While driving advances in HBM, foundry, and advanced packaging, AI generative applications also boosted the demand and sales of semiconductor equipment.

Recently, Japanese semiconductor equipment giant DISCO announced that its non-consolidated (individual) shipments for April to June 2024 amounted to JPY 85.7 billion, marking a 50.8% year-on-year increase. The quarterly (individual) shipment surpassed the JPY 78.5 billion from January to March 2024, setting a new record high.

DISCO pointed out that the demand for precision processing equipment related to generative AI remains solid; for consumable-type precision processing tools, the demand remains high, align with the operation rates of customers’ equipment.

Semiconductor equipment refers to specialized equipment used in the production of various types of integrated circuits and discrete semiconductor devices, encompassing various products mainly categorized into front-end process equipment and back-end process equipment.

Front-end process equipment is used in the wafer manufacturing process involving products such as lithography machines, etching equipment, thin film deposition equipment, and CMP equipment.

Back-end process equipment is mainly used in the packaging and testing processes of semiconductor products to ensure product quality and reliability. Representative products include dicing equipment, packaging equipment, testing equipment, and wafer dicing saws, which are used to cut wafers into individual chips for subsequent packaging and testing. DISCO is a leading manufacturer in this segment.

Japanese semiconductor equipment holds a significant position globally, gathering numerous renowned companies such as Tokyo Electron, Advantest, Hitachi High-Tech, Nikon, and DISCO.

With the AI boom, the industry believes that sales of Japanese semiconductor equipment will continue to climb up. The Semiconductor Equipment Association of Japan (SEAJ) forecasts that Japan’s semiconductor equipment sales is expected to exceed JPY 4 trillion for the first time in 2024, representing a 15% annual increase, which is projected to surpass JPY 5 trillion by 2026.

This growth is primarily benefited from the increasing demand for AI-driven GPU and HBM. In May 2024, Japanese semiconductor equipment sales surged by 27% YoY, continuing to grow and setting new monthly records.

China’s semiconductor equipment market is also enjoying robust growth driven by favorable factors like AI. Recently, data jointly released by the Semiconductor Equipment and Materials International (SEMI) and SEAJ indicated that in the first quarter of 2024, global semiconductor equipment sales totaled USD 26.4 billion, down 2% YoY and 6% QoQ, which was dragged down by the sluggish demand in some markets.

Despite the headwind globally, China’s sales reached USD 12.52 billion in the first quarter, up by 113% YoY, maintaining its position as the world’s largest semiconductor equipment market for the fourth consecutive quarter.

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(Photo credit: TEL)

As the demand for AI chips surges, orders for thermal compression (TC) bonders, which play a critical role in HBM (high-bandwidth memory) manufacturing, are also heating up.

To further gain market momentum, South Korean chip packaging equipment manufacturer Hanmi Semiconductor plans to launch 2.5D big die TC bonder models in the second half of 2024, while increasing its annual sales target for this year to 650 billion won (USD 471 million), according to the latest report by the Korea Economic Daily.

Citing Kwak Dong-shin, vice chairman and CEO of Hanmi Semiconductor, the report notes that the company eyes strong revenue growth in the next two years, projecting 1.2 trillion won (USD 870 million) in sales for 2025, and 2 trillion won (USD 1.45 billion) for 2026.

TC bonders play a pivotal role in HBM production by employing thermal compression to bond and stack chips on processed wafers, thereby significantly influencing HBM yield. According to the report, Hanmi plans to introduce several upgraded models in the next two years, including 2.5D big die TC bonders in the second half of this year, mild hybrid bonders in the latter half of 2025, and hybrid bonders in 2026.

Memory giants have developed their own ecosystems to secure TC bonders’ supply. The report notes that Hanmi has been providing its TC bonders to SK hynix, while the latter is a major HBM supplier to Nvidia. In addition, the company also entered into a 22.6 billion won agreement with Micron in April.

Whether in the near future, Hanmi Semicodutor would be able to finalize similar contracts with Samsung, another memory heavyweight, remains to be seen. For now, Samsung sources its equipment from Japan’s Toray and Sinkawa, as well as its subsidiary SEMES.

Hanmi Semiconductor produces TC bonders at its six factories located in Incheon, where its headquarters are situated. The report indicates that it aims to increase the capacity of its newest, the sixth factory from 264 units of TC bonders annually this year to 420 units next year, which makes it the largest annual capacity for TC bonder producers worldwide.

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(Photo credit: Hanmi Semicondutor)

According to a report from Wccftech, Huawei’s Kirin 9100 processor is scheduled to be unveiled later this year, rumored to be manufactured using SMIC’s 5nm process. Its performance is reported to surpass that of the Qualcomm Snapdragon 8 Gen 2, and it will be featured in the entire Mate 70 series of smartphones.

The same report cited industry sources, suggesting that SMIC has successfully produced 5nm chips using DUV lithography instead of EUV, which is typically required for 5nm production. The high cost and low yield of DUV make it a challenging feat for most manufacturers. Fortunately, this breakthrough could help Huawei narrow the performance gap in its processors.

Reportedly, the Kirin 9100 is rumored to outperform the Snapdragon 8 Gen 2 overall and offer interface smoothness comparable to the Snapdragon 8 Gen 3. Huawei’s software optimization is anticipated to contribute significantly, as the company plans to launch HarmonyOS NEXT this year, completely moving away from the Google Android framework.

The report notd that switching to HarmonyOS NEXT has advantages, including memory usage that is three times more efficient than Android, and stringent resource consumption management. The new system can also be installed on older Huawei smartphones with previous-generation Kirin processors. Thanks to the 5nm process, the Kirin 9100 will also have improved energy efficiency. However, the actual performance will need to be verified once Huawei releases more detailed information.

