Weaker yen impact on the 2013 material and equipment market size

By Dan Tracy, Industry Research and Statistics, SEMI

Semiconductor industry revenues reported by the World Semiconductor Trade Statistics (WSTS) reached a record high in 2013 with global revenues totaling over $305 million. In addition, the WSTS report showed that total unit shipments for integrated circuit devices (ICs) increased by over 9 percent last year; thus, 2013 proved to be a strong year for unit shipments. The IC shipment growth ties to the continuing strong consumer demand for mobile electronics. ICs consumed in mobile products are fabricated using device technologies based on 32nm, 28nm, and below technologies, that require leading-edge materials, such as 300mm wafers and advanced photoresists, to fabricate.

Given the strong unit trends, some year-end materials data collected by SEMI registered growth rates significantly lower than the 9 percent observed in unit shipments. As commented on in last month’s article on reclaim wafers, wafer shipments for prime electronic grade (excluding reclaim) grew just 0.4 percent for the year. The article explained factors around this low area shipment growth.  In addition to shipments, silicon wafer revenues declined by almost -13 percent in 2013, marking the second consecutive year of double-digit revenue declines in the silicon wafer market (semiconductor applications only). Aggregate average selling prices are declined for silicon and a significant factor contributing to the decline in 2013 was the weakened yen.

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he average yen-to-US dollar exchange rate was 80¥/US$ in 2012. In 2013, it weakened to 98¥/US$. Given the strong market position Japanese material suppliers have in the industry, including silicon wafers, this trend dampened the revenues reported in U.S. dollars.  Another material segment where the exchange conversion impacted the revenues was the photoresist market. Again, a number of Japanese companies are key industry suppliers in this segment, and photoresist revenues declined in 2013 — even for the advanced resist materials and despite the strong IC unit growth.

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Finally, the impact of the weaker yen played out in the SEAJ book-to-bill equipment trends as well (SEAJ: Semiconductor Equipment Association of Japan).  Total billings for fab, test, assembly & packaging, and other semiconductor equipment reported by the SEAJ declined by almost -30 percent when reported in U.S. dollars.  That same data set when reported in Yen, posts a year-over-year decline of -14 percent.

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Source: SEAJ, March 2014

2013 was a strong year for IC unit shipment growth. Downward price pressures and a weakened Yen, however, contributed to a challenging year for semiconductor materials and equipment suppliers alike as far as revenue growth. These factors are important in comparing year-over-year trends.

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For more information on SEMI Market Research, visit www.semi.org/en/MarketInfo. For information on SEMI, visit: www.semi.org

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