Monthly Archives: March 2017

growth

IC Insights has raised its worldwide Semiconductor market growth forecast for 2017 to 11%

IC Insights has raised its worldwide IC market growth forecast for 2017 to 11%—more than twice its original 5% outlook—based on data shown in the March Update to the 20th anniversary 2017 edition of The McClean Report. The revision was necessary due to a substantial upgrade to the 2017 growth rates forecast for the DRAM and NAND flash memory markets.

IC Insights currently expects DRAM sales to grow 39% and NAND flash sales to increase 25% this year, with upside potential from those forecasts.  DRAM market growth is expected to be driven almost entirely by a huge 37% increase in the DRAM average selling price (ASP), as compared to 2016, when the DRAM ASP dropped by 12%. Moreover, NAND flash ASPs are forecast to rebound and jump 22% this year after falling by 1% last year.

The DRAM market started 2017 the way it ended 2016—with strong gains in DRAM ASP.  In April 2016, the DRAM ASP was $2.41 but rapidly increased to $3.60 in January 2017, a 49% jump.  A pickup in DRAM demand from PC suppliers during the second half of 2016 caused a significant spike in the ASP of PC DRAM.  Currently, strengthening ASPs are also evident in the mobile DRAM market segment.

With total DRAM bit volume demand expected to increase by 30% this year and DRAM bit volume production capacity forecast to increase by 20%, IC Insights believes that quarterly DRAM ASPs could still surprise on the upside in 2017. Furthermore, DRAM output is also being slowed, at least temporarily, by the ongoing transition of DRAM production to ≤20nm feature sizes by the major DRAM producers this year.
At $57.3 billion, the DRAM market is forecast to be by far the largest IC product category in 2017, exceeding the expected MPU market for standard PCs and servers ($47.1 billion) by $10.2 billion this year.  Figure 1 shows that the DRAM market has been both a significant tailwind (i.e., positive influence) and headwind (i.e., negative influence) on total worldwide IC market growth in three out of the past four years.

Figure 1

Spurred by a 12% decline in the DRAM ASP in 2016, the DRAM market slumped 8% last year.  The DRAM segment became a headwind to worldwide IC market growth in 2016 instead of the tailwind it had been in 2013 and 2014. As shown, the DRAM market shaved two percentage points off of total IC industry growth last year.  In contrast, the DRAM segment is forecast to have a positive impact of four percentage points on total IC market growth this year. It is interesting to note that the total IC market growth rate forecast for 2017, when excluding the DRAM and NAND flash markets, would be only 4%, about one-third of the current worldwide IC market growth rate forecast including these memory devices.

The March Update to the 2017 edition of The McClean Report further describes IC Insights’ IC market forecast revision, updates its 2017-2021 semiconductor capital spending forecast, and shows the final 2016 top 10 OSAT company ranking.

To review additional information about IC Insights’ new and existing market research reports and services please visit our website: www.icinsights.com.

 

 

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Test Yourself: How well do you know TSMC?

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Where is TSMC located?

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When did TSMC launch the 14nm process?

history

The History of the Integrated Circuit

The integrated circuit, sometimes called a ASIC, IC, or just a chip, is a series of transistors placed on a small, flat piece that is usually made of silicon. The IC is really a platform for small transistors that a small chip which can operate faster than old-fashioned large transistors which were used in previous generations. They are also far more durable and significantly cheaper to produce which allowed them to become part of many different electronic devices.

 

The advent of the integrated circuit revolutionized the electronics industry and paved the way for devices such as mobile phones, computers, CD players, televisions, and many appliances found around the home. In addition, the spread of the chips helped to bring advanced electronic devices to all parts of the world.

 

Early History of the Integrated Circuit

 

The beginnings of the IC really started with the inherent limitations of the vacuum tube, a large, bulky device that preceded the transistor which eventually led to the microchip. Vacuum tubes worked as an electronic circuit, but they required warming up before they could operate. Plus, they were quite vulnerable to being damaged or destroyed even by minor bumps or impacts.

 

With the limitations in mind, German engineer Werner Jacobi filed a patent in 1949 for a semiconductor that operated similarly to the current integrated circuit. Jacobi lined up five transistors and used them in a three-stage arrangement on an amplifier. The result as Jacobi recognized was the ability to shrink devices such as hearing aids and make them cheaper to produce.

