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Is there a semiconductor glut on the horizon?

Daniel Nenni

Admin
Staff member
On one hand we have a reported chip shortage. On the other hand we have surging CAPEX. Hard not to think we have over capacity coming? At some point in time all of that capacity that has been building up in China over the last five years has got to come online...

MILPITAS, Calif. – April 13, 2021 – Worldwide sales of semiconductor manufacturing equipment surged 19% from $59.8 billion in 2019 to a new all-time high of $71.2 billion in 2020, SEMI, the industry association representing the global electronics product design and manufacturing supply chain, reported today. The data is now available in the Worldwide Semiconductor Equipment Market Statistics (WWSEMS) Report.

semi logo

For the first time, China claimed the largest market for new semiconductor equipment with sales growth of 39% to $18.72 billion. Sales in Taiwan, the second-largest equipment market, remained flat in 2020 with sales of $17.15 billion after showing strong growth in 2019. Korea registered 61% growth to $16.08 billion to maintain the third position. Annual spending also increased 21% in Japan and 16% in Europe as both regions are recovering from the contraction in 2019. Receipts in North America decreased 20% in 2020 following three years of consecutive growth.

Global sales of wafer processing equipment rose 19% in 2020, while other front-end segment sales grew 4%. Assembly and packaging showed strong growth across all regions, resulting in a 34% market increase in 2020, while total test equipment sales increased 20%.

Compiled from data submitted by members of SEMI and the Semiconductor Equipment Association of Japan (SEAJ), the Worldwide SEMS Report is a summary of the monthly billings figures for the global semiconductor equipment industry. Equipment categories cover wafer processing, assembly and packaging, test, and other front-end equipment including mask/reticle manufacturing, wafer manufacturing, and fab facilities.

Annual Billings by Region in Billions of U.S. Dollars with Year-Over-Year Change Rates

Semiconductor Equipment Sales 2020 SEMI.jpg


The SEMI Equipment Market Data Subscription (EMDS) provides comprehensive market data for the global semiconductor equipment market. A subscription includes three reports:
  • Monthly SEMI Billings Report, a perspective on equipment market trends. Monthly Worldwide Semiconductor Equipment Market Statistics (WWSEMS), a detailed report of semiconductor equipment billings for seven regions and 24 market segments. SEMI Semiconductor Equipment Forecast, an outlook for the semiconductor equipment market.
For more information or to subscribe, please contact the SEMI Industry Research and Statistics Group at mktstats@semi.org. More information is also available online.

About SEMI
SEMI® connects more than 2,400 member companies and 1.3 million professionals worldwide to advance the technology and business of electronics design and manufacturing. SEMI members are responsible for the innovations in materials, design, equipment, software, devices, and services that enable smarter, faster, more powerful, and more affordable electronic products. Electronic System Design Alliance (ESD Alliance), FlexTech, the Fab Owners Alliance (FOA) and the MEMS & Sensors Industry Group (MSIG) are SEMI Strategic Technology Communities, defined communities within SEMI focused on specific technologies. Visit www.semi.org to learn more, contact one of our worldwide offices, and connect with SEMI on LinkedIn and Twitter.

Association Contact
Michael Hall/SEMI
Phone: 1.408.943.7988
Email: mhall@semi.org
 

hist78

Active member
I'm wondering if the number $6.53 billion for North America is underestimated. In 2020 Intel alone had spent $14.259 billion on Capex before we start counting equipment spending from Globalfoudries, Samsung, TSMC, and many other small US players.

Although part of the Capex were not spent on equipment and some of the Capex were applied to non North America fabs, it seems the $6.53 billion equipment billing number for North America is low. Furth more if this $6.53 billion is correct, then the question is that how much Capex and equipment spending Intel made for US fabs in 2020?
 

Paul2

Active member
No shortage of people paying for latest nodes after a lull at 10-7nm.

And even with the first really new 200mm capacity expansion in decades, it will still be completely insufficient to empty current years long backlogs for most demanded mature nodes.
 

Daniel Nenni

Admin
Staff member
The problem is that very important people get caught up in their own BS and start spending money like drunken sailors. No offense to drunken sailors by the way, it is just a sea shanty, and I am a sailor so I can quote it.

Let's see how this plays out but my guess is that the media keeps hyping the "crippling" chip crisis and the semiconductor ecosystem CEOs will spend money with abandon to fix the crisis and we end up with too much capacity which in turn will keep chip prices down. So it really is a win for the ecosystem and consumers. The CEOs that spend too much however will be held accountable by Wall Street. The CEOs will get golden parachutes so no problem there but the investors will ultimately be left holding the flaming bag of dog droppings. The circle of semiconductor life I guess...
 

Arthur Hanson

Well-known member
Unlike other fields, obsolescence is accelerating at a blistering pace in semis and mems of all types. This and the expansion of all types of semis presents some interesting market realities that no field has had to deal with before. Between these two factors, no one can predict what is going to happen. Rarely, if ever have we seen products become obsolete in any sector as fast as we see in the semi sector. The semi sector is and its technologies are changing even the largest industries radically, just look at transportation and energy among just a few of the areas radically and rapidly changing by the application of semis. Automation of everything has just really started and is in its infancy. Semis are literally disrupting everything physically, economically, and socially and this is just in the early stages.
 

count

Active member
I can definitely see a glut 2-3 years down the road. We've got significant investments in new fab capacity being made right now to meet current demand growth, and I think demand growth is a little elevated right now. The industry is highly cyclical.
 

Paul2

Active member
I can definitely see a glut 2-3 years down the road. We've got significant investments in new fab capacity being made right now to meet current demand growth, and I think demand growth is a little elevated right now. The industry is highly cyclical.
You think 200mm capacity which even before CoVID had like year long lead times will improve by that much?

And there is no end for demand for sub 10nm in sight since bleeding edge will wholy be occupied by AMD Apple for foreseable future.
 

count

Active member
You think 200mm capacity which even before CoVID had like year long lead times will improve by that much?

And there is no end for demand for sub 10nm in sight since bleeding edge will wholy be occupied by AMD Apple for foreseable future.

TSMC and Samsung are talking about capex boosts of as much as 50% while the semi market historically grows 10-15% a year, so it'll take a few years for those investments to turn into production but yeah given the amount of capex being spent right now production will more than catch up to demand.
 

Paul2

Active member
TSMC and Samsung are talking about capex boosts of as much as 50% while the semi market historically grows 10-15% a year, so it'll take a few years for those investments to turn into production but yeah given the amount of capex being spent right now production will more than catch up to demand.

We have 120k WPM of current cutting edge node on the market. It is many times less than AMD, and Apple can sell. And the price is too high even for a third player like Nvidia, which would otherwise be bathing in cash.

Having extra 140-200k WPM basically only means you can finally find a laptop with a mainstream AMD CPU on sale, and previous <10nm nodes will finally be open to mortals outside of F500.
 
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