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Semiconductor manufacturing equipment varies greatly due to different processes and functions, which has a large chain reaction on the entire machine tool industry. The demand for semiconductor manufacturing equipment will become the driving force for the recovery of machine tool orders. OEM Manufacturer custom made metal parts
According to World Semiconductor Market Statistics (WSTS), global semiconductor demand has been between 300-340 billion US dollars since 2010, rapidly growing to 412.2 billion US dollars in 2017 due to the accelerated construction of data centers and the advancement of NAND flash stacking technology. , and continued to grow rapidly to US$468.8 billion in 2018. The memory supply and demand balance temporarily eased in the second half of 2018, but demand in 2019 was the same as in 2017 due to continued investment in the logic chip field. Demand began to surge again in the second half of 2020, reaching US$440.4 billion. WSTS is expected to reach US$553 billion in 2021. Judging from the continued huge investment in the future, optimistic predictions are that it will reach US$601.5 billion in 2022. According to industry insiders’ opinions in media reports and think tank reports, it is generally believed that it will reach US$1 trillion by 2030.
- Moore’s Law and the Silicon Cycle
In the semiconductor industry, “Moore’s Law” proposed in 1965 advocated that the number of components on each integrated circuit would double every year (modified to “double every two years” in 1975), which has continued to this day, mainly through circuit line width. The miniaturization enables an increase in the number of integrations. Integrating more transistors has been one of the main drivers for device upgrades to improve computing performance, reduce power consumption and reduce costs. By 2021, the practical circuit line width has shrunk to 5nm, and major wafer factories are moving towards mass production of 2nm products around 2025. imec, an influential Belgian research institution, predicts that 1nm will be put into practical use in 2027 and 0.7nm in 2029. The industry is also developing with the goal of 0.1nm (= Angstrom). OEM Manufacturer custom made metal parts
In the 2010s, FinFET structures with vertical channels sandwiched between gates (three dimensions) were actually used in advanced semiconductors. Currently, with the goal of commercialization in the mid-2020s, a more complex Nanosheet structure is being developed in which the entire periphery of the channel is wrapped by the gate. The evolution of the CFET structure to a vertically stacked MOS FET is also under active development.
Until now, the business cycle of the semiconductor industry has been based on the basic rhythm of PC and server demand. Advances in miniaturization technology and improvements in yield have been involved in the “silicon cycle” that rotates roughly every four years. Compared with the general inventory cycle model, semiconductors require longer capital investment and production lead times, and large fluctuations in inventory often create supply and demand gaps.
In addition, due to high fixed costs, the general product sector is characterized by the fact that even if a loss occurs, operating rates are unlikely to decline as long as marginal profits are generated. In the semiconductor field with significant technological innovation, existing products and equipment are updated rapidly, making production adjustment difficult. On the other hand, starting in 2017, demand growth significantly exceeded the previous supply and demand cycle, leading some to speculate that it has shifted to a “super cycle” based on frontier demand expansion. OEM Manufacturer custom made metal parts
- Background of increased demand for semiconductors
(1) Digitalization process
In addition to traditional “digitization” as a means to improve operational efficiency, the maturity of IoT (Internet of Things) technology has enabled the visualization of various corporate activities. The concept of “digitalization” has begun to become popular, and its main purpose is to transform business models through information sharing and comprehensive management, data accumulation and utilization, etc. In the second half of the 2010s, digital transformation became a watchword in the business world, and the demand for semiconductors in various machines and equipment continued to increase. Especially in the manufacturing industry, the “Industry 4.0” concept advocated by Germany in the first half of the 2010s has had an impact on other countries, and the promotion of smart factories has become a further tailwind.
(2) Toward the practical application and popularization of 5G communications
In the actual application of global 5G communication services, mobile phones and other devices are compatible with existing frequency bands and millimeter wave bands, perform data communication functions with peripheral devices, perform advanced processing of images and videos, control batteries, etc., requiring more complex electronic circuits and more power than ever before. High functionality leads to the need for smaller components. OEM Manufacturer custom made metal parts
(3) Internet of Vehicles, development of driving assistance functions, and progress in vehicle electrification
The automotive industry is in a period of great change, and new trends are collectively referred to as “CASE.” Among them, Connected (communication) provides navigation and service information acquisition, remote monitoring, etc., using communication functions and touch screen terminals similar to smartphones to grasp the vehicle situation and surrounding environment through various sensors, and the processor appropriately drives Autonomous (autonomous driving) to support or Electric is leading the automotive industry, in which power semiconductors are widely used for power and voltage control, which require a large number of automotive semiconductors.
