Saturday, April 25, 2015

Fast ALD Growth for the Semiconductor Equipment industry

There are reports on growth in the ALD industry coming in all the time. Here are two recent examples:

"Atomic Layer Deposition (ALD) ranks as the fastest growing market, driven by the increasing use of the technology in the production of electronic gadgets such as mobile phones, smartphones, PDAs, DVD players, portable media players, video games, home-theater systems, microwaves, and printers, among others." [Report]

"The analysts forecast the Global Atomic Layer Deposition market to grow at a CAGR of 36.10 percent over the period 2013-2018. One of the key factors contributing to this market growth is the growing demand for miniaturized components. The Global Atomic Layer Deposition market has also been witnessing the development of new atomic layer deposition materials. However, the slow deposition rate of atomic layer deposition could pose a challenge to the growth of this market." [Report]

That is why I think it is interesting to hear what these companies say in their earning calls. Bellow I collected some examples from ALD equipment companies. Clear is that growth in the semiconductor industry comes from:

  • FinFET introduction at Foundries (SAMSUNG, TSMC and Globalfoundries)
  • Multipple patterning for both logic and memory
  • 3DNAND & DRAM as always

ASM International (2015 - 1Q Earnings Call, www.SeekingAlpha.com)

[...] The leading manufacturers have already ramped notable device generations based on our ALD and (PE)ALD products. For these industry leaders we have become strategic partners in the development of ALD and (PE)ALD technologies.

http://www.asm.com/

In a more recent periods we have also penetrated new customers with our ALD and (PE)ALD products. In 2014, we recorded a substantial first time revenue contribution from a number of these new customers as they began ramping ALD and (PE)ALD in high volume manufacturing. Including the tool record selections that we secured last year, we now supply our ALD and (PE)ALD products to all of the top 10 CapEx spenders in our industry. We will leave this successful growth of our customer base as well as our expansion to new ALD and (PE)ALD application demonstrates the competitiveness of our products.

As discussed during our last results conference call we expect our addressable product of the ALD and (PE)ALD market the single wafer and many batch [ph] part of that market to double over the next three to four years. And that is doubling compared to a baseline of more than US$600 million in 2014. Taking this three, four year horizon, we see a number of strong market drivers. In memory, we see a continue to growing need for advanced multiple patterning solutions. And as most listeners are probably where we have strong position with our PEALD technology for spacer defined double patterning. In the logic and foundry segments, the transition to FinFET devices will provide significant opportunities for the ALD and (PE)ALD market in general.

Over the next three to four years, we expected successful generations of FinFET devices will require a steady increase in a number of ALD and (PE)ALD process steps. This includes ALD and (PE)ALD process steps are rising from the expected to increase need for multiple patterning in advanced logic and foundry processes. The short prospects are our ALD markets in the coming years are strong and as a market leader, we believe we are well position to benefit.

In the memory market, the strength of last year has carried over to this year. Spending in memory in 2015 so far looks healthy, in DRAM on the 20-nanometer node and then NAND Flash on 18, 16-nanometer.

http://www.asmi-annualreport.com/2013/media/a/s/ASMI_DelPrado_Letter_to_shareholders%20(2).png

ASM International's (ASMI) CEO Chuck del Prado

Ultratech / Cambridge Nanotech (2015 - 1Q Earnings Call, www.SeekingAlpha.com)

The ALD product bookings also are showing increase trends and is included in our nano products bookings where they represent 7% of new system orders points. We’ve completed the second generation of the third LED batch production model the Phoenix 2G now all three products the Savannah, the Fiji and the Phoenix have been redesigned for better performance and reliability.

http://www.cambridgenanotechald.com/

This now completes the transition of the ALD product line with all models shipped to customers around the world. We are currently projecting an increase in the ALD business for 2015.

http://www.ultratech.com/ir/Interactive%20AR_2011/images/shareholder.png

Ultratech's (UTEK) CEO Arthur Zafiropoulo



[...] Now let's turn to the core markets. I've spoken in earlier calls about our strategic initiative to capture additional opportunities in our core semiconductor business. The industry is facing several inflection points, including the shift from planar devices to 3D as well as the increased need for multi-patenting. As a result, the industry has adopted techniques which rely significantly on Etch and deposition steps to continue to shrink critical dimension. Industry analysts project that from 2014 to 2019, the number of Etch and deposition tools required will outpace the industry by more than 15% further creating opportunities for MKS to do our strong exposure to these process steps. For example, as critical dimensions continue to shrink to 20 nanometers and below conformal angstrom thick deposition is essential. Processes such as global CVD and atomic layer deposition or ALD are used to deposit these very thin layers. In ALD, oxidizing precursor is required for the process and ozone is a preferred oxidizer, since it provides a number of advantages and throughput and film quality.

Bildergebnis für mks instrument logo
 
MKS ozone systems are the industry standard, beating our competitors due to our quality, reliability and system performance and we continue to supply ozone systems for ALD for a leading Korean chip manufacturer. Additionally, MKS's next generation plasma products continue to be the positive choice in the latest CVD applications and will ramp along with a 16 nanometer node adoption in thin set applications. Hand-in-hand with depositing very thin films is the etching of minute features into them. Because the films are so thin, process control is critical.
 
http://www.mksinst.com/images/JColella.jpg
 
MKS Instruments (MKSI) CEO Gerald Colella


We are continuing to deliver the next generation of solutions that define the leading edge such as atomic layer deposition capability for applications such as spacer-based patterning schemes and atomic layer etch for high aspect ratio etch process steps.

Bildergebnis für Lam Research

These technologies have long suffered from under adoption in the industry because of productivity concerns, but Lam is now changing that paradigm with frequency of new product releases and engagements with customers that are designed to enable continued scaling for our customers.

As we move into calendar 2015, we will further emphasize by our actions the priority of staying close to our customer at a strategic and tactical level both, partnering with them on their technology introduction and ramp plans, sizing and allocating our R&D investments accordingly.

Operating expenses were flattish at $321 million. SG&A declined sequentially while R&D spending increased both in absolute dollars as well as a percentage of total operating expenses. We continue to invest in R&D programs to ensure we’re ready for the current as well as next set of technology inflections, which is critical to enable our revenue growth. This R&D spending is focused in areas like ALD and ALE which Martin referenced earlier.


Lam Research's (LRCX) CEO Martin Anstice