silicon wafers

In testimony today before a U.S. government interagency panel considering tariffs on $300 billion worth of Chinese goods, SEMI called for the removal of about 30 tariff lines, which cover items central to the semiconductor manufacturing process.Mike Russo, vice president of global industry advocacy at SEMI, explained in his testimony that while SEMI strongly supports efforts to better protect valuable intellectual property (IP), tariffs will not help address Chinese trade practices, and will ultimately have significant and unintended consequences.SEMI asserts that these tariffs will harm not only companies operating in the U.S., but other companies as well in the semiconductor supply chain by increasing costs, introducing uncertainty, and most problematically, stifling innovation. Collectively, SEMI estimates that this round of tariffs will cost its 430 U.S. members millions annually in additional duties. All told, SEMI estimates that all U.S. and Chinese retaliatory tariffs will cost members nearly $800 million in annual duties.SEMI’s full written comments note that these tariffs, on top of those already in force and the retaliatory tariffs, will hamstring the industry. The tariffs seem to target firms for simply operating in China. Given that tools, materials, and related products are extremely complex, precise, and difficult to manufacture, it is unreasonable to believe that a constituent component can simply be replaced with a part or tool from another source. Further, this U.S. government approach does not take into account that many items subject to these tariffs are not available, at sufficient quality and cost, from domestic sources, or even non-Chinese sources.Over the past year, SEMI has submitted written comments and offered testimony on the three previous rounds of tariffs, which covered about $250 billion worth of Chinese goods, or about half of all imports from China. The tariffs hit various components in the electronics manufacturing supply chain critical to the semiconductor industry, including materials and equipment used to manufacture wafers, boules, and chips as well as test, inspection and sensing equipment. We urge SEMI members to review the $300 billion U.S. tariff list to determine the level, if any, of impact. We also strongly encourage members to review Chinese retaliatory lists as well. Any SEMI members with questions should contact Jay Chittooran, Global Public Policy Manager at SEMI, at [email protected].

When will the memory market likely show signs of bottoming out? Following is an analysis of the current memory climate using the Memory Inventory Cycle Index introduced in this SEMI two-part article series in October 2018.

Region’s Fab Capacity Expansion Picks up PaceUnwavering in its drive to build a strong, self-sufficient semiconductor supply chain, China plans more new fab projects than any other region in the world from 2017 to 2020, and its expansion of fab capacity recently picked up pace on the strength of new foundry and memory projects from both domestic and foreign companies, according to SEMI’s 2018 China Semiconductor Silicon Wafer Outlook report. China’s installed fab capacity is forecast to grow at a 12 percent CAGR from 2.3 million wafers per month (wpm) in 2015 to 4 million wpm in 2020, faster than all other regions.Well known for its semiconductor packaging prowess, China in recent years shifted its focus to front-end semiconductor fabs and a few key material markets. In 2018, the region’s surge in fab investment thrust it past Taiwan as the second largest capital equipment market in the world, behind only Korea. However, China’s semiconductor manufacturing growth faces strong headwinds. Chief among them is the tight supply of silicon wafers over the past two years due in large part to the sector oligopoly’s firm control of global production, with the top five wafer manufacturers accounting for over 90 percent of market revenue. In response, China’s central and local governments has made the development of its domestic silicon wafer supply chain a key initiative, funding multiple silicon wafer manufacturing projects.According to the 2018 China Semiconductor Silicon Wafer Outlook report, many of China’s domestic silicon suppliers capably provide wafers 150mm in size and smaller. And the while the region lags peers in 200m and 300mm processing technology and capacity, strong domestic demand and favorable policies have fueled progress in 200mm and 300mm silicon manufacturing with some Chinese suppliers having reached key large-diameter manufacturing milestones.However, it will take these new suppliers several years before they can meet capacity and yield requirements of the larger-diameter silicon wafer market. Company plans and announcements indicate that by the end of 2020, total silicon supply capacity in China will reach 1.3 million wpm for 200mm, possibly leading to a slight oversupply, and 750,000 wpm for 300mm.China’s equipment suppliers, particularly crystal furnace vendors, are also investing in the development of 300mm wafer manufacturing, and domestic tool suppliers have developed most of the necessary tools for wafer manufacturing, except for inspection.While China’s silicon wafer suppliers continue to lag international peers in manufacturing capabilities, the region’s silicon manufacturing ecosystem is maturing and becoming better integrated. The sector’s growth is driven and accelerated by significant domestic market demand and favorable policies.About the China Semiconductor Silicon Wafer OutlookSEMI’s 2018 China Semiconductor Silicon Wafer Outlook is a comprehensive research report with a Microsoft Excel® workbook containing in-depth analysis of China’s silicon wafer manufacturing ecosystem as it relates to the global semiconductor wafer industry. The report covers the latest developments in China’s silicon wafer supply chain, including details on the rise of China’s silicon manufacturing, polysilicon, and silicon wafer-related equipment companies. The report also examines policies, funding and their implications for China’s silicon wafer supply chain.Clark Tseng is director in Industry Research and Statistics at SEMI.