Southeast Asia Fab Capacity to Grow 10% in 2012
Driven by the Strong Demand, Southeast Asia Leads the Packaging Materials Spending
By Clark Tseng and Karen Lo, SEMI Singapore
The industry forecast for semiconductor revenue growth for 2012 is expected to reach a range of 3 to 10 percent. With positive demand in the electronics sector, especially for mobile devices, SEMI expects the semiconductor industry to continue growing.
As the regional hub in Southeast Asia, Singapore offers an attractive business climate and quality human resources to overseas enterprises. In the semiconductor sector, Singapore houses the Asian headquarters or manufacturing sites of various foreign firms from the global semiconductor makers and testing houses such as Freescale, Infineon, Micron, STMicroelectronics, Siltronic-Samsung Wafer, Intel-Micron Flash and more. Currently, Singapore has 14 wafer fabs, 20 assembly and test operations, containing three of the world’s top five assembly and test subcontractor companies. There are about 40 IC design centers, which comprise nine of the world’s “Top 10” fabless IC design companies.
“With policy support in talent development and excellent transportation infrastructures, Singapore was chosen by world’s leading semiconductor players to be the Asian operation or global manufacturing centers,” said Terry Tsao, president of SEMI Southeast Asia. “In Southeast Asia, we are looking at almost 10 percent growth in fab capacity this year which surpasses the global growth at 6 percent. 300mm fabs in the region continue to drive capacity growth in 2012 and 2013.”
In recent years, equipment manufacturers also increased their presence in Singapore and located more of their manufacturing facilities in the region aiming to reduce cost of production and improve efficiencies across the supply chain. These developments present enormous opportunities for Southeast Asian suppliers of component and parts, precision engineering services, module design, heat/surface treatment, and cleaning services. On the other hand, investments by IDM and OEM players in manufacturing sites in Malaysia and Vietnam also represent new opportunities for Singapore’s equipment, component and materials suppliers.
Leading equipment makers such as Applied Materials, KLA-Tencor and Ultratech are participating in the OEM sourcing program at SEMICON Singapore 2012 to look for their ideal suppliers and partners in precision engineering, contract manufacturing, engineering design, tooling design & manufacturing in Southeast Asia. A series of briefing sessions and one-on-one meetings will be arranged from April 24-26.
Advanced Packaging Enables Growth in Electronics
Packaging technology continues to be an important industry segment enabling growth in electronics that are increasing in functionality in a mobile form factor. Demand for smartphones and media tablets exploded throughout the 2010 recovery and into 2011.
The 3D-IC packaging technology is widely expected to break Moore’s Law and meet the market’s requirements for shorter design period and time-to-market. Most major semiconductor companies, especially those involving in Wide I/O DRAM, expect the 3D-IC technology to solve the bandwidth issue and reduce power consumption. Many major companies have announced their future 3D-IC development plans. An example is TSMC’s plan to launch 3D-IC packaging services in early 2013. Also, chip suppliers for mobile devices, such as Qualcomm and ST-Ericsson, have expressed their interests in the 3D-IC packaging technology.
Terry Tsao pointed that “the 3D-IC technology, which is able to provide heterogeneous integration between memory and analog functions, will be a popular technology among future high-end mobile devices. However, technology challenges still exist in design, production, packaging and test before mass production begins while cost reduction will be another crucial issue. “
To address the technology issues and further enhance the industry collaboration, leading companies — such as Aptina, ASE, Hitachi Chemical, Lam Research, Novellus, SEMATECH, Sliecs International, SPTS, STATS ChipPAC, Tech Search International, and Tezzaron Corporation — are going to gather at the SEMICON Singapore 2012 2.5D/3D-IC Forum to share their experiences with a special emphasis on industry trends, manufacturing readiness, applications, roadmaps, and interdependencies with others in the eco-system.
“Through technology demonstrations at 3D-IC Gallery and the 2.5D/3D-IC forum, SEMI wants to introduce the latest technology developments into Singapore’s semiconductor industry,” said Tsao.
