Epitaxy Equipment for More than Moore 2021

EPITAXY EQUIPMENT IS THE FOUNDATION FOR MISSION-CRITICAL DEVICES USED IN MORE-THAN-MOORE APPLICATIONS

We are at a crucial period of history where each device around us is becoming smarter, greener, and more compact. Even the excruciating COVID situation has had nothing more than a positive impact on the semiconductor industry by only further accelerating technological innovation. In such an innovation race to add more functionalities into our everyday devices using the More-than-Moore (MtM) approach, the Power-Performance-Area-Cost (PPAC) factor is improved not only by scaling but also by using non-Si materials and by heterogeneously integrating them to one another. In this regard, Si, along with non-classical substrates such as GaAs, GaN, SiC, and InP, is growing at significant Compound Annual Growth Rates (CAGRs). However, the choice of these materials comes with stringent material quality requirements and hence necessitates ultrapure thin films grown using epitaxy equipment. As of 2020, epitaxy equipment sales for More-than-Moore applications amounted to around $692M and are expected to grow to $1.1B by 2026, with a CAGR2020-2026 of 8%. However, these figures do not do justice to the vitality and omnipresence of the epitaxy step in missioncritical applications in market segments such as automotive (EV/HEV), consumer (smartphone, smartwatch, AR/VR), and aerospace & defense. It is further intriguing to realize that these complex epitaxy equipment systems used in HVM are supplied by only very few players, including some not very well known in the mainstream front-end market.

ACCELERATED TECHNOLOGICAL TRENDS IN 2020 AND 2021 ARE TRANSLATING DIRECTLY INTO EQUIPMENT DEMANDS

From a technical standpoint, MOCVD covers most of the III-V epitaxy while High-Temperature CVD (HTCVD) is the mainstream deposition technique for Si- and SiC- devices. Historically, MOCVD is required for commodity devices such as GaN-based traditional LEDs. However, an increasing number of upmarket applications, such as fast chargers, MicroLED displays, and VCSELs for 3D sensing, will drive demand in the years to come. For HTCVD, the primary market remains the power applications, which are based on Si and SiC epi-material and are mainly deployed in market segments such as automotive and industrial. As a third technique, MBE is already used in low-volume, high-performance demanding applications as a potential competitive solution to MOCVD. While MOCVD and HTCVD combined represented around $650M in revenue in 2020, MBE remained limited with an estimated revenue of only slightly more than $40M. This is because MBE users are concentrating mainly on pilot-line and R&D applications and in only a small way to volume production of RF and VCSEL devices. Accounting for all these three equipment types, demand from a wide range of applications translates directly to growth of different sets of epi-materials. SiC, in particular, is experiencing a lot of demand in China.
Having said that, we believe that in many cases, the investments in 2020 and 2021 for this equipment are rather strategic than the actual market demand. The equipment market is estimated to jump by 15% in 2021, and we believe the momentum will continue into 2022. To explain this jump, we must consider the various macro-economic factors that have accelerated the technological transition at the device level. For example, the penetration of GaN and SiC is happening at lightning speed into the automotive and consumer market segments. In general, the transition to non-Si wafers and the transition to higher wafer diameters for these materials are also occurring faster than previously anticipated.

A DYNAMIC GEOPOLITICAL SITUATION IS INTENSIFYING THE COMPETITIVE LANDSCAPE FOR EPITAXY EQUIPMENT VENDORS

This high demand for equipment is satisfied by very few equipment vendors. In total, we have identified 11 major epitaxy equipment vendors in the MtM space, and the top three (Aixtron from Germany, Veeco from the US, and AMEC from China) dominated in 2020 with more than 60% of the market share by revenue. However, this market is also occupied by various other frontend equipment giants (such as AMAT, TEL, ASM International, Naura), domain-specific players (such as Taiyo Nippon Sanso, NuFlare, LPE), and some unidentified start-ups from China. The dominance by the top three players in 2020 was not a big surprise as it has remained the case at least since 2018. However, if we look at the top-2 players, between 2018 and 2020, Aixtron increased its market share by 10%, while Veeco has seen its market share fall by 15%. One of the many reasons for this is the US-China trade tension, which has chosen the semiconductor industry as one of their battlegrounds. This battle is even more pronounced in the epitaxy equipment space as the demand is primarily driven by China. As a result, 2020 resulted in one of the best sales years in China for Aixtron, with approximately 57% of their revenue coming from the region, in contrast to Veeco’s mere 13% revenue. Naturally, Aixtron continues to be the leader in the overall epitaxy equipment market, with Veeco retaining its second spot (thanks to its improved MBE revenue in 2020). AMEC follows closely in third place with a good volume of equipment shipped for LED devices. With the geopolitical situation evolving and the supply chain ever more fragile, we expect the competition between equipment vendors to intensify in the coming years.

