Artificial Intelligence

As artificial intelligence (AI) continues to revolutionize industries, the technology behind AI chips is advancing at an unprecedented pace. Meeting the demands of faster processing, greater efficiency, and increased complexity requires cutting-edge solutions in semiconductor manufacturing. SEMI spoke with Kai Beckmann, Member of the Executive Board at Merck KGaA, Darmstadt, Germany and CEO of the Electronics business sector, who shared insights into Merck KGaA, Darmstadt, Germany's latest strategic move that underscores the company’s commitment to innovation in semiconductor and optics technologies. With the acquisition of Unity-SC, a leading provider of advanced measurement and inspection technology, this marks a significant milestone in the evolution of AI chip manufacturing and beyond by bridging expertise in electronics and optics to drive innovation.Strengthening AI Chip Manufacturing with Unity-SC On October 31, 2024, Merck KGaA, Darmstadt, Germany’s Electronics business acquired Unity-SC, a global leader in metrology tools for semiconductors. According to Beckmann, this acquisition not only enhances Merck KGaA, Darmstadt, Germany’s portfolio in advanced measurement and quality inspection but also bolsters its position in the development of AI chips. These chips, essential for driving AI, rely on cutting-edge manufacturing processes like advanced packaging and heterogeneous integration.“Unity-SC brings precision to the table,” Beckmann explained. “Its technology is vital for managing the complex production sequences involved in creating high-density, three-dimensional chip structures. Without this precision, the production of AI chips at the necessary scale and quality would be nearly impossible.”The expertise of Unity-SC is pivotal for ensuring reliability in semiconductor manufacturing, reducing waste, and optimizing performance. With Merck KGaA, Darmstadt, Germany’s established relationships with major chip manufacturers, the integration of Unity-SC's technology is set to create synergies that will benefit the entire industry.A New Era for Merck KGaA, Darmstadt, Germany: Electronics Meets OpticsThe acquisition of Unity-SC aligns with Merck KGaA, Darmstadt, Germany’s broader strategy of combining expertise in semiconductors and optics, a vision that includes rebranding its display business as Optronics. This move represents a transformation from a traditional display specialist to a pioneer in optical technologies that complement electronic advancements. “Integrating optics with electronics opens up vast opportunities,” Beckmann shared. He highlighted key areas of focus like silicon photonics, which is revolutionizing data transmission, and augmented reality, where lightweight, powerful headsets represent the next frontier.Merck KGaA, Darmstadt, Germany’s foray into these domains underscores the importance of merging light management and materials expertise. For instance, the precision metrology brought by Unity-SC dovetails with Merck KGaA, Darmstadt, Germany’s work in materials science, forming a foundation for advancements in next-generation technologies such as quantum computing and neuromorphic systems. Driving Innovation in AIAdvanced packaging and heterogeneous integration are at the core of today’s AI revolution. These technologies make it possible to stack chips in 3D configurations, reducing energy consumption and increasing processing power. “Unity-SC plays a crucial role in this process,” Beckmann noted, emphasizing that the precise measurement of intricate structures ensures the reliability and efficiency of these complex systems.By mastering these technologies, Merck KGaA, Darmstadt, Germany is positioning itself as a leader in both materials and metrology for semiconductor manufacturing. “Integrating metrology and inspection into our portfolio is a leap forward in aligning our expertise with the needs of the AI-driven semiconductor industry,” Beckmann said. Looking AheadMerck KGaA, Darmstadt, Germany’s combination of semiconductor and optics expertise is not just about advancing technology but about creating a stronger, more resilient organization capable of tackling future challenges. The integration of Unity-SC is a step toward achieving this vision, fostering innovation at the intersection of light and materials.“Working in the semiconductor industry has always been exciting,” Beckmann shared. “But now, with AI reshaping the landscape, the opportunities for innovation and growth are unparalleled. Together with Unity-SC, we’re not just keeping pace—we’re leading the charge.”Merck KGaA, Darmstadt, Germany’s strategic evolution signals a promising future for AI, semiconductors, and the broader field of optoelectronics, where the interplay of light and materials continues to unlock new horizons.Kai Beckmann is a Member of the Executive Board of Merck KGaA, Darmstadt, Germany and CEO of the Electronics business sector. Joining Merck KGaA, Darmstadt, Germany in 1989, he has held roles in IT, consulting, and international management, including as Merck KGaA, Darmstadt, Germany’s first CIO. Since 2017, he has led the Electronics sector (operating under the name EMD Electronics in the US and Canada), driving innovation in semiconductors and optics. Beckmann also oversees the Darmstadt site and co-determination in Germany. He holds a computer science degree from TU Darmstadt and a doctorate in economics earned in 1998.SEMI ContactMaria Daniela Perez, Communications ManagerEmail: [email protected]

China’s semiconductor sector has exploded to become one of the largest in the world and match the region’s prominence as the biggest consumer of chips. From 2015 to 2020 alone, revenue of China’s integrated circuit (IC) industry expanded at a rapid clip of 20% CAGR (RMB) to $128 billion.

