SAN FRANCISCO—Representatives from the SEMI trade association were downright giddy as they prepared to raise the curtain on the 46th annual Semicon West tradeshow here Tuesday (July 11) in the midst what is shaping up to be the best year for the semiconductor equipment industry in more than a decade.
In a year when market watchers expect the semiconductor sales to grow by 12 percent, SEMI expects wafer fab equipment sales to increase by a whopping 23 percent while sales of semiconductor materials—which typically grow 1-2 percent per year—are projected to increase by 5 percent over last year’s total.
“Our data shows that this is a really good time for the industry and it’s a really exciting time for Semicon West,” said Dan Tracy, SEMI’s senior director of industry research and statistics.
Ajit Manocha, the former Globalfoundries CEO who took the reigns as president and CEO of SEMI just four months ago, wondered aloud “Does anybody remember when we had double digit [semiconductor] growth in the last five to 10 years, or at least in this decade?”
Indeed, it’s been awhile. Projections for growth in semiconductor sales in 2017 would mark the best year-over-year increase since 2010, when the industry grew by 31 percent following the global financial meltdown.
Manocha told journalists gathered at a pre-show press conference silicon content is increasing across a number of industries, highlighting growth in automotive electronics, medical electronics and the continued dominance of the smartphone as a market driver.
Tetsuro Higashi of Tokyo Electron Ltd. delivers the opening keynote at Semicon West Tuesday.
Credit: Dylan McGrath/EE Times
“Last year was a great year,” Manocha said. “This is shaping up to be a great year, too. I like to think that future years will be like this.”
Much of the optimism stems from China’s rapid rise to prominence in semiconductor manufacturing, at least as far as spending is concerned. With more than 20 chip fabs in the process of being built, SEMI expects China to pass Taiwan to become the world’s No. 2 spender on semiconductor equipment next year. By 2019, China is expected to move past South Korea to become the world’s leading market for fab tools.
In 2019, SEMI expects China to spend between $16 billion and $18 billion on semiconductor equipment. Tracy described the forecast for growth of sales in China as “record levels that we have not ever recorded before in our data collection.”
SEMI is currently projected that fab tool spending will grow an additional 8 percent next year, reaching about $54 billion. “We have some trends here that point to I think a pretty decent equipment market for the next several years, depending of course on industry cycles going forward,” Tracy said, citing an increase in spending on smart manufacturing and the rising silicon content of automobiles, among others.
But the most important trend of all for equipment makers right now is clearly China and its stated goal to pump more than $161 billion over the next 10 years into beefing up its domestic semiconductor industry. Minus China, Tracy added, the forecast for equipment spending for next year would be flat to slightly down.
—Dylan McGrath is editor-in-chief of EE Times.