Post on 16-Dec-2015
Making Chips, Solar Panels
and Public PolicyITC Briefing – February 15, 2011
Maggie Hershey, SEMI and William Morin, Applied Materials
2
About SEMI• Global industry association• ~1900 members• Established in 1970 to serve
the semiconductor supply chain
• Today serves members interests in the following market segments:– Semiconductor– Photovoltaic/Tech-Energy– Emerging or Adjacent
Markets• HB-LED• Flat Panel Display• Nanotechnology• MEMS
The Electronics Ecosystem
Materials
SemiconductorEquipment
SemiconductorsSemiconductors
Electronic End EquipmentElectronic End Equipment
Source: SIA, SEMI, and IC Insights
SEMI®
membership
Estimate2010
$43B
$38B
$300B
$1,237B
{
4
Semiconductor Industry Outlook:2010 is a Record Year
150
204
139 141166
213228
248 256 249226
301319 330
$0$25$50$75
$100$125$150$175$200$225$250$275$300$325$350$375
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
F
2011
F
2012
F
-50%
-25%
0%
25%
50%
75%
100%
Semiconductor Revenue Annual Growth
Source: SIA/WSTS historical year end reports, SIA November 2010 Forecast
Glo
bal
Sem
ico
nd
uc
tor
Rev
enu
e U
S $
B
(bar
gra
ph
)
An
nu
al G
row
th %
(li
ne
gra
ph
)
5
Demand Drivers
• Shift from personal computers toward consumer and wireless applications; small proportion of demand from government
• End Market Drivers for Semiconductor Demand– Wireless applications (cellular, Wi-Fi networks)– Entertainment (DVD, home FPDs, games)– Personal Computers– Automotive Electronics
6
Worldwide IC Revenues by Region of Sale
Source: WSTS
0%
10%
20%
30%
40%
50%
60%
Pe
rce
nt
of
IC S
ale
s
2000 2006 2007 2008 2009 2010
Americas Europe Japan Asia-Pacific
7
Capital Equipment Cycles
58 9 9 9 8
1015
2426 28
2225
48
28
2022
3733
4043
30
16
3839
$0
$10
$20
$30
$40
$50
$6019
8719
88
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
E20
11F
-50%
-25%
0%
25%
50%
75%
100%
125%
150%
Capital Equipment Revenue Annual Growth
Source: SEMI and SEMI/SEAJ year end historical reports, SEMI Mid-Year 2010 Forecast
Glo
bal
Cap
ital
Eq
uip
men
t R
eve
nu
e U
S $
B
(bar
gra
ph
)
An
nu
al G
row
th %
(li
ne
gra
ph
)
8
SEMI® 2010 Year-end Equipment Forecast By Market Region
Source: SEMI Year-end 2010 Semiconductor Consensus Forecast, November 2010
$0$5
$10$15$20$25$30$35$40$45
N. America Japan Taiwan Europe S.Korea China ROW
ROW 3.05 2.61 1.44 3.62 4.08 4.52
China 2.92 1.89 0.94 3.27 3.77 4.16
S.Korea 7.35 4.89 2.60 8.61 8.28 8.72
Europe 2.94 2.45 0.97 2.33 2.91 3.20
Taiwan 10.65 5.01 4.35 9.99 9.00 9.17
Japan 9.31 7.04 2.23 4.41 4.90 4.94
N. America 6.55 5.63 3.39 5.31 6.01 5.81
2007 (A) 2008 (A) 2009 (A) 2010 (F) 2011 (F) 2012 (F)
US
$ B
illi
on
s
$15.92
$37.54
$29.52
$38.95$42.77 $40.52
Totals may not add due to rounding.
9
7 8 9 9 9 1013
1519 21 22
2023
20 2124
2931
37
43 43 4446
28
35
05
1015202530354045505560
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
E
2011
F
-50%
-25%
0%
25%
50%
75%
100%
Materials Revenue Annual Growth
Source: Rose Associates historical reports 1987 through 1999, SEMI 1999 through 2011, January 2011
Glo
bal
Mat
eria
ls R
eve
nu
e U
S $
B(b
ar g
rap
h)
An
nu
al G
row
th %
(li
ne
gra
ph
)
Semiconductor Materials Cycles
10
$0$5
$10$15$20$25
$30$35$40
$45$50
N. America Japan Taiwan Europe S.Korea China Southeast Asia
Southeast Asia 4.55 5.03 6.18 6.79 6.90 6.05 7.35 7.50 7.67
China 1.28 1.64 2.38 3.31 3.57 3.27 4.09 4.60 5.03
S.Korea 3.10 3.78 4.88 6.10 5.90 4.72 6.11 6.52 6.81
Europe 2.80 2.88 3.39 3.68 3.32 2.52 3.13 3.22 3.27
Taiwan 4.85 5.31 6.74 8.34 7.87 6.84 9.07 9.56 9.91
Japan 7.61 7.58 8.57 9.19 9.96 7.65 9.33 9.49 9.53
N. America 4.63 4.72 5.11 5.25 4.99 3.78 4.48 4.63 4.72
2004 2005 2006 2007 2008 2009 2010F 2011F 2012F
US
$ B
illi
on
s
$37.25
$28.82
$42.52
$34.83$30.94
Totals may not add due to rounding. Source: SEMI Materials Market Data Subscription January 2011
$42.67$45.53
$43.55$46.93
SEMI® 2011 Materials Forecast By Market Region
11
Some Industry Characteristics
• R&D intensive: 10-15% of revenues reinvested into R&D
• Export dependent: over 80% over U.S. companies’ sales are overseas
• Global: no U.S. monopoly on this technology
12
Making the Same Chip
Etch
CVD
PVD
Implant
Lithography
Track
Mask Making
CMP
Process Control
Lam, AMAT
Novellus
Applied
Varian
ASML
TEL
Nuflare
AMAT
KLA-Tencor
Lam, AMAT
Novellus
Applied
Varian
ASML
TEL
Nuflare
AMAT
KLA-Tencor
TEL, Hitachi HT
Jusung
Ulvac
SEN
Nikon
Sokudo
Micronic
Ebara
Vistec
TEL, Hitachi HT
Jusung
Ulvac
SEN
Nikon
Sokudo
Micronic
Ebara
Vistec
TEL, HHT, AMEC
ASM
Unaxis
Nissin
Canon
Suss MicroTec
Hitachi
Tokyo Seimitsu
Nova Measuring
TEL, HHT, AMEC
ASM
Unaxis
Nissin
Canon
Suss MicroTec
Hitachi
Tokyo Seimitsu
Nova Measuring
Option 1 Option 2 Option 3, etc.
