Wednesday, April 13, 2016

ALD is now firmly established as a key enabling technology according to ASMi

ASM International, the leading ALD company, has released their 2015 report (http://asmi-corporatereporting.com/2015/). This is in part what ASMi CEO Chuck del Prado had to say about 2015 and in specifically abot ASM ALD business:
  • ALD now accounts for clearly more than half of ASMi´s equipment revenue.
  • ALD is now firmly established as a key enabling technology
  • For the first time, all of the top 10 semiconductor companies, ranked by capital spending, have adopted ASMi´s ALD technologies in high-volume manufacturing in. 
  • The 10 nm node transition that is taking place in 2016 in Logic and Foundry is expected to result in a significant increase in the number of single wafer ALD applications.


From the Annual report: 2015 has been another year of healthy growth for our company. Thanks to continued strong momentum in our ALD business we increased our revenue by solid double digits and again outperformed the broader wafer fab equipment market. We significantly increased investments in R&D during the year. Profits further improved and cash generation was again solid. We increased the dividend and started another share buyback program, while maintaing a strong balance sheet. With the need for ALD further increasing at the next technology node transitions ASMI is well positioned for a continued strong performance.

Looking back at 2015, conditions in the semiconductor end-markets slowed down in the course of the year. The market for wafer fab equipment ended the year relatively flat, with the first half being stronger than the second half. For the year as a whole Memory was again the strongest segment within the wafer fab equipment market. Our company increased revenue by 14% on a constant currency basis in 2015, which was again driven by the ALD business. ALD now accounts for clearly more than half of our equipment revenue.


ALD FIRMLY ESTABLISHED AS A KEY ENABLING TECHNOLOGY
ALD is now firmly established as a key enabling technology. Today, ALD has become a critical technology for the manufacture of virtually all leading-edge semiconductor devices. The leading customers in our industry have already ramped several device generations based on our ALD equipment – for high-k metal gate applications in Logic and Foundry and for multiple patterning applications in the Memory sector.

In the more recent years, we have also broadened our customer base beyond the leading device manufacturers. In 2015, for the first time, all of the top 10 semiconductor companies, ranked by capital spending, have adopted our ALD technologies in high-volume manufacturing. In combination with an expanded client base, we have also achieved a more robust and balanced customer mix over the years. Apart from expanding our presence in the Logic-Foundry segment we have built a much stronger exposure and customer relationships in the Memory sector. Our ALD technology for multiple patterning is used by virtually all of the Memory customers and has been a strong growth driver.

Over the last five years we have positioned our company as a leader in the ALD market. As the number of customers and ALD applications continued to expand we have grown our total revenue by an average annual growth rate of 18% since 2010. The wafer fab equipment market grew by an average annual growth rate barely above 0% during the same period.

We believe that growth prospects for the ALD market remain strong. Further miniaturization, introduction of 3D device architectures such as next generation FinFET devices and new and complex material integration schemes increase the need for more precise film deposition. We expect that this will in turn continue to drive the demand for ALD at the most advanced technology nodes.
Building on our leadership in ALD remains a key element in our strategy to further grow our company. As reflected by the increase in R&D investments during the year we continue to commit significant resources in further enhancing our leading platforms and to grow the pipeline of new ALD applications that will help transitioning our industry to the future technology generations.

OUTLOOK
Against the backdrop of an uncertain macro-economic outlook, market research firms have forecasted the wafer fab equipment market to be down by a low- to mid-single-digit percentage in 2016. At the same time, 2016 wafer fab equipment spending is expected to be supported by healthy investments in leading-edge manufacturing capacity. The transition to the most advanced technology nodes continues to enable our customers to produce new semiconductor devices that are smaller, faster and more power efficient. This in turn will support their customers to bring new and innovative end-products to market such as solid-state drives (SSD) and smartphones with enhanced functionality. Our ALD solutions support our customers to stay on Moore’s law and to transition to the next-technology nodes.

2016 spending in the Logic and Foundry segment is expected to be driven by the transition to the 10 nanometer technology node. The first investments in 10 nanometer volume manufacturing have started in the early part of 2016, although the ultimate size and timing of this ramp are still uncertain. This node transition in Logic and Foundry is expected to result in a significant increase in the number of single wafer ALD applications.

The market research firms expect 2016 equipment spending in the DRAM segment to drop by a double digit percentage compared to the strong level in 2015. At the next technology node, however, the number of multiple patterning layers is expected to increase further. Our company is well-placed to support DRAM customers in their ever increasing technology and productivity requirements, as soon as equipment demand for the next 1x node starts to pick up.

In NAND Flash a larger part of spending is projected to shift from planar NAND to the new 3D NAND technology. This transition is initially expected to have a mixed impact on the ALD market opportunity. The requirements for patterning are less in 3D NAND. At the same time, our company is engaged with customers in new 3D NAND applications that are expected to start contributing to revenue in 2016 with a growing contribution in the coming years.

As a leader in the ALD market we believe our company is well positioned for further healthy growth. The continued strong performance of ASMI in 2015 strengthens us in our belief that we have taken the right strategic steps over the last years. We would like to thank our employees for their continued dedication and hard work that contributed to the successful results in 2015. We are also grateful for the trust of our customers and the continued support of our shareholders. Our focus remains the creation of sustainable value for our all our stakeholders.