Recently, Robert Castellano, a well-known semiconductor industry analyst, said that Applied Materials (AMAT) will surpass ASML in 2020 and become the leader in semiconductor equipment again. According to Castellano’s statistics in 2019, ASML surpassed Applied Materials that year and ranked first in the global semiconductor equipment manufacturer rankings.
Castellano said Netherlands-based ASML’s 31% year-over-year revenue decline in the first quarter of 2020 was the main reason for the company’s loss of the top spot in 2020. He predicts that Applied Materials’ market share will increase to 18.8% in 2020, up from 15.9% in 2019. While ASML’s market share in 2019 was 16.9%, it will drop slightly to 16.8% in 2020.
Other suppliers in the top five include Lam Research, Tokyo Electron (TEL) and KLA.
Figure: Top 5 Semiconductor Equipment Suppliers by Sales, 2015-2020 (USD Million)
The market share of the third-ranked TEL will grow from 11.7% in 2019 to 13.4% in 2020.
Lam Research’s market share will grow from 10.6% in 2019 to 11.8% in 2020 due to low ASP and high inventory overhang.
KLA’s market share will grow from 5.4% in 2019 to 6.8% in 2020.
In 2020, wafer processing front-end equipment (WFE, classified by process flow, in wafer fab equipment investment, wafer processing front-end equipment occupies the main market share, about 85%, packaging and testing equipment accounts for about 15%) The total market size is $64 billion. Overall, in the WFE equipment market, the value of etching machines, lithography machines, and thin-film equipment accounts for the highest proportion, and these markets are also controlled by the top five manufacturers.
Castellano said that in 2020, the top five companies will gain more market share. Among them, the three companies of Applied Materials, ASML and TEL together account for as high as 60%-90%, especially Applied Materials and TEL. It is a leading enterprise of aircraft carrier level in multiple sub-sectors. And smaller competitors will see their market share decline, from 39.6% in 2019 to 33.4% in 2020.
In 2021, semiconductor capital spending by memory and logic chip makers, as well as foundries, is expected to grow. The main beneficiaries of the economic climate in 2021 will be ASML, Applied Materials and Lam Research, Castellano said.
Two heroes fight for hegemony
In the decades before 2018, Applied Materials has long been the No. 1 supplier of semiconductor equipment in the world, relying on its comprehensive and powerful product line, especially the front-end semiconductor manufacturing with higher technology content equipment, the company has a solid technical foundation.
Historically, Applied Materials has continuously strengthened its strength through a series of mergers and acquisitions. However, in the 30 years from 1967 to 1996, the company had only one acquisition related to its core business, the acquisition of the British company Lintott Engineering in 1980, entering the ion implantation market and launching the first fully automatic in 1985. Precision Implant 9000, an ion implanter. In 1992, Applied Materials surpassed TEL to become the world’s largest semiconductor equipment manufacturer, and has held the title for many years. After becoming the market leader, the company accelerated the pace of mergers and acquisitions. From 1997 to 2007, it initiated 14 mergers and acquisitions, continuously entering new markets and improving product composition.
Applied’s product line covers dozens of devices for semiconductor manufacturing, including atomic layer deposition (ALD), chemical vapor deposition (CVD), physical vapor deposition (PVD), ion implantation, etching, rapid thermal processing (RTP), chemical Mechanical polishing (CMP), and wafer inspection equipment, etc.
The technical barriers of the semiconductor equipment industry are very high. As the process becomes more and more advanced, higher and higher requirements are put forward for the performance and stability of semiconductor equipment, and a lot of research and development funds are required. Applied Materials has always maintained a high investment in R&D. 30% of its employees are professional R&D personnel, with nearly 12,000 patents, and an average of more than 4 new patents are applied for every day. It is this continuous high investment in R&D that has contributed to the internal innovation of Applied Materials, which constitutes a high technical barrier, and has maintained its position as the world’s largest semiconductor equipment company since 1992.
In terms of ASML, according to Gartner statistics, the company’s share in the global lithography machine market is close to 80%. Among the revenue, deep ultraviolet lithography machine (DUV) accounts for the highest proportion, reaching 55%. With the volume of TSMC’s 5nm+ process Production, the demand for its EUV lithography machine has increased significantly.
