2017 august monthly meeting - cmc fabs · market assessment/analysis . there is risk in the...

2017 AUGUST MONTHLY

MEETINGMike Walden, Dir. CMC Prog. & Bus. Dev.

Lita Shon-Roy, President / CEOTerry Francis, Sr. Technology Analyst

Copyright 2017 TECHCET CA LLC All Rights Reserved CMC Fabs CONFIDENTIAL 1August 2017

[email protected]

http://www.cmcfabs.org/

mailto:[email protected]

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.

• Contrary to the popular belief that the government has relaxed antitrust enforcement, in recent years the Justice Department has recommended jail sentences for the majority of persons convicted of violating antitrust laws. Moreover, the U.S. Supreme Court has ruled that a trade association may be held legally responsible for the unauthorized, as well as authorized, acts of its members. Accordingly, every effort must be made to avoid even the appearance of impropriety.

2Copyright 2017 TECHCET CA LLC All Rights Reserved CMC Fabs CONFIDENTIALAUGUST 2017

Outline■ Opening and Hot Topic Identification– 5 min

■ TECHCET Analyst Update: Terry Francis – Sputtering Targets / Metals – 20 min

■ CMC Fabs Update – Next Monthly Meeting and F2F Status – 10 min

■ CMC Fabs Survey Update – 15 min– Mini-survey (Photo-chemicals)– CMP Slurry Format– Timing

■ Hot Topics, Q&A – Up to 10 min (As Needed)

■ Other – (Time Permitting)– Past Benchmarking and Mini-Surveys


Hot Topics to Discuss _Honeywell and Praxair intentions on their respective target business_TOSOH business outlook__________________ (your hot topics here)


Terry Francis – Sr. Technology AnalystCovers metals/sputter targets markets and supply-chains. His work experience includes CTO, Sr. Director, technical application expert, process manager and engineering management from companies such as Matheson, Air Products, Applied Materials, Burroughs, NCR, AMI, and National Semiconductor. He has over 40 years of experience in the semiconductor industry and has managed businesses from $2M to over $100M in revenues. In addition, he is experienced in material, chemical, and electrical engineering as well as the R&D and development programs in the Chemical/OEM/IDM sectors in the microelectronic industry. He holds a M.B.A. from National University, and a B.S. in chemistry from Oregon State University.

TECHCET Critical Materials: Sputtering Targets/Metals

Terry A Francis

August [email protected]

6

http://www.techcet.com/

Copyright TECHCET CA LLC. All rights reserved.

Confidential InformationThe information contained in this presentation is for the use of TECHCET’s representatives and customers / prospective customers. It is considered confidential in nature and should not be shared with others outside of the aforementioned parties. Your cooperation is greatly appreciated.


Market Assessment/Analysis There is risk in the material supply-chain and changes in prices are expected during the forecast period (through 2021).

o Copper - price trend: increasing.

o Tantalum – price trend: stable to decreasing.

o Cobalt – price trend: increasing.

o Chinese target suppliers - price dynamic that needs to be watched.

o Material profitability impact – mine closures possibly continue.

Target costs can be driven by material or target manufacturing costs (details in 2017 Sputter Target Report)

Geopolitical and export issues continue to be factors - Russia and China.


UpdatesAs predicted in the TECHCET Technology Trends report, PVD growth in selected device markets has increased.

Multiple ReRAM memories are in production.

Ge2Sb2Te5 (GST) is the material used but several dopants are being employed to improve reliability and device performance.

STT-MRAM is in production.

The process used is PVD and process control is absolutely critical in this device structure. Ta, Ru, NiFe, MnIr, CoFeB, MgO are the compounds used.

FE-RAM are in niche application production.

Lead-Zirkonate-Titanate is the major material needed.


Copper Despite mine outages reducing supply by 12%, prices of copper have not risen as expected by financial analysts.

The deciding factor is China production and demand. This remains stable at a 3% growth and since this is a year for the China Party Congress, expectations are for stability.

The primary factor in China internal demand is the improvement in their electrical grid structure. TECHCET does not expect impact on sputtering targets at this time, but will follow closely.

World Copper Conference indicates shortages predicted in 2020 due to shortage of new supply projects versus projected demand growth.

Predominant growth is in the power grid sector development.

Copper manganese targets are more prevalent in the market for barrier(SFB) usage.

Copper usage in the metal plating sector for damascene and packaging is covered in a separate TECHCET report .


Global Growth in Copper: 2016 Changes and Surprise

On a global basis, copper demand appears to be heading toward a shortage. (CRU-Commodity Research unit)

London Metal Exchange

20,000mT

2016 2017


AluminumAluminum at a moderate surplus of 0.4 MMT for 2017.

China took steps to reduce Aluminum surplus keeping price steady to slightly increasing.

Aluminum prices up 3.4 % to $2030/mT

TECHCET is watching the green house gas policies on a global basis.

Countries adhering to this need to control Aluminum production due to coal usage for power generation.

Overall impact on targets is minimal.

Japanese chemicals company Showa Denko K.K. announced that it plans to double capacity at its high-purity aluminum foil plant in China due to rising demand for capacitors.


Cobalt Cobalt will be reviewed as it is becoming a replacement for W-plugs to improve contact resistance - the mining issues, in terms of conflict materials, is relevant.

On the demand side, strong requirements for cobalt in lithium ion batteries is continuing and growth is seen in applications such as high performance alloys, tool materials, and catalysts.

On a conflict material basis, both Intel and Apple have restrictions on use from the DRC.

Pricing for cobalt has risen form $15 to $24 per ton recently.


Cobalt Integration


Sn Update TECHCET is tracking the Sn commodity due to its use in EUVL and SAC solders.

