april 2017 cmc monthly meeting...detailed market trends analysis for hydrogen peroxide, sulfuric...

April 2017 CMC Monthly Meeting

LITA SHON-ROY, PRESIDENT / CEOYU BIBBY, PHD, SENIOR TECHNOLOGY ANALYSTMIKE WALDEN, DIRECTOR CMC PROGRAMS

APRIL 20, 2017

4/21/2017

Agenda Opening / Hot Topic Identification* 3 - 5 min CMC Update – Upcoming Mtgs /

Conf Review & Member Homework 10 -15 min DB Survey Update 5 - 8 min TECHCET Analyst Update – Wet Chems 20 min Hot Topic Discussion* TBD Other:_____________ TBD

2

* Hot Topics are Materials Related Issues that you want to alert others about and/or get feedback or validation on. Please avoid using supplier names where necessary.

4/21/2017

CMC Anti-Trust Reminder• CMC Fabs activities are a coordinated effort among

competitors in the semiconductor device fabrication industry and are, therefore, subject to antitrust laws.

• Although this coordination is perfectly legal under U.S. antitrust laws, we want to make sure that no antitrust risks are raised by the manner in which the CMC Fabs program is carried out. Accordingly, these guidelines may go somewhat beyond the prohibitions of the law, but that is done in the interest of safety.

• The penalties for violating antitrust laws are quite severe, including large fines and even imprisonment of individuals found guilty of illegal conduct.

3

4/21/2017

Insert Your Hot Topics Here Hot topic 1 ______________________________ Hot topic 2 ______________________________ Etc.

4

4/21/2017

CMC F2F Meeting Highlights CMC private meeting: May 9-10 – Qorvo hosting at

Doubletree Inn, Richardson, TX (Dallas area)

Overview

Day 1:• Case studies / Hot Topics;• Ad hoc Hot Topics; • Live survey; & • Networking dinner

Day 2*:• Invited supplier presentations

(morning);• CMC Joint Session – Fabs and

Associates (afternoon); &• Networking reception

* May invite prospective Fab members

5

4/21/2017

CMC Private F2F Meeting (Day 1) 6

Time - Topic8:30 am TECHCET to Provide Ad hoc Hot Topic Index Cards for Members to Fill out8:45 am Welcome, Introductions, Meeting Objectives, Agenda Review9:00 am Case Studies* and Prepared Hot Topics

15 min Break at 10:30am

Case Studies / Prepared Hot Topics Wrap-up, Turn in Ad hoc Hot Topics Cards12:00 Lunch1:15 pm Facilitated Ad hoc Hot Topic Discussion3:15 pm Complete Live Survey – Silicon Wafer Status

3:40 pm Break4:10 pm Survey Results + Q & A [Are these results surprising? Why or why not? Are these

results valid? Why or why not?]5:00 pm Adjourn, CMC Networking Dinner – depart lobby at 5:30 pm

Open forum to discuss pressing fab concerns impacting

supply chain

Outlined SCM issues, resolutions and

lessons learned from CMC Fabs members

Supply chain topic in survey format to

engage members in interactive discussion

Socially relaxed dinner to allow

friendly exchanges among members* Each member company presents 2: Either 2 case studies or a case study and hot topic

4/21/2017

CMC Private F2F Meeting (Day 2) 7

Time Topic8:30 AM CMC Fabs Members Take Seats8:45 AM Invited Supplier Presentations to CMC

Supplier A – Wet Chemicals - KMGSupplier B – Specialty Gases - VersumSupplier C - Photoresists - JSR (TBD)Supplier D – ALD Precursors - Johnson/Matthey

11:00 AM Break11:30 AM Supplier Presentation Post-mortem Discussion12:00 AM Lunch1:30 PM CMC Fabs and Associate Member Joint Session – Welcome, Introductions

& Agenda Review1:45 PM Speaker Presentation of Common CMC Interest2:15 PM Live Survey Related to Presentation – Results Review and Discussion4:30 PM Afternoon Take-Away, Preview CMC Conference Agenda Day 3 & 45:00 PM Adjourn5:30-6:00 PM CMC Fabs and Assoc. Member Private Networking Reception*

