IHS Chemical Week


Semicon West 2013: Outlook positive as chip demand rebounds

8:28 AM MDT | July 22, 2013 | By REBECCA COONS

Expectations for a modest improvement in semiconductor demand and new materials development opportunities presented by next-generation chip architectures helped fuel optimistic sentiment at Semiconductor Equipment and Materials International’s (SEMI; San Jose, CA) annual Semicon West conference, held 9–11 July at San Francisco.

Mario Stanghellini, v.p. and business director/CMP Technologies at Dow Chemical, says the outlook for the rest of the year and 2014 is modest but positive. “The biggest change in semiconductor landscape is smartphone demand, which actually fueled a large amount of semiconductor growth in the last few years,” he says. Fab capacity and chip inventories have been built in anticipation of higher demand, particularly surrounding the launches of Apple’s iPhone 5 and the Galaxy S4 from Samsung, but demand for tablets and smartphones cooled off more quickly than anticipated, he adds. “[It] was an awakening for the industry to take a bit more of a conservative outlook in the second half of 2013 and into 2014.”

Stanghellini adds that declining logic chip demand has resulted in some excess capacity and 2014 capital expenditure will likely be less than originally planned. He remains positive, however. “I wouldn’t say it’s an unhealthy forecast, just conservative. Industry has been pretty much flat for the last couple of years.” Industry recovered strongly 2010, and demand has been flat in 2011 and 2012, he adds. “Each year we’ve been anticipating that next year would be a strong year, and each year it was flat. I think at this point we are optimistic that 2014 is an upturn, but given the fact that we’ve been expecting that for the last three, I think the forecast is pulled back [to] low single-digits in 2014—which is still healthy,” he adds.

The mood is generally more upbeat than in previous years, says Bart Pitcock, v.p. and general manager/electronic chemicals at KMG. “2013 is going to be fairly modest [in terms of] growth, but the outlook for 2014 is certainly positive, and I think the same for 2015.” Conversations with customers suggest there will not be a dip or softening of demand in the second half of 2013, he adds. “We’re not seeing any projected dip or softening during the second half of the year, but it’s not like it’s gangbusters-type year either.”

SEMI expects semiconductor materials revenue to approach $48 billion in 2013—up modestly from $47.1 billion in 2012—and grow to $50.2 billion in 2014. The forecast assumes a “slowly improving global economic outlook,” says Daniel Tracy, senior director/industry research and statistics at SEMI. North America will be a key region for new semiconductor investments, he adds.

While a revival in end-market demand is sparking much of the recent growth in semiconductor sales, collaborative advances in materials and processing technologies are also a sustaining force in the industry’s recovery. New chip architectures require a plethora of new chemistries, and the few chip makers that can afford to build fabs for the most advanced nodes are looking to suppliers for solutions.

In his keynote address on 9 July, Global Foundries (Milpitas, CA) CEO Ajit Manocha said shortened technology cycles and rising integrated circuit development costs are increasing investment risks and the cost of manufacturing 14 nanometer (nm) chips can only be borne by the top four chipmakers—Global Foundries, Samsung, TSM, and Intel. He said the industry needs to evolve a new, collaborative business model to help meet technical hurdles, including the evolution of technology below 28 nm, the challenges of multipatterning lithography, and the advent of 450 nm wafers. Lithography costs, which dominate wafer costs at 14 nm and smaller, are a major challenge to advanced process nodes, he added.

Jim O’Neill, senior v.p./electronic materials at ATMI (Danbury, CT), says these challenges are opportunities that play into ATMI’s strategic strengths and agrees that close collaboration along the supply chain is key to developing technologies for advanced chips. ATMI has been expanding engagement with the original equipment manufacturing community, he adds. “For us that is a lever into the marketplace, and for them it is an extension of their equipment capabilities,” O’Neill says.

According to Andrew Ho, global industry director/advanced semiconductor materials at Dow Corning, the pace of innovation across the semiconductor processing and packaging value chain has never been greater. Several critical needs are emerging among global semiconductor customers, he adds. The trend toward smaller devices with more densely packed electronic components is coinciding with the expanding use of flip chip and stacked die architectures, Dow Corning says. As a result, the industry is seeking improved thermal management from advanced silicone technologies that effectively dissipate heat and deliver greater device reliability.

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