Fab Investment Outlook Foundry, Memory and LED Clark Tseng, Sr. Research Manager, SEMI Vietnam Semiconductor Strategy Summit September 16-17, 20214
Outline Fab Investment & Capacity Trend Memory and Foundry Investment Outlook LED Investment Outlook Summary
Economic Trends: GDP and Some Indicators July, 2014 Contribution to World in 2012 YoY in % 2011 2012 2013 2014 2015 World 3.9 3.2 3.0 3.4 3.9 Advanced Economies: 1.7 1.4 1.3 2.2 2.3 USA (update 6-16-14) 1.8 2.8 1.9 1.7 3.0 23.6 Euro Area: 1.5-0.7-0.5 1.2 1.5 18.4 Germany 3.1 0.9 0.5 1.7 1.6 France 2.0 0.0 0.3 1.0 1.5 Japan -0.6 1.4 1.5 1.4 1.0 7.4 UK 1.0 0.3 1.8 2.9 2.5 4.1 Emerging Markets: 6.2 5.0 4.7 4.9 5.3 China 9.3 7.7 7.7 7.4 7.1 8.1 India 6.3 4.7 4.4 5.4 6.4 2.4 Brazil 2.7 1.0 2.3 1.3 2.7 GDP World others 2011 2012 2013 2014 2015 2016 World Bank (June 14) 2.8 2.5 2.4 2.8 3.4 3.5 IC Insight (Jan 14) 3.2 2.7 2.8 3.4 Henderson (May 14) 3.0 2.5 2.4 3.0 3.6 3.7 DuPont (Jan 14) 3.0 2.5 2.4 3.1 UBS (Apr 14) 3.2 2.7 2.5 3.2 3.4 Dow Jones Industrial Average hits a new record of over 17,000 points July 3, 2014 S&P 500 surges to new record with over 1985 July 3, 2014 US unemployment rate: 6-year low dropping to 6.1 (lowest since 2008) Source: Reuters July 3, 2014) Consumer Comfort Index improving 2011: -47 2012: -38 2013: -31 2014: -29 Source: Bloomberg (6-24-14) Source: IMF and Others, July 2014 3
Economic Trends 2014 Semiconductor Revenue Forecasts August, 2014
Economic Trends 2015 Semiconductor Revenue Forecasts August, 2014
Fab Investments & Capacity
Fab Construction Spending
Construction Spending by Segments - Led by Foundries
Stronger Investment Momentum in 2014 and 2015
Fab Equipment Spending: Industry Cycles 10
Investment in Fabs (Front End): Construction + Equipping Most (not all) construction spending goes into new facilities. 13
Low Single Digit Capacity Growth
Shift of Capacity Share (including discrete) ~10.7 M 200mm equiv./month ~19.4 M 200mm equiv./month Source: SEMI World Fab Forecast
Foundry and Memory Lead Capacity Growth
Capacity: Fab Equipment Spending vs Capacity Micron Feb 2014: Industry bit supply growth slowing: DRAM: 49% in 2010 to 24% in 2015 NAND: 74% in 2010 to 45% in 2015 SEMI World Fab Forecast: Since downturn the industry spends more money on upgrading existing facilities Average change rates 2003 2007 2010-2014 2011-2015* Fab Equipment 18% 29% 5% Fab Capacity 17% 4% 3% * 2011-2015: excluding 2010 because fab equipment growth was unusual high 17
Capacity: Begin Volume Production Per Node Forecast 3Q14 18
Changing Landscape: The Industry Consolidates Number may not ad up to 100 due to rounding 19
Memory and Foundry Investment Outlook 20
Fab Equipment Spending- Driven by Foundry and Memory
Both NAND and DRAM See Strong Growth Source: SEMI World Fab Forecast, August 2014
Foundry Investment by Region Source: SEMI World Fab Forecast, August 2014
LED Fab Investments
Global Revenues for Packaged LEDs 2013-2018
LEDs in Lighting 27% CAGR
LED Dedicated Fabs Changing LED Landscape Year (begin operation) 2001 2006 2015 Total count of LED fabs* 36 64 178 Capacity in 4-inch EQs w/m 127,124 376,400 (152 EPI) ~3,100,000 Americas 4 5 9 Europe/Mideast 1 2 10 S. Korea 3 8 16 Japan 7 9 21 China 7 16 74 Taiwan 14 24 44 SEAsia 0 0 4 *Fab number includes both LED epitaxy and chip facilities. Source: SEMI Opto/LED Fab Forecast, August 2014
LED Fab Capacity by Region, 2014 Worldwide LED Epitaxy capacity to reach 2.6 M in 2014 (4 equivalent per month) Source: SEMI Opto/LED Fab Forecast, August 2014
World LED Capacity Trend LED Epitaxy capacity (4 equivalent per month) Source: SEMI Opto/LED Fab Forecast, August 2014
LED Epitaxy Wafer Size Transition 2012 Epi Capacity 2015 Epi Capacity 1% 21% 46% 2" 3" 23% 35% 2" 3" 30% 3% 4" 6" 8" 39% 2% 4" 6" 8" Source: SEMI Opto/LED Fab Forecast, August 2014
LED Wafer Fab Equipment Spending LED Equipment Spending (US$ millions) $3,000 $2,500 $2,647 $2,000 $1,500 $1,000 $1,931 $1,530 $1,102 $1,189 $1,401 $500 $0 2010 2011 2012 2013 2014 2015 Source: SEMI Opto/LED Fab Forecast, August 2014
Equipment Spending by Region China Percent of Global Spending 40% 1400 1200 1000 Equipment Spending By Region (in millions) 2011-2015 800 600 400 200 0 EU-ME Americas Japan Korea Taiwan China 2011 2012 2013 2014 2015 Source: SEMI Opto/LED Fab Forecast, August 2014
Southeast Asia Market Key Facts Installed Fab Capacity Packaging & Test Semiconductor Materials Semiconductor Equipment 2014 Status ~1.3 million 200mm wafers/month Strong presence of subcon and IDM facilities in the region (including 20 assembly & test operations in Singapore) ~$6.7 billion ~$2.0 billion range Source: SEMI World Fab Forecast, WWSEMS, & MMDS
Summary
Summary Overall Outlook - Positive outlook for the global economy in 2014 - Mid to high single-digit revenue growth for semiconductors Fab Investment & Capacity - Fab investment is expected to show continuous growth into 2015 led by foundry and memory manufacturers. - Both NAND Flash and DRAM are seeing strong investment rebound. - Mobility, wireless, and connectivity remain the growth engines. LED Investment - Lighting applications to drive LED market growth. - LED investment to recover in 2015.