Private presentations from invited suppliers

of interest to CMC Fabs members

Unique opportunity for fabs and suppliers to address in common

supply chain concerns

Conducive atmosphere for fab

and supplier networking * Conference reception begins at 6:00pm (same location)

4/21/2017

CMC Private Meeting Homework Each company to prepare two brief items, either:

Two case studies; OR A case study and a prepared Hot Topic Templates provided – these will be similar to those used during

the Shanghai meeting in November, 2016 Completion of each item is expected to take 15 – 20 minutes and

should be finalized prior to May 9 Case studies choices include:

Challenges of managing a critical material which represents a small portion of the supplier’s overall revenue; and

A material cost reduction strategy that delivered benefits A preview of the live survey will be provided in advance but is to

be completed only during the allotted time on May 9

8

4/21/2017

CMC Conference Update CMC Conference 2017: May 11-12, Doubletree Inn

Keynote: Hans Stork, VP/CTO of OnSemi

Focus topic roundtables after May 11 presentations http://cmcfabs.org/cmc-events/

9

4/21/2017

The Critical Materials Council (CMC) Conference is a 2- day event providing actionable information on materials and supply-chains for current and future semiconductor manufacturing. Business drives the world, but technology enables semiconductor business, so we must understand the dynamics of how materials and technologies enable the scaling of devices in IC fabs.

10

4/21/2017

CMC Conference Agenda 11

1.5 days of practical and engaging topics pertinent to the semi industry

May 11 May 12

4/21/2017

Gases DB Survey Update Double Blind Survey – gases currently underway

We HAVE NOT received enough responses to proceed with analysis – we require five or more for each given gas to have results reported

The requested submission deadline is April 30 This is a “give to get” survey so if you are interested in

receiving results, please submit your survey response to Meena Sher

If we receive enough responses in a timely fashion, results will be delivered to participants in the first half of May

CMP slurries DB survey will occur in 3Q17

12

4/21/2017

AR’s / Ideas for May Discuss Double Blind Survey – value, logistics, why aren’t

more people participating Non-semi market demand for process materials and the

impact on the semi materials supply chain – to be addressed in May

See you all in Texas!

Techcet Critical Materials: Wet Chemicals

Analyst presentation for April CMC Monthly

Yu Bibby, Ph.D.

April 2017www.Techcet.cominfo@Techcet.comTECHCET CA LLC Copyright 2016 4/21/2017

14

Confidential Information

The information contained in this presentation is for the use of Techcet’s representatives and customers or prospective customers. It is considered confidential in nature and should not be shared with others outside of the aforementioned parties. Your cooperation is much appreciated.

TECHCET CA LLC Copyright 2016 4/21/2017

15

Industry OutlookFor 1st quarter of 2017, global silicon wafers had a healthy growth on average.

At one end of the market, 200-mm silicon wafers had a growth of 4%, which is up from last year’s growth of 2%.

Suppliers of materials for mature products, such as chips from 200-mm silicon wafers, faced declining demand last few years and we start to see some improvement.

TECHCET CA LLC Copyright 2016 4/21/2017

16

Industry Outlook Cont’dAt the other end of the market, 300-mm silicon wafers had a healthy growth of 9% for the first quarter of this year, but was slowed down from last year’s growth of 12%.

Suppliers of materials used for making more advanced chips fabricated on 300-mm wafers have enjoyed much higher growth since 2013 .

We see the trend slowing down for 300-mm wafers from growth of 23% in 2013 to growth of 5% by the end of this year or early next year.

TECHCET CA LLC Copyright 2016 4/21/2017

17

Industry Outlook Cont’dProfitability has been tempered by demands from chip makers for price reductions as high as 30%.

Materials have become a cost-cutting target because chips with thinner circuit lines require more steps and more chemicals such as photoresists, dielectrics, thin-film precursors and processing wet chemicals.

We continue to see a stable growth trend in cleaning chemicals.