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(Photo credit: Huawei)

Peter Wennink, former CEO of ASML, recently stated in an interview with Dutch broadcaster BNR that the chip war between China and the US lacks factual basis and is entirely driven by ideology. According to reports from Reuters and the Commercial Times, Wennink also anticipated that this chip war will not be resolved anytime soon and could potentially persist for decades.

The global EUV lithography supplier ASML stands out as the world’s largest and most advanced EUV company, as both TSMC and Samsung utilize EUV equipment for manufacturing, covering TSMC’s 7nm, 5nm, and 3nm processes and Samsung’s EUV Line (7nm, 5nm, and 4nm), along with the 3nm GAA process.

Wennink further emphasized that ASML has been operating in China for over 30 years, serving numerous customers and employing a large workforce locally. Therefore, the company feels obligated to protect the rights and interests of its customers and employees.

He acknowledged striving to maintain a balance between the US and China during his tenure, advocating on one hand for the US government to relax export restrictions and on the other hand raising concerns with Chinese officials about intellectual property infringements.

According to the reports, Wennink brought up the concerns from the U.S. authority about which party he sided with. Wennink noted that officials in Washington might sometimes think he’s friend of China. However, he is a friend to ASML’s customers, suppliers,  employees and shareholders. He then forecasted that given geopolitical interests are at stake, the chip war could take decades to play out.

Before retiring in April this year, Peter Wennink led ASML for a decade, transforming it into Europe’s largest semiconductor equipment manufacturer. During his tenure, China’s semiconductor influence rapidly grew, becoming ASML’s second-largest customer outside of Taiwan.

Since imposing export restrictions on China in 2018, the US has gradually expanded the list of controlled product categories, thus impacting ASML. In April this year, the US announced the latest round of export restrictions, limiting ASML’s ability to service high-end products already shipped to China.

At the time, Wennink emphasized that these new restrictions would not significantly impact ASML’s financial performance from 2025 to 2030, as only a small portion of its Chinese customers would be affected

Besides Netherlands, a previous report from Reuters on June 19 also mentioned that Japan, home to several chip equipment manufacturers like Nikon and Tokyo Electron, imposed restrictions on the export of 23 types of machinery to China to align with U.S. government policies aimed at curbing China’s technological advancements.

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(Photo credit: iStock)

With the widespread adoption of AI, the demand for GPUs and high-bandwidth memory (HBM) is soaring. The Semiconductor Equipment Association of Japan (SEAJ) has revised its forecast for sales of Japanese-made semiconductor equipment, predicting that for the first time in history, sales will exceed JPY 4 trillion in the 2024 fiscal year. It is also estimated that sales will further exceed JPY 5 trillion in the 2026 fiscal year.

Per a report by Nikkei on July 5th, SEAJ’s forecast report indicates that for the 2024 fiscal year (April 2024 to March 2025), the sales of Japanese-made chip equipment (including sales by Japanese companies both domestically and overseas) have been revised from the previous estimate of JPY 4.0348 trillion (in January 2024) to JPY 4.2522 trillion, marking a significant increase of 15.0% compared to the 2023 fiscal year.

This will be the first time in history that annual sales exceed JPY 4 trillion, setting a new record. The main reason for this growth is the widespread adoption of AI, which has led to a strong demand for GPUs used in AI servers and a continuous surge in demand for HBM used in conjunction with them.

Reportedly, SEAJ stated that, due to anticipated steady investments in logic/foundry and memory, the sales forecast for Japanese chip equipment in the 2025 fiscal year (April 2025 to March 2026) has been revised upward from JPY 4.4383 trillion to JPY 4.6774 trillion, representing a 10.0% year-on-year increase.

Additionally, the demand for chip equipment is expected to be driven by AI-related semiconductors, resulting in a projected 10.0% year-on-year increase in sales for the 2026 fiscal year, reaching JPY 5.1452 trillion. This will mark the first time annual sales exceed JPY 5 trillion.

The compound annual growth rate (CAGR) for Japanese chip equipment sales during the 2024-2026 period is estimated to be 11.6%. Japan’s global market share for chip equipment (in terms of sales) is approximately 30%, making it the second-largest in the world, following the United States.

SEAJ has indicated that in addition to servers, AI will be integrated into into PCs and smartphones at a faster pace in the near future. SEAJ President Toshiki Kawai mentioned that by 2027, 30-40% of PCs and smartphones are expected to incorporate AI, which is anticipated to have a more significant impact on increasing the demand for chip equipment compared to servers.

Toshiki Kawai further mentioned that as the self-sufficiency in manufacturing equipment remains insufficient in the Chinese market, the demand remains consistent and robust for Japanese-made equipment.

On June 25th, SEAJ released statistics indicating that in May 2024, Japan’s semiconductor equipment sales (3-month moving average, including exports) reached JPY 400.954 billion. This marked a significant increase of 27.0% compared to the same month last year, marking the fifth consecutive month of growth and the largest increase in 19 months (since October 2022, with a growth of 27.6%).

Monthly sales exceeded JPY 300 billion for the seventh consecutive month and surpassed JPY 400 billion for the first time in history, setting a new monthly sales record (previously, the highest record was JPY 389.106 billion in April 2024).

Read more

• [News] New Regulations Reportedly Introduced by Japan Regarding Semiconductor Exports
• [News] Booming Sales of Japanese Semiconductor Equipment Continue to Break Records, Reportedly Surpassing JPY 300 Billion

(Photo credit: TEL)