Substantial Foreign Availability of Technology
February 2011
13
PV Group Focus - Manufacturing
• Close to 500 SEMI member companies form PV Group, many of them with history and expertise in semiconductor manufacturing
• 85+ PV “pure players” have joined since January 2009
• Advisory Committees, Technology Roadmap and Industry Collaboration, Standards, Expositions and Conferences, Policy and Advocacy, Industry Research and Statistics
SEMI PV Group
14
Worldwide PV Production
• In 2009, China and Taiwan built 49% of PV modules
• U.S. ranked 5th in worldwide production
15
Worldwide PV Installations
• Worldwide installed PV capacity has grown 16-fold over the past decade
• Most of new capacity has been in Germany• US poised to overtake Germany in next two years
16
Policy Issues
17
Export Control Reform
• Administration’s export modernization initiative seeks to create a:– Single list– Single license processing agency– Single IT system– Single enforcement agency
• SEMI believes the system needs updating, particularly the Commerce Control List.– Semiconductor equipment controls not updated in 20 years.– Industry is highly controlled, products are widely available.– Emerging domestic industry within China.
• U.S. companies need equal access to China market now to establish themselves, build their long term business, and to fund R&D and remain leaders.
18
U.S.-Korea Free Trade Agreement
• SEMI urges Congress to pass this agreement as soon as possible. Working with the High Tech Trade Coalition (HTTC), a group of 15 industry associations.
• Key benefits include:– Tariff elimination– Intellectual property rights protection– Trade facilitation– Need for U.S. to regain momentum on trade liberalization
• SEMI also supports market expansion efforts through the Colombia and Panama Free Trade Agreements and the Trans-Pacific Partnership.
19
ITA Product Expansion
• WTO’s Information Technology Agreement negotiated in 1996. Originally 29 participants, now 70.
• Eliminated tariffs on wide range of IT products, including many types of semiconductor devices and equipment. Estimated cost savings in the billions.
• Preliminary stage of considering expansion of product list:– New products and major changes in industry since
1996– Clarify coverage, avoid classification disputes
• Several associations recently sent a letter to USTR Kirk encouraging this initiative and work is beginning to build support with key trading partners.
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Intellectual Property
• Mounting challenges in IP protection can undermine the incentives and rewards of innovation.
• Developing and protecting intellectual property has become a costly global management concern: – Rising costs of R&D increase pressure for return on these
investments– Escalating legal costs of IP management and litigation– The globalization of the semiconductor business requires a
global approach to IP management
• Increasing IP violations are driven by: – Weak IP protection laws, enforcement and penalties in many
regions– Outsourcing and off-shoring from the US and Europe to Asia– Major pressures for cost reduction in a consumer driven
market
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Intellectual Property
Industry Impact: • Equipment – many companies focus on a limited number of product
areas, making it difficult to absorb IP losses since there is not a lot of room to spread out these losses
• Materials – many companies often serve multiple industries and could focus their resources in other areas if semiconductor-related investments are no longer advantageous
Government:• Promote strong IP protection and enforcement provisions in free trade
agreements• Ensure compliance by trading partners• Assist individual companies as possible
Industry:• SEMI promotes best practices by requiring all member companies to
commit to an IP Statement of Principles, Board-level discussions, educational activities, etc.
• IP White Paper: www.semi.org/ip
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Other Policy Issues
• PV/Solar Energy:– Extension of the grant-in-lieu-of investment tax credit– Expansion of the advanced energy manufacturing tax credit– Renewable energy standard or clean energy standard with solar
provisions
• R&D Tax Credit– Extension before December 2011 expiration, goal of permanency
• Government Investment in Basic Research:– NSF, NIST, DOE Office of Science, Focus Center Research Program
• High Skills Immigration:– H-1B visas are critical for highly skilled workers and shortages
continue
• Supply Chain Issues:– “Rare earth” minerals: restrictions from China– Conflict minerals: SEC reporting/disclosure
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For More Information
Maggie HersheySenior Director, Industry Advocacymhershey@semi.org202-289-0440www.semi.org
William MorinDirector, Government AffairsApplied MaterialsWilliam_Morin@amat.com202-638-4434www.appliedmaterials.com