First quarter semiconductor trends and update

By Dan Tracy, senior director, Industry Research & Statistics, SEMI

Given the slow economic growth in the U.S. during the first quarter, coupled with challenging geo-political developments around the world,uncertainty once again permeates the industry outlook for the year.  With that said, industry trends show the first quarter of this year being generally stronger than the first quarter of one year ago. This week, the Semiconductor Industry Association (SIA) announced that semiconductor sales reached $78.6 billion in the first quarter, the highest-ever first quarter sales.

Industry data collected by SEMI and its data partners also demonstrate a positive first quarter compared to one year ago. Combined equipment billings reported by SEMI and the Semiconductor Equipment Association of Japan (SEAJ), as reported in our respective book-to-bill programs, have first quarter 2014 billings at about $7.9 billion, over 30 percent higher than one year ago.  Leadframe unit shipment growth, reported to SEMI, is up 14 percent compared to the same period one year ago.

Segment

1Q 2013

1Q 2014

Year/Year Growth

Equipment Billings* ($B)

$5.9

~$7.9

~33%

Leadframe Shipments

77.2

88.4

14.5%

*- Combined billings reported by the SEMI and SEAJ book to bill, respectively

Following two years of decline in investments, equipment spending is expected to improve this year — off of the lower base, while steady semiconductor unit growth will drive spending growth on semiconductor materials.  Combined spending on equipment and materials will approach $85 billion globally for the year.

Over the previous ten years, approximately $110 billion has been spent on equipment and materials in North America for semiconductor manufacturing, and another $12 billion (or more) in spending for 2014 will enable manufacturers here to maintain their prominent rankings in the industry.  With this investment, North American wafer fabs continue to represent over 14 percent of the total installed base globally.

The encouraging start to the year, coming off of two years of declining investments, will result in growth for semiconductor equipment and materials in 2014. Clarity in the overall economy and in demand growth for electronics will determine just how strong investment and spending growth will unfold for the year.

The SEMI/Gartner Market Symposium at SEMICON West on Monday, July 7 will provide an update on the semiconductor market outlook. In addition to presentations by SEMI and Gartner analysts, Sunit Rikhi, VP of Technology and Manufacturing Group and General Manager, Intel Custom Foundry, will present on “Intel Custom Foundry – Competing in Today’s Fabless Ecosystem.”

Other upcoming SEMICON exhibitions and conferences include SEMICON Russia (May 14-15), SEMICON Taiwan (September 3-5),SEMICON Europa (October 7-9), and SEMICON Japan (December 3-5).

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