This year, SEMI ISS covered it all – from a high-level semiconductor market and global geopolitical overview down to the neuro morphic and quantum level. Here are key takeaways from the Day 1 keynote and Economic Trends and Market Perspectives presentations.In the opening keynote, Anne Kelleher from Intel pointed to the huge growth of data, with fabs collecting more than 5 billion sensor data points each day. The challenge, Kelleher noted, is to turn massive amounts of data into valuable information. Moore’s law is not dead. New models of computing benefit still from Moore’s law and advances in Si/CMOS technologies for conventional, deep learning, neuro morphic and quantum computing.With customers expecting continual improvements in applications, the question is whether the chip industry is moving fast enough to meet these expectations, Kelleher said. A broad supply chain, equipment and materials innovations, and attracting the “best of the best” college graduates to fuel innovation is key, she said.In the economic trends session, Nicholas Burns (ambassador ret.) from Harvard University pointed out that we will see a major shift in power. The U.S. will remain the major world power over the next 10 years, but we will see a major shift in power in the next coming decades as the gap with countries like China, Russia and India continues to narrow.Duncan Meldrum from Hilltop Economics said that we are passing the peak growth of economic cycle. He warns that a more likely outlook is that a global growth recession is developing. Although semiconductor MSI growth will see a noticeable slowdown in 2019 and 2020, the semiconductor industry is still healthy over the longer term.Bob Johnson from Gartner sees demand shifting from consumer to commercial applications with higher ROIs and budgets. AI, IoT and 5D are the major enablers. He sees structural changes in the semiconductor industry especially for memory but also for Moore’s law with increasing costs and fewer players.The DRAM markets shows volatility and NAND market may be negative in 2019 but non-memory are expected to accelerate mainly because of increasing content and some price hikes.Overall Gartner expects good long-term growth with a CAGR (2017 to 2022) of 5.1%, outpacing 2011 to 2016 CAGR of 2.6%. After a strong 2018 with 13.4% revenue, he forecasts a slower 2019 with 2.6% growth followed by a 8% growth in 2020 and negative growth rate in 2021.Andrea Lati of VLSI went “Back to fundamentals” in his presentation about the industry. VLSI sees a downside bias due to slowing global economy, tariffs, and trade wars. Future drivers are data economy, cloud, AI and automotive.As memory leads the 2019 slowdown, analog, power, logic and other sectors remain in positive territory. VLSI lowered its semiconductor equipment forecast for 2018 from 20% (Jan. 2018) to 14% (Dec. 2018) but increased its sales outlook from 8% to 15% in 2018. VLSI expects revenue to slow into the first half of 2019 but increase to over 4% in the second half of the year, resulting in total 2019 drop of 2.7%. Semiconductor equipment sales are expected to drop from 14% in 2018 to -10% in 2019.Michael Corbett of Linz Consulting, covering wafer fab materials in the years of 3D scaling, sees these as good times for the industry. His outlook for wafer fab materials is bullish based on strong MSI and because wafer fab materials suppliers are getting bigger because of M As.In the Market Perspective session, Sujeet Chand of Rockwell Automation pointed out that as more and more data is generated, the problem is how to get value of all the data collected. There is a need to create the right architecture for machine learning and AI and big data is increasingly being replaced by contextual/structured data. He expects Industry 4.0 to drive foundries to become smaller, more flexible and more productive.In the Technology and Manufacturing session, Aki Sekiguchi of TEL addressed process challenges in the age of co-optimization. The semiconductor industry continues to expand, driven by massive growth of interconnected devices, with heavy demand for processing power and storage. He expects an exponential increase of data from about 40ZB in 2018 to 50ZB in 2020 to 163 ZB in 2026.Major technologies such as DRAM, 3D NAND and logic are dealing with scaling challenges. The density of DRAM (Mb/chip) is plateauing according to 2015 to 2020 trend data, with DRAM is in need of EUV. Memory capacity demand is leading to increasing layers and higher aspect ratios that is concern for 3D NAND and mainly for plasma etch. With Logic already implementing 3D structures, it appears to be in a solid position. Buddy Nicoson of Micron talked about his 50 years in the industry and looked ahead to the next 50. The anchors – quality, cost, scale and speed – won’t change. It has been a great journey so far with unprecedented opportunities and challenges ahead of us. We are getting into a convergence (specialization, integration) and solution-based phase. We will see some inflection points in the coming years, with the best yet to come.Christian G. Dieseldorff is senior principal analyst in the Industry Research and Analysis group at SEMI in Milpitas, California.

