Monday, September 7, 2020

Impacts of the US-China trade conflict on the semiconductor equipment market and ALD

Here is an interesting review article  (Seeking Alpha, LINK) covering the trade war between the US and China and the implications on the semiconductor wafer equipment market and the leading OEMs in the US, Asia and Europe. According to the article the confilict strated as a US strategy to reduce the deficit of bilateral trade but is now more about unfair trade practices for technology, IP theft, and prevention in the growth of China’s military strength.

My readout, from an ALD viewpoint, the main OEMs in China are Naura and Shenyang Piotech competeing with mainly ASM International, Tokyo Electron, Kokusai, and South Korean OEMs. If you study the latest quarterly reports from both ASM and TEL you can see that both companies are growing in China. Also Picosun reports increased sales in China, meaning that the China ALD market is defenitly growing and US OEMs risk to be be excluded to participate.

According to the article, a further escalation of the US-China tarde conflict may put the Applied Materials takeover of Kokusai at risk. Besides Batch LPCVD, Kokusai is controlloing the ALD Batch market together with TEL with ASM mainly as a follower. 

ALD has been proven to be a critical technology for Logic and Memory scaling and the cost for continious research and development is high and need to be financed by equipment sales like any leading edge processing technology. Traditionally, Intel has always been a leader in implementing new ALD technology and one of the drivers behind why ASM invested in ALD technology from Finland (Microchemistry) and Plasma ALD from South Korea (Genitech). However, Intel of today does not have the same power as Intel had back then 15 to 20 years ago. If the US-China clash continuous both Applied Materials and Lam Research risk losing market share in the ALD space. You can imagine that a similar risk is there for Etch and Clean. However, for PVD, CMP and metallization processing technology Applied Materials is still very much in control so in this segment I suspect that it will be a a different game. Please check out the article for the big picture!

Article in Sumary:

  • Recent U.S. Department of Commerce restrictions threaten exports of foreign semiconductor equipment suppliers.
  • The uncertainty is creating significant confusion among equipment suppliers, not just in the U.S., but in Japan, Europe, and elsewhere.
  • Current Chinese equipment companies have the capability of processing semiconductor chips down to the state-of-the-art 5nm node.
  • Besides economic ad political ramifications, restrictions could escalate IP theft as Chinese manufacturers reverse engineer superior foreign equipment.
  • Applied Materials will be most impacted by export restrictions of all foreign suppliers, and restrictions will halt the acquisition of Hitachi Kokusai Electric.

Full article: China Equipment Suppliers' Threats For Applied Materials And Peers, by Robert Castellano


 Examples of the 300 mm ALD tools offered by Naura (left: Polaris CCP-PEALD for dielectrics and TiN) and Shenyang Piotech (right: FT-300T, PEALD and thermal ALD single wafer for dielectrics and high-k). Naura has additional tools fot thermal single wafer ALD for gate stack and capacitor materials as well as a R&D tool called Promi (below).


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