Rumor that Intel has quit Sematech confirmed by website?
Potential industry impact-
Is this a consolidation by-product?
Do we need a trade group?
Does it benefit Intel?
We have heard from several sources over the last few days that Intel has quit Sematech, the semiconductor industry trade group focused on technology development and advancement. This does not appear to be confirmed by any press announcement from either party and could easily be wrong but Intel is noticably absent from the membership roster on the Sematech website where it had previously been listed . We are dubious that such a glaring mistake could have been made by accident.
Sematech was formed as a trade group focused on furthering technology and promoting and protecting the US semiconductor industry. There is a similar trade group in Europe IMEC performing a similar function for European companies. If the measure of success was protecting the US semiconductor industry we would probably give it a failing grade based upon the current state of the US semiconductor industry as compared to when Sematech was founded. Its obvious that most of the industry has moved overseas.
Limited technology successes…
There has probably been more success on the technology front however the vast majority of innovation is done by semiconductor and semiconductor equipment companies on their own. Sematech does fund and oversee a number of technology initiatives that have no singular home or main sponsor in the industry or don’t have the proper ROI that participants require. It could be also viewed as a central R&D function or a replacement of the early version of bell labs that did basic pioneering research
Has consolidation eliminated the need?
When the semiconductor industry was fragmented with 50-100 chip companies, pooling R&D resources makes a lot of sense as no single company could support many of the long range projects and there was communal benefit. Now with 3 or 4 behemoths in the industry each of which can drop hundreds of millions on a project there may be less motivation to pool resources.
With the consolidation of the equipment industry each of the surviving players is so big they too have the resources to do R&D on their own and clearly don’t want to share any breakthroughs. The only project that has seen significant pooled resources was ASML’s passing the hat around for EUV development which was done outside of the auspices of Sematech anyway.
Intel passing the baton to Asia?
Intel has been the standard bearer, flag carrying advocate of Sematech as well its leading financial supporter as dues are based on financial model. Given that Intel has now fallen to number three in capital spending behind TSMC and Samsung the role seems to make less sense. It was unclear to us if Intel got an appropriate return on its Sematech investment and as Intel is watching its expenditures ever more closely they may have done that calculus and decided the resources could better be invested elsewhere (like buying into the Chinese market)
Can Sematech survive?
In our view its unclear if Sematech can survive the loss of Intel or if it will start a rush for the exit doors. IMEC could see a similar fate. Maybe Sematech could move to Asia?
What does it mean to equipment companies?
This is clearly a positive for the big four equipment companies, ASML Eteris, LRCX and KLAC and a negative for smaller equipment companies. Likely a negative for EUV as Sematech has been a supporter. Probably neutral to most semiconductor companies and likely a positive for Intel.
Semiconductor Advisors LLC
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