Fab Equipment Challenges For 2019
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Fab Equipment Challenges For 2019

After a period of record growth, the semiconductor equipment industry is facing a slowdown in 2019, in addition to several technical challenges that still need to be resolved.Generally, the equipment industry saw enormous demand in 2017, and the momentum extended into the first part of 2018. But then the memory market began deteriorating in the middle of this year, causing both DRAMand NAND vendors to push out their equipment orders.The memory downturn is expected to extend into 2019, which will impact equipment makers with exposure to DRAM and NAND. Then, on the geopolitical front, the trade issues between the United States and China are a cause for concern, although the long-term impact remains unclear.On the positive side, foundry vendors continue to ramp up their 7nm processes, propelling equipment orders in the logic space. The outlook is good at the other end of the spectrum, as well, where the industry continues to see demand for mature 200mm equipment.Still, the demand for leading-edge and mature tools can’t make up for the downturn in memory, which likely will put the equipment industry in negative territory. In total, the worldwide semiconductor equipment industry is expected to grow by 13.7% in 2018, but the business is projected to slow and decline by 8.6% in 2019, according to VLSI Research.Of course, the forecast could change overnight, and it’s not all gloomy in the market. Tool segments with exposure to logic will fare better in 2019. But amid a downturn in memory, tool segments with exposure to DRAM and NAND are in for a rough ride.For example, some foundries are expected to ramp up extreme ultraviolet (EUV) lithography at 7nm, a move that will likely propel EUV scanner orders for ASML. Inspection and metrology are also bright spots.“If you look at the equipment side, EUV is obviously going to be positive. The other one that you see performing better in downturns is process control. If foundry and logic maintain their spending, they are heavy on process control compared to memory,” said Risto Puhakka, president of VLSI Research. “On the negative side, you will probably see etch and some deposition segments that are heavily dependent on memory. That will probably see a bigger decline.”To help the industry get ahead of the curve in 2019, Semiconductor Engineering has taken a look at several equipment segments, including foundry, memory, China and 200mm.More numbersWhat a difference a year makes. Citing huge demand for memory, the semiconductor market is projected to grow by 15.5% in 2018, according to VLSI Research. But the current memory slowdown is expected to drag down the industry, causing the IC market to decline by 1.6% in 2019, according to the firm.The equipment industry is following a similar pattern. 2018 started out looking like another record year for the equipment industry, but the memory downturn slowed the momentum.“The equipment market will grow about 14% in 2018, which is a little bit below what we were predicting earlier in the year. But still, it’s a good year,” said Andrea Lati, an analyst with VLSI Research. “But we did see a de-acceleration in the second half of 2018, which we expected. If you look how much spending went on in 2017, we knew at some point that supply was going to catch up with demand and surpass it. That happened in the second half of this year.”At that point, the market failed to regain the momentum. “This downward pressure we are seeing in the second half of 2018 is going to roll over into 2019. We’re a little bit more bearish about 2019. We do expect both the semiconductor and the equipment markets to decline in 2019,” Lati said. “Part of it is because there is some over-build in our industry. The second part is really the macro picture. It’s slowing, and we also have the China situation. That is also adding uncertainty.”Compounding the problem is the memory downturn. “We expect memory sales to decline almost 10% in 2019. We do see that logic will probably be in positive territory and growing almost 4%. So it will be primarily a memory-driven downturn in 2019,” Lati said.Needless to say, this will impact the equipment industry. In a different forecast, SEMI predicts that worldwide sales of new semiconductor equipment will increase 9.7% to $62.1 billion in 2018, but the market will decline by 4% in 2019. In 2019, South Korea will remain the largest equipment market, followed by China and Taiwan, according to SEMI.Fig. 1: Worldwide sales of new semiconductor manufacturing equipment. Source: SEMITwo other metrics, semiconductor capital spending and the wafer-fab equipment (WFE) market, are seeing similar trends.“(For) WFE CapEx, calendar 2018 was driven by buoyant demand for memory,” said Toshiki Kawai, president and chief executive of TEL, in a recent presentation. “Expect year-over-year growth of approximately 5%-10%.”In 2019, though, WFE will reach $50.6 billion, down 5% over 2018, according to KeyBanc Capital Markets. Capital spending will reach $87.2 billion in 2019, down 5% over 2018, according to KeyBanc.