SEMI's Outlook - Fab Investments, Equipment and Materials Forecasts SEMICON Korea Press Conference January 2018 Dan Tracy, Sr. Director SEMI Industry Research & Statistics
Agenda 2017 Wrap Up 2018 Semiconductor Outlook and Drivers Investments and Spending Forecasts Summary
2017 Wrap Up
2017- A Record Setting Year 2017 is a record setting year for the industry Semiconductor sales: >$400B for the first time Fabless sales reach the $100B mark for the first time Investments All-time high for CAPEX by single company (Samsung) Equipment spending in Korea soars pass previous regional spending record Worldwide equipment billings: ~$56B Silicon shipments Also, a rebound in wafer pricing Images from SEMICON Korea 2017
Top Ten Semiconductor Sales Leaders 2016 Rank 2017 Rank Company 2016 Sales (US$ Billion) Preliminary 2017 Sales (US$ Billion) 2 1 Samsung 44.3 65.6 1 2 Intel 57.0 61.0 3 3 TSMC 1 --- --- 6 4 SK Hynix --- --- 7 5 Micron Technology --- --- 5 6 Broadcom 2,3 --- --- 4 7 Qualcomm 2 --- --- 8 8 Texas Instruments --- --- 9 9 Toshiba --- --- 16 10 Nvidia 2 --- --- WW Total $365.6 $438.5 Industry Growth DRAM up 74% NAND up 44% 1. Foundry; 2 Fabless; 3 Includes acquired company sales for all of 2016 and 2017 Source: IC Insights, The McClean Report 2018
2018 Outlook and Drivers
2018 Semiconductor Forecasts Future Horizons (Jan 18), 21.1% IC Insights (Nov 17), 8.0% VLSI Research (Jan 18), 7.7% Gartner (Jan 18), 7.5% IHS Markit (Jan 18), 7.4% WSTS (Nov 17), 7.0% Cowan LRA (Jan 18), 5.9% Semico Research (Nov 17), 4.5% 0% 5% 10% 15% 20% 25% Source: SEMI January 2018
Semiconductor Cycles- Revenues to reach $500 billion by 2019 $550 25% $500 Semiconductor Revenue ($US Billion) $450 $400 $350 $300 $250 $200 $150 8.0% 3.0% 20.0% 8% 6% 20% 15% 10% 5% Annual Growth (%) Semiconductors are pervasive Key drivers in 2018 are highperformance computing, IoT, and automotive $100 $50-1.0% 0% $0 2014 2015 2016 2017F 2018F 2019F Semiconductor Revenue Annual Growth -5% Source: IC Insights McClean Report, January 2018
Semiconductor Revenue Outlook Beyond 2018 10% 8% 6% 4% 2% 0% -2% -4% 2018 2019 WSTS IC Insights Gartner IHS Markit AlphaOne Capital Partners 2020 Source: SEMI January 2018
Industry Trends and Growth Drivers Data Centers Big Digital SoCs Storage Solid State Memory Gateways Data Collection Hubs IoT Nodes Sensors Actuators Imagers Transmitters Source: Mentor, A Siemens Business, presented at ISS US January 2018 Source: IHS Markit, presented at ISS US January 2018
Source: VLSI Research, presented at ISS US January 2018
Investments and Spending Forecasts
Key Fab Projects Driven by NAND, DRAM and Foundry NAND Samsung Pyeongtaek P1 SK Hynix M14 3D NAND line Micron Building 60 (Lehi) and Fab 10X in Singapore Toshiba/Flash Alliance Fab 2, Fab 6 and new R&D Center Intel Fab 68 in China $25 $20 Fab Equipment Spending DRAM Samsung Pyeongtaek P1 and Line 15 Micron Fab 15 (Hiroshima) and Fab 16 SK Hynix M14 US$ Billion $15 $10 Foundry TSMC Fab 12, Fab 14 and Fab 15 Samsung S2 and S3 GLOBALFOUNDRIES Fab 1, Fab 8 and Fab 11 SMIC Beijing B2 and B3, new Shanghai 300mm fab and Shenzhen 300mm fab UMC Fab 12A P5 and Xiamen fab $5 $0 NAND DRAM Foundry 2016 2017F 2018F Source: SEMI World Fab Forecast, December 2017
Fab Investments- Growth is likely to continue beyond this year KEY CHINA PROJECTS Samsung 2018 Intel Fab 68 Phase 2 TSMC Nanjing Phase 1 Hua Li Fab 2 Fujian Jin Hua - DRAM 2019/2020 Tsinghua Unigroup (Nanjing) and Yangtze Memory Technology (Wuhan) Samsung Xian phase 2 SK Hynix C3 GlobalFoundries Chengdu SMIC Beijing B3 and new Shanghai fab Hefei Chang Xin Memory
SEMI Year-End 2017 Equipment Forecast- By Market Region $70 $60 Taiwan SEA/ROW North America Korea Japan Europe China $55.93 $60.10 US$ Billion $50 $40 $30 $20 $37.50 $36.53 $41.23 $10 $0 2014 2015 2016 2017F 2018F China 4.37 4.90 6.46 7.59 11.33 Europe 2.38 1.94 2.18 3.43 3.79 Japan 4.18 5.49 4.63 6.02 6.24 Korea 6.84 7.47 7.69 17.89 16.88 North America 8.16 5.12 4.49 5.57 7.38 SEA/ROW 2.15 1.97 3.55 2.81 3.23 Taiwan 9.41 9.64 12.23 12.62 11.25 New equipment. Totals may not add due to rounding Korea- record spending year for any region Previous spending highs: $12.9B N. America (2000) $12.2B Taiwan (2016) Source: SEMI December 2017
Semiconductor Materials Markets- 8% Revenue Growth in 2017; 3% Growth Forecasted for 2018 Includes both Fab and Packaging Materials Taiwan 22% SEA/ROW 13% North America 11% China 16% South Korea 16% Europe 7% Japan 15% 2016 = $43.7 billion Source: SEMI Materials Market Data Subscription, January 2018 Region 2017F $US B 2018F $US B China $7.71 $8.16 Europe 3.35 3.46 Japan 7.03 7.15 South Korea 7.48 7.87 North America 5.27 5.38 SEA/ROW 5.89 6.01 Taiwan 10.57 10.86 Totals may not add due to rounding Total $47.3 $48.9
Summary
South Korea- 2018 Market Highlights 2018 Outlook Installed 300mm Capacity Memory Total Fab Investments (Equipment, Construction, Facilities) Technology Semiconductor Materials Total Semiconductor Equipment Largest share globally (30% share) Largest market share globally >55% of the worldwide memory capacity In Korea: $23 billion In China: $3.5 billion NAND: ramping 64L/72L DRAM: investing in 1X/1Y node EUV installation beginning for 7nm ~$7.9 billion Approaching $17 billion; Will remain the #1 spending region on fab equipment Source: SEMI World Fab Forecast, WWSEMS, & MMDS
Summary 2017 a record setting year for the industry Semiconductor revenues Fab investments; All-time high for total equipment spending Equipment spending in Korea smashes previous regional spending record Silicon shipments Record breaking to continue in 2018 Samsung and SK Hynix maintain strong investment levels Long-term semiconductor industry outlook is positive due to connectivity and datacentric applications High-performance computing (AI, AR/VR) Data centers Automotive/Transportation IOT Sensor networks