Unexpected Surprises at SEMICON West 2015

As companies such as TSMC and Intel spend less on capital expenditures this year, expectations for SEMICON West 2015 were pretty bleak. I thought I’d have fewer appointments and nothing to really write home about.

Au contraire. Although traffic on the show floor was nothing compared to events like CES, there are three things that I think are driving growth and excitement at semiconductor equipment and material companies.

First, the major driver of equipment spending is changing from a focus on new greenfield fabs to the technology transitions that are and are not happening. Gary Dickerson, CEO of Applied Materials, clearly laid out the ‘inflections’. 3D NAND devices are a material enabling inflection and 10nm/7nm logic devices are driving a litho or patterning inflection. What does all this mean? The bottom line is more steps and more tools.

The delay of EUV and the implementation of finFETS are forcing logic manufacturers to add 4x, 10x or even 15x patterning steps. With a fixed amount of throughput, the need to send a wafer through 10 times, or even four more times, creates additional demand for more tools. The need can be seen at logic manufacturers developing 10nm and 7nm process technology and at the memory manufacturers rolling out 3D NAND. The need for more of the same tools is a boon for the existing suppliers. Fab operators are always more comfortable buying from the ‘installed’ tool vendors. But even younger companies such as AMEC, a Chinese supplier of etch technology, are seeing more demand. Launched in 2007, AMEC has reached an installed base of over 400 process units (100-tool equivalent) and has developed an advanced etch tool for 3D V-NAND Flash processing. The total available market for PVD, CVD, etch, implant, and CMP tools are all growing. AMAT also whetted our appetites with the mention of a new tool for ‘selective material removal’. They didn’t go into more detail but that tool sure piqued my interest.

The second major driver of growth in the semiconductor manufacturing arena is often overlooked. The technology ‘inflection’ points that Gary Dickerson laid out and all these added steps are making a big impact on material usage. Each time a wafer goes through a process step, more consumables are required. For example, Entegris─who acquired ATMI last year─not only supplies chemicals, filters, and CMP slurries; they also provide the containers that are used to store and ship the chemicals. I also learned that those containers are not recycled. A new container goes along with each chemical shipment and is specifically designed to protect the quality of the chemical in the container. As process steps increase 4x, 10x, or 15x, don’t forget the consumables go up also!

And finally, the TechXPOT South session on used equipment was overflowing with people. It was the biggest crowd that I saw on the show floor. I stayed for one presentation given by Emerald Grieg, vice president, US and Europe at Surplus Global. She made some great points about the market for 200mm equipment and referenced a few slides contributed by Semico. It is good to report that used equipment sales are doing very well this year. MEMS and sensors are moving or have already moved to 200mm wafer processing and should utilize mature 200mm fabs for years to come. Power management devices, RF transceivers and many analog products rely on 200mm fabs for most of their capacity requirements. But the audience seemed very curious about the longevity of the 200mm tool market. With the recent announcement of Peregrine Semiconductor partnering with GLOBALFOUNDRIES on RF SOI on 300mm wafer technology, the analog move to 300mm will continue.

SEMICON West has once again proven to be an event not to be missed.