Glossary and definition 2

Table of contents 5

Report objectives 8

Report scope 9

Report methodology 13

About the author 14

Companies cited in this report 15

What we got right, what we got wrong 16

Who should be interested by this report 18

Yole Group’s related reports 19

Three-Page Summary 21

Executive summary 25

Introduction and context 65

• Overview of Semiconductor Manufacturing
• Moore vs More-than-Moore approaches
• Introduction to epitaxy

Epitaxy market trends 90

• Epitaxy drivers and requirements
• Epitaxy market trends by application
• Epitaxy market trend by substrate material type

Epitaxy equipment market trends 124

• Overview of deposition technologies
• Introduction to epitaxy equipment types
• Epitaxy equipment trends by application
• Epitaxy equipment trends by material type

Epitaxy equipment market forecast (2020 – 2026) 159

• Overall epitaxy equipment market in units and revenues
  • By epitaxy equipment type
  • By epilayer
• MOCVD equipment forecast in units and revenues
  • By application, market segment, substrate type and epilayer
• HTCVD equipment forecast in units and revenues
  • By application, market segment, substrate type and epilayer
• MBE equipment forecast in units and revenues
  • By application, market segment, substrate type and epilayer

Epitaxy equipment vendors – competitive landscape 209

• Epitaxy equipment vendor ranking and market share
  • By equipment type
  • By semiconductor applications
  • By substrate type
• Epitaxy industry news (by equipment type)
• Product portfolio
• Focus on China
  • Chinese epitaxy equipment vendor positioning

Brief look on epi-houses and supply chain 269

• By equipment type
• By application type

Conclusion and perspectives 291

Appendix : In-depth introduction by Device type

Photonics 301

• Introduction to photonics devices
• Light Emitting Diodes (LEDs)
  • Epitaxy driver, requirements, and challenges
  • Focus on Epitaxy of MicroLEDs
• Laser Diodes (LDs)
  • Epitaxy challenges
  • Epitaxy equipment choice

Power 351

• Introduction to Power devices
• Power GaN
• Power SiC
• Power Si
• Epitaxy drivers, requirements and challenges
• Epitaxy equipment of choice

Radio-Frequency (RF) 401

• Introduction to RF components
• RF device trends
• RF epitaxy related news
• Epitaxy challenges

Short introduction to Smart Manufacturing 415

Short introduction to Digital Twin 419

Corporate presentation 423

Aixtron, AMEC, Applied Materials, ASM International, CSD Epitaxy, DCA Instruments, Epiluvac, Epistar, II-VI, Infineon, IntelliEPI, IQE, LPE S.p.A, MBE Komponenten, Naura, Nexperia, NuFlare, Onsemi, Power Integrations, Riber, SOITEC, STMicroelectronics, Taiyo Nippon Sanso, Tokyo Electron (TEL), TOPEC, TSMC, Veeco, VPEC, Wolfspeed, X-Fab and many more.

Key features:

• 2020-2026 epitaxy equipment market forecast (by application, substrate type, equipment type, and epi-material)
• 2020 epitaxy equipment market shares; Competitive landscape for equipment vendors by epitaxy equipment type, epi-material type, and application type
• Focus on China: sales in China for major global equipment vendors and a look at their counterparts from China
• Overview of leading players and supply chain using epitaxy equipment (by application, by substrate type, and by epi-material)

Objectives of the report:

• Present the current status of epitaxy equipment technologies (by equipment type, epi-material,and application)
• Provide detailed information about different semiconductor applications addressed by epitaxy growth technology
• Furnish an overview of the technological trends involving epitaxial layers
• Provide market metrics for epitaxy equipment used in MtM semiconductor applications (2020 – 2026)
• A snapshot of the equipment vendors competitive landscape and an exploration of supply-chain synergy by identifying key players in the epitaxy field