(4) Demand for additional data centers
Due to the popularity of video distribution services and the development of cloud services, various forms of data traffic have increased, resulting in a surge in demand for data servers. Major automakers have also moved to set up their own data centers to enhance driver support capabilities. In addition to the development of machine learning and deep learning and the use of artificial intelligence for power saving purposes, there is also the replacement of HDD (hard disk drive) with SSD (solid state drive) to speed up reading.
(5) Changes in work styles and lifestyles due to the COVID-19 epidemic
As the COVID-19 epidemic began to spread around the world in early 2020, remote working became a new way of working, and the demand for commercial PCs and routers compatible with the latest standard WiFi-6 continued to increase. Including school education, online conferencing has been widely used to supplement face-to-face communication, and the demand for headphones, speakers, external cameras, etc. has increased rapidly. In addition, demand for gaming devices, health devices with electronic functions, etc. is driving growth in the semiconductor market. OEM Manufacturer custom made metal parts
(6) Popularization of non-contact sensors and readers
As electronic payment systems develop, smartphone payments using payment apps and QR codes become popular, and the demand for reading devices increases. Additionally, due to the spread of the coronavirus, there has been a significant increase in demand for non-contact sensors that measure body temperature from a distance, among other things.
- Areas where semiconductor demand is expected to expand in the future
(1) Development and popularization of AI (artificial intelligence)
Artificial intelligence, which is based on a large amount of accumulated data to make up for the lack of human knowledge and experience, will be applied in various B to B and B to C applications and scenarios. Its practicality will be greatly improved and the cost of use will be reduced. In the 2020s, as efforts using big data gain momentum, the pursuit of more natural, accurate and efficient output is expected to make huge progress. Obviously, this will require a lot of higher performance semiconductors.
(2) Practical applications of quantum computers
The characteristics of quantum mechanics such as the “superposition” or “entanglement” of 0 and 1 are calculated in parallel, and the processing speed is tens of millions to 100 million times faster than traditional computers. Significant progress is expected to be made in various fields such as finance, healthcare, and artificial intelligence. Quantum computers also require advanced logic semiconductors for command and control. OEM Manufacturer custom made metal parts
(3) Popularization of AR/VR
Due to the advancement of smart glasses, AR (augmented reality) is gradually being applied to various aspects such as remote maintenance, surgical support, and business improvement. In addition, VR (virtual reality) applications such as transportation and urban design, medical rehabilitation, and evacuation drills for hypothetical disasters are also on the rise. Increasing activity is also expected to move in the direction of conducting communications and business transactions in “virtual spaces,” efforts that will lead to a sharp increase in demand for data centers and promote the development of semiconductors with better processing performance.
(4) Further improvement of communication standards
In terms of high-speed communication standards, 5G is currently being put into practical application. The international standard for 6G has not yet been determined, but relevant companies have proposed the concept of greatly surpassing 5G in terms of speed, capacity, power consumption, and low latency. The increase in compatible mobile phones and base stations is expected to stimulate demand for semiconductors.
(5) Demand for power semiconductors in next-generation travel systems and other systems
Power diodes, power MOSFETs (metal oxide semiconductor field effect transistors), IGBTs (insulated gate bipolar transistors), etc. are collectively referred to as “power semiconductors”. The demand for low-loss, low-heat silicon carbide (SiC) and gallium nitride (GaN) power semiconductors has shifted from the current mainstream silicon (Si) power semiconductors to next-generation travel equipment and power generation such as EVs. Other industrial machinery, railways, etc. are also expected to increase. OEM Manufacturer custom made metal parts
- Semiconductor and digital industry strategies of various countries and regions
(1) Japan
In order for Japan to transition to a 5.0 society before the rest of the world, the government recognizes the need to accurately grasp the changes of the times and improve the competitiveness of the semiconductor and digital industries. In 2021, the “Semiconductor and Digital Industry Strategy Conference” will be launched. At the meeting, “Establishing an industrial base as a national enterprise”, “Establishing an enterprise operator rooted in Japan and establishing a position in global interdependence”, “Simultaneous realization of digitalization and greenization, and early practical applications” were discussed Three major goals are set, and relevant basic ideas are proposed as strategies for semiconductors, digital infrastructure and digital industries.
