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The Semiconductor Supply Chain, a Moving Market By John Housley Techcet Group, LLC
The Semiconductor Supply Chain, a Moving Market
ByJohn Housleyy
Techcet Group, LLC
Techcet Group, LLCTechcet Group, LLC• Strategic Planning and
Business Development Consulting Business Development Consulting –Specialized in Electronic Materials Supply Chain Business & Technical TrendsChain Business & Technical Trends
• Techcet Critical Material Reports* :• Solar Cell Process Materials
Solar Cell Equipment Consumables • CMP Consumables• Solar Cell Equipment Consumables• Polysilicon Market and Supply Chain• Ceramics• High K/ALD Precursors
• Gases• Graphite• Masks and Reticles• Photoresists and Photoresist Ancillaries• Interconnect Materials Beyond 65nm
• Ion Implant Sources• Liquid Dopants• Low Temperature Dielectric Precursors
Photoresists and Photoresist Ancillaries• Quartz• Silicon Carbide• Sputter Targets• Wet Chemicals
December 2009
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• Advanced Interconnect Dielectrics• Advanced Interconnect Metallization
www.techcet.com2
• Wet Chemicals
* Several Critical Materials Reports are commission by International Sematech.
Supply Chains We FollowSupply Chains We Follow
Semiconductor Materials both directSemiconductor Materials, both direct and indirectOEM suppliersOEM suppliersIntellectual treasureSkill d L bSkilled Labor
OEM Semiconductor Supply Chain- Silicon Valley
In 2008-2009 we were losing 3-4In 2008 2009 we were losing 3 4 machine shops and related supply chain providers per monthIn 2010, newer generation risk takers are buying equipment and older shops
i t f ll itare running at full capacityCurrently no shortage of most raw materialsmaterialsThis supply chain is recovering, but still very vulnerable to the Asia shufflevery vulnerable to the Asia shuffle
Intellectual Treasure Supply Chain
Graduate and Will this discourage experienced Engineers working on daily contracts
gfuture generations of hard science majors?Can American
New Graduates, Engineers, physics and Chemistry majors
Can American graduates compete with Asian engineers on a cost basis?Chemistry majors
working at Starbucks.New Engineers that are hi d ki f h
cost basis?Is it worth it?
hired working for much lower salaries
Skilled labor supply chainSkilled labor supply chain
If fabs move out of Silicon Valley, theIf fabs move out of Silicon Valley, the jobs for skilled labor moves or diesFew opportunities for occupational pp ptrainingWith the repeated industry ups and downs, many skilled workers switch industries.SEMI d th i h h dSEMI and other companies have had good luck with their High Tech U programprogram.
Materials Supply Chain, Always Looking for the Lowest Link
Electronic MaterialsElectronic Materials
Semiconductor materials as measured in Direct
Indirect Materials
3%US$
Direct Materials
28%
3%
Packaging47%
Silicon22%
CGMG-SemiconW 2010
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Supply Constraints/ DriversSupply Constraints/ Drivers
Market Drivers• Portable Applications
Other Markets Demanding Same Materials
Materials Business
ppDriving Need for Smaller Geometry IC’s
Materials
Growth/ Profitability
• Cloud Computing Driving Demand for Simpler TechnologiesTechnologies
Raw Material Production Si/ polySi
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Flexibilityp y
Wafer Prices
January 2010
Crazy Supply ChainsCrazy Supply Chains