“For memory, what we are seeing right now is a definite slowdown. I see a CapEx decrease in ’19 for DRAM after an incredible year. In NAND, it will be modestly down in ’19,” said Oreste Donzella, senior vice president and chief marketing officer at KLA-Tencor. “We believe foundry will go up. The question is how much will foundry go up.”From an applications perspective, it’s also a mixed picture. The smartphone market is flat, but there are other applications that will drive IC demand, such as automotive, artificial intelligence and wireless.AI involves a technology called machine learning. In simple terms, machine learning uses a neural network in a system. In neural networks, a system crunches data and identifies patterns. It matches certain patterns and learns which of those attributes are important.The industry is accelerating the use of machine learning in various systems, thereby driving the demand for ASICs, FPGAs, GPUs and memory.“The world of memory is increasing in the era of AI and deep learning,” said Gill Lee, managing director of memory technology at Applied Materials. “Bit growth is happening with all of these new applications, such as AI, deep learning and data centers. The memory applications are becoming more diversified.”Others see similar trends. “Startup funding for semiconductor companies is back up, with similar increases for new programs inside existing companies,” said Aki Fujimura, chief executive of D2S.“Excitement over deep learning, autonomous driving, and continued innovation in IoT are providing new design starts,” Fujimura said. “Despite the recent hiccup from the cooling off in cryptocurrency, I continue to see a strong rising tide behind Nvidia for simulation of natural effects, image and video processing, and deep learning. It is great to see a new wave of funding of innovation in new chips, particularly driven by deep learning. We are going to see deep learning improve what we do in semiconductor manufacturing, as well, in 2019.”Thirumal Thanigaivelan, senior marketing director at Veeco’s UItratech division, said: “Diverse market requirements in AI, graphics and automotive are driving leading-edge development. We expect the investment to continue as we drive toward more processing capability in HBM (high-bandwidth memory). The diverse markets and applications space dampens the fluctuations in fab equipment spending, reducing the cyclicality.”Wafers and masksOne way to get a pulse on the market is to look at the demand picture for two key building blocks in the IC sector—silicon wafers and photomasks.In 2019, silicon wafer shipments will reach 13,090 million square inches, up 5.2% over 2018, according to SEMI. In 2018, silicon wafer shipments grew 7.1%.Then, the photomask market is forecast to exceed $4 billion in 2019, up 4% over 2018, according to SEMI.Photomask makers see demand for both leading- and trailing-edge masks. For example, EUV mask shipments are expected to double, from 1,041 in 2017 to 2,185 in 2018, according to a survey from the eBeam Initiative. That’s a small percentage of overall mask shipments, as 587,233 photomasks will be delivered in 2018, up 27% over 2017, according to the survey.“EUV masks went up 2X, which is expected. That’s a good thing. But the numbers are insignificant compared to the overall masks that are reported. But taken by itself, a 2X increase is a strong indication that the industry is getting ready for EUV,” D2S’ Fujimura said.EUV lithography—a next-generation technology that patterns tiny features on a chip—is moving into high-volume production in 2019 after years of delays. In an EUV scanner, a power source converts plasma into light at 13.5nm wavelengths, enabling the system to print fine features.Chipmakers need EUV because it’s becoming more difficult to pattern the tiny features using today’s 193nm immersion lithography and multiple patterning.Foundry growthMeanwhile, the foundry business, which is a big equipment market, is a mixed bag. Capital spending in the foundry sector will reach $25.1 billion in 2019, up 14% over 2018, according to KeyBanc.But the number of leading-edge foundries is dwindling, meaning there are fewer buyers of equipment at the most advanced nodes.Tool vendors are seeing demand in several foundry segments. At the high end, the demand driver is 7nm, although the product mix is changing at advanced nodes. “20nm, 16nm, 14nm and 10nm were really driven by mobile,” KLA-Tencor’s Donzella said. “At 7nm, we still have a high number of tape-outs driven by mobile. We also see AI applications. Now, the question is how many of these tape-outs are going to be realized in wafer capacity.”Not all of the action is at advanced nodes. “If you look at the percentage of revenue coming from the trailing edge, say 40nm and above, it’s still quite significant. Some 50% of the foundry revenue comes from trailing edge. That isn’t going to change. The reason is because of IoT demand, driving RF and MEMS. Then, you have automotive,” Donzella said.At 22nm and above, the industry continues to develop chips based on traditional planar transistors. In contrast, 16nm/14nm and 10nm/7nm are based on finFETs.It’s becoming more difficult to scale at each node. “PPAC (power, performance, area, cost) scaling at the leading edge is getting more complex and costly,” said Yang Pan, corporate vice president of advanced technology development at Lam Research.The challenges have caused a major shakeup in the leading-edge foundry landscape. Today, there are only two companies shipping 7nm—Samsungand TSMC. In 2018, GlobalFoundries halted its 7nm efforts. The company couldn’t justify the return-on-investment at 7nm, as only a few customers can afford to design chips at advanced nodes. At the same time, Intel is struggling at 10nm and has delayed it several times. (Intel’s 10nm is roughly