Semiconductor Fabrication Comes Roaring Back
To everything there is a season, and now is the time to build -- at least as far as the semiconductor industry is concerned. It's a boom that's boosting the photonics bottom line.
According to recently released figures from market analyst Strategic Marketing Associates of Santa Cruz, Calif., 36 expansion, upgrade or new semiconductor fabrication projects are scheduled over the next year. In April, Santa Clara, Calif.-based Intel Corp. announced a $2 billion makeover of a facility in Chandler, Ariz. Two days later, Infineon Technologies AG in Munich, Germany, revealed a billion-dollar fabrication-expansion project in Richmond, Va.
Taiwan Semiconductor Manufacturing Co. of Hsinchu, Taiwan, has multiple construction and expansion projects under way locally and in mainland China. "Our capital expenditure in 2004 is 2 billion US dollars," noted Daniel Holden, a company spokesman.
Because many of these projects are state-of-the-art factories, they require state-of-the-art tooling such as excimer-laser-driven lithography tools, and many are already being ordered or planned. Ray Morgan, strategic marketing manager for the semiconductor division of Canon USA Inc. in Lake Success, N.Y., noted that his company's internal tracking of projected sales of the multimillion-dollar lithography tools has escalated. Late last year, the estimate was for 450 to 470 such tools to ship worldwide. That has increased this quarter to an expected total market size of about 550 units worldwide, Morgan reported.
He added that the mix for Canon was about 40 percent low-end systems, 40 percent midrange and 20 percent the most advanced tools, which are used in the most critical and demanding patterning steps. In another sign of strengthening demand, he commented that the shipment of refurbished tools had declined as compared with new tools.
Partly because of this greater demand, the company reported a year-over-year net income increase of 17 percent for the first quarter of 2004. Another lithography tool supplier, ASML Holdings NV of Veldhoven, the Netherlands, reported higher order backlogs and total sales for 2004 as compared with 2003.
The boom's effects aren't confined to lithography toolmakers. Other photonics-dependent vendors are also feeling the impact. Semiconductor metrology toolmaker Rudolph Technologies Inc. of Flanders, N.J., for example, reported a 30 percent year-over-year revenue jump in April.
All told, San Jose, Calif.-based Semiconductor Equipment and Materials International (SEMI) is forecasting a 39 percent growth in semiconductor tool sales for 2004 and a further 18 percent surge next year. According to Daniel P. Tracy, senior director of SEMI's Industry Research & Statistics, lithography tools should undergo a similar increase.
However, he cautioned that things have a way of changing. "The challenge for the semiconductor industry overall is the longer-range outlook."
The expectation is that the projects currently under way will be done and in full production in two years or so. That extra capacity will have some impact, and the betting is that that won't be a time to build.
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