2012: A Year in Review — Semiconductor Equipment and Materials Market and Outlook
By Lara Chamness, senior market analyst manager, SEMI
Semiconductor Market Trends
While 2012 started out promising, persistent economic uncertainty plagued the industry, resulting in decreased bookings, billings, and shipment activity beginning in the summer and continuing through the end of the year. Semiconductor revenues declined 3 percent according to the SIA, while the new equipment and semiconductor materials markets contracted 15 percent and 2 percent, respectively.
Semiconductor Device, Equipment, and Materials Markets 2002-2012
World Fab Forecast database
Fab-by-fab analysis of capacity and
Worldwide sales of semiconductor manufacturing equipment totaled $36.9 billion in 2012, representing a year-over-year decrease of 15 percent and spending on par with 2004 levels. Looking at equipment sales by major equipment category, 2012 saw contractions in all major categories, except Other Front End (Other Front End includes Wafer Manufacturing, Mask/Reticle, and Fab Facilities equipment). This growth was driven specifically by the Mask/Reticle segment, which experienced its third consecutive record breaking year to reach $1.3 billion. Wafer Processing equipment contracted 18 percent, while Assembly and Packaging and Test equipment contracted 8 and 6 percent, respectively.
Due to aggressive spending by TSMC, Taiwan reclaimed the top spot ($9.5 billion) in equipment spending from North America, resulting in North America falling to the third position last year. The South Korea market claimed the second place for the third year in a row by keeping its investment levels on par with 2011 levels at $8.7 billion. Japan remained in the #4 spot, with $3.4 billion in equipment sales. Equipment sales to Europe decreased 39 percent in 2012. China and Rest of World both pulled back on their spending for the second year in a row in 2012. Rest of World region aggregates Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets.
Semiconductor Equipment Markets – Regional Trends
Comparing equipment spending trends in 2002 versus 2012, South Korea represents a larger share (up 15 percent) of the total market in 2012 versus 2002, while North America and Japan saw market shares decline 8 percent and 11 percent, respectively. Europe accounts for 4 percent less in 2012 than it did in 2002, while share in Taiwan increased 8 percent 2012 compared to 2002. The ROW region, including China, now accounts for 13 percent of the market compared to 14 percent in 2002.
The global semiconductor materials market, which includes both fab and packaging materials, contracted 2 percent in 2012 totaling $47.1 billion — marking the first decline for the materials market in three years. Even with the decrease, the semiconductor materials market has been larger than the new equipment for the past five years.
Taiwan maintained the top spot for the second year in a row, followed by Japan, Rest of World, and South Korea. Driving the materials market in Taiwan are advanced packaging operations and foundries. While Japan still claims the most fab capacity and has a tradition in packaging, many companies in Japan have rapidly adopted a fab lite strategy and have consolidated their fab and packaging plants. Rest of World, primarily SE Asia, represents the third largest market for materials given the dominance of packaging in the region.
Looking at the materials market by wafer fab and packaging materials, packaging materials revenues grew 1 percent while wafer fab materials contracted 3 percent; resulting in the packaging materials market overtaking the wafer fab materials for the first time since SEMI has been tracking materials. Wafer fab materials contraction was driven in a large part to the severe pricing pressure faced by silicon suppliers, which saw their aggregate average selling price decline 12 percent, even though the segment shipped record volume of 300 mm wafers that have higher selling prices.
Most analysts predict mid- single-digit growth for the semiconductor device market for the year. Given growth expectations for the device market, it is projected that the semiconductor materials market will increase this year 4 percent, to total $48.9 billion, setting a new market high for materials. The growth picture for equipment is hazier; current data and Capex announcements are indicating that the market will either be flat or slightly down.
2012 was a disappointing year for many segments in the semiconductor industry as the year started out promising but activity slowed down during the second half of the year. The growth outlook for 2013 is mixed, with device and materials revenues anticipated to increase. However, the equipment segment is expected to contract or remain flat relative to 2012.
Portions of this article were derived from the SEMI Worldwide Semiconductor Equipment Market Statistics (WWSEMS) and the Material Market Data Subscription (MMDS). These reports are essential business tools for any company keeping track of the semiconductor equipment and material market. Additional information regarding this report and other market research reports is available at www.semi.org/marketinfo
April 9, 2013