Homepage » Events & Tutorials »

Where is the continent’s and UK’s micro-electronics industry going to?

Semicon Europa in Munich – Capex remains flat, lead-free parts supply remains the unpredictable issue in the worldwide supply chain
Where is the continent’s and UK’s micro-electronics industry going to?

The recent Semicon Europa in Munich/Germany is over and we can say that the outlook for this industry appears quite uncertain, but not really bad. Covered by this trade fair are materials and equipment for the manufacture of semiconductors (and also for MEMS, nanotechnology and photovoltaic), with some coincidence with the SMT show 150km apart in the almost neighboring Nuremberg a couple of days later.

At the event in the Bavarian capital there were in total present 874 exhibitors (primary exhibitors 457, co-exhibitors 417) from more than 25 countries. Last year 16,3553 persons were recorded (probably including the exhibitors’ personnel), but it can be doubted that this year’s event has reached that figure. The traffic on the show ground was mostly pretty low. As Semi’s European president Walter Rössger put it: “This is a communication platform for our industry. Taking this into account, we have brought our conferences on the show floor for the benefits of the professional attendees”. On the other hand, it was surely not helpful that in the following week the SMT in Nuremberg partly had a similar focus with ASICs, packaging and hybrids. Therefore, a couple of exhibitors had to be present (or not?) at both shows within a mere eight days – not to mention a significant number of the visitors.

As we know, the European region is not a strong player in semiconductor manufacturing, but with Infineon (meanwhile criticized as Inferno Technologies), ST Microelectronics and Philips there are three substantial players among the ten leading companies worldwide. This gives at least reason for some hope, especially when a good knowledge of application-based, detailed semiconductor solutions is required. At any rate, it should not be forgotten that also a good manufacturing basis is a prerequisite for a region to prove its presence in the global solid-state game. For example, if there were a shortage of devices, the problem for European industry would then be access to the highly necessary parts. Or another possible situation: a company has to transfer its IP of a key product to a region where the understanding of how to deal respectfully with intellectual property is not marked by high ethical standards. It’s not necessary to use names in this case.
Be realistic, plan for a miracle
Though the market volume for semiconductors rose from $166bn to $213bn in the year 2003 to 2004, the industry market pundits’ expectations for this year’s worldwide semiconductor revenues growth wobble between –5% to up to +15%, whereas the latter must be an over-optimistic Californian Westcoast view, and the first too pessimistic. A more realistic estimation, provided by most of the market researchers, points to equilibrium or a minor growth at best. What can this mean for the investments in capital equipment (capex)? After an exceptional high in the year 2000 with $47bn, which was never seen before in this industry’s history, the decline in the three subsequent years was dramatic, but the recovery in 2004 with $37bn for this business was really a fundamental and badly needed development.
Let’s have a look at the currently available figures (in US dollars) of market volumes for semiconductor equipment in the year 2004 and their growth from the year 2003: Europe 3.44bn (+34%); Japan 8.28bn (+49%); South Korea 4.61bn (+46%); North America 5.81bn (+23%); Taiwan 7.76bn (+168%); and mainland China 2.68bn (+133%). The major market for semiconductor equipment is clearly Southeast Asia with a different weight in the respective countries, and the exceptional growth rates point out that this will not change. Only about 22% of worldwide manufactured equipment will not be used outside the Pacrim (Pacific Rim) area.
Material’s still a fine business
Now we can see that the different forecasts predict that even the improved equipment-business figure will probably not be reached in the coming two years. Semi’s Walter Rössger: “For capex a decline of –5% is forecasted for this year, and the flat European market is estimated to remain at $3.4bn”. And again, the next year will not really reveal better numbers, but in 2007, a small upward movement may be possible. So, again very tough times for a couple of equipment suppliers? Yes, some of them will suffer again, but not all. The situation of development in the materials sector seems to be a good bit better, despite the economic scenario in this industry, with expected growth of between 5 and 10% every year in the mid-term.
The problem is not that semiconductors or other products manufactured with a similar wafer-based or lithographic technology are not in demand. But with a flat consumption of these devices, the semiconductor fabs are generally able to fulfill demand with the existing machines on their shop floors. Also, if prices and earnings are relatively low, then capex activities are also low. Innovation, and in turn demand for new equipment in virtually all production steps, comes from even further reduced circuit structures on the silicon chips, and also – to a minor degree only in the backend of manufacturing – from the ongoing trend in providing adequate packaging for all the miniaturized chips. Besides miniaturization, the scenario in advanced packaging is dominated by cost concerns as well as by the demand for simpler and more freely available assembly methods requiring fewer steps and materials.
The transition to 300mm wafers has not brought the long awaited capex boom. Development and operation of the necessary equipment for 300mm production lines are exceptional costly; only huge players in the semiconductor business have the resources to invest in those billion-dollar wafer fabs. The change in the paradigm of using lead-free finishes on electronics part terminations has apparently not gained fresh momentum by this trade show. Still, not all manufacturers are able to supply their devices with lead-free terminations – but for reaching the deadline of July 2006 on the board-assembly shop floor, they are needed now. It seems that our Semi friends from California didn’t take fully into account this genuine European issue with its global consequences when they assembled the trade-shows topics.
Gerhard B. Wolski
EPP EUROPE 407
Current Issue
Titelbild EPP EUROPE Electronics Production and Test 11
Issue
11.2023
READ
Newsletter

Subscribe to our newsletter now

Webinars & Webcasts

First hand technical knowledge

Whitepapers

Find all current Whitepapers here

Videos

Find all current videos here


Industrie.de Infoservice
Vielen Dank für Ihre Bestellung!
Sie erhalten in Kürze eine Bestätigung per E-Mail.
Von Ihnen ausgesucht:
Weitere Informationen gewünscht?
Einfach neue Dokumente auswählen
und zuletzt Adresse eingeben.
Wie funktioniert der Industrie.de Infoservice?
Zur Hilfeseite »
Ihre Adresse:














Die Konradin Verlag Robert Kohlhammer GmbH erhebt, verarbeitet und nutzt die Daten, die der Nutzer bei der Registrierung zum Industrie.de Infoservice freiwillig zur Verfügung stellt, zum Zwecke der Erfüllung dieses Nutzungsverhältnisses. Der Nutzer erhält damit Zugang zu den Dokumenten des Industrie.de Infoservice.
AGB
datenschutz-online@konradin.de