Makers selling to: Manufacturers, “Blenders”, Purifiers and Repackagers who sell to each otherOEMs competing with like parts/ materials suppliers (quartz, targets, post CMP cleaning)Users always trying to buy deeper in the chain to save money and control POR
CGMG-SemiconW 2010
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Silica Worldwide Use
Other
Hot growth areas:• “green” tires (US & Europe)• reinforced silicone-rubber in shoes (Asia)
t th t (Chi ) >5% CAGR
RubberEl t i
Coatings8%
Other9%
• toothpaste (China) >5% CAGR• electronics (CMP WW)• cosmetics (WW)
36%
Investment
Electronics10%
“Rise in Chinese Economy Boosts Toothpaste Market”
alkoxysilane3%
C ti
Health20%
Investment Castings17%fumed
31%
3%
ConsumptionSource: USGS
20%
colloidal66%
July 2010 Techcet Group, LLCwww.techcet.com
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66%
Indirect Materials Supply ChainIndirect Materials Supply ChainMines
Base Material Supplier
Quartz Fabricators
Cold Cold & Hot Hot
OEM Eqt. Supplier
End User (IC Fabricator)
CGMG-SemiconW 2010
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Supply Chain ShiftSupply Chain Shift
Makers selling to end usersUS Makers consolidating or getting out of g g gthe businessSolvents being minimized in IC FabsgAsian material supplier market growingFor other chemicals such as acids we areFor other chemicals such as acids, we are too picky and cheap
CGMG-SemiconW 2010
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Gases & Wet ChemicalsGases & Wet Chemicals$3,500
$4,000
$2 000
$2,500
$3,000
$3,500
s ($
M's
)
Specialty Gases
$1,000
$1,500
$2,000
Reve
nues
Ambient Gases
C ti
$0
$500
2003 2004 2005 2006 2007 2008 2009 2010 2011
Wet Chemicals
ConsumptionSource: USGSSpecialty Products and Smaller Quantities Relegated to
Smaller Companies and Local SuppliersLarger Companies Primarily Want to Deal in Bulk Volumes and
January 2010 Techcet Group, LLCwww.techcet.com
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g p yCater to Asia
Indirect Materials Hit Hard –Quartz and SiC Markets
SiC and Quartz ($Ms)
$700$800$900
$1,000
s U
SD) SiC
Quartz Fabrication
25%
30%
35%
40%
of T
otalBoth SiC and Si
continue to gain
$200$300$400$500$600
even
ues
($M
's10%
15%
20%
25%
C as
a P
erce
nt o
grelative market shares G hit l i
$0$100$200
2003 2004 2005 2006 2007 2008 2009 2010
Re
0%
5% SiGraphite losing
ground based on “dirty” perceptiony p pSilicon and SiC have such a better CTE, and cleaner reputation, they are hard to beat
January 2010 Techcet Group, LLCwww.techcet.com
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Targets - Tantalum Supply and Demand
• Poor demand impacting Ta market160
• Poor demand impacting Ta market
• Main Ta Mine Moth-balled80
100
120
140
enue
($M
)
Ta 2000 2010 est commentsSupply
Australia 1.3 0.0 Mines shutdownAf i 0 79 1 025 H it i
0
20
40
60
Rev
e
C ti• 2009 Ta Target Revenues ~ $70M will soar to >$140M in 2010 due
Africa 0.79 1.025 Humanitarianissues
Brazil 0.42 0.85China 0.37 0.33SE Asia 0 25 0 27
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Consumptionwill soar to >$140M in 2010 due to price escalation
SE Asia 0.25 0.27Canada 0.17 0.15Others 0.05 0.19Recycled 0.75 0.5Stockpiles 0 65 0 42
December 2009 Techcet Group, LLCwww.techcet.com
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Stockpiles 0.65 0.42Total Supply 5.25 3.735Demand 5.2 4.2Shortfall 0.05 0.465
PolysiliconPolysilicon
450,000)
Established Suppliers New Entrants
450%500%
Price
300,000350,000400,000
ty (M
T/Yr
300%350%400%450%Price
Fluctuation
150,000200,000250,000
al C
apac
it
150%200%250%
050,000
100,000
Ann
ua
0%50%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013Techcet Group, LLCwww.techcet.com
