Jim Mello, Vice President, Sales and Marketing, Entrepix, Inc.
The global economic difficulties are impacting the semiconductor industry more now than ever because the world has become increasingly interconnected and more consumer driven. The financial crisis in Europe, the "fiscal cliff" in the US and the slow down in China’s growth have made it more difficult for any one catalyst to push the markets in a positive direction. Ultimately, the semiconductor industry is caught up in this environment and its outlook continues to be mixed, which points towards a flat 2013. While smart phones and tablets will continue to drive the markets for communication chips, CMOS image sensors and many other types of sensors, the semiconductor industry will not be able to overcome the stagnation of the PC market. The momentum for more powerful, smaller and faster portable devices will dominate the PC market, continuing to drive smaller system packaging technologies and less power consumption while creating more functionality and memory capacity. Technology investments will continue for the advanced nodes and leading edge packaging development, but until the confidence of the economy comes back, the capacity investments will be selective based on individual markets.
One of the biggest challenges for the industry is that 80 percent of the devices used for portable and mobile applications are currently manufactured on 200mm or smaller wafers. How this plays out going forward could change who the dominant players will be and therefore could drive consolidation. As the communications market advances, design wins play a large role in the uncertainty. The secondary equipment market provides ongoing opportunities throughout the entire market, especially during periods of economic difficulty, and is extremely well positioned to capitalize on the continued strength of the 200mm market. Remanufactured equipment continues to demonstrate its viability within the industry, often being sold with guaranteed reliability and shorter lead times that allow for capacity investments that can accommodate changes in short term demand. Additional value-add can be found in the secondary market from a subset of suppliers who are specialized in specific processes. These vendors provide process development and fully qualified processes to customers to accelerate the manufacturing ramp and further enhance the cost of ownership benefits of refurbished equipment.