 

Despite Jacobi’s invention, there appeared to be no immediate interest. Three years later, Geoffrey Dummer who worked for the Royal Radar Establishment as part of the Ministry of Defence in Britain proposed the first fully conceived idea for the integrated circuit. However, despite giving lectures about his ideas, he was never able to build one successfully. It was the failure to actually create an IC on his own that led to the movement towards the chip overseas to America.

 

Invention of the IC

 

Fast forward to 1957 when the idea of creating small, ceramic wafers that each contained one component was first proposed by Jack Kilby who worked for the US Army. His idea led to the Micromodule Program which held quite a bit of promise. However, as the project to develop this idea started to gain traction, Kilby was inspired to come up with another, even more advanced design that became the IC that we know today.

 

Kilby’s prototype was primitive by today’s standards, but it worked and his idea really took hold when he left the army and went to work for Texas Instruments. On September 12th, 1958, Kilby demonstrated the first working IC and applied for a patent on February 6th, 1959. Kilby’s description of the device being a work of an electronic circuit that was totally integrated led to the coining of the term, integrated circuit.

 

Perhaps not surprisingly, the first customers for Kilby’s invention was the US Air Force. It was not long before many common electronic devices were being designed with the IC in mind. For his part in inventing the first true integrated circuit, Kilby won the Nobel Prize in 2000. Nine years later, his work was labeled a milestone by the IEEE.

 

Development and Production

 

Although Kilby’s IC was revolutionary, it was not without problems. One of the most troubling was that his IC or chip was fashioned out of germanium. About six months after Kilby’s IC was first patented, Robert Noyce, who worked at Fairchild Semiconductor recognized the limitations of germanium and creating his own chip fashioned from silicon.

 

At the same time, Jay Last, who led the development team at Fairchild Semiconductor, worked on producing the first planar integrated circuit. Instead of a singular version, it would use transistors in two pairs so they could operate separately. A groove was made between the transistors so they could operate properly. Despite how revolutionary Last’s idea was and the success of the prototype, the bosses at Fairchild either didn’t understand or recognize his work, so he was let go.

 

Fairchild went forward and created IC chips for use in the Apollo spacecraft which went to the moon. It was this program along with using chips for satellites that spread the IC from military applications to the commercial market. It also lowered the price of the IC drastically which made it perfect for use in many electronic devices.

 

Noyce, who stayed at Fairchild, used an idea from Kurt Lehovec, who worked at Sprague Electric, to create the p-n junction isolation. This was a valuable new concept for the IC since it allowed the transistors placed inside to work independently of each other. This opened new possibilities for the chip and it was not long before Fairchild Semiconductor developed self-aligned gates which is what all CMOS computer chips use today.

 

The development of the self-aligned gates was first credited to Federico Faggin who came up with the idea in 1968 and was recognized for his work in 2010 when he received a National Medal of Technology and Innovation.

 

The 1960s were also dominated by many lawsuits between rival companies that had developed their own version of the microchips as they were being improved for many different types of electronic devices. However, it would be the computer that saw the greatest benefit. In the 1950s, computers were massive devices that could barely hold a few megabytes. The incorporation of the integrated chip combined with other innovations allowed computers to shrink considerably in size while gaining in memory.

 

Today, the IC is still a vital part of many different types of electronic devices. It is recognized as one of the most important inventions of the 20th century and has led to the elevation of Jack Kilby and Robert Noyce to be considered the inventors of the integrated chip. While Kirby was the first, Noyce added the right elements to make the IC work properly and provide it with the potential that it has demonstrated over the decades.

 

 

Market Research

MCU Market Forecast to Reach Record High Revenues Through 2020

The IC industry’s original system-on-chip (SoC) product category—microcontrollers—is expected to steadily reach record-high annual revenues through the second half of this decade despite an overall slowdown in unit growth during the next five years. Microcontroller sales barely increased in 2015, rising less than a half percent, to set a new record high of slightly more than $15.9 billion, thanks to a 15% increase in MCU shipments that lifted worldwide unit volumes to an all-time peak of 22.1 billion last year (Figure 1).  Strong unit growth—driven by smartcard MCUs and 32-bit designs—enabled the MCU market to overcome a 13% drop in the average selling price (ASP) of microcontrollers to a record-low $0.72 in 2015.   Price erosion—especially in 32-bit MCUs—has weighed down MCU sales growth in three of the last four years, but ASPs are now expected to stabilize and increase slightly in the 2015-2020 forecast period, rising by a CAGR of 1.6% compared to a -7.7% annual rate of decline between 2010 and 2015.

