Source: SEMI Silicon Manufacturers Group

11%

7,538

7,626
1%

Leadframe Shipments (M)

2013

2014

339,133

370,617

% Year-over-Year Change

Leadframe ($ M)
% Year-over-Year Change
Source: SEMI/NEDIA

9%
3,342

3,461
4%

Impact Exchange Rates on the Market

~$900M higher through

June assuming avg. 2014
exchange rate

2014=~106/US$
2015=~120/US$

Source: SEMI and SEAJ

Equipment and Materials Forecasts

Capital Equipment Cycles

200%

Capital Equipment
($US Billion)

$50

150%

$40
$30
$20

100%

87%
66%

67%

66%

40%
28%

14%
5%
-7% -9%

$10

150%

50%

18%
23%
3%
12%
10%
9%
6%
5%
5% 0%
-11%
-21%
-14%
-30%
-31% -15%
-41%
-46%
-50%

17%

-100%
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
2015F
2016F

$0

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

Annual Growth

Annual Growth
(%)

$60

Regional Semiconductor
Equipment Markets
Region

Taiwan
25%

China
12% Europe
6%
Japan
11%

ROW
6%
North
America
22%

Korea
18%

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%

$37.50

$38.44

3%

Total

2014 = $37.50 billion

Source: SEMI/SEAJ August 2015 update

Totals may not add due to rounding

Fab Equipment SpendingDriven by Memory and Foundry

FoundriesRamping 200mm capacity in 2015 and 2016

Installed Capacity (Millions wpm)

Installed 200mm Foundry Capacity

2.50
2.45
2.40
2.35
2.30
2.25
2.20
2.15
2.10
2.05
2.00
1.95

2010
y only-Source:
200mm
2.12
SEMI World Fab Forecast

2010

2011
2.19

2011

2012

2012
2.27

2013

2013
2.29

2014E

2014E
2.28

2015F

2016F

2015F
2.37

2016F
2.43

Worldwide Wafer Fab Materials Forecast

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

995

1,059

1,121

1,104

3,319

3,481

3,577

3,721

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

$22,652

$23,977

$24,574

$25,641

6%

2%

4%

Wet Chemicals4
Gases
Sputter Targets4

Total

% Growth
Source: SEMI August 2015

Totals may not add due to rounding

Wafer Fab Materials Forecast Notes

1.
2.
3.
4.
5.
6.

7.
8.

Silicon wafers include merchant sales value only; includes SOI wafers; no
reclaim wafers
Includes captive market
Includes resist removal chemicals, developers, anti-reflective coatings,
contrast enhancers, edge bead removers, adhesion promoters, etc.
Source is Linx Consulting LLC, Sputter Targets includes precious metals
Estimates for IC applications only
Includes low k dielectrics, copper plating solutions, dielectric precursors,
organometallic precursors, etc.
All forecasts in current dollars
Source for all data is SEMI, unless otherwise indicated

Photomask Market
Taiwan

ROW

North America

Korea

Japan

Europe

China

$4,000
100%

Percent of Market

$3,500

US$ Million

$3,000
$2,500
$2,000
$1,500

80%
60%
40%

20%
0%

$1,000

2005

2015F

$500

Merchant

Captive
Source: SEMI March 2015

$0
2005

2007

2010

2015F

2016F
Source: SEMI March 2015

15/05: Photomask CAGR 1%, Semiconductor CAGR of 4% for the same period

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%

$24.57

$25.64

4%

Total

Totals may not add due to rounding

Source: SEMI August 2015

Worldwide Packaging Materials Forecast

Actual

Forecast

2013
US$ M

2014
US$ M

2015
US$ M

2016
US$ M

$3,342

$3,461

$3,350

$3,346

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

$20,398

$20,358

$20,986

$21,644

-0.2%

3%

3%

Leadframes

Major update
coming
7,408
7,612 in November
8,196
8,586

Organic Substrates1

Total
% Growth
Source: SEMI August 2015

Totals may not add due to rounding

Packaging Materials will be 46% of the 2015 Total Semiconductor Materials Market

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

Region

Taiwan
21%

China
21%
Europe
3%

Japan
13%

SEA/ROW
26%

North Korea
America 13%
3%

2015F = $21.0 billion

Source: SEMI August 2015

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%

$20.99

$21.64

3%

Total

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 ratesweaker Yen & Eurowill 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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