equivalent to 7nm from the foundries.)Still, Samsung and TSMC are moving ahead at 7nm, but they will face challenges along the way. In 2018, TSMC moved into production at 7nm using traditional optical lithography. Then, TSMC plans to insert EUV for its second version of 7nm, which is slated for early 2019.Samsung recently announced 7nm using EUV. Then, at some point, Intel is expected to insert EUV.Bringing up EUV into production presents some challenges. “The introduction of EUV creates new challenges and opportunities for new patterning films and advanced etch processes such as atomic layer etching. Multiple patterning, complementary to EUV, will continue to drive density scaling,” Lam’s Pan said.There are other challenges at advanced nodes. “The other grand challenge in PPAC scaling is RC (resistive-capacitance) reduction, which requires new materials and integration to reduce line and via resistance to improve circuit power performance,” Pan said.Memory woesMemory, another big market for equipment, is in a difficult period. In early 2018, the NAND market declined and fell into an oversupply mode. Oversupply has extended throughout 2018, while prices have plummeted.The NAND outlook is gloomy. “For NAND flash, 2019 revenues should be down 40% from 2018,” said Jim Handy, an analyst at Objective Analysis. “I expect for NAND to reach cost and hug the cost curve until the current oversupply situation ends in a couple of years.”The DRAM market faces a similar situation after years of growth. “DRAM is just beginning a collapse that NAND has been undergoing since early this year,” Handy said.And if that isn’t enough, there are some technical challenges in memory. For example, planar NAND has reached its physical limit at the 1xnm node. So, NAND vendors have been migrating from planar NAND to 3D NAND. Both types are used for solid-state storage drives (SSDs).Unlike planar NAND, which is a 2D structure, 3D NAND resembles a vertical skyscraper in which horizontal layers are stacked and then connected using tiny vertical channels.Today, vendors are migrating from 48- to 96-layer 3D NAND devices with 128-layer products in R&D. Some refer to layers as pairs.The bit density increases as you add more layers. “In 2018, we’ve seen 96 pairs come into the market. Next year, I expect that we will see the next-generation technology, something larger than 120,” Applied’s Lee said.Continued scaling of 3D NAND will drive down the bit cost, enabling high-density SSDs at lower prices. This in turn expands the market for SSDs. “NAND-based SSDs were originally targeted for more of the high end. Now, it’s a big part of notebook computers. SSDs are also targeting even the low-end of storage. So, the market for NAND is not only going up, but it’s also covering a big part of the hard disk-drive market,” Lee said.Still, it’s difficult to scale 3D NAND from 64 to 96 layers and beyond. In the 3D NAND flow, alternating films are stacked on a substrate using deposition. The process is repeated several times. But as more layers are added, the challenge is to stack the layers uniformly and without defects.In the next step, a plasma etcher etches tiny circular holes or channels from the top of the device stack to the bottom substrate. Each channel must be uniform. Otherwise, CD variations may occur.“Stress management is another area of extreme importance when the layer count increases,” Lam’s Pan said. “High aspect ratio (HAR) etch continues to be the most critical and difficult step in the entire flow. At 96 layers and above, not only does the memory hole module get more challenging, other structures such as slits also become critically difficult with layer stacking.”China and 200mmFor years, China has been a growing market for semiconductor equipment. Trade issues, however, are infusing uncertainty in this arena.In China there are two types of chipmakers—multinational and domestic players. “The domestic semiconductor companies have been spending quite a bit. And the business is up at all major equipment suppliers in 2018,” VLSI Research’s Puhakka said.What about 2019? ‘’I don’t expect overall WFE from China to change significantly between ’18 and ’19,” KLA-Tencor’s Donzella said. “The mix is different. We see more foundry and less memory. We see more foreign investment and less local.”Meanwhile, 200mm is also a key equipment market. Demand for analog, MEMS and RF chips continue to cause shortages for 200mm fab capacity and equipment.“Some of the Asian foundries are afraid of lower orders in the second half of 2018. However, the current utilization of most fabs in Asia is over 90%,” said Bruce Kim, chief executive of SurplusGlobal, a supplier of secondary equipment. “There is still a big demand for 200mm tools.”What about 2019? “It will be very tight. Some of the advanced devices will be moved from 200mm to 300mm. I estimate the 300mm transfer won’t be so large in 2019,” Kim said.Heading into 2019, there is a shortfall of 200mm equipment. The industry requires from 2,000-3,000 new or refurbished 200mm tools to meet fab demand, according to SurplusGlobal. But there are only 500 available 200mm tools on the market, according to the company.200mm tool prices will remain high. “300mm tool prices are lower than 200mm tool prices these days,” Kim said.All told, 2019 looks cloudy for the equipment industry. Foundry looks up, but memory is down. And so, equipment vendors will need to hold on tight. It will likely will be a stormy ride over the next year.
