John Housley Techcet Group, LLC Los Gatos, CA
John HousleyTechcet Group, LLCLos Gatos, CA
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Techcet MegaTrends™The Sure Facts –
Fact #1: Even during the worst years, the world almost always consumes more silicon than the year before. We think 2008 may have had a less than 3% increase over 2007. Some believe it was flat. Our prediction for semiconductor silicon (MSI) for 2009 is down 10%‐15%, if we are lucky. Fact #2: What the semiconductor market doesn’t consume the Solar market has been taking and likely will continue in volume consumed
“Green is In” –Opportunities may exist to lower greenhouse gas emissions or hazardous wasteMay threaten to limit growth of gases or chemicals that were once deemed “environmentally friendly” but are now not environmentally friendly enough
Growing market segments still linked to copper interconnectGrowth opportunities still exist in materials or processes that can lower cost per chip or per wafer
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Techcet MegaTrends, continuedMaterials markets on average normally grow year to year, not for 2009Even in good times,exceptions are those materials that are tied directly to equipment installs or utilization (for example indirect materials)Bulk gases are least impacted by industry downturn (equipment still needs to be purged even when not in use)Materials markets will be slow to no growth for the next two years and may recover by late 2010200mm Fabs shutting down, flooding the market with 200mm used equipment
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The MegaTrend to Watch
Taiwan and Korea are targeting the OEM and materials businessMaterials businesses will go where the customers demandSome materials prices will fall, needless and hopeless.Forecasting the future: The future looks like 6 months
Everything is connected to everything else
Other industries have more of an impact on Semiconductor Materials
Cost of earth, wind and fire continues to escalate (except for oil)
Materials constrained by external markets include:
Polysilicon / silane [solar]
Wet chemicals [bio‐fuels]
Titanium [aerospace and building]
Tungsten [industrial]
IPA / resists / organo compounds [petroleum]
More and more materials producers and suppliers are focused on the solar industry
May stimulate creative ways to lower costs
World economic recession taking a toll
R&D support from suppliers will get even worse
But what about the price of oil? The ole Oklahoma discount. Up 40%, down 10%
Supply Chain Concerns
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Key Market Indicators –Total IC Process Materials 5 Year CAGR 7‐8%
$43 B total for 2007$12 B of this = FEOL process materials>$55 B estimated for 2011Costs of energy and raw materials constraining margins, forcing more rationalization and consolidation Sources: Techcet Group, LLC.,
TechSearch International, and SEMI
Direct Materials
27%
Silicon31%
Packaging38%
Indirect Materials
4%
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Front End Materials Market $12 B in 2007 ; ~ $13 B for 2008
Source: Techcet Group, LLC.
Adv. Dielectrics and SOGs
5%
Electroplating1%
CMP11%
Gases18%
Masks22%
Photoresist9%
Ancillaries6%
Targets3%
Wet Chemicals6%
Graphite2%
Quartz6%
Silicon Carbide1%
Ceramics2%
Other Indirects8%
* Does not include silicon
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Historic Silicon Usage ‐ SEMI
Sources: Historical Data – SEMI; 2008 estimate and 2009 Forecast - Techcet Group, LLC.
Silicon Consumption
0100020003000400050006000700080009000
10000
2001 2002 2003 2004 2005 2006 2007 2008est
2009est
Mill
ions
of S
q.In
ches
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Perc
ent C
hang
e
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PolySi CapacityAccording to SEMI, of the 10 major traditional suppliers, most of them plan to at least double, if not triple or more capacity in the next 5 years
In addition, there are at least a dozen potential new players
Many of the new players may be empty suits (sorry, empty buildings)
If they all produce what they announce, the capacity could be as much as 5X or greater 2011 over 2006
Techcet’s third law: in our business, for every action, there is an equal and opposite over‐reaction
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Hemlock27%
Wacker19%
REC12%
Tokuyama10%
MEMC9%
Mitsubishi6%
Sumitomo2%
Other15%
Polysilicon Producers
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Announced Polysilicon Capacity
Includes captive and merchant markets; solar and semiconductor applications. Does not include metallurgical gradeSource: SEMI, Techcet Group, LLC.
050,000
100,000150,000200,000250,000300,000350,000400,000450,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Ann
ual C
apac
ity (M
T/Yr
)
Established Suppliers New Entrants
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Gases – Market Forecast and History
Gas market is less impacted by down turns given bulk gases are still consumed when equipment is idleGas market grew ~7% in 2008Expected to be less than 4% growth in 2009
Specialty Electronic Gas Market Share as a Percent of WW Revenues
Source: Techcet Group, LLC.
AL21%
AP35%BOC/Linde
4%
Prax8%
TNS29%
Other3%
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Regional Consumption of IC Gases 2007
Relates to high volume materials spanning all technology nodesBased on wafer start data and inputs from suppliers
Source: Critical Materials Report on Gases 2008
Techcet Group, LLC.
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Gases ‐ Silane
Silane availability constrained by high demand for polysiliconNew plants coming ‐massive oversupply planned for 2010
Silane Demand vs. Production
05000
100001500020000250003000035000400004500050000
2006 2007 2008 2009 2010
Met
ric T
ons
WW Demand(polysilicon)
WW Demand(PVcells,IC&TFT fab)WWProduction
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Wet Chemicals
Petroleum prices have fallen >25% over the past 5 months
Fall out from the wet chem business has left few major companies in this space
The majority of chemicals are bought locallySmall companies are King
These smaller companies are the ones left standing and may now actually have a margin
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WW Photoresist Market
Photoresist grew a little in 08, not by volume but by total $ (ArF)However, market growth will be slowed by lower wafer starts and fab capacity cuts for 2009 and 2010.We predict as much as 12% or worse decline in resist volume in 09
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2006 2007 2008 2009 2010 2011
Rev
enue
s ($
M's
)
-10%
-5%
0%
5%
10%
15%
20%
Per
cent
Cha
nge
* Semiconductor Application Only Source: Techcet Group, LLC.