January 2010 17Source: SEMI and Techcet
CMP Sl & P d M t i l M k tCMP Slurry & Pad Materials Market
Cu Barrier
Cu Step 1
Tungsten1 600
1,800
2,000
D)
Cu Barrier
Cu Step 1
Tungsten
Cu Barrier
Cu Step 1
Tungsten1 600
1,800
2,000
D) Tungsten
Oxide
S-STI
1 000
1,200
1,400
1,600
& Pa
d nu
e (M
$USD
Tungsten
Oxide
S-STI
Tungsten
Oxide
S-STI
1 000
1,200
1,400
1,600
& Pa
d nu
e (M
$USD
C ti600
800
1,000
Slur
ry &
nnua
l Rev
en
600
800
1,000
Slur
ry &
nnua
l Rev
en
Consumption
0
200
400A
0
200
400A
July 2010 Techcet Group, LLCwww.techcet.com
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2006 2007 2008 2009 20102006 2007 2008 2009 2010
Supply Chain Cross-LinksSupply Chain Cross LinksPV Materials Markets drive for lower cost PV Materials Markets drive for lower cost will impact ASPs of Like SC Materials
Already happening in TFT area - GasesAlready happening in TFT area Gases
Meters of Solar Cell Substrates
80 0
100.0
120.0
2
CIGS/CISCdTe
Thin Film CAGR of 20%+ expected
40.0
60.0
80.0M
illio
ns o
f m2
a-Si/mx-Sic-Siover 5 yrs
January 2010Techcet Group, LLCwww.techcet.com 19
0.0
20.0
2008 2009 2010 2011 2012 2013
Front End Process Materials*Front End Process Materials*$14 000
$10 000
$12,000
$14,000
)
Ceramics
Silicon Carbide
Quartz
GraphiteIndirects
PhotoresistAncillaries
$6 000
$8,000
$10,000
ues
(M$'
s) Graphite
Wet Chemicals
Targets
Ancillaries
Indirects
Gases
Masks
$2 000
$4,000
$6,000
Rev
enu
Photoresist
Masks
Gases
CMPCMP
$0
$2,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
CMP
Electroplating
Adv.Dielec. and SOGs
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January 2010
* Without Silicon
Worldwide Estimated Photoresist $Market Size (in US$)
1800
11501230
1400
12001300
1540
1200
1400
1600
in $
M
950
800
1000
1200
l Rev
enue
200
400
600
Ann
ual
02006 2007 2008 2009 2010 2011 2012
Cost Per Puddle Puddle size Puddles Per Wafer
Techcet Group, LLCwww.techcet.com
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Cost Per Puddle Puddle size Puddles Per Wafer
Conclusions?Conclusions?
These four supply chains are at major riskThese four supply chains are at major riskGrowth in Asia continues, causing much of this riskSome jobs can switch to software or bio-engineeringSome jobs can switch to software or bio engineering, but where is the re-training for the over 45 group?For materials, US laws and regulations affect an , gaging and disappearing manufacturing baseGrowth areas in SC Materials
Litho – 193 nm ArF resistsInterconnect Materials (CMP, dielectrics, metals) > $2BFront End Materials (dielectrics metals) <$200M by 2015
December 2009 Techcet Group, LLCwww.techcet.com
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December 2009 Techcet Group, LLCwww techcet com
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Front End Materials (dielectrics, metals) <$200M by 2015
AcknowledgementsAcknowledgements• SEMI Dan Tracy Ph D and Lara Chamness• SEMI - Dan Tracy, Ph.D. and Lara Chamness• TechSearch International - Jan Vardaman• VLSI Research Risto Puhakka• VLSI Research – Risto Puhakka• Techcet Partners and Associates
Lita Shonroy Partner– Lita Shonroy – Partner– Karey Holland, Ph.D. – Partner– Steve Holland, Ph.D.– Partner– Mike Fury, Ph.D. – Director / Sr. Technologist– Allan Wiesnoski – Director / Sr. Market Analyst
Jiro Hanaue Associate Market Analyst
December 2009
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– Jiro Hanaue – Associate Market Analyst
December 2009 Techcet Group, LLCwww.techcet.com
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