In the third quarter of 2019, ASML’s new EUV orders reached 23 units, which is a 130% increase from the all-time high of 10 units. At the same time, ASML’s EUV deliveries have also steadily increased. According to statistics, 7 EUV devices were delivered in the third quarter of 2019 and 8 units were delivered in the fourth quarter, thus achieving 26 units delivered throughout the year. And in 2018, the number of EUV devices delivered to customers was 5, 11 and 18, respectively.
In addition to TSMC, a major customer, Samsung is also closely following advanced processes, especially the 7nm process. To this end, the company purchased 15 additional EUV equipment from ASML in 2019, which is the 10 it announced in February 2018. After EUV, purchase in large quantities again.
In the third quarter of 2020, ASML delivered a total of 10 EUV equipment and achieved sales revenue of 14 systems in the quarter. New orders in the third quarter reached 2.9 billion euros, of which 595 million euros came from 4 EUV equipment.
On the DUV lithography side, the company qualified the first TWINSCAN NXT:2050i in the third quarter of 2020 and shipped it early in the fourth quarter. NXT: The 2050i is a new version based on the NXT platform that includes technical improvements to the reticle stage, wafer stage, projection objective and exposure laser. Thanks to these innovations, the system provides better control of overlay accuracy than its predecessor, as well as higher productivity.
In terms of EUV lithography machines, most of the TWINSCAN NXE:3400B systems have been upgraded with productivity modules at the same time. ASML announces final specs for TWINSCAN NXE: 3600D, new model on EUV roadmap with 30 mJ/cm2 exposure speed, 160 wafers per hour exposure, 18% increase in productivity, and improved machine kit Quasi-accuracy down to 1.1nm, with shipments scheduled to begin in mid-2021.
Segmentation Market Pattern and Chinese Power
Let’s take a look at the market structure of several major segments of the WFE market.
In terms of lithography machines, major manufacturers include ASML (Netherlands), Nikon (Japan), Canon (Japan) and Shanghai Microelectronics (SMEE, China). ASML launched the TWINSCAN series of step-scan lithography machines in 2001, which adopts a dual-stage system architecture, which can effectively improve the output rate of equipment, and has become the most widely used high-end lithography machine.
The 90nm high-end step-and-scan projection lithography machine developed by Shanghai Microelectronics has completed the whole machine integration test, and has carried out process tests on the customer’s production line. In the Chinese market, Shanghai Microelectronics is the only company in China that can produce integrated circuit lithography machines. Among the lithography machines that the company has mass-produced, the best performance is SSA600/200, which can reach 90nm process technology, while ASML The N+1 lithography machine produced adopts an advanced process and can reach 7nm. Therefore, the high-end lithography machines required by domestic fabs are completely dependent on imports. In addition, from the perspective of other lithography equipment such as lithography machine workbench, coating and development, degumming/cleaning, etc., my country’s research companies include Huazhuo Jingke, Xinyuan Micro, and Yitang Semiconductor.
In terms of etching machines, Lam Research, TEL, and Applied Materials have achieved full coverage of silicon etching, dielectric etching, and metal etching, occupying more than 80% of the global dry etching machine market.
In the Chinese market, the dielectric etching machine is the most advantageous semiconductor equipment in my country. At present, among the mainstream equipment in China, the localization rate of degumming equipment, etching equipment, heat treatment equipment, cleaning equipment, etc. has reached more than 20%. Among them, the largest market is the etching equipment, and the representative manufacturers are China Micro Corporation, North Huachuang, and Yitang Semiconductor.
Zhongwei Semiconductor is strong in the field of dielectric etching, and its products have achieved mass production on more than 20 production lines including TSMC, SK Hynix, SMIC and other manufacturers. The company’s 5nm plasma etching machine has been verified by TSMC and has been used in the world’s first 5nm process production line. China Micro Semiconductor has also entered the field of TSV through silicon via etching and metal hard mask etching.