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Release time：2018-12-25 00:00 reading：1214 Continue reading>>
Total <span style='color:red'>fab equipment</span> spending reverses course, growth outlook revised downward
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Total fab equipment spending reverses course, growth outlook revised downward

Total fab equipment spending in 2019 is projected to drop 8 percent, a sharp reversal from the previously forecast increase of 7 percent as fab investment growth has been revised downward for 2018 to 10 percent from the 14 percent predicted in August, according to the latest edition of the World Fab Forecast Report published by SEMI.Entering 2018, the semiconductor industry was expected to show a rare fourth consecutive year of equipment investment growth in 2019. But the SEMI World Fab Forecast Report, tracking more than 400 fabs and lines with major investment projects, forecast in August a slowdown in the second half of 2018 and into the first half of 2019. Now, with recent industry developments, a steeper downturn in fab equipment is expected (Figure 1).Figure 1The report shows overall spending down 13 percent in the second half of 2018 and 16 percent in the first half of 2019 with a strong increase in fab equipment spending expected in the second half of 2019.Plunging memory prices and a sudden shift in companies’ strategies in response to trade tensions are driving rapid drops in capital expenditures, especially among leading-edge memory manufacturers, some fabs in China, and some projects for mature nodes such as 28nm. Industry sectors expecting record-breaking growth in 2019, such as memory and China, are now leading the decline.Following a sharp fall in NAND flash pricing earlier this year, DRAM prices in the fourth quarter of 2018 began to soften, seemingly ending the two-year DRAM boom. Inventory corrections and CPU shortages continue, prompting predictions of even steeper price declines.Memory makers have quickly responded to changing market conditions by adjusting capital expenditures (capex), and tool orders have been put on hold. DRAM spending may see an even deeper correction in 2019 while NAND flash-related investment could also suffer a double-digit decline next year.A review of spending by industry sector reveals that, while memory capital expenditures were expected to grow by 3 percent in 2019, they are now forecast to drop by 19 percent year-over-year (YOY). DRAM is hit the hardest with a fall of 23 percent, while 3D NAND will contract 13 percent in 2019.China and Korea are suffering the largest drops in spending since the August report.China fab spending fallsProjections for equipment spending in China in 2019 have been revised from US$17 billion in August to US$12 billion, with multiple factors at play including a slowing memory market, trade tensions, and delays in some project timelines.SK Hynix is expected to slow DRAM expansion in 2019. GLOBALFOUNDRIES reconsidered its plan for the Chengdu fab, delaying the ramp. SMIC and UMC are slowing spending. The Fujian Jinhua DRAM project has been put on hold.Korea fab spending downIn August, SEMI forecast that Korea fab equipment spending would decline by 8 percent, to US$17 billion, in 2019 – a projection that has now been slashed to US$12 billion, a drop of 35 percent YoY. Samsung began to reduce equipment investments in the fourth quarter of 2018, and the spending cuts are expected to continue into the first half of 2019. Samsung’s largest projects to be hit are P1 (slowdown) and the ramp of P2 Phase 1 (delayed). Adjustments to the S3 schedule are also expected.Not all memory makers cut capital expendituresWhile SEMI’s detailed, fab-level data show that some memory makers will scale back capital expenditures for 2019, one company stands out. Micron will increase capex for FY19 to US$10.5 billion, up about 28 percent, or $8.2 billion, from FY18. Micron plans to expand and upgrade facilities, invest less in NAND in FY19 than in FY18, and anticipates no new wafer starts.Outlook still upbeat for mature technologiesIn other sectors, especially for non-leading-edge and specialty technologies, some fabs are still increasing investments (Figure 2).Figure 2Opto – especially CMOS image sensors – shows strong growth, surging 33 percent to US$3.8 billion in 2019. Micro (MPU, MCU and DSP) is expected to grow more than 40 percent in 2019 to US$4.8 billion. Analog and mixed signal investments also show strong growth – 19 