中文 English

What’s Ahead For Chips & Equipment?

An analyst from Gartner provides an outlook for semis.

popularity

It’s been a topsy-turvy year in the semiconductor industry.

2020 was supposed to be a strong year. Then, the coronavirus outbreak hit. Countries implemented various measures to mitigate the outbreak, such as stay-at-home orders and store closures. Economic turmoil and job losses soon followed.

Earlier in the year, the chip market looked bleak. Now, business appears to be strong. To gain some insights in the market, Semiconductor Engineering discussed the status of the semiconductor industry with Bob Johnson, an analyst at Gartner.

SE: What’s your latest forecast for the semiconductor market in 2020? Has that changed over the year?

Johnson: Our current forecast for the semiconductor market this year is for total revenue to be $432.9 billion, up 3.3% from last year. This is up a bit from our Q2 forecast, as we have seen stronger markets in premium ultramobile PCs, hyperscale data centers and test and measurement equipment. This is being boosted by strong demand to test 5G base stations. Overall, this is down about $35 billion from our Q4 ‘19 forecast, and reflects the effects of the COVID crisis.

SE: What is your forecast for memory in 2020?

Johnson: Memory will be up 11.7% this year, with DRAM ($62.9 billion) up 1.1% and NAND ($54.6 billion) up 28%. Note that both DRAM and NAND had down years last year (DRAM -38%, NAND -26%). Both are coming off a low year. DRAM remains in oversupply this year, while NAND is seeing demand from premium smartphones and SSDs.

SE: How about the foundry business?

Johnson: For foundry, we are looking at total revenue being up 13.7% from 2019 at $70.8 billion. This is driven by surprisingly strong revenue at the most advanced nodes. The primary driver is 5G smartphones, which are projected to increase to around 200 million units this year, in spite of a 16.7% drop in total smartphone units from 2019. Note that the semi content for 5G phones is significantly higher than for 4G phones. Foundry revenue is also driven by Apple’s iPhone 12s, plus production earlier in the year for Huawei and now for those looking to replace Huawei. Demand from AMD, Nvidia and Intel are all driving leading-edge volume. Note that the leading-edge strength primarily affects TSMC and Samsung, and are the primary drivers behind CapEx growth this year.

SE: What does Q4 look like?

Johnson: On a quarterly basis for the semiconductor market, we are looking at quarter-over-quarter growth resuming in Q3 (+7%) and continuing into Q4 (+0.8%). Note that our non-memory semis outlook for the remaining quarters of this year is much stronger, with non-memory growth in Q3 at 10.6% and Q4 at 1.4%. We are now looking at a return to normal seasonal growth patterns with Q1 being down 5.9% from Q4, moderate growth in Q2 (2.3%) and a strong Q3 (+17.1%) followed by 5.9% in Q4 ‘21.

SE: What is your forecast for CapEx and semiconductor equipment for 2020?

Johnson: Our current forecast for CapEx is up 1.8% in 2020 to $101.1 billion, with wafer-fab equipment (WFE) being up 4.5% to $58.0 billion. Surprisingly, WFE and CapEx have been hit relatively little by COVID, as continued investment by TSMC, Samsung and Intel in leading-edge logic has kept investments relatively strong. However, TSMC has spent most of its budget, as stated in their Q3 earnings call. They will be keeping their total CapEx for the year at $17 billion, which means that their Q4 spending will be down from Q3.

SE: What about China?

Johnson: We are currently projecting significant increases in spending by domestic Chinese companies, led by SMIC ($6.7 billion for the year), CXMT ($3 billion) and YMTC ($3.5 billion). The problem is that Chinese companies don’t always hit their targets. And with the recent addition of SMIC to the Commerce Department’s entities list, this may delay some of their spending. So the spending emphasis for Q3 and Q4 has shifted away from the major spenders to the more minor ones, and this poses some risk for the industry.

SE: What’s your general outlook for 2021?

Johnson: Next year, we expect things overall to return to a more normal growth pattern. Semiconductor revenue should be up about 9.5%, with an anticipated strong year for DRAM (+22%) being the main driver as DRAM goes into undersupply and prices rise. For CapEx, we are looking at 3.1% growth, as investment in new memory capacity resumes. We expect logic/mixed signal investment to be down 3.6% next year. For WFE, we are looking at a 3.8% increase in line with CapEx.



Leave a Reply


(Note: This name will be displayed publicly)