 

Figure 1
While ASP erosion is expected to end, MCU unit shipments are forecast to rise at a much lower rate than in the first half of this decade, primarily because of a slowdown in the growth of smartcard microcontrollers and tighter reins on IC inventories for the “next big thing”—the Internet of Things (IoT). IC Insights’ forecasts MCU sales will rise in 2016 to nearly $16.6 billion, which is a 4% increase from $15.9 billion in 2015.  MCU unit volumes are expected to grow by 2% in 2016 to 22.4 billion, and the ASP for total microcontrollers is forecast to rise 2% this year to $0.74.  Between 2015 and 2020, microcontroller sales are projected to grow by a CAGR of 5.5% to nearly $20.9 billion in the final year of the forecast.  Since the middle 1990s, worldwide MCU sales have grown by a CAGR of 2.9%.

As shown in Figure 1, no downturns are anticipated in MCU sales through 2020.  Total MCU revenue growth is expected to gradually strengthen between 2016 and 2019 (when sales are forecast to grow 9%) before easing back to a 4% increase in 2020.  MCU unit shipments are now projected to grow by a CAGR of 3.9%.

A major factor in slower MCU unit growth through 2020 is the maturing of the smartcard market, which in recent years has accounted for nearly half of microcontroller shipments and about 15-16% of total revenue. By 2020, smartcard MCUs are expected to represent 38% of total microcontroller unit shipments and about 12% of sales.

 

Additional details and analysis on microcontrollers and other IC product segments are included in the 2016 edition of IC Insights’ flagship report, The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry.  A subscription to The McClean Report includes free monthly updates from March through November (including a 250+ page Mid-Year Update), and free access to subscriber-only webinars throughout the year.  An individual-user license to the 2016 edition of The McClean Report is priced at $3,890 and includes an Internet access password.  A multi-user worldwide corporate license is available for $6,890.

 

 

To review additional information about IC Insights’ new and existing market research reports and services please visit our website: www.icinsights.com.

 

samsung-apple

Mobile Phone IC Market CAGR Forecast at 6.7% Through 2019

he increasing value of the average IC content in cellular handsets along with the increasing percentage of smartphones sold as a percent of total cellular handsets will help drive the cellphone IC market to $94.3 billion in 2019. Strong double-digit growth rates in the cellular handset IC market were logged in 2013 and 2014 but only a 2% increase was registered in 2015. Despite the expected increase of 4% in 2016, the 2015-2019 total cellphone IC market CAGR is forecast to be 6.7%, 3.0 points higher than the 3.7% CAGR forecast for the total IC market during this same time.  The $94.3 billion 2019 cellphone IC market is forecast to be about 30% higher than the level registered in 2015.

 

Figure 1
In 2015, the IC product segment that had the highest average content per cellphone was the MPU category ($9.92), which includes the application processors used in smartphones.  The second highest was the application specific logic segment, which had an average $8.55 of IC content per cellular handset.  In total, there was an average of $38.78 worth of ICs in a 2015 cellular handset.

DRAM memory held 59% ($12.3 billion) of the total cellphone memory market in 2015, with NAND flash representing most of the remainder of the market.  The $21.0 billion cellphone memory market in 2015 was driven by the surge in shipments of memory-rich high-end smartphones and the 6% increase in the cellphone DRAM market.

The average analog content in a cellphone increased in 2015 to $6.64 while the total cellphone analog IC market increased by 8%, six points better than the 2% growth rate experienced by the total 2015 analog IC market.  Application specific analog, mostly comprised of mixed-signal devices, represented about 83% of the total $12.5 billion 2015 cellular handset analog IC market.

In 2019, as the market shifts more toward low-end smartphones, the cellphone MPU market is expected to represent 23% of the total cellphone IC market, down two points from 26% in 2015.  Moreover, the cellphone DRAM memory market in 2019 is forecast to reach $19.9 billion and be more than 2x larger than the total flash cellphone IC market ($9.5 billion) in that year.  In contrast to the high-growth cellphone DRAM market, the 2019 cellphone DSP market is forecast to be less than $0.1 billion, down from $1.3 billion in 2012.
 

Additional details on the market for cellular phones and cellphone ICs are included in the 2016 Update of IC Insights’ IC Market Drivers—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits. This report examines the largest, existing system opportunities for ICs and evaluates the potential for new applications that are expected to help fuel the market for ICs through the end of this decade.

