MILPITAS, CA – Semiconductor revenues increased 1% in 2016 compared to 2015, according to the World Semiconductor Trade Statistics (WSTS), resulting in record revenues for devices.
The materials market mirrored the device market with a 2% increase, while the equipment market experienced growth of 12%, says SEMI. The materials market remained larger than equipment for the ninth year in a row. 2016 data were stronger than initially forecasted at the start of the year.
2016 saw the strengthening of the Japanese Yen versus the US dollar, especially in the second half of the year when equipment billings activity accelerated. Given the importance of Japan-headquartered suppliers in the semiconductor supply chain, the strengthening Yen boosted the growth of the global semiconductor supply chain when reported in US dollars. SEMI says if the data remained in Yen, the 2016 market for Japan-based suppliers would be up 5%. However, when the
Yen are converted to dollars, the 2016 equipment market for Japan-based suppliers increased 15% if kept at a constant conversion rate.
Market performance in 2015 was uneven along the supply chain in 2015, says SEMI. However, in 2016 segments tracked by SEMI experienced growth. Additionally, 2016 saw the convergence of unit and revenues growth across the board, unlike in 2015. Semiconductor silicon shipment volumes increased 3%, marking the third consecutive record-setting year for volume shipments, while silicon revenues saw an increase of 1%.
Semiconductor revenue increased 1%, while shipments increased 5%. The strengthening of the Yen against the dollar aided this market recovery.
Worldwide sales of semiconductor manufacturing equipment totaled $41.2 billion in 2016, a year-over-year increase of 12%, placing spending just below the last market peak of $43.5 billion in 2011, but still well below the market high set in 2000 of $47.7 billion, says SEMI.
By category, only the Other Front-end segment decreased, while Wafer Processing equipment increased 14%, and the Assembly and Packaging and Test equipment segments expanded 20 and 11%, respectively.
For the fifth year in a row, Taiwan retained its number one ranking last year, driven in large part by TSMC for its 16nm ramp and impending transition to 10nm manufacturing and Micron for 20nm and 18nm capacity. South Korea held onto the second place, as Samsung and SK Hynix invested heavily, while the market in China grew more than 30%, moving up to claim the third spot. The equipment market in China was fueled by aggressive spending by Intel, Samsung, SK Hynix, SMIC, and UMC, as well as strong Assembly and Packaging investments. The Japan market fell to fourth place, followed closely by North America. Equipment sales to Europe and Rest of world increased 12 and 80%, respectively, in 2016. These regions benefited from investments by Intel for its Israel and Ireland fabs and by Micron at its 3D NAND fab in Singapore. Rest of World region aggregates Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets.
The global semiconductor materials market, which includes both fab and packaging materials, increased 2% in 2016, totaling $44.3 billion. The wafer fab materials segment increased 3%, while the packaging materials segment saw 1% growth. However, if bonding wire were excluded from the packaging materials segment, the segment would have increased 2% last year. The continuing transition to copper-based bonding wire from gold is negatively impacting overall packaging materials revenues, says SEMI.
Taiwan maintained the top spot in the materials market for the seventh year in a row, followed by South Korea, Japan, China, Rest of World, North America, and Europe. Advanced packaging operations and foundries continue to drive the materials market in Taiwan. South Korea held onto the second position for the second year in a row. The materials market in China grew the most last year to approach the size of Japan’s material market, as China strengthened its domestic semiconductor manufacturing. China now accounts for 17% of the world’s total fab capacity without discrete, an increase from 13% in 2015. The region also maintains a very strong position in packaging; approximately 68% of China’s total semiconductor materials market comes from packaging materials, according to SEMI.
Forecasts for the 2017 semiconductor market are optimistic, with projections ranging from 3 to 11% growth. Initial 2017 monthly data for silicon shipments, mass flow controllers, leadframes, and semiconductor equipment are proving to be strong. In light of growth expectations for the device market, SEMI projects the semiconductor materials market will increase 2% this year. Given current CapEx announcements and the strong equipment order activity throughout the second half of 2016, the semiconductor equipment outlook is optimistic as well. Current projections for equipment market growth are in the low teens for the year, which would place the equipment market above the last market high in 2011 but below the industry high-water mark set in 2000.
