Transcript Billions of US Dollars

Semiconductor Manufacturing:
Positive Growth in 2003
SCEM Telebriefing
18 December 2002
Host:
Speakers:
research
consulting
measurement
Klaus-Dieter Rinnen
Dean Freeman
Jim Hines
Jim Walker
community
news
Major Forecast Changes Since Midyear
Semiconductor revenue forecast still positive for 2002 — units up
14%; for 2003, expect 12% revenue growth
2002: Capital spending and equipment growth forecasts
– -37% for Capital Spending
– -33% for WFE
– -23% for P&A Equipment
2003: Capital spending and equipment growth forecasts
– 15% for Capital Spending
– 16% for WFE
– 25% for P&A Equipment
Next build cycle for new fabs delayed six months to 1H04
Next downcycle delayed up to nine months to early 2006
Entire contents © 2002 Gartner, Inc. All rights reserved.
Page 1
Forecast Growth Scorecard
Revenue Growth (%)
2002
Up
World GDP
U.S. GDP
E Equipment*
Base
2003
Down
Up
Base
+1.8
+2.4
+2.8
+2.9
+1
+6
Down
Semiconductor
+2
+1
-1
+21
+12
-9
Capital Spending
-34
-37
-38
+25
+15
-2
Equip. Spending
WFE Equipment
P&A Equipment
-31
-32
-21
-32
-33
-23
-32
-33
-24
+30
+28
+41
+17
+16
+25
+4
+3
+14
Silicon (MSI)
+19
+5
*Production revenue
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Page 2
Global Economy Is Struggling
Uncertainty Brings Volatility
United States is slowly recovering.
Recoveries in Europe and Japan have stalled.
Asia/Pacific has experienced a healthy rebound.
Japan is starting to invest again.
Middle East uncertainties are casting a pall over global markets.
A global deflationary threat is growing.
The interplay of confidence and economic policy will shape the
recovery dynamic.
High degree of risk and uncertainty will tilt the economic outlook to
a more protracted recovery; expect continued market volatility.
Entire contents © 2002 Gartner, Inc. All rights reserved.
Page 3
Quarterly U.S. GDP Growth — November 2002:
Slower Outlook Anticipated
U.S. GDP Growth (Percent SAAR)
4
3
2
1
0
Forecast
5
Revised Actual!
6
-1
-2
-3
Entire contents © 2002 Gartner, Inc. All rights reserved.
Source: Global Insight and Gartner Dataquest
Page 4
Global GDP Growth Scenarios, 2000-2004
Optimistic, p=10%
Real GDP Growth
Rising Confidence
Strong Policy Stimulus
5
+2.0
+2.9
Most Likely, p=55%
Falling Confidence
Weak Policy Stimulus
+1.1
1
+1.6
+1.8
+1.8
2
+2.8
+3.1
+3.9
3
+4.0
+3.7
4
Pessimistic, p=30%
0
2000
2001
Entire contents © 2002 Gartner, Inc. All rights reserved.
2002
2003
2004
Source: Global Insight (December 2002)
Page 5
Electronic Equipment Production:
Phased Recovery Under Way
2H02
1H03
2H03
1H04
Spending
Consumer
Corporate
Cellular Phones
PCs
Communications
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Page 6
Quarterly Semiconductor Revenue:
Uncertainty Reigns 2003 Market
Billions of U.S. Dollars
Scenarios
(Probability)
2002
2003
Optimistic
Most Likely
Pessimistic
2.4%
1.4%
-1.4%
+21%
+12%
-9%
65
60
55
50
45
40
35
30
4Q98 2Q99 4Q99 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02 2Q03 4Q03
Optimistic
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Pessimistic
Most Likely
Page 7
Semiconductor Revenue Forecast
Billions of U.S. Dollars
300
19% -2%
250
26%
200
12%
1%
150
100
Entire contents © 2002 Gartner, Inc. All rights reserved.
Source: Gartner Dataquest (November 2002)
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
0
1993
50
Page 8
Supply Side: Positive Outlook After Years of Decline
Two years of steep declines in CAPEX have limited excess capacity.
 2002 CAPEX lower than 1998 CAPEX
 2001-2002 capacity additions 15% of 1999-2000 additions
 20% over-investment at end of 2000, 14% under-investment at end
of 2002
More than 100 fab closures between 2000 and 2003 have weeded out
old excess capacity — 10% of total.
Leading-edge utilization was greater than 85% throughout 2002.
 Yield improvements at 130-nm effectively provide more capacity
with little additional investment.
 Slight increase in demand can create capacity shortages.
Foundry, DRAM, restructuring in Japan are bright spots for 2003.
Empty shells/unfinished fabs allow a fast response to new demand.
Expect manufacturers to plan and implement capacity increases
very carefully.
Entire contents © 2002 Gartner, Inc. All rights reserved.