IC Market Drivers is divided into two parts.  Part 1 provides a detailed forecast of the IC industry by system type, by region, and by IC product type through 2019.  In Part 2, IC Market Drivers examines and evaluates key existing and emerging end-use applications that will support and propel the IC industry through 2019.  Other system application covered include the Internet of Things, smartphones, personal/mobile computing (including tablets), servers, medical/wearable devices, and a review of many applications to watch—those that may potentially provide significant opportunity for IC suppliers later this decade.  IC Market Drivers 2016 is priced at $3,490 for an individual user license and $6,590 for a multi user corporate license.

 

To review additional information about IC Insights’ new and existing market research reports and services please visit our website: www.icinsights.com.

Microprocessor in hand in front of chip layout

Semiconductor Unit Shipments To Exceed One Trillion Devices in 2018

Total yearly semiconductor unit shipments (integrated circuits and opto-sensor-discrete, or O-S-D, devices) are forecast to continue their upward march and are now expected to top one trillion units for the first time in 2018, according to data presented in IC Insights’ recently released 2016 edition of The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry, and its soon to be released 2016 O-S-D Report—A Market Analysis and Forecast for the Optoelectronics, Sensors/Actuators, and Discretes. Semiconductor shipments in excess of one trillion units are forecast to be the new normal beginning in 2018. Figure 1 shows that semiconductor unit shipments are forecast to climb to 1,022.5 billion devices in 2018 from 32.6 billion in 1978, which amounts to average annual growth of 9.0% over the 40 year period and demonstrates how increasingly dependent on semiconductors the world has become.

 

 

Figure 1
 

The largest annual increase in semiconductor unit growth during the timespan shown was 34% in 1984; the biggest decline was 19% in 2001 following the dot-com bust.  The global financial meltdown and ensuing recession caused semiconductor shipments to fall in both 2008 and 2009, the only time the industry has experienced consecutive years in which unit shipments declined.  Semiconductor unit growth then surged 25% in 2010, the second-highest growth rate since 1978.

 

The percentage split of IC and O-S-D devices within total semiconductor units has remained fairly steady despite advances in integrated circuit technology and the blending of functions to reduce chip count within systems.  In 1980, O-S-D devices accounted for 78% of semiconductor units and ICs represented 22%. Thirty-five years later in 2015, O-S-D devices accounted for 72% of total semiconductor units, compared to 28% for ICs (Figure 2).

 


Figure 2

 
From one year to the next year—and usually depending on the must-have electronic system or product in the market at the time—different semiconductor products emerge to experience the strongest unit shipment growth. Figure 3 shows IC Insights’ forecast of the O-S-D and IC product categories with largest unit growth rates forecast for 2016. Semiconductors showing the strongest unit growth are essential building-block components in smartphones, new automotive electronics systems, and within systems that are helping to build out of Internet of Things.  More about these semiconductor products and end-use applications are included in IC Insights’ McClean Report and O-S-D Report.

 


Figure 3

 

Report Details:  The 2016 McClean Report and 2016 O-S-D Report

 
Further details on IC, O-S-D, and total semiconductor unit and market trends are provided in the 2016 editions of two recently revised reports from IC Insights.  The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry is IC Insights’ flagship report and analysis of the IC market. A subscription to The McClean Report includes free monthly updates from March through November (including a 250+ page Mid-Year Update), and free access to subscriber-only webinars throughout the year.  An individual-user license to the 2016 edition of The McClean Report is priced at $3,890 and includes an Internet access password.  A multi-user worldwide corporate license is available for $6,890.

 

IC Insights expands its coverage of the semiconductor industry with its 360-page O-S-D Report—A Market Analysis and Forecast for the Optoelectronics, Sensors/Actuators, and Discretes (released in late March 2016). Details in this one-of-a-kind report include a detailed forecast of sales, unit shipments, and selling prices for more than 30 individual product types and categories through 2020. Also included is a review of technology trends for each of the segments.  The 2016 O-S-D Report, with more than 240 charts and figures, is priced at $3,390 for an individual-user license and $6,490 for a multi-user corporate license.

 

 

 

 

 

More Information Contact

For more information regarding this Research Bulletin, please contact Brian Matas, Vice President of IC Insights. Phone: +1-480-348-1133, email: bmatas@icinsights.com