percent – in 2019, bringing spending to US$660 million. The foundry sector, the second largest product segment in total investments at US$13 billion, shows a 10 percent rise in 2019.The recent three-year boom in the semiconductor market was chiefly driven by the memory sector (e.g. DRAM and 3D NAND flash). One company, Samsung, invested at unprecedented levels, lifting the entire industry. Other memory makers rode the wave of the boom cycle by boosting investments. And China’s profile rose with its huge investments. The industry was poised for four consecutive years of revenue growth – a streak not seen since the 1990s.Now the industry faces well-known threats of inventory correction and the trade war. Both phenomena could slow growth significantly and if both unfold in full force in tandem, the impact could be serious. The data in SEMI’s latest publication of the World Fab Forecast show that the four-year growth streak will not materialize.Since its August 2018 publication, more than 260 updates have been made to the World Fab Forecast. The report now includes more than 1,280 records of current and 115 future front-end semiconductor facilities from high-volume production to research and development. The report covers data and predictions through 2019, including milestones, detailed investments by quarter, product types, technology nodes and capacities down to fab and project level.The SEMI World Fab Forecast examines capital expenditure plans of individual front-end device manufacturers, while the SEMI bi-annual Semiconductor Equipment Sales Forecast is based on year-to-date data collected from equipment manufacturers and modeled off of announced capital expenditure plans of both front-end and back-end equipment manufacturers.
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Release time：2018-12-18 00:00 reading：1184 Continue reading>>
Global <span style='color:red'>fab equipment</span> spending to rise by 14%, according to SEMI
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Global fab equipment spending to rise by 14%, according to SEMI

　　In its Mid-Year Update to the 2018 McClean Report, IC Insights updated its forecast of sales growth for each of the 33 major IC product categories defined by WSTS (Figure 1).  IC Insights now projects that seven product categories will exceed the 16% growth rate expected from the total IC market this year. For the second consecutive year, the DRAM market is forecast to top all IC product segments with 39% growth. Overall, 13 product categories are forecast to experience double-digit growth and 28 total IC product categories are expected to post positive growth this year, down slightly from 29 segments in 2017.　　Rising average selling prices for DRAM continued to boost the DRAM market through the first half of the year and into August.  However, IC Insights believes the DRAM ASP (and subsequent market growth) is at or near its peak, as a big rise in DRAM capital expenditures for planned capacity upgrades and expansions is likely put the brakes on steep market growth beginning in 2019.　　In second place with 29% growth is the Automotive—Special-Purpose Logic market, which is being lifted by the growing number of onboard electronic systems now found on new cars. Backup cameras, blind-spot (lane-departure) detectors, and other “intelligent” systems are mandated or are being added across all new vehicles—entry level to luxury—and are expected to contribute to the semiconductor content per new car growing to more than $540 per vehicle in 2018.　　Wireless Comm—Application-Specific Analog is forecast to grow 23% in 2018, as the world becomes increasingly dependent on the Internet and demand for wireless connectivity continues to rise. Similarly, demand for medical/health electronics systems connectivity using the Internet will help the market for Industrial/Other Application-Specific Analog outpace total IC market growth in 2018.　　Among the seven categories showing better than total IC market growth this year, three are forecast to be among the largest of all IC product categories in terms of dollar volume. DRAM (#1 with $101.6 billion in sales), NAND Flash (#2 with $62.6 billion), Computer and Peripherals—Special Purpose Logic (#4 with $27.6 billion) prove that big markets can still achieve exceptional percentage growth.
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Release time：2018-09-19 00:00 reading：995 Continue reading>>

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