semiconductors

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.

Despite a tough year for critical subsystem suppliers, their overall expenditure on R&D has remained at near record levels– evidence that critical subsystems are indeed critical to the semiconductor manufacturing equipment industry and that high R&D spending on these products is essential.

The market for chillers and heat exchangers used in semiconductor manufacturing equipment has more than doubled since 2014 and is expected to reach a total value of $383 million in 2019.

The silicon wafer market got off to a rough start in 2019 with major silicon wafer manufacturers’ sales weakening in the first quarter of the year following a sharper memory market downturn than expected. Earnings forecasts for the rest of the year have been revised down.

The electronics markets (and global economies in general) remain fragile, but there is some glimmer of hope on the horizon.

Global business conditions remain uncertain but the electronic sectors appear poised for growth in late 2019 or early 2020. Normal seasonality will fuel short-term sales increases through late autumn but real growth is still a ways off.

There is a glimmer of light at the end of the tunnel. But most electronic industry time series will likely struggle at least though autumn.

The typical winter “seasonal slowdown” is now behind us. What can we expect as the year progresses? 

When will the memory market likely show signs of bottoming out? Following is an analysis of the current memory climate using the Memory Inventory Cycle Index introduced in this SEMI two-part article series in October 2018.