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Merry Old Europe not out of race

China to become the glittering star on the semiconductor sky
Merry Old Europe not out of race

After three dire years, Teradyne can again see noteworthy profits from its IC tester business, said Mark E. Jagiela, president Semiconductor test division. But there’s no reason for euphemism in Europe. Here are just some of a chosen few in semiconductor manufacturing, and these few already know by heart by equipment and materials suppliers. As is standard in this commerce worldwide. (Among the top-ten, worldwide leading semiconductor manufacturers are STMicroelectronics/Italy, Infineon Technologies/ Germany and Philips Semiconductors/Holland).

And all signs point to the East, at least in Mark Jagiela’s presentation, as well. Whereas the Teradyne chip tester business (ATE, automated test equipment) was made up by 64% in the West in the last few years, and the rest in Asia, now – now, after the recession – 56% come from Asia and 44% from the West. The investment activities of chip manufacturers in Taiwan, South Korea and Singapore, also in order to support their business in mainland China, is tremendously high – compared to other global regions in the Americas und Europe. Main investment impetus clearly lies now on 300-mm lines, where actually about 60% of all these monthly wafer starts are provided in Asia (although so far no 300-mm line is operating in mainland China). In the Semi figures, Europe comes in second with 22% of 300-mm wafer starts, followed by the US with 13% and Japan with 8%. Notice the interesting difference between Asia and Japan, from a European perception an artificial one. In total about 2/3 of all 300-mm wafer starts will now be made in Asia. But companies in Europe will still maintain and fight for their good position.

Teradyne is also paving a way into Asia: the SoC (system on chip) tester J 750 (a very important product for the European marketplace) is now build in Shanghai, and currently about 25% of total software engineering takes place in India. And for the repair of tester boards (worldwide board swapping) there are now low-cost rework centers installed in Costa Rica and in Cebu/Philippines. From a European perspective, it seems that this “old” region of the world is now more or less a market and place of decline in comparison to Asia Pacific. Mark Jagiela believes that about 10% of the company’s chip-tester turnover will still be generated in Europe. From the entire global semiconductor equipment market of about $30.7bn in 2003, about 5.8bn came from chip ATE.
Many tiles provide a better picture
At this point it seems helpful to analyze the situation a bit more in worldwide semiconductor commerce. From last years total semiconductor market of $166bn, Japan was recorded to consume $38bn (23.5%), and the Americas had a volume of 32bn (19.8%), Europe accounted for $31.6bn (19,3%), China came in fourth with 20.6bn (12.3%). But in terms of market-volume growth (world-wide average is 16%), China was located at 34%, Japan 26%, Europe 14% and the Americas with 3%. These Semi figures unmistakably reveal which markets are really mature, which perform averagely, and which with outstandingly high rates. So now we get to another relevant aspect: in building manufacturing capacity. For the years 1995 to 2000, Taiwanese companies lead the pack by 23%, followed by Japan, Americas und Europe (19 to 20%); China came in with a mere 2%. But for the current time span from 2001 to 2006, things will change remarkably: the area of Taiwan is still heading forward with 26%, Americas 17%, Japan and Europe 12% – but China will move on with building 18% more capacity. (Note that the developments in China are regarded without taking into account possible uncertainties or troubles in the areas of social security, banking and loans.)
At this end we should have a look at what we can probably expect in four or five years: as we are all aware of, probably no one really knows anything about the future. By 2008 Semi expects a total semiconductor market volume of about $276bn. The largest market will be Asia Pacific with 27%, China with 20%, Japan, Americas and Europe with about 18% each. Make no mistake: in real terms, Asia is the main market with approximately 2/3 of the total volume of semiconductors consumed. And what about the market development in terms of compound average growth (CAGR)? Here it is what Semi expects between 2003 and 2008: China should achieve 22%, Asia Pacific 13%, Europe 10%, Americas 9% and Japan 8%. From these entire figures we can now get a more reliable picture, and see that the signs point even more to Asia and especially into mainland China. But still, the mature markets in the Americas, Japan und Europe cannot be neglected or seen as not being “worthwhile” – and in design, application and innovation, these semiconductor business areas are still in a central position. But they will undoubtedly have to share these developments with the other regions step after step. Gerhard B. Wolski
EPP EUROPE 413
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Titelbild EPP EUROPE Electronics Production and Test 11
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11.2023
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