Industry News
Semiconductor advanced packaging set for strong growth
ADVANCED packaging is currently growing at a 18% compound annual rate, and equipment manufacturers will be major beneficiaries according to the report Lithography and Etch Market Analysis for Flip Chip manufacturing, recently published by The Information Network.
“Our leading indicators are pointing to a downturn in
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semiconductor equipment sales for the second half of 2011 and through 2012,”, noted Dr. Robert Castellano, President of The Information Network. “These data are corroborated by SEMI’s (Semiconductor Equipment and Materials International (SEMI) is a trade organization of manufacturers of equipment and materials used in the fabrication of ICs) recent mid-year consensus forecast.”
But all semiconductor equipment
markets are not created equal, and there is a sector market that equipment vendors, large and small, public and private, have in their crosshairs that is projected to show strength while the rest of the equipment market falters. Flip chip technology, an advanced form of packaging of ICs. The stakes are big. Total flip chip sales represented 11% of worldwide IC production in 2010 but will grow to more than 18% in 2015.
Flip chip comprised only 5% of IC production in 2005.
Intel (INTC) is the leader in the
industry, followed by Chipbond Technology (TPO:6147), TSMC (TSMC), Samsung (005930.KS), NEPES Corp. (033640:KOSDAQ), and ASE (ASX). Equipment vendors are taking advantage of the booming market. Estimates are that the front-end (before the flip chip packaging steps) will exhibit a compound annual growth rate (CAGR) of 4% between 2010 and 2013. In contrast, sputtering and copper electro-deposition equipment, main sectors of the flip chip equipment market, will exhibit a CAGR of 17%. In researching further the market for flip chip technology, the chart below shows UTEK’s revenues for its equipment normalized to 2006 in comparison to front-end equipment and privately held NEXX systems. Interestingly, despite growth of 148% in 2010 according to SEMI, semiconductor equipment through 2011 is projected to reach only 90% of 2006 levels of revenue. UTEK through Q1 2011 has grown 1.8 times its revenue of 2006. NEXX Systems, according to their S-1/A filing of June 2011, has exhibited revenue growth 2.7 times their 2006 revenue.
Analysts predict slow down
ECONOMIC research firm e-
forecasting.com announced that the European Semiconductor Sales leading indicator went down 0.4 percent in May to a reading of 202.3 after a decline of 0.9 percent in April. The index was set to average 100 in 2000. The indicator, comparable to the company’s other global regional semiconductor industry indicators for North America, Asia Pacific and Japan, is a forward-looking composite index that forecasts six months ahead, on average, business activity in the region for sales for semiconductors. “The European semiconductor industry leading indicator has slowed the last four months, with a significant decrease in its six month growth rate. Now nearing zero, it shows that this region will decline later this year, “ commented Dr. Evangelos Simos, Chief Economist of
e-forecasting.com.
The semiconductor leading
indicator’s six month growth rate went recorded 0.8 percent in May 2011, after reaching 2 percent in April. Consecutive positive values in the six-month growth rate predict an end to an economic recession and the beginning of an upcoming expansion. Two of the seven components that make up the leading indicator for semiconductor sales in the European market improved in May: US Monetary Conditions, Yield Spread and Orders to Inventories Ratio, US Electronics. The five components that had a negative contribution to the leading indicator for semiconductor sales in the European market were: Productivity Barometer, US Manufacturing; Productivity Barometer, European Manufacturing; Non-EU Demand Prospects, Top-10 partner-countries; Change in Profit Margins, US Semiconductors and European Short- term Interest Rates.
www.euroasiasemiconductor.com Issue III 2011
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