Semiconductor Process Equipment

Report Highlights

• The semiconductor industry spent $22 billion on new equipment in 1998; a year in which sales was depressed due to the Asian economic crisis and a memory integrated circuit glut. After a slump in 1997 and 1998, the semiconductor equipment market grew in 1999 to $160 billion, an 18% increase over 1998s $136 billion. This represents 16% of the annual sales being invested in equipment in 1998, which was a poor year for the industry.
• Intel is planning to expand its capital expenditures from $3.4 billion in 1999 to $5.0 billion in 2000. This is a 57% increase in spending. New equipment is needed to speed the progress towards 0.18 and finer line widths and 300-mm (12-in) wafers. The equipment used can be categorized as wafer processing, packaging and test equipment.
• The worldwide semiconductor industry sales will reach $200 billion by the year 2000.

INTRODUCTION

The semiconductor industry is a growing but cyclical market. Because of this, the semiconductor equipment market trails it by about a year in sales changes.

The semiconductor industry is capital intensive. It takes over $1 billion to construct a new fab with a lead-time of 12 to 18 months. With the long lead-time of construction and high equipment cost, it is imperative to make the best equipment decisions so the fab does not become obsolete quickly.

SCOPE OF THE STUDY

This report concentrates on the semiconductor process equipment industry. Suppliers of items such as power supplies for plasma equipment, and photomask manufacturers are not included. Emphasis is placed on silicon integrated circuit manufacturing. Much of the equipment is also used for the manufacture of discrete semiconductors such as transistors and for GaAs (Gallium arsenide) wafers used for LED (light emitting diode) manufacture.

ANALYST CREDENTIALS

The analyst has been involved in thin film coating for medical applications for 15 years.

INFORMATION SOURCES

Information sources are from manufacturer's press releases, manufacturer's web sites, and Securities and Exchange Commission (SEC) filings.