Large volume wet process chemicals such as sulfuric acid and hydrogen peroxide have moderate growth of 5-7%. They are not tied to any one process, they track to wafer starts.

TECHCET CA LLC Copyright 2016 4/21/2017

18

Industry Outlook Cont’d

The global hydrogen peroxide market is slightly consolidated with major players adopting mergers and acquisitions to consolidate their market shares in various regions.

Some of the major players in the global hydrogen peroxide market include Solvay S.A., The Dow Chemical Company, Mitsubishi and half dozens of others (see more details in our WetChem report).

TECHCET CA LLC Copyright 2016 4/21/2017

19

Industry Outlook Cont’dRecently, Solvay partnered with United Chemical Company (UCC) to evaluate the construction of a new hydrogen peroxide production facility in Kazakhstan.

The unit is anticipated to provide sustained supply of H2O2 to various Kazakh companies and several consumers in Central Asia.

UCC has been commissioned with active support from the Kazakhstan Government and the positive results of the evaluation are likely to boost the economy of the region.

TECHCET CA LLC Copyright 2016 4/21/2017

20

Industry Outlook Cont’d

Single wafer tools will contribute to increased wet chemicals consumption, especially such as sulfuric acid, hydrogen peroxide, hydrochloric acid for wafer cleaning and wafer handling; these already account for the largest volume consumption.

With anticipated 10 nm process being fully ramped in next few years, cleaning chemicals supply would be tight. Since 10 nm process will have more single wafer tools, this will require more wet chemicals for processing.

TECHCET CA LLC Copyright 2016 4/21/2017

21

Industry Outlook Cont’d

Market trend for sulfuric acid is for higher end and large volume. (see more details in our WetChemreport).

Some suppliers in the US have already expanded their production last year and will further expand this year to meet an anticipated ramp up in semiconductor production.

TECHCET CA LLC Copyright 2016 4/21/2017

22

Market Trends for Wet Chemicals

Based on our proprietary wafer start and processing model, we predict market trends for various wet processing chemicals.

Detailed market trends analysis for Hydrogen Peroxide, Sulfuric Acid, HF/BOE, Post CMP Cleans, Al Clean, Cu Clean, Phosphoric Acid, Nitric Acid and etc., are included in our WetChem report.

Following are some selected examples for market trends for Hydrogen Peroxide, Sulfuric Acid and Post CMP Cleans.

TECHCET CA LLC Copyright 2016 4/21/2017

23

Hydrogen Peroxide

Modest growth due to industry drivers

TECHCET CA LLC Copyright 2016 4/21/2017

24

Sulfuric Acid

Small growth due to industry drivers

TECHCET CA LLC Copyright 2016 4/21/2017

25

Post CMP Cleans

Modest growth due to industry drivers

TECHCET CA LLC Copyright 2016 4/21/2017

26

Mergers & Acquisitions

On March 10, 2017 Chemtrade Logistics announced that it has completed the purchasing of Canexus for $680 million.

Chemtrade had sales of more than $1 billion in 2015. It is one of North America’s largest producers of sulfuric acid and also makes sodium nitrate, sodium chlorate, and potassium chloride.

Canexus had sales last year of about $425 million, is a major producer of sodium chlorate and also makes chlorine and caustic soda.

TECHCET CA LLC Copyright 2016 4/21/2017

27

Mergers & Acquisitions Cont’d

Air Products & Chemicals has completed the $3.8 billion sale of its performance materials division to Evonik Industries.

The business, which had sales of about $1.1 billion in 2015, makes epoxy curing agents, polyurethane additives, and specialty surfactants.

The sale completes Air Products’ effort to exit chemicals and focus on industrial gases. It spun off its electronics materials business as Versum Materials last October.

TECHCET CA LLC Copyright 2016 4/21/2017

28

Thank You!Ybibby@techcet.com

lshonroy@techcet.com

TECHCET CA LLC Copyright 2016 4/21/2017

29

4/21/2017

Insert Your Hot Topics Here Hot topic 1 ___________ Hot topic 2 ___________ Etc.

30