Semiconductor Equipment Subsystems: will the supply chain cope in 2023?
Subsystems, modules & components: US vs. China trade dispute, COVID-19, and a stubbornly strong demand have reconfigured the supply chain leading to a drive towards regionalization.
- The total market represented US$46 billion as of 2022. Subsystems take the greatest share of this market (50%), ahead of Modules (34%) and components (16%).
- Despite a setback in late 2022 and Q1-2023, suppliers have experienced unparalleled growth over the past four years.
- The memory market downturn is significant, but the specialty markets and advanced packaging are still healthy and, in some cases, continue to grow.
- Zeiss, MKS Instruments, and Edwards Vacuum are the three largest semiconductor subsystem companies in revenue as of 2022.
The fall in memory prices in Q3-2022 sent shock waves through the semiconductor equipment supply chain resulting in a slight fall in demand for subsystems, components, and modules in Q4-2022. This further accelerated in Q1-2023 as OEMs race to run down their considerable parts inventories.
Gaël Giusti, Ph.D., Technology and Market Analyst, Semiconductor Manufacturing & Equipment division at Yole IntelligenceThere is no question that Q1-2023 will be challenging for suppliers, even though quarterly revenues are still at levels that most well-run companies consider profitable and are close to historic highs. This temporary pause in strong market growth provides a welcome opportunity for companies to solve operational problems they did not have time to address previously.
In this context, Yole Intelligence releases its new product: Semiconductor Equipment Subsystems Market Monitor. In this brand-new Market Monitor, the company – part of Yole Group –comprehensively analyzes the semiconductor equipment market including subsystem, component, and module levels. Therefore, These products are essential to manufacturing and running front-end wafer fab equipment .
John West Director, Semiconductor Manufacturing & Equipment, Yole IntelligenceAs well as providing our customers with a complete picture of the semiconductor supply chain and the role suppliers of subsystems, components, and modules play, we will also highlight specific market and technology trends as they evolve. We developed a segmentation that captures the whole bill of materials for WFE and has data from almost 200 suppliers.
Titre du visueljune 2021
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This is Yole Intelligence’s first edition. The company will keep adding companies and segments as analysts find them. In this context, the Market Monitor is a constantly evolving service where customers can expect improvements every quarter. Each quarter will additionally feature a focused report on a particular product or technology.
The outlook is for sales to recover in the second half of 2023 as imbalances in memory supply and demand are corrected and the transition to volume manufacturing at 3 nm takes hold. In addition, the significant downturn in Q1 might be sufficient to clear excess inventory held at OEMs and suppliers in just one quarter. If this is the case, sales could stabilize as early as Q2-2023 before starting the long road to recovery. It is worth noting that the service & support market has not been impacted as hard as the rest of the parts market and will continue to grow organically in 2023.
This trend towards regionalization is perfectly illustrated by TSMC’s move to Arizona in the US. In contrast, over the past few years, US OEMs such as Applied Materials, Lam Research, and KLA have shifted manufacturing to South-East Asia (e.g., Singapore and Malaysia), where they now produce many tools. Interestingly, many companies in their supply chain have also moved with them to be closer to their primary customers. On a slightly different note, the situation in China, hit hard by tariffs and import/export restrictions, is introducing significant uncertainties for OEMs and their suppliers. This situation has to be closely monitored.
All in all, 2023 will be a year of contrasts: a challenging year for those suppliers exposed to the memory market and a good year for those dependent on non-memory applications. However, most suppliers are well-resourced (financially) and are likely to remain profitable throughout the year.
Yole Intelligence’s Semiconductor Manufacturing & Equipment team invites you to follow the technologies, related devices, applications, and markets on www.yolegroup.com.
In this regard, do not miss Yole Intelligence’s Analyst Thursday – Manufacturing Equipment on April 13th – Register here. The current slowdown in demand for wafer fab equipment will be discussed and the experts will explain why some market segments and applications will do much better than others in 2023.
In addition, don’t hesitate to check our latest presentations:
- Evolution of Semiconductor Technologies with New Applications Are Bringing A Bigger Stage for Test Suppliers – Lin Fu, John West during TESTCONX PHOENIX 2023
- Photolithography equipment market and technology: State and challenges – Taguhi Yeghoyan during SPIE ADVANCED LITHOGRAPHY + PATTERNING 2023
- MEMS Equipment Market – John West during ASTC 2023 – ADVANCED SEMICONDUCTOR TECHNOLOGY CONFERENCE
- WFE : Wafer Fab Equipment