Business Booms for Semiconductor Manufacturing Equipment Makers

July 7, 2010
Makers of manufacturing equipment for semiconductors see a business boom on the eve of Semicon West

Semicon West,

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What a difference a year makes.

“We are coming out of the deepest, darkest hole the industry has seen in ages,” says Jonathan Davis, president of SEMI North America, when describing business conditions for semiconductor capital-equipment makers. “In the last year, we have actually seen vigorous growth, basically a doubling of business. The capital-equipment market will be back at a level of sales we saw in 2008.”

SEMI, the industry association serving manufacturing supply chains for the microelectronic, display, and photovoltaic industries, says its figures indicate semiconductor capital equipment sales could hit $24 billion this year, up from about $11 billion last year. Moreover, it looks as though a heavier demand for ICs is driving the increase.

“In the last couple of months we have seen more and more announcements (of equipment sales) related to boosting capacity rather than to technology upgrades, as was the case during the recession,” says Dan Tracy, head of SEMI’s Industry Research & Statistics Group. “Orders now are to fill out unfilled fabs that came online in late 2007 and early 2008.”

The picture is the same for back-end semiconductor manufacturing processes, those involving chip packaging and testing. SEMI says back-end equipment sales last year were about $1.4 billion. Tracy thinks the figure could climb to $2.6 or 2.7 billion this year.

And despite the widely chronicled slowdown in European subsidies for solar cells, SEMI sees the photovoltaic market recovering, though it does not track PV-manufacturing equipment sales. “PV companies have seen a recovery in sales from the bottom of the market last year,” says Tracy. “There is growth in the demand for solar cells among end users.”

All in all, the semiconductor manufacturing industry this year seems to be upbeat about the future. “From my conversations with executives, I’d say there is a broad-based recognition of a blistering upturn. People are conditioned to be cautious after what happened last year, but I think we are in the beginning of a multiyear expansionary cycle,” says SEMI’s Davis. “Growth this year will moderate next year or the year after that. And people are going to be scrambling within their supply chains to make sure they can meet demand,” he says. “Still, that doesn’t dampen the enthusiasm I see and the broad-based recognition of increasing orders across the board.”

Semicon West is the flagship annual event for the display of new products and technologies for microelectronics design and manufacturing. It kicks off July 13 at San Francisco’s Moscone Center, featuring exhibits and technical sessions spanning the microelectronics supply chain, from electronic-design automation, to device fabrication (wafer processing), to final manufacturing (assembly, packaging, and test). Attendees will also see technologies born from the microelectronics industry, including microelectromechanical systems (MEMS), photovoltaics, flexible electronics and displays, nanoelectronics, solid-state lighting (LEDs), and related technologies.

© 2010 Penton Media, Inc.

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