Mike’s Blog: Here’s what test vendors are saying about the semiconductor market
As Evaluation Engineering has been reporting on a monthly basis, worldwide sales of semiconductor wafers and equipment have waned throughout the first half of 2019. In the first quarter of 2019, global semiconductor sales fell 15.5% from Q4 2018, and were down 13% year-over-year. The latest North American semiconductor equipment billings report from SEMI showed that April billings ticked up 4.7% from March, but were down a whopping 29% year-over-year.
Looking further ahead, World Semiconductor Trade Statistics (WSTS) shared its 2019-2020 worldwide semiconductor market forecast on June 4, stated that the market is expected to be down 12.1% in 2019 to $412 billion before recovering by 5.4% in 2020.
“This reflects expected decrease in almost all major categories, with an extraordinary decrease from memory at 30.6%, followed by analog with 5.0% and logic with 4.0%,” WSTS said. “In 2019, all geographical regions are expected to decrease.”
Commenting on 2020’s modest recovery, WSTS said all regions are forecasted to grow, with memory contributing the highest growth, followed by optoelectronics and logic.
Likewise with WSTS’ forecast, SEMI’s Q2 2019 World Fab Forecast update said that global fab equipment spending will drop 19% in 2019 to $48.4 billion before recovering strong in 2020 with 20% growth to $58.4 billion.
As part of EE’s upcoming special report on semiconductor test that will be featured in our July print and digital magazine, we asked a pool of electronic test instrument vendors what their thoughts are on the state of the global semiconductor market, their level of confidence in it, and its near-term outlook. We weren't able to fit their responses to that question in print, so I'm posting them here. See what they told us below:
Rob Knoth, product management director in the Digital & Signoff Group at Cadence Design Systems: “I have a great deal of confidence in the overall semiconductor market. There are lots of new startups and existing players with design starts at 7nm and now 5nm. We’re seeing increased investments and the productization of artificial intelligence (AI) and machine learning (ML) semiconductor designs proliferate in many emerging areas such as automotive, safety-critical, and 5G applications.”
Judy Davies, vice president of global marketing communications at Advantest: “We are optimistic in growth prospects for the overall IC market. While the recent super cycle—driven by record-setting demand for memory ICs—has run its course, industry analysts expect positive growth in the ATE market. Market watchers have projected that the ATE market will experience a CAGR of approximately 3.3% over the next five years, growing from this year’s anticipated level of $3.5 billion to reach $4.2 billion in 2024.”
Sausan Arebi, technical writer and Brandon Malatest, COO at Per Vices: “As with any product, sales will wane at times, but the applications of semiconductors are growing, new technologies are due to demand them, and in high volumes. These include IoT, M2M, 5G, and autonomous vehicles, offering manufacturers with the potential to develop new semiconductor designs and implementations.”
Markus Loerner, market segment manager—industry, components, research & universities at Rohde & Schwarz: “5G will bring a major boost for RF semiconductors, but we are still on the verge of mass production. Another topic is radar modules for autonomous driving with multiple sensors, five and more per car, while not there in volume models today. This will change early in the next decade.”
Bob Stasonis, technical product specialist at Pickering Interfaces: “When you look at the technology landscape—IoT, sensors, greater intelligence in vehicles, the present problem of long lead times for components, and of course, waiting for the next big thing—I feel that demand for semi devices by manufacturers will again drive the market for test hardware, probably by end of the year or early next year.”
Jon Semancik, director of marketing at Marvin Test Solutions: “The semiconductor capital equipment market is quite cyclical in nature, even in the absence of new disruptive technology. Development activities around 5G and the subsequent need for higher frequency production test capabilities should drive additional procurement activities in the next 6 to 12 months.”
Peter Griffiths, director of business development at Tektronix: “I believe we are facing a longer period of uncertainty and slowdown than we anticipated entering the year. At the start of the year, we saw a one-to-two-quarter slowdown as semiconductor companies corrected inventory to account for the iPhone sales growth stutter. The tit-for-tat tariff escalations between the U.S. and China and the blacklisting of the world’s number two cellphone producer, Huawei, has led to a lot more uncertainty. Until the situation stabilizes, investment decisions are likely to slow. This means we are likely to have at least one more quarter of slow economic activity in the semiconductor arena. The impact is also likely to be longer, as China companies look for solutions that involve the U.S. less—European alternatives and a faster drive to enabling the local companies to be viable competitors.”