Page 9
Overall Wafer Fab Utilization:
Ratio of Silicon Shipment to Fab Capacity
Leading-Edge
100%
90%
80%
70%
60%
50%
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Page 10
Foundry Fab Utilization
Ratio of Silicon Shipment to Fab Capacity
Leading-Edge
100%
90%
80%
70%
60%
50%
40%
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Page 11
Foundry Market Revenue Forecast
2001-2007 CAGR 21.4%
Billions of U.S. Dollars
30
25
20
15
10
5
0
2001
2002
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2003
2004
2005
2006
2007
Page 12
Quarterly WFE Forecast Scenarios
Scenarios
(Probability)
Optimistic
Most Likely
Pessimistic
Millions of U.S. Dollars
(Seasonally Adjusted)
2002
2003
-32% (0.15) +28% (0.20)
-33% (0.70) +16% (0.50)
-33% (0.15) +3% (0.30)
14,500
12,500
10,500
8,500
6,500
4,500
Optimistic
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Pessimistic
4Q04
2Q04
4Q03
2Q03
4Q02
2Q02
4Q01
2Q01
4Q00
2Q00
4Q99
2Q99
4Q98
2,500
Most Likely
Page 13
Percentage of Wafer Fab Equipment Shipped as 300-mm
Percentage of Wafer
Fab Equipment Market
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
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Page 14
What Is Hot and What Is Not in 2003?
Selected Wafer Fab Equipment Segments
2003 Growth
60%
193-nm Steppers (~100%)
E-Beam Mask Lithography
50%
ECD
40%
30%
Steppers
20%
Implant
RTP
CMP
10%
Diffusion
Track
Fac. Auto
PVD
Wet
Clean
Dry Etch
Nontube
CVD
Market
Growth
Process
Control
0%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 Revenue (US$M)
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Note: Some segments include OEM sales
Page 15
Total Industry P&A Factory Utilization
Factory Utilization
100%
90%
Leading-Edge Util.
10
8
80%
70%
6
60%
4
50%
40%
30%
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2
0
Page 16
Utilization for SATS
SATS Utilization
100%
90%
Leading-Edge Util.
10
8
80%
70%
6
60%
4
50%
40%
30%
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2
0
Page 17
Semiconductor Packaging and Test Market Forecast
Revenue (Billions of U.S. Dollars)
50
SATS
40
IDM/OEM
30
20
10
0
1999
2000
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2001
2002
2003
2004
2005
2006
Page 18
Quarterly P&A Equipment Forecast Scenarios
Optimistic
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Pessimistic
4Q04
2Q04
4Q03
2Q03
+40% (0.25)
+25% (0.50)
+14% (0.25)
4Q02
-21% (0.10)
-23% (0.80)
-25% (0.10)
2Q02
Optimistic
Most Likely
Pessimistic
4Q01
2003
2Q01
2002
4Q00
2Q00
4Q99
2Q99
2,000
1,750
1,500
1,250
1,000
750
500
250
0
4Q98
Millions of U.S. Dollars
(Seasonally Adjusted)
Scenarios
(Probability)
Most Likely
Page 19
P&A Equipment Growth in 2003
Growth
Flip-Chip Bonders
AP Lithography
40%
Solder Ball Attach
Mold./Encap.
Vision Inspection
30%
Lead Trim and Form
20%
Dicing Saws
Wire Bonders
Die Bonders
Contact Probers
Test Handlers
Market
Growth
10%
0%
0
100
200
300
400
500
2003 Revenue (US$M)
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Page 20
Long-Term View: Cycles Continue
Capital Spending and Equipment Forecasts
Capital Spending (excl. SATS)
Capital Equipment [excl. Test]
Billions of U.S. Dollars
Billions of U.S. Dollars
70
45
40
60
35
50
30
40
25
30
20
15
20
10
10
5
0
0
1999
2001
2003
2005
2007
1999
2001
2003
2005
2007
Gartner Dataquest’s Index of Semiconductor Market
Leading Indicators, December 2002:
Arbitrary Units
2.50
Semiconductor Revenue Growth
Actual Forecast
2.00
60%
50%
40%
30%
1.50
20%
1.00
10%
0%
0.50
0.00
-10%
Indicator
Semiconductor Growth
-0.50
Entire contents © 2002 Gartner, Inc. All rights reserved.
-20%
-30%
-40%
Page 22
Conclusions
Economy
 Expect gradual recovery in 2003
 High uncertainty clouds immediate future
Electronic Equipment
 Expect gradually improving macro conditions in 2003 to spur phased
recovery pattern in application segments
 Corporate spending returns in 2003, strength dependent on economy
Chips
 Expect typically slow 1Q03, with demand returning in 2Q03
 Expect revenue growth of 12 percent
Capital Spending and Equipment
 Supply-side fundamentals improving because of two-year spending cuts
 Anticipate utilization to exceed 85% in 2H03
 More optimistic outlook on CAPEX with 15 percent growth in 2003
 Second down-leg in quarterly WFE revenue for 4Q02, 1Q03
 "Ready for Equip" fabs afford rapid equipment move in for 2003, allowing for
16% growth in WFE
 Next fab build cycle slipped in 2004; next downcycle early 2006
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Page 23