Business and Markets

Custer Consulting Group has its first estimate of global electronic equipment growth in 4Q’18 vs. 4Q’17.

The December 2018 edition of the World Fab Forecast Report published by SEMI reveals a downward revision of total fab equipment spending growth for 2018 to 10% from the 14% forecast in August. Spending in 2019 is now projected to drop 8%, a reversal from the previously expected increase of 7%.

Now that most companies in our sector analyses have reported their calendar third quarter 2018 financial results, we have final or 3Q’18/2Q’17 growth estimates for the world electronic supply chain. We estimate electronic equipment grew 6.7% on a U.S. dollar-denominated basis.

Electronic equipment shipments are approaching their seasonal peak for this year. Oct '18 was up 8.4% compared to Oct '17 but only up 0.4% sequentially from Sept '18. As the consumer-driven busy season winds down, electronic equipment and component monthly sales will decline until late next spring.

Global fab equipment spending will increase 14% this year to US$62.8B and is expected to rise 7.5%, to US$67.5B in 2019, marking the highest investment year for fab equipment in the history of the industry, according to SEMI's latest World Fab Forecast Report.

World manufacturing growth has slowed but its growth rate varies significantly by region. Recently China and Europe have registered slower growth but U.S. growth is expanding. How long U.S. manufacturing will continue to accelerate remains to be seen. Geopolitical issues abound.

The new edition of the Worldwide OSAT Manufacturing Sites Database, released today by SEMI and TechSearch International, now tracks 320 facilities and adds the world’s top 20 OSAT companies by revenue in 2016 and 2017 to deliver even greater business value.

Vacuum subsystems sales account for 1/3 of expenditure on all critical subsystems used in semiconductor manufacturing equipment (excluding optical subsystems). The increase in vacuum process intensity of the semiconductor industry means that by 2023, the market for vacuum subsystems could top $3.1B.

Despite the growth, reclaim suppliers continue to struggle to cost-effectively remove complex materials from wafers in the face of ever-tightening particle specifications, cope with the shortage of feedstock for reclaim, and manage yields from repeatedly reclaimed wafers.

The global semiconductor materials market increased 9.6% while worldwide semiconductor revenues increased 21.6% from the prior year in 2017. Total wafer fabrication materials and packaging materials totaled $27.8B and $19.1B, respectively, in 2017, according to the SEMI Materials Market Data Report.