CapEx forecasts; EUV orders; Intel, Samsung and WD invest in startup.
Worldwide semiconductor capital spending is projected to decline 0.7% in 2016, to $64.3 billion, according to Gartner. This is up from the estimated 2% decline in Gartner’s previous quarterly forecast. “Economic instability, inventory excess, weak demand for PC’s, tablets, and mobile products in the past three years has caused slow growth for the semiconductor industry. This slowdown in electronic product demand has driven semiconductor device manufacturers to be conservative in increasing production,” said David Christensen, senior research analyst at Gartner, in a statement. “Looking ahead, it appears the second half of 2016 may see improved demand. However, following Brexit, semiconductor inventory levels may rise in the third and fourth quarters, which could lead to reduced production volumes.”
Others are slightly more bullish. Last week, TSMC raised its capital spending budget for 2016 by $500 million, to between $9.5 billion and $10.5 billion, up from $9.0 billion to $10.0 billion, according to Pacific Crest Securities. “Intel reiterated its $9.5 billion +/- $500 million capex budget,” said Weston Twigg, an analyst with Pacific Crest Securities, in a report. “We have made a few other small adjustments to our model, and semiconductor capex is tracking to up 5% in 2016, consistent with our prior forecast. Samsung, which reports next week, could drive our estimate higher, as the company is likely preparing for another phase of 3D NAND expansion. Overall, the demand environment is good for equipment companies entering 2H16, led by strong 3D NAND and 10nm logic/foundry activity.”
North America-based manufacturers of semiconductor equipment posted a book-to-bill ratio of 1.00 in June, down from 1.09 in May, according to SEMI. “Although order activity slowed for the most recent month,” said Denny McGuirk, president and CEO of SEMI. “Billings activity for equipment companies based in North America are at their highest level since February 2011.”
SEMI and the Fab Owners Association (FOA), an international group of semiconductor and MEMS fab owners and suppliers, announced that the FOA has become a SEMI Strategic Association Partner.
ASML posted its results for the quarter. “ASML moderately beat our and consensus Q2 estimates, and guided Q3 revenue above our estimate, but below consensus. Two trends stood out: strengthening logic/foundry demand as 10nm ramps, and improving EUV momentum as customers prepare for 7/5nm development,” Twigg said in a separate report.
“Q2 orders included four EUV systems, worth roughly €450 million, in our view. These likely consisted of an NXE:3350 for Samsung memory, an NXE:3400 for Samsung foundry, and two NXE:3400 systems for TSMC, based on our assumptions,” he said.
To date, Intel has five EUV tools with four more on order, according to the firm. TSMC has five EUV tools with two more on order, it said. Samsung has three EUV tools with three more on order, according to the firm. Meanwhile, GlobalFoundries has one EUV scanner with one on order, while Imec has two. Toshiba and SK Hynix each have one, while Micron has one on order.
“We’ve been waiting years for the EUV lithography ramp to become reality, and we may now be on the verge,” Twigg added.
Kazan Networks has closed a $4.5 million Series A funding round led by Samsung Ventures, with participation from Intel Capital and Western Digital. “As the solid-state drives (SSDs) used in datacenter storage have leapt forward in speed and capacity, cloud service providers need faster interfaces for moving data between the storage media and the network,” according to Kazan. “Kazan Networks has developed a sub-1us latency solution of NVMe (Non-Volatile Memory Express) over Fabrics, which connects high performance storage to racks of servers in the datacenter.”