EUVL is a small use but requires high purity. (Price or availability impact can be issue due to low volumes)

Sn Prices have decreased recently despite market expectations of increase. Largest growth is in the automobile battery applications.

SAC or Pb-free solders continues to grow due to FOWLP, Flip-chips, PCB.

In a separate TECHCET report, we are predicting growth of SAC solders at 23%CAGR over 5 years but TSMC A11 inFO introduction has several market predictions that are at the 50%CAGR.

Tin production is 200,ooo-300,000 tpy on a world-wide basis, 50% controlled by China . Total solder consumption is 40% based on recent global reports.


Rare EarthsChina still controls 90% of production and is in command of market pricing.

China has 10 focused programs on Rare Earth development / applications along with three focused research centers.

A view of the China’s strategy to maintain control in this sector:

China’s Ministry of Industry and Information Technology (MIIT) issued “Guidelines for formation of large enterprise groups of rare earth”. It requires by law that the China’s rare earth industry integrates and restructures into six large State-Owned-Enterprise (SOE) groups: China Aluminum Group, China Minmetals Group, Northern Rare Earth Group, Xiamen Tungsten Group, Southern(Ganzhou ) Rare Earth Group and Guangdong Rare Earth Industry Group.

China’s policy makers believe this will “let Chinese rare earth industry to form a joint force to facing the outside world to change the current rare earth oversupply situation, effectively control the rare earth production and marketing.”

China Treasury also established special funds to subsidize its Rare Earth restructure & exploitation. It issued subsidies of 458 million yuan ($67 Million) to the Ganzhou Rare Earth Group for the development and comprehensive utilization of resources dedicated to rare earth, rare earth mine geological environment restoration. Since 2012, Ganzhou Rare Earth Group has received total subsidies of 950 million yuan($140 Million) from China’s Ministry of Finance for its rare earth exploitation.

No progress on US REE supply-chain other than small academic investments in Ion Exchange extraction.

Semiconductors are in the lower percentile of use but due to Rare Earth use in major application products, this has a drizzle down affect.

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Market Assessment/Analysis Recap There is risk in the material supply-chain and changes in prices are expected during the forecast period (through 2021).

o Copper availability could run short starting 2020 due to supply

o Tantalum ore prices could go into surplus due to Lithium mine production

o Market penetration by Chinese target suppliers and possible new entrants will force price pressures on targets. Impact is already being seen in Al and will continue with Ti, and Cu

o Mine closure have been evident in line with attempts to manage supply/demand pricing and the profitability factors of specific mines

Ta and W prices are highly leveraged by price changes in raw materials and recycling. Costs of Al, Ti, Cu, and other targets materials are more dependent on fabrication costs than raw material costs.

Cobalt prices have risen and the conflict material concerns are evident.

Geopolitical and export issues continue to be factors - both restrictions on Russia and China could cause major disruptions in the supply-chain.

Thank [email protected] 908-285-3636

18


Future Meetings CMC Fabs Monthly Call – September 21– Analyst Update – Photoresist CMC F2F / Seminar – October 31 - November 1 / November 2

We have been unable to confirm hosting by a CMC Fabs member for our next Fall CMC F2F targeted for Singapore – in addition, expenses are elevated and the location is somewhat remote for overall travel

We are pursuing alternatives in Taiwan – relatively favorable outlook We will provide final confirmation by August 25

CMC F2F / Conference – Phoenix: Apr 24 – Apr 25 / Apr 26 – Apr 27, 2018


CMC Fabs Mini-survey (Photo-chemicals) “Give to get” mini-survey Initial responses were timely but have tailed off – 4 so far Requested submission by August 15 but extending to August 21 Are there additional council members who would like to take advantage of

this information? Please let me know via e-mail as this is the last call.


Upcoming Pricing Survey (CMP Slurries)(5 responses required)

■ Reality Check– Per discussion early this year, simplification is important to promote

completion and sharing – the questions below are to further stimulate thought and input from the council:

– What classes or groupings of slurry can we make in order to cover the most space with the fewest number of individual input spreadsheets?

– What specific information (input variables) are needed for this survey? – Ideas include: candidate material to be planarized, slurry particle size,

surface planarity requirements - Are these appropriate? Are there any additional ones?

■ Survey approach – double blind, per normal methods

■ Timing: distribute within two weeks from finalizing format, end of August – allow four weeks for response and 1.5 weeks for analysis and distribution, assuming timely inputs


Hot Topics Discussed _Honeywell and Praxair intentions on their respective target business_TOSOH business outlook


Other Discussion


Past Benchmarking and Mini-Surveys We are putting together a proposal to allow access to past

benchmarking (Member Shares) and mini-surveys This would provide an option for:

New members to participate; and Members to revisit / update respective inputs

In order have access to results, companies would be required to complete inputs (new members / members who did not previously participate)

Members who completed in the past would have access to the updated results and have the option to refresh their previous inputs prior to distribution

Rollout expected end of 4Q17


BCP Reliability of SupplyEnsuring Incoming QualityInventory ManagementProcurement Savings and KPIsIso-Tanker ConfigurationSupplier AuditingShip To ControlSupplier Claims HandlingTracking Material ConsumptionSupplier Management

PCN HorizonWorking Group Interest / TopicsSolvent Suppliers in ChinaSlurriesRFID Inventory Control

Mini-Surveys

Past Member Shares

Thank You – Let Us Know How We Can Be of

Assistance!Mike Walden – CMC Programs and Business Dev Director

[email protected]+1-859-274-8240

Meena Sher – CMC Coordination [email protected]

+1-480-382-8336 x 102

Lita Shon-Roy – President / [email protected]

+1-925-413-9373





2017 august monthly meeting - cmc fabs · market assessment/analysis . there is risk in the...

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