Outsourced Semiconductor Assembly and Test (OSAT) service providers experienced strong growth in 2017, but will this growth continue? In the last few years, OSAT growth has been driven by shipments for packages found in smartphones, but this market is slowing. What will replace it? Growth in power devices is strong and electronic content in vehicles is increasing. Will OSATs participate in this growth? Many OSATs have plants dedicated to automotive package assembly and will see continued growth. Growing demand for connectivity everywhere, called IoT, is generating large amounts of data, creating the need for more servers and datacenters. The adoption of Artificial Intelligence (AI) across a broad range of applications is driving demand for high-performance packages, but will this assembly take place at the OSATs or foundries? In the third and fourth quarters of 2017, growth in cryptocurrency provided unanticipated revenue for a number of OSATs. Given that the most well-known crypto mining companies and the biggest mining pools are all based in China, several OSATs, including major Taiwanese and Chinese service providers, experienced revenue growth in 2017 directly attributed to the assembly of ASICs in flip chip scale packages (FC-CSPs) and GPUs in flip chip ball grid arrays (FC-BGAs) for the cryptocurrency market. However, the first and second quarter of this year has seen decreased demand for GPUs and ASICs for this application. The assembly of packages for cryptocurrency slowed considerably in the first half of the year and therefore can’t be counted on to add as much to the revenue base as in the previous year. Going into the latter half of the year, the demand for Crypto ASICs is expected to pick up as new generation of 7nm chips will drive new investment and replacement cycle while crypto-mining GPU will see a further decline. Three of the top 10 OSATs, Jiangsu Changjiang Electronics Technology (JCET), Tianshui Huatian Technology (Huatian), and Tongfu Microelectronics (TFME), are based in China. China’s share of the top 10 OSATs’ revenue increased from slightly less than 23 percent in 2016 to more than 25 percent in 2017, and this trend is expected to continue. Crypto-related packaging and test business has certainly contributed a big portion of the share gain. Major OSATs such as TFME and Tianshui Huatian plan expansion in their plants and they expect to fill this added capacity in a broad range of packages. Huatian’s new Nanjing plant will include assembly for memory packages. TFME plans to set up a plant in Xiamen, Fujian Province to provide bumping, wafer level packaging, and system-in-packaging (SiP) services. Tracking the capabilities of OSATs is increasingly important. SEMI and TechSearch International have introduced a new Worldwide OSAT Manufacturing Site Database that provides listings of OSAT facility locations and package and test options in each factory. This database indicates the specific packages offered at each location. Finding plants that offer automotive qualified assembly is also possible with the database. Companies that offer bumping and wafer level packaging are identified. Over 120 companies and 300 facilities are tracked in this database covering both OSAT packaging and test facilities. For additional information about this informative database, please visit https://discover.semi.org/osat-database-registration.html E. Jan Vardaman is president of TechSearch International, Inc., and Clark Tseng is director of Industry Research and Statistics at SEMI.

