A Fabulous 2014 and the Road Ahead
By Denny McGuirk, SEMI President and CEO
After several tough years, 2014 brought strong growth to our industry. There is no shortage for new challenges, but looking back at 2014, it truly was fabulous. 2015’s outlook is promising and collaboration through the extended supply chain is increasingly being seen as an enabler as we look down the road towards 2020.
2014 was a great year for SEMI Members and SEMI. Sales started strong and continued at high levels throughout the year. In 2014, semiconductor equipment sales are expected to come in at almost $38B, up nearly 20% vs. 2013. Semiconductor manufacturing materials are projected to reach nearly $45B in 2014. A number of SEMI’s publically listed Members enjoyed 15% to >40% (notably, Applied Materials and Lam Research) annual stock price increases.
Consolidation continued in 2014, making our industry narrower and deeper. Consolidation is changing the face of our industry, reducing the number of participating companies and driving much deeper collaboration through the extended supply chain – from components/raw materials all the way to major electronics manufactures. 2014’s M&A activity was brisk, naming just a few: Edwards Vacuum was acquired by Atlas Copco, ATMI was acquired by Entegris, Molecular Imprints was acquired by Canon, SPTS Technologies was acquired by Orbotech, Covalent Materials was acquired by CoorsTek, and Solid State Equipment (SSEC) was acquired by Veeco Instruments. While in the background, Applied Materials and Tokyo Electron continue to prepare for their planned merger – the biggest ever – as Eteris and anticipate to be completed in 2015. Semiconductor manufacturers also consolidated including the long-influential IBM with GLOBALFOUNDRIES stating its intention to acquire IBM’s microelectronics business.
Membership, SEMICON, and new programs up in 2014. The number of SEMI Member companies increased in 2014 to more than 1,910, 5% above 2013. In 2014, worldwide SEMICON expositions hosted more than 4,000 exhibitors (up more than 8% YoY), 136,000 unique registered attendees, and over 210,000 total visitors (includes registered attendees and attending exhibitors). The regional SEMICON expositions continue to be the leading gatherings of the SEMI communities. As SEMI’s Membership changes, so do the SEMICON shows. In 2014, program innovations and new segments were added and exposition venues were changed to reflect a changing and diverse SEMI Membership.
SEMICON Japan moved to Big Sight, nearer to downtown Tokyo, with new programming – including a new and compelling IoT focus – increased both exhibitors and attendees vs. 2013. SEMICON Europa inaugurated a Grenoble venue with new features such as the Innovation Village, Cluster Alley, low power, and power electronics related programming which drove an increase in exhibitors by 38% and attendees by 20% vs. 2013. SEMICON Europa now begins a rotation between Grenoble and Dresden on a biannual basis. SEMICON Singapore has been expanded to focus on the entire Southeast Asia region and in 2015 will move to Penang, Malaysia for the first time. SEMICON West added many new elements in 2014 including the Semiconductor Technology Symposium, the Sustainable, Manufacturing Forum, and richer programing on printed electronics, MEMS, IoT, and 3D IC technologies. In every region, new focused programs were added to address regional interests – such as the first ever International Printed Electronics Conference in Korea.
SEMI introduced another new emerging region forum in 2014. SEMI continued opening opportunities in emerging markets by organizing the first ever South America Semiconductor Strategy Summit. This event successfully brought together South American front-end and back-end project interests with the SEMI community, similar to 2014’s second annual Vietnam Semiconductor Strategy Summit. Throughout SEMI’s history, SEMI has endeavored to identify emerging regions early, facilitate business development, and add regional SEMI platforms to support SEMI’s Members such as those that now support vital and specific regional needs in Japan, China, Korea, Taiwan, Singapore (SEA), Europe, India, and USA.
2015 and 2020 – Looking Forward and Looking Ahead. With SEMI’s Industry Strategy Symposium (ISS) currently underway, we’ll soon have a deep update on the 2015 industry outlook. What seems safe to say is that 2015 will be another growth year. In 2015, there are likely at least ten fab projects with greater than one billion dollars in fab equipment spending each, including: Samsung Line 17-A (DRAM and Logic), Samsung Xian, TSMC with four fabs, Intel Ireland, GLOBALFOUNDRIES (New York), and Flash Alliance Fab 5, Phase 2. These projects should provide a range of opportunities for SEMI Members to grow and evolve their products to take on the demands of our changing industry.
While consolidation has made the larger players larger – and fewer – the number of challenges the industry faces are quickly increasing. The push-out in next generation lithography and wafer size transitions mean that device manufacturing at the cadence of Moore’s law is becoming more difficult, more expensive (capital intensive), and is driving simultaneous innovations in transistor formation, new material introductions, 2D and 3D IC architectures, and packaging solutions. Meanwhile, the diversity of device demand is broadening with high-end mobile applications on one end and IoT and other low-power extremely low cost devices on the other end.
What is becoming clear is that companies can’t meet all these challenges on their own. Collaboration is becoming essential to being successful. SEMI’s platforms are key instruments to facilitate this collaboration. SEMI International Standards, such as the currently hotly followed SEMI 3DS-IC Standards and 450mm Standards activities, continue to be the forum to find consensus on emerging global technology implementation, safety, sustainability, and manufacturing issues. SEMI’s Advocacy efforts continue to influence regional government policies and funding to benefit SEMI’s Members with activities as diverse as championing the US manufacturing innovation act (RAMI act, passed in 2014) to understanding and informing SEMI Members of the recent changes to China’s IC investment ("National Guideline for the Development and Promotion of the IC Industry," issued by the State Council of China). SEMI’s programs and expositions are reaching out to the extended supply chain bringing participation and presenters from EDA, IP, fabless (Qualcomm, Broadcom, etc.) as well as demand drivers such as Google, Apple, Cisco, Samsung, and Illumina. At the same time, SEMI is developing programs and business access for emerging markets (such as MEMS, Flexible Hybrid Electronics, others) that utilize semiconductor processing technology or core competencies, tools and comparable material sets of existing SEMI members.
SEMI is actively working to align its platforms and Membership value delivery to today’s – and tomorrow’s – industry:
- Meet the needs of a mature, consolidated, cost and technology driven specialty industry.
- Enrich the SEMI community to be inclusive of the extended semiconductor manufacturing supply chain.
- Identify and develop industry expansion opportunities with platforms to facilitate Membership new business.
- Attract Membership participation in emerging related market segments.
- Act as the central voice in the micro/nano-electronics manufacturing space.
- Increase the depth and breadth of international industry advocacy activity.
- Provide information to SEMI Membership via improved communications channels and brand alignment.
- Promote, locally and regionally, the semiconductor equipment and materials industries to improve workforce development and to achieve favorable visibility.
As we look ahead, we’re guided by SEMI’s Vision and Mission Statement:
SEMI Vision—What We Stand For
promotes the development of the global micro and nano-manufacturing supply
chain and positively influences the growth and prosperity of its members. SEMI
advances the mutual business interests of its membership and promotes fair
competition in an open global marketplace.
SEMI Mission Statement—Our Focus for the Next Five Years
SEMI provides enlightened industry stewardship and effectively engages the imagination, creative energy and commitment of our members and employees to advance the interests of the global micro- and nano-manufacturing supply chain.
I congratulate the industry on a fabulous 2014 and look forward to our work together in 2015 and beyond.
January 13, 2015