Applied Materials leads in PVD,
while Semitool is ahead in ECD
NEW TRIPOLI, Pa. -- Applied Materials was the global market leader in sales of chemical vapor deposition (PVD) equipment last year, while Semitool led in electrochemical deposition (ECD) tools for copper interconnects.
The market for equipment used to deposit thin films for semiconductor manufacturing will double from 1999 to 2002, according to the Information Network, market researcher based here. This market will shoot up by nearly 60% this year to hit sales of $5.6 billion, and then grow another 31% to $7.4 billion in 2002.
But 2003 is a different story. "We see erosion in the market beginning in 2003 for the CVD and PVD market because of excess capacity brought about by over building of fabs in the 2000-2002 time period," predicts Robert Castellano, head of the Information Network.
On the other hand, he notes, electrochemical deposition tools will continue to grow in 2003 and 2004 because IC makers will continue to make technology purchases at a time when capacity purchases slows," he predicts. ECD tools will grow more than 300% during in this period as copper processing will make a significant impact in the IC marketplace, the market researcher adds.
Why Lehman Bros.' White says
equipment cycle is not ending
NEW YORK--After Kulicke & Soffa scared the heck out of investors and spurred a run on semiconductor equipment maker stock early in August, Lehman Bros. analyst Edward C. White came out with his 10 reasons why this industry would continue to grow.
There is a huge amount of demand for electronic equipment, White points out, fueled by DVD players, digital cameras and camcorders, information appliances, and PCs. "A major downturn in semiconductor equipment would be unlikely in [such] a climate of very strong electronics demand," he says.
Capacity shortages still abound across the entire electronics industry, the analyst insists. It will take a lot of time to turn this situation into a glut of electronics, he says. The semiconductor industry is "fundamentally healthy," he says. Unit volumes are still rising, pricing trends are normal, and there doesn't appear to be large inventory accumulations of chips, he adds.
The capacity expansion cycle in the U.S. and Japan is just beginning, White notes. "The amount of new chip capacity that is coming on line [now] is limited," he says. And equipment utilization rates are still high, he adds.
If the industry was coming to the end of a cycle, there would be a flood of order cancellations for chip gear, he maintains. No such thing is happening, he adds, and chip makers are trying to accelerate their equipment deliveries.
Chip expansion projects are still being added, White notes, they're not being delayed or canceled.
Finally, a new semiconductor manufacturing technology up-cycle is just beginning, he points out. Three major events will happen next year, he says: the move to 300-mm wafers, the move to copper processing, and the move to volume manufacturing at 0.13-microns. All three have been planned for some time, and it is unlikely hey will be postponed unless there is a great deal of industry turmoil. All three of these events, he adds, will involve the purchase of a significant amount of high priced equipment.
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