SEMI FabView update for calendar year Q3 2018 Global fab construction investment shows continuing strength, with 19 new fab projects expected to begin construction in 2019 and 2020, based on the latest data published in SEMI’s World Fab Forecast. Fab investment is just one indicator of how growing demand in areas such as high-performance computing, data storage, artificial intelligence (AI), cloud computing, and automotive are driving the fourth consecutive year of spending growth in the semiconductor industry. Below are a few highlights* from September’s SEMI FabView: Memory: Not fading Micron plans to invest $3 billion by 2030 in Manassas, Virginia – These investments, driven by strong demand for automotive applications, are contemplated in Micron's long-term model. The production ramp is anticipated to be in the first half of 2020. SK Hynix to build new DRAM fab in Icheon (Gyeonggi Province), Korea – The construction, to be completed by the end of 2020, will adopt 1znm node (probably EUV). Total investment is estimated to exceed $13 billion. Nanya Technology doubles 2018 capex plan – The increase is for additional DRAM capacity and more 20nm DRAM conversion (from 30nm). 200mm and below: Not leading edge, but continues to draw investment Vanguard changes fab investment strategy – Vanguard will focus on 200 mm and has scrapped its plan for 300mm expansion. Murata to invest into 150mm expansion – Murata announced a 5 billion Yen investment (US$44.6 million) in a new fab extension in Vantaa, Finland. Investment, M A in Analog, Logic, Power and Opto Segments Texas Instruments is looking to invest $3.2 billion in new fab construction in 2019 – Texas Instruments is eyeing Richardson, Texas and also considering sites outside Texas. Bosch 300mm fab in Dresden, Germany – Bosch held a groundbreaking ceremony on April 24. Equipment installation is expected in 2H19. Microchip completes acquisition of Microsemi – Microchip closed its $8.45 billion acquisition of Microsemi on May 29. Microsemi has five fabs in the U.S. with a wide range of semiconductor products and system solutions. New fabs in China keep on coming Shanghai Jita Semiconductor/Huada Semiconductor – Shanghai Jita Semiconductor, a subsidiary of Huada Semiconductor and China Electronics Corporation (CEC), announced plans earlier this month to build both 200 mm and 300 mm semiconductor fabs for analog and power semiconductors in Shanghai. The combined fab investment will total $5.18 billion. Hamamatsu Photonics building 200 mm fab – Hamamatsu announced that it is building a new facility Investment of 2.8 billion Yen (US$25 million) to boost opto semiconductor capacity. Production is anticipated to start in late 2019. * Actual FabView updates provide more detail SEMI FabView, a mobile-friendly, interactive version of SEMI’s popular World Fab Forecast, delivers on-demand fab information such as fab spending and capacity for over 1,200 facilities, including over 60 planned facilities worldwide, across a wide range of product segments including Power, GPU, Memory, Foundry, MEMS and Sensors fabs. Fab data include region, start of construction, operation, construction and equipment spending, capacity, wafer sizes, product types and geometries. SEMI FabView subscribers receive forecast model updates through SEMI’s World Fab Database. Click here for a trial if you want to experience SEMI FabView first hand. Christian G. Dieseldorff is senior principal analyst and Eugenia Liu is senior product marketing manager, Industry Research and Statistics, SEMI, Milpitas, California.

SEMI Releases latest update to World Fab Forecast with adjusted semiconductor revenue consensus for second-half 2018 and 2019 Global semiconductor revenue in 2018 is now expected to reach $473.8 billion and clock a growth rate of 15 percent, a significant upward revision from the 7.5 percent expansion (to $442.9 billion) forecast at the start of the year by six research and investment forecasts tracked by SEMI Industry Research and Statistics (SEMI IR S). Data center growth will remain robust in the coming quarters, fueling demand for memory devices. In addition, cloud computing will continue to spur strong CPU, GPU, networking, ASIC, and DRAM and NAND demand through 2019, driving a consensus 3.63 percent year-to-year growth to reach the semiconductor revenue of $491 billion in 2019. Fab equipment spending (new and used) for 2018 is expected to increase by 14 percent to a record high of $63 billion, according to the last data from the SEMI World Fab Forecast, published by SEMI IR S. For 2019, fab equipment spending (new and used) is expected to increase 8 percent to another record of just under $68 billion. Memory continues to be the biggest swing factor in fab spending in 2018 and is expected to lead growth into 2020. 3D NAND will see the most capacity added in 2018 and 2019 with growth of 41 percent in 2018 and 27 percent in 2019, according to the SEMI World Fab Forecast. DRAM investment will see even stronger growth in 2018 and 2019 driven by new capacity addition as well as the continued technology shrink towards 1y/1z nm. For the first half of 2018, global spending for semiconductor fab equipment continues its growth momentum from 2017. Though we expect some softness in the second half of 2018, the outlook for 2019 remains robust with a fourth consecutive year of growth – the first such run since the 1990s. This prolonged growth cycle has been propelled by memory and will be extended by significant investment in China in 2019. Although a potential slowdown in 2020 is a concern, the overall outlook for semiconductor demand remains solid due to broad-based growth trends in data center, artificial intelligence (AI)/machine learning (ML), automotive, and industrial segments. Following are other SEMI forecasts for fab spending. Installed Capacity 3D NAND will see the most capacity added in both 2018 and 2019 with growth of 41 percent in 2018 and 27 percent in 2019. Foundry capacity growth is steady at 3 percent in 2018 and 6 percent in 2019, driven by both leading-edge and trailing-edge capacity buildup. 