North Huachuang is strong in the fields of silicon etching and metal etching. Its 55nm/65nm silicon etching machine has become the main equipment of SMIC. The company’s 28nm silicon etching machine has also entered the industrialization stage, and its 14nm silicon etching machine The machine is being verified in the production line, and the metal hard mask etching machine has broken through the 28nm-14nm process.
In terms of physical thin film deposition (PVD), Applied Materials dominates, accounting for more than 80% of the global market share. In terms of chemical deposition (CVD), Applied Materials, Lam Research, and TEL account for more than 70% of the global market share.
Among Chinese equipment manufacturers, NAURA has the most types of thin film deposition equipment. Its 28nm hard mask PVD has achieved mass production, and its copper interconnect PVD, 14nm hard mask PVD, Al PVD, LPCVD, and ALD (atomic deposition) equipment has been Enter the production line verification stage. In April 2020, NAURA announced that its THEORISSN302D 12-inch silicon nitride deposition equipment has entered the leading domestic integrated circuit manufacturing enterprise. The delivery of this equipment means that the domestic vertical LPCVD equipment has achieved significant progress in the application expansion of advanced integrated circuit manufacturing.
In addition, China Micro Semiconductor’s MOCVD has achieved domestic substitution in China. Shenyang Tuojing 65nm PECVD has achieved mass production.
In terms of ion implantation, the main manufacturers are Applied Materials and Axcelis. Most of the ion implanters used in Chinese production lines are imported.
In China, Beijing Zhongkexin, CLP 48, Shanghai Kaishitong, etc. can also provide a small amount of products. Among them, Zhongkexin has the mass production capacity of on-line models of different types of ion implanters (low energy large beam current, medium beam current and high energy).
In terms of cleaning equipment, trough wafer cleaning machines currently account for about 20% of the entire cleaning process, and the market has been gradually replaced by single wafer cleaning machines. The main manufacturers of trough wafer cleaning machines are Deans, TEL and JET, which account for more than 75% of the global market share.
The main manufacturers of single-wafer cleaning machines are Japan’s Deans, TEL and American Lam Research, three of which account for more than 70% of the global market share.
Among the single-wafer wet process equipment manufacturers in China, the Space Alternating Phase Shift (SAPS) megasonic cleaning equipment and the sequential cavitation oscillation control (TEBO) megasonic cleaning equipment exclusively developed by Shengmei Semiconductor have been successfully integrated into South Korea and China. circuit production line. The cleaning equipment of NAURA has also successfully entered the SMIC production line.
According to the statistics of China International Tendering Network, among the more than 200 cleaning equipments purchased by Yangtze Storage, Hua Hong Wuxi, and Shanghai Huali Phase II projects, the suppliers are sorted according to the number of bids, followed by Deans, Shengmei, and Lam. Research, TEL and North Huachuang, the shares are 48%, 20.5%, 20%, 6% and 1%.
In terms of polishing machines (CMP), the main manufacturers are Applied Materials, and Japan’s Ebara, of which Applied Materials accounts for about 60% of the global CMP equipment market, and Ebara accounts for about 20%.
In China, the main R&D units of CMP equipment include Tianjin Huahai Qingke and CLP 45. Among them, Huahai Qingke’s polishing machine has been tried out on SMIC’s production line.
To sum up, in the field of semiconductor equipment, the world’s top three applied materials, ASML and TEL have a high market share and a strong voice, while relatively speaking, the top domestic manufacturers in China are in absolute revenue. There is still a big gap in terms of amount and market share. For example, a data from the China Electronics Special Equipment Industry Association shows that in 2019, the sales revenue of Chinese semiconductor equipment manufacturers ranked first in Zhejiang Jingsheng Electromechanical, and its semiconductor equipment sales revenue in 2019 was 2.886 billion yuan, ranking second. The top one is North Huachuang, with sales revenue of 2.842 billion yuan. Judging from the sales revenue of global semiconductor equipment leading companies, the scale of my country’s semiconductor equipment companies is still at a relatively low level. The demand for industrial equipment mostly depends on international brands, and there is still a lot of room for development of local equipment.