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SEMI ISS: The Outlook

SEMI ISS: The Outlook
by Paul McLellan on 01-14-2015 at 12:11 pm

I spent Monday at the SEMI ISS meeting in Half Moon Bay. There is a lot of stuff to choose from, the entire day was interesting throughout. The day started with a keynote from Scott McGregor, the CEO of Broadcom. I’ll cover that in a separate posting.

Next up was Andrea Lati of VLSI Research on The Cycle: Is It Different This Time?He started with a review of 2014. Things that went right:

  • Apple’s A8 in 20nm at TSMC
  • Intel’s 14nm FinFET
  • EUV moving to production insertion at N10

And what went wrong:

  • 450mm put on back-burner, won’t happen until 2023 or later (or never in my opinion)
  • 3D TSV still three years out
  • Electronics market continued to grapple with falling ASPs (commoditization of smartphones, tablets fizzled, electronic market overall growing slower than semiconductor)

The answer to the question in the title of his talk was that magnitude of swings in the silicon cycle are much dampened when looking back as far as the 1980s. Equipment seems to be on a 2 year cycle for a couple of decades and based on history 2015 should be a good year. The big unknown: China goes nuclear to expand its semiconductor industry (for the 3rd time, maybe it will work this time).

Next up, Mario Morales of IDC on What’s Next for the Semiconductor Market. By the end of 2015 he expects:

  • A base of 680M iOS and 1.7B Android devices
  • 3.3M apps available, 45-50 apps downloaded per year per device
  • But key market indicators are slowing
  • Tablet market his wall (iPad shipments actually declined) partially due to cannibalization by Phablets

IoT will start in industrial where there are already massive amounts of data coming online. One machine at one plant might produce 1TB/day of data to be analyzed. IoT will then expand into the home. Challenges are low power, cost and security.

Mike Corbett of Linx-consulting talked about materials. One interesting datapoint is that wafer cost is growing 41% node to node but the material node to node growth rate is 43%. As a result, materials are growing as a portion of wafer cost, especially sub 20nm due largely to all the additional material required for double patterning. DRAM is similar, with 9% node to node wafer cost growth but materials cost growing at 14%.

Nariman Behravesh had his Top 10 Economics Predictions for 2015. So here they are:

  • US growth will be solid in the 2.5-3% range
  • The European recovery will proceed at a sluggish pace but UK growth will be robust
  • Japan’s economy will regain weak growth momentum
  • China’s growth will decellerate more but remain stronger than most
  • A few emerging markets will struggle (Brazil, Russia) whilemany will see above average growth
  • Commdity prices will slide further (oil $60-70)
  • Inflation will remain a distant threat while deflationary worries persist
  • The US Fed, Bank of Canada, Bank of England will likely being raising rates while other central banks will be on hold or provide more stimulus
  • The US dollar will rise against most currencies while the Euro and Yen will fall
  • Perennial downside risks will be balanced by some upside risks (delveraging is largely over in US and UK, rising US oil production and the fall in prices is a $1.5T transfer, 2% of world GDP, from oil exporting to oil consuming countries)

    Finally, to wrap up the morning, Roger Baker of Stratfor gave a Geopolitical Forecast: Trends Shaping Semiconductor Manufacturing Countries. There was so much information it was like drinking from a fire-hose. But here are his key issues:

    • China is in a heightened sense of security and attempting an economic rebalancing towards consumption
    • Japan is attempting to brek from a 20-year malaise
    • Korea and Taiwan will be squeezed in the middle
    • ASEAN will exploit a slow but increased integration
    • US opportunities are expanding

    To pick one slide, China is attempting to push urbanization from 51% in 2011 to 70% by 2030. It plans to do in 17 years what took the US 50 years.

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