200mm fab capacity will increase 4 percent in 2018 and 3 percent in 2019, fueled by demand for MCU, sensors, PMIC, MOSFET and Driver IC. New Facilities / Construction Spending In 2018, there are 72 construction projects with investments totaling $15 billion, a year-over-year increase of 23 percent. Construction spending will reach all-time highs with China continuing its lead at US$7 billion in 2018, shattering its own record of $6.3 billion investment in 2017. Most construction spending in 2018 will be for Memory (just under $9 billion), primarily for 3D NAND followed by DRAM. Foundry will log second place in construction spending at just under $5 billion. Fab Equipment Spending Fab equipment spending (new and used) for 2018 is expected to jump 14 percent to a record high of US$63 billion, flat from the forecast issued in June 2018. Equipment spending (new and used) for 2019 is expected to increase 8 percent to another record of just under US$68 billion, a downward adjustment from +9 percent published in June 2018. We believe equipment spending will remain healthy, driven by solid, broad-based demand and predictable technology investments on top of constructive SEMICAP equipment fundamentals. Activity Report The August report features 1,265 records including about 300 Opto- and LED-related facilities. We have made 223 changes related to 216 fabs/lines. The modifications include the addition of new records, changes to existing records, the deletion of records since the February 2018 World Fab Forecast report. We are tracking 103 future facilities/lines with various probabilities that will start volume production in 2018 or later. Download a sample report Not a subscriber? Please review SEMI fab databases listed below. Our databases deliver the latest forecast and a complete analysis of front-end fabs and foundries worldwide. They are ideal resources to empower your market research. Eugenia Liu is a Senior Product Marketing Manager at SEMI.

Device manufacturers continue to invest. Spending in cloud data center (compute, networking and storage), automotive (content per car increases), industrial (on content, factory automation, and positive macro trends), and consumer (gaming) end-markets is particularly strong. We see capital expenditure growth in 2018 and early indications pointing to sustainable spending into 2019. We also expect 14 percent increase (YoY) for fab equipment spending in 2018, up from the February forecast of 9 percent, and expect 9 percent increase in 2019, adjusted from the February forecast of 5 percent. 92 future facilities/lines with various probabilities are scheduled to start production in 2018 or later. Fab investment is just one indicator of how growing demand in areas such as from Artificial Intelligence (AI), cloud/data storage, automotive and Internet of Things (IoT) is driving unprecedented spending in the semiconductor industry. Below are a few highlights* of recent SEMI FabView insights. Details of each project can be found in FabView online 24/7 or World Fab Forecast report (Excel format). Infineon’s new 300mm Fab in Austria - Infineon is planning a new 300mm thin wafer Fab for Power Devices in Villach, Austria. Rumors on Toshiba’s new Fab plans - More 3D NAND fabs in the future at Toshiba are feasible. The timing will depend on market conditions, and our forecast will adjust accordingly. Vanguard's possible 300mm foundry fab - Vanguard's management said it might buy or build a 300mm fab in the near future as all 200mm fabs are essentially full. Powerchip plans to build new memory fab in Taiwan - Powerchip is investing more in expansions since Memory pricing is holding up. Rohm announced to build a new SiC fab in Fukuoka Japan - Rohm announced its plans to build a new SiC fab. Micron is building a new fab in Singapore - Micron broke ground in a ceremony for a new fab in Singapore on April 4, 2018. Bosch had groundbreaking ceremony of their 300mm fab in Dresden end April 2018 - Investment of 1 billion Euro. This is the biggest single investment in Bosch’s 130-year history. SEMI FabView, a mobile-friendly, interactive version of SEMI’s popular World Fab Forecast, delivers on-demand fab information such as fab spending and capacity for over 1,100 facilities, including over 82 planned facilities worldwide, across a wide range of product segments including Power, GPU, Memory, Foundry, MEMS and Sensors fabs. Fab data include region, start of construction, operation, construction and equipment spending, capacity, wafer sizes, product types and geometries. SEMI FabView subscribers receive forecast model updates through SEMI’s World Fab Database. Click here for a trial to experience SEMI FabView first hand. *Actual updates provide more detail Christian G. Dieseldorff and Clark Tseng, Industry Research Statistics Group, SEMI.