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Quartz Consumables (Spares)
Source: Techcet Group, LLC.
Quartz and SiC market segments directly impacted by lack of equipment sales
These markets expected to decline 19% in 2008
Quartz and SiC will be boosted by demand for crucibles for solar cell wafers
$0
$400
$800
$1,200
2002 2003 2004 2005 2006 2007 2008fcst
2009fcst
Ingots/Boules
Tubes/RodsCold Fabrication (SW)
Hot Fabrication (Batch)
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Photomasks
Mask market now $3.3B for 2008Negative growth (at least ‐6%) expected for 2009Merchant shops continue to lose share Captives now support 40% of total masks produced by revenue
DNP23%
Toppan20%
Photronics11%
TSMC*15%
Samsung*6%
Other Captives19%
Hoya4%
Other<1%
TMC2%
Source: Techcet Group, LLC
Market Share as a Percent of Total Mask Market Revenues
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New and Potential Growth Opportunities
In the semiconductor industry, the adoption of copper continues and still drives new material opportunities and good market growthCMP still looks like a growth areaSolar may mean lower purity and lower margin materials but the volumes are too high to disregard. This market as a huge growth opportunity
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Cu Interconnect Becoming Universal
2%
0%
20%
40%
60%
80%
100%
Perc
ent W
afer
Sta
rts
w/ C
u
RAM MPU45 nm
74%
56%
RAM MPU65 nm
71%
45%
RAM MPU90 nm
37%
RAM MPU130 nm
51%
15%
RAM MPU180 nm
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CMP Consumables & Ancillaries Continue To Be Popular CMP consumables still growing on average 8% or better year/yearPad conditioners are a hotbed
Conditioner market for Cu CMP is large, partly due to low conditioner lifeNew materials, designs, research
Cu PCMP* is still a growth marketW PCMP niches will grow below 45nmS‐STI PCMP showing signs of life
PVA brushes – new names, new designs
Retaining rings – new materials*Post CMP cleaning*Post CMP cleaning
Advanced Pads for Next Advanced Pads for Next NodesNodes
Courtesy NexPlanarCourtesy NexPlanar
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CMP Slurry Market Trend
0
500
1,000
1,500
2,000
2005 2006 2007 2008 2009 2010
Rev
enue
(Mill
ions
$U
SD) Upside
Downside
Upside, Downside or Something in Between?> 15 Slurry Suppliers Bring Price Competition, esp. Cu & BarrierSlurries
Cu and Barrier not “one size fits all”Ceria (“direct”) STI growingOxide defectivity challenges increase with advanced nodes
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Solar Market Growing Fast!Two key technologies each growing >30% per year in volume
Silicon wafer based (20% – 30% growth)
Thin film (28%+)
Si wafer based solar cells now exceed ICs in terms of square inch equivalents and growing at a much higher rate
Silicon costs are coming down fast
Thin film solar cells will drive growth in deposition metals andmetal oxides, conductive inks as well as specialty and bulk gases
Generated F2 may find some success here to replace NF3, a more expensive chamber cleaning gas
The largest volume IC material consumed for solar is silane ‐used to make polysilicon and for nitride
www.techcet.comSMC - 1/2009
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Solar Market Huge Growth
Global PV Capacity
Sources: JP Morgan, Photon International, Techcet Group, LLC.
0
1,000
2,000
3,000
4,000
5,000
6,000
19992000200120022003 200420052006200720082009
MW
p
0%10%20%30%40%50%60%70%80%
Gro
wth
Yr2
/Yr1
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Challenges for the FutureContinuing Challenges
The cost of earth, wind and fire continues to rise, resulting in higher prices, finally being passed on to IDM’s and foundries
Precious metals increasingPetroleum based chemicals and carriers, oil price down, chemicals and plastics not down as muchShipping (gas and diesel down, shipping not)
Cost of developing and implementing new materials for successive generations is skyrocketing. Are the customers willing to pay?
New materials require costly development, but manufacturing volume use is low, at least at the beginning of the cycle; this dynamic is forcing materials suppliers to re‐evaluate, exit or minimize their involvement in the IC market
Emerging Challenges
The material efficiency effect of 300mm wafers begins to show (per chip usage) on materials. How will 450 mm wafers affect materials?
Materials companies moving to the customers
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If You Don’t See It Here…Just Ask!
Photovoltaics/Solar Materials MarketsFPD Process Materials MarketsIII‐V Process MaterialsSputtering TargetsSiC and GraphiteHi K / ALDIon ImplantStrain MaterialsCMP Pads, Slurry, Conditioners
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AcknowledgmentsDan Tracy, Ph.D. – SEMI
Lara Chamness ‐ SEMI
Techcet Group & Associates Lita Shon‐RoySteve Holland, Ph.D. Mike Fury, Ph.D. Robert Geffken, Ph.D.Jiro HanaueMaggie LeeKatherine DerbyshireLarry Thompson, Ph.D.Allan Wiesnoski