Shipments, spirits high at SEMI dinner

Electronic News, Oct 2, 1995 by Judy Erkanat

At its 22nd annual dinner and awards ceremony, Semiconductor Equipment & Materials International (SEMI) last week reported worldwide semiconductor equipment shipments for the first half of 1995 at $10.9 billion. The 800-plus members of the equipment manufacturing community on hand for the event at the Westin Hotel were jubilant at the news of the industry's 55 percent increase over the first half of 1994.

"Last year we were wondering how long the boom would go on," said Bobby Greenberg, president of Prism Technologies, in his after-dinner presentation. "This year, we're still wondering."

Equipment orders during 2Q95 continued to gain on shipments, with the worldwide book-to-bill ratio topping out at 1.16.

SEMI's Executive Summary Report, based on the combined SEMI-SEAJ (Semiconductor Equipment Association of Japan) worldwide database, also revealed that total equipment shipments for 2Q95 had reached $5.8 billion, reflecting an annual growth rate of 72 percent. The rest of the world (ROW) region, including Korea, Singapore, Taiwan and Thailand, increased its worldwide market share during 2Q to 29 percent, 5 percentage points above 2Q94.

"With some luck, we will have a soft landing in 1996 by trying to avoid overbuilding capacity," predicted Erik Jansen, managing director of Alex. Brown & Sons. "The party can't go on forever, but we still project 10 percent growth for 1997, which I feel is probably realistic, or at least reasonable." Semiconductor capital spending in 1996 is estimated to grow by 30 percent, down from 1995's 63 percent growth.

Mr. Jansen felt that the industry would not overbuild and that metrology would help to avoid volume problems. He also favored test equipment in 1996 with slightly larger growth and spoke of the "greening" of the fab as one of the industry's continuing concerns.

Other market figures released by SEMI were $3.5 billion in sales for Japan and a 21 percent improvement in European market shipments over the same period last year for a total of $579 million. European market orders grew at a 73 percent annual rate during second quarter, 1995, with unfilled order backlog growing to $500 million since the third quarter of 1994.

North American semiconductor equipment shipments for second quarter, 1995, were up to $1.64 billion, a 57 percent increase over last year's second quarter figures. The book-to-bill was 1.23 in the same geographical area, up by 37 percent to $2.2 billion. (A book-to-bill ratio over 1.0 indicates an expanding market.)

T. J. Rodgers, president and CEO of Cypress Semiconductor, spoke about such diverse topics as decreasing government spending and SRAM pricing, in a press conference before the dinner. "SRAM prices are going up quarterly in spite of what I read in the papers about prices falling," he said, referring to recent reports on price-cutting in the Taiwanese spot market (EN, Sept. 18). "The U.S. is more competitive than we've ever been. The Japanese threat is behind us. Korea and Taiwan are the current threats. The question is, where is all that capacity going to come from?"

With semiconductor sales up to $100 billion, and projected to triple by the year 2000, the atmosphere at the banquet's 81 tables was festive. Other highlights of the evening included the 1995 SEMI Awards for North America, presented to Arnon Gat, founder and chairman of AG Associates, and Vincent J. Coates, founder of Nanometrics, for their contributions to the semiconductor equipment and materials industry.

In 1980, Dr. Gat conceived and proved the feasibility of rapid thermal processing (RTP) using light energy and founded AG Processing Technologies, Inc. in 1981, where he introduced the first commercial RTP system, the Heatpulse 210.

Mr. Coates co-founded the Coates & Welter Instrument Corp. in 1970. There, he collaborated with Leonard Welter in designing the world's first field emission scanning electron microscope (SEM) before going on to found Nanometrics in 1975 and pursuing the design of small spot film thickness and critical dimension metrology tools specifically designed for semiconductor wafer process control.

T.J. Rodgers provided the ultimate high point of the evening when he made a grand entrance dressed in a red plaid kilt and accompanied by a Marine Corps color guard, along with a bagpipe player and a drummer in traditional Scottish attire, before addressing the assemblage on the evils of government economic policy.

In a related vein, SEMI president William Reed called on California Governor Pete Wilson to sign into law AB 397, legislation that would increase tax credit for R&D facilities from 8 to 10 percent by extending the break to semiconductor clean rooms. The law includes an amendment to the California Manufacturers Investment Tax Credit Law to make semiconductor equipment manufacturers eligible for a 6 percent credit for investing in "special-purpose buildings," like clean rooms.

AB 397 would correct the oversight that left the industry's SIC code 355 off the original list of industries eligible to receive the credit.