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Tracking the Secondary Semiconductor Equipment Market

The semiconductor industry grabs headlines when companies like Intel announce the construction of multibillion-dollar state-of-the-art research and manufacturing facilities. High-performance servers, PCs, and most of our electronic devices would not exist today if it weren’t for the continual advances in semiconductor manufacturing technology.

While the most advanced chips supply the processing power and memory needed to provide the functionality and capabilities of our newest mobile devices and home electronics, they are surrounded and supported by dozens of run-of-the-mill semiconductor devices that play a crucial role in the electronics industry but don't garner the same level of attention.

The vast majority of these mainstream semiconductors are actually manufactured via something less than leading-edge technologies. Analog devices, sensors, microcontrollers, optoelectronics, discretes, MEMS, and a number of other semiconductor products comprise the largest markets in terms of semiconductor units.

In order to address the increased demand for mature processing capacity, manufacturing facilities can expand in two ways. In some cases, factories can increase unit output with marginal productivity increases and yields. However, many of these factories have already maximized equipment productivity and process yields. Such factories require additional equipment to increase wafer output.

In addition, some higher-volume products are able to benefit from an increase in wafer size, transitioning from 100mm to 150mm, or from 150mm wafers to 200mm wafers, thus creating new demand, refurbishment, servicing, and repurposing opportunities for 150mm and 200mm capacity.

Semiconductor Equipment and Materials International, or SEMI, the industry association serving the equipment and material supply chains for the microelectronic, display, and photovoltaic industries, has recently established the Secondary Equipment, Services, and Technology Group. SESTG provides a worldwide focus for the secondary market, including OEMs, equipment refurbishers, resellers, users, and service providers.

As part of its mission, SEMI/SESTG joined with {complink 7526|Semico Research Corp.} to conduct a research study to provide ongoing data and analysis that defines the secondary equipment, services, and technology markets. Semico is a marketing and consulting research company founded in 1994 by a group of semiconductor industry experts who have improved the validity of semiconductor product forecasts via technology roadmaps in end-use markets.

This study collected information from a wide variety of market players around the world, both large and small, from dealers and refurbishers to OEMs and IDMs. We embarked on this study knowing that the semiconductor secondary equipment market is complex and disaggregated. Needless to say, gathering and analyzing the data was challenging; however, the results are interesting and are expected to play a dynamic and significant role for this market segment.

Complex, disaggregated markets are inefficient. Information is not consistently available, causing duplication of effort, disparate pricing, variation in quality, and often unsatisfactory experiences. This study attempts to shed some light on this multifaceted market. The report includes data on the size of the market, with breakouts by vendor type, regions, and type of equipment. Reaching $6 billion, secondary equipment sales represent approximately 13 percent of total semiconductor equipment sales and increased over 77 percent in 2010 over 2009.

Although the semiconductor industry transitioned from 100mm wafers to 125mm wafers to 150mm wafers to 200mm wafers, the transition from 200mm to 300mm wafers marked the first time that a significant market for secondary equipment emerged. Brokers, dealers, refurbishers, and other IDMs entered this market to take advantage of a need that this industry never experienced before.

Currently the largest equipment vendors sell less than 50 percent of the secondary equipment. Interviews with IDMs revealed that most companies prefer to purchase equipment that is ready to install, and yet the market is still supported by a variety of players in the supply chain.

In most cases, as markets mature, clear winners emerge, eliminating a number of inefficient players. That is not the case with the secondary equipment market, yet. For more information about the SEMI/Semico study click here or call Sam Caldwell at 602-214-9697.

4 comments on “Tracking the Secondary Semiconductor Equipment Market

  1. jbond
    April 14, 2011

    It's nice to read some research that involves the secondary market instead of focusing on the major players. Maybe as more research is done and published, some of the more efficient players can gain some ground in the market place and help reduce costs for consumers and suppliers.

  2. elctrnx_lyf
    April 16, 2011

    Probably, it is not really an easy exercise to actually track the secondary equipment market of the semiconductor manufacturing machines. But if there is an organization which can act as a certificate ageny between the buying and selling companies. This will actually bring more trust for the buyers to actually get these second hand equipment and at the same time the sales will be tracked.

  3. SunitaT
    April 17, 2011

    “The vast majority of these mainstream semiconductors are actually manufactured via something less than leading-edge technologies.”

    Sam, I agree with you. Most of the mainstream semiconductors are still manufactured using less than leading-edge technologies not everyone of them use deep submicron technologies. One advantage of less than leading-edge tech is its cost advantage. I think there are still lot of applications which can be developed using these less than leading-edge tech.

  4. saranyatil
    April 18, 2011

    The idea of setting up an organization to track sales is good, but immediately a question arises whose going to invest on setting up such organizations is it going to be the buyers or sellers.

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