(2) South Korea
The Korean government stated that it will maintain its strength in the memory field, while also striving to become the world’s number one in system LSI development, design, manufacturing and foundry, and has compiled a strategy to advocate a comprehensive semiconductor power: expand R&D and facility investment tax credits ; Establish a low-interest capital investment fund; provide 50% support for the power infrastructure maintenance costs of semiconductor operations and 10-year water supply guarantee; build the world’s largest semiconductor supply chain “K-Belt” by 2030; support more than 1.5 trillion Development of next-generation power semiconductors, A-semiconductors, etc. in South Korea; tuition exemption for new university semiconductor departments, etc. OEM Manufacturer custom made metal parts
(3) China
The development of China’s semiconductor industry has long been a subject, with clear requirements to improve and increase self-sufficiency as a national goal for an internationally competitive advanced industry. In August 2020, the “Notice on Several Policies to Promote the High-Quality Development of the Integrated Circuit and Software Industry in the New Era” was issued, proposing a number of support measures in taxation, investment and financing, research and development, import and export, human resources, etc., and clarified Policies to accelerate the high-level development of the integrated circuit and software industries. In addition, in the “14th Five-Year Plan” adopted by the National People’s Congress in March 2021, integrated circuits have been listed as one of the “major issues in the forefront of science and technology.” Specifically: the research and development of important materials as integrated circuit design tools, key equipment and high-purity target materials; breakthroughs in advanced integrated circuit technology and special technologies such as insulated gate bipolar transistors and micro-electromechanical systems; upgrading of advanced storage technology; focusing on the development of silicon carbide , gallium nitride and other wide bandgap semiconductor directions.
Currently, Taiwan, China is the world’s largest concentration of semiconductor production. Since the early 1970s, it has systematically promoted the development of the semiconductor and electronics industries as a regional strategy. Although Taiwan leads the world in semiconductor production, its upstream production equipment and two materials are heavily dependent on imports. Therefore, the development and production of the upstream part in Taiwan is a top priority to maintain Taiwan’s long-term competitiveness in the semiconductor industry.
(4) United States
Since the second half of the 2010s, the U.S. government has regarded semiconductors as one of its strategic commodities and developed domestic industries through fiscal stimulus. The United States has a high global market share in design and final products, but most of these two manufacturing areas are outsourced to Asian OEM giants. In June 2021, the U.S. Senate passed the American Innovation and Competition Act, which includes promoting semiconductor manufacturing and R&D in the United States (budget: approximately $52 billion). OEM Manufacturer custom made metal parts
(5) Europe
In January 2021, the EU announced a joint statement to strengthen its design and manufacturing capabilities in the electronics field and invest up to 145 billion euros in policies. Subsequently, in March of the same year, “Digital Compass 2030” was announced, with the goal of achieving digital transformation by 2030. Increase the EU region’s global share of next-generation semiconductor production, with a focus on increasing digital literacy and developing advanced digital human resources, developing secure, high-performance and sustainable digital infrastructure, leveraging digital technologies in business, and digitizing public services that will Increase the current level of about 10% to more than 20% and increase the usage of cloud services in the EU from the current 26% of companies to 75%.
- Semiconductor manufacturing equipment’s demand for machine tools
There is a wide range of requirements for using machine tools to process semiconductor manufacturing equipment. Typical processing workpieces include various chambers, pumps, valves, flanges, wafer transfer equipment, etc. The processing materials are mostly aluminum, and the accuracy requirements are generally strict. In addition to high-speed cutting performance of machine tools, automatic countermeasures against chips and filter clogging and maintenance are also required. In addition, the demand for the machining of multi-variety, low-volume parts is high, requiring general-purpose machine tools with a wide range of uses. Changes in processing methods are not easily accepted by users, and efforts are also required to reduce costs.
Air chambers and valves often require high-precision processing, and it is expected that both prototypes and mass production will trigger many business contacts in the future. In addition to responding to demand trends for more complexity and larger sizes, manufacturing equipment also needs to be resistant to high pressures and corrosion. OEM Manufacturer custom made metal parts
In addition, the use of materials such as anodized aluminum, molybdenum, tungsten, SiC (silicon carbide), gallium nitride, aluminum and PZT (lead zirconate titanate) is increasing, while ways to improve yields are also needed. Cooperation with tool manufacturers, design for high-rigidity machining, prevention of dust and scattering caused by chips, and measures to prevent damage to the telescopic cover are also factors that manufacturing equipment manufacturers need to consider when making capital investments.
The practical application of new technologies and changes in standards are often turning points that stimulate capital investment, and machine tool manufacturers need to pay close attention to these trends. For example, silicon wafers with a diameter of 300mm are becoming more and more common, but it is generally believed that 450mm wafers, which can produce more chips, will not move forward for the time being from the perspective of yield and profitability due to low yield rates. However, if the synchronized development among equipment manufacturers and the timing of investment in manufacturing equipment are met, the demand for machine tools is likely to increase significantly as capital investments in handling arms and processing sizes for each process increase. In addition, exposure equipment and inspection equipment using extreme ultraviolet light (EUVL) are in the early stages of widespread use for purposes such as miniaturization of circuit line widths. Here, judging profitability is also the key to full popularization. In order to win orders, we must constantly pay attention to the profitability prospects of key technologies. OEM Manufacturer custom made metal parts