Important growth areas in packaging include chipscale packaging (CSP) — both laminate and leadframe based, stacked-die and other 3-D packaging form factors, wafer-level packaging (WLP), power device packaging, LED packaging, and other system-in-package (SiP) type technologies. The outlook for advanced packaging continues to remain strong, and this includes ball grid array (BGA), CSP (including leadframe-based), flip chip, and WLP packages. These package types will have strong unit growth rates over the next four years. More traditional packaging technologies will see demand stagnant or grow at single-digit rates.
Southeast Asia Leads the Packaging Materials Market
The market for semiconductor packaging materials, including thermal interface materials, is expected to reach $22.8 billion in 2011 and grow to $25.7 billion by 2015. Laminate substrates remain the largest segment of the market, worth an estimated $9.7 billion globally in 2011, and on a unit basis are projected to grow at a compound annual growth rate of eight percent over the next five years.
Southeast Asia has long been the leading region of packaging materials market. The total semiconductor materials spending in Southeast Asia will reach $8.4 billion and $8.7 billion in 2012 and 2013 respectively. Packaging materials account for $6.6 billion of the spending this year, with fab materials spending forecasted to reach $1.8 billion. We believe both IDMs and OSATs will continue to invest the back-end capacity and related material consumption in the region.
Equipment Spending to Pick up from 2H 2012
Due to macro uncertainty and industry supply chain adjustment, the global semiconductor equipment spending in 2012 is expected to dip 10 percent year over year to reach $37B. Though current equipment bookings and billings remain relatively low compared to 2010 and early 2011, equipment bookings are slowly improving and spending shall bottom out in the 1st half of 2012. SEMI expects to see healthy spending pick up from 2nd half of 2012 onward especially from top foundries and NAND Flash makers. The investment momentum is expected to continue into next year with current estimation of 7 percent growth in equipment spending for 2013.
In the Southeast Asia region, total semiconductor equipment spending is expected to reach $2.9B and $3.2B in 2012 and 2013, respectively. For 2012, about $1.6 billion to $1.7 billion will be spent on fab equipment, $800 million for test equipment, and almost $500 million on packaging equipment. Foundry players and memory makers in the region will continue to make big investment on technology migration. In addition, analog/power semiconductor vendors also play quite active roles in the region, accounting for one-fourth of regional fab equipment spending this year. For packaging, companies are focusing investment on wafer bumping, wafer-level packaging, and 3-D technologies.
New Opportunities in Southeast Asia LED Supply Chain
On the emerging technologies front, Solid State Lighting (SSL) or High-Brightness LED (HB-LED) has caught a lot of attention lately. LED investment in the region has long been supported by two leading players in the world. SEMI expects to see strong investment growth this year from new capacity and facility buildup. Asia has recently become the market with the world’s fastest-growing LED capacity contributed by the world’s leading manufacturer of high-power LED, Philips Lumileds. According to the latest SEMI Opto/LED Watch, the total equipment spending had grown 35.8 percent to $2,415 million in 2011. MyLED, a Malaysia-based SSL manufacturer, has just signed Memorandum of Understanding with Amprex, Light-Trend and OSRAM and invested US$55 million to expand its plant for LED lighting. This will open up new opportunities for the LED supply chain in Southeast Asia.
SEMICON Singapore to Strengthen the Industry Collaboration in Southeast Asia
SEMICON Singapore is the most important annual event for the semiconductor industry in Southeast Asia and will take place April 24-26 at the Marina Bay Sands Expo and Convention Centre. Aiming at supporting Singapore to be the hub of Southeast Asia, the event will gather more than 60 executives and experts from leading companies to address the critical topics ranging from the latest market forecasts to the latest information on next-generation 3D-IC, MEMS, LEDs to shape the future of microelectronics manufacturing and markets.
In addition to demonstrating the most advanced products and brings in the most up-to-date market and technology trends, an entrepreneurship seminar, a series of buyers programs and work force development programs will be special highlights of the exhibition. Online registration will be available until April 16. For registration or more information, please visit www.semiconsingapore.org
March 6, 2012