A Glimpse into the Southeast Asian Semiconductor Equipment and Materials Market
by Edwin Hall with contributions from Dan Tracy, Christian Gregor Dieseldorff, and Paul Davis
SEMI Industry Research and Statistics
The Southeast Asia region has continued to be a vital part of the assembly and test of semiconductor devices, especially the countries of Singapore, Malaysia, Indonesia, Thailand, and the Philippines. This region consists of the largest activity in the area of assembly and test equipment and is consider the second largest market region for packaging materials. In addition, new fab investments continue to make significant strides in this region.
While it is estimated that capital spending will decline by 10% to 15% globally in 2008, Southeast Asia will likely run counter to this trend. For Southeast Asia, the semiconductor equipment market is expected to gain several percent from 2007 to 2008 ($3.05 billion to $3.13 billion). The assembly and test equipment market represents about 50% of this market, given the strongg presence of assembly and test plants in the region.
Source: SEMI Equipment Market Data Subscription (EMDS), March 2008
Not to be overlooked, the global semiconductor materials market, which consists of wafer fab materials and packaging materials, is forecasted to grow 9.3% from $43 billion (2007) to $47 billion (2008). In particular, the Southeast Asia semiconductor materials market has enjoyed consistent growth in the last two years and is expected to continue this trend. It is forecasted that for 2008, the materials market will grow from $6.8 billion to close to $7.6 billion—an increase of about 12%. The packaging materials segment within this market is expected to reach $5.0 billion in 2008. The region continues to outpace Europe in this market and has surpassed North America in semiconductor materials revenue. This growth is driven by a consumption of advanced materials such as packaging substrates and green encapsulant materials
Source: SEMI Materials Market Data Subscription (MMDS), January 2008
Investments in front-end production capacity are still growing in Southeast Asia. Already the location of fabs for IM Flash, Tech Semiconductor, Chartered Semiconductor, UMC, ST Microelectronics, Infineon and SSMC and others are emerging in the region. A few of these fabs are highlighted as follows:
- IM Flash (a joint venture between Intel and Micron Technology) in Singapore started a 60K wpm flash fab in Q2 ‘07 with a total estimated cost of about US$3.0B. The fab is expected to begin equipping in 2H 2008 and begin first silicon near the end of 2008 or the beginning of 2009.
- Tech Semiconductor—the joint venture now between Micron, Canon, and Hewlett-Packard—is more than one third through the transition from 200 mm to 300 mm. The 300 mm fab is expected to reach about 50,000 wpm by end of 2008. In addition, 68 nm has began to ramp near the beginning of this year.
- Qimonda pushed out construction start of their 60K fab from the beginning of 2008 until ‘market conditions improve’. However, it is expected the fab may start construction by end of 2008.
- Infineon—headquartered in Germany—designs, develops, and manufacturers a broad range of semiconductor devices. The company has a worldwide presence including a front-end fab located in Southeast Asia (in Kulim, Malaysia), which is the largest non-memory fab in the world. This $1 billion fab began its production ramp-up in August 2006 and is in a full ramping mode at a maximum capacity of 100K wpm producing power and logic semiconductor devices used for automotive and industrial applications.
- Chartered Semiconductor, the largest foundry in Southeast Asia, has plans to expand its wafer capacity in the upcoming months. The company has put in motion plans to expand their 300 mm fab (Fab 7) focusing on geometries of 65 nm and 45 nm. Capital expenditures in 2008 are expected to be at $630M (most of it for 65 nm and some for 45 nm capacities). It is projected that by the end of 2008, Fab 7 will increase their capacity to 30,000 wpm.
- Chartered Semiconductor, in a surprise move to expand its capacity, has acquired an 8-inch fab from Hitachi in Singapore at the end of Q1 ‘08 for US$233M. This is a 24K wpm fab capable of 0.18 µm to 0.15 µm high voltage and display controller products.
View Southeast Asia - 200mm/300mm Frontend Semiconductor Fabs in a larger format
Besides the increased investment, the capacity of the fabs for this region has shown a year-over-year increase of 13% from 671K (2006) to 760K wpm (2007). It is estimated that this will increase to 904K wpm by the end of 2008—an increase of about 19%!
Southeast Asia is a region to closely monitor. Although its growth will not be as aggressive as its Greater Asian counterparts, it will continue to make significant strides into the semiconductor equipment materials market. The new fab activities in this region will increase the momentum for greater fab capacity in Southeast Asia. Also, India is just four hours flying time from Singapore and represents a frontier in high tech manufacturing. The recently announced national semiconductor policy has stimulated several fab proposals and even more activity in photovoltaics.
Portions of this article were derived from the SEMI Equipment Market Data Subscription (EMDS), the Material Market Data Subscription (MMDS), FabFutures, and the World Fab Forecast. These reports are essential business tools for any company keeping track of the semiconductor equipment and material market. Additional information regarding this report and other market research reports can be found at www.semi.org/marketinfo.