Business and Markets

Sales of abatement systems for semiconductor applications grew 15.6% in 2019, significantly outperforming other critical subsystems segments in a year where total critical subsystems revenues declined by 10.6%.

Included in this outlook is a discussion of the financial impact of the current pandemic and a forecast for GDP growth by major region for 2020 and 2021.

All countries and regions have seen a sharp manufacturing slowdown. China, hit hard in February, recovered in March and then dipped in slightly but the balance of the world saw manufacturing plunge in April as COVID-19 forced factory closures. Unemployment skyrocketed and GDPs plunged.

In the past 3 months, silicon wafer shipments leveled off and the YoY growth rate had started to rebound, SEMI reported in Silicon Wafer Market Monitor, a new quarterly report that tracks wafer shipment dynamics including historical shipments, supply & demand shifts, and pricing trends & forecasts.

VLSI research released the list of top suppliers of critical subsystems to the semiconductor and related manufacturing industries. The data shows EUV adoption greatly benefited optical subsystems suppliers in 2019 as other critical subsystem suppliers battled through the tail end of the downturn.

Plunging stock prices and Coronavirus-driven business shutdowns presently dominate the news. Current economic data, including the recently released February Global Purchasing Manager Index, support earlier negative predictions of an imminent industry decline.

Data through December showed a steady recovery in the global electronic supply chain with SEMI equipment leading the way, but in late January COVID-19 began to make its negative impact felt, snarling supply chains and shutting down factories near Wuhan, China.

Critical subsystems technologies for semiconductor applications are highly engineered and specialized pieces of equipment. Only a select group of companies are able to produce these products to the high specifications demanded by the semiconductor industry and in the volume required.

We are now in the recovery phase of the current business cycle with SEMI equipment already in a growth mode. However significant economic and geopolitical concerns persist.

With all major global electronic equipment OEMs having now reported their third quarter financials, we estimate that combined equipment sales increased 0.4 percent in 3Q’19 versus 3Q’18 and 2 percent sequentially from the second versus the third quarter of this year.