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Monday, March 03, 2008


With semiconductor capex spending looking bleak for the year, I hope you’re one of the many SEMI members also serving the flat panel display (FPD) industry.

According to DisplaySearch, sales of equipment used to manufacture TFT-LCDs will surge 40% to over $11 billion in 2008, and will likely remain at a similar level through 2009. TFT fab utilization increased from a sickly 85.4% at the beginning of last year to a robust 95.7% as the year ended, the highest level recorded. In response, the top five LCD makers—Samsung, AUO, LPL, CMO and Sharp—are all expecting to increase spending through 2008 and well into 2009.

Apart from the added growth that new markets offer, diversification can help balance revenue streams and minimize impact of the boom and bust cycles affecting any one segment.

For many SEMI members, PV offers the same diversification opportunity that FPD offers. Certainly the polysilicon suppliers have benefited from the emergence of PV the last few years, but many equipment suppliers have seen a large bump in sales from PV applications as well. The number of PECVD, sputtering, furnaces, laser scribers, screen printing, and other tools targeted for PV have doubled in the last two years and will likely double again by 2011.

Another industry that is providing SEMI members with diversification opportunities is solid state lighting. Revenues from discrete LED devices are expected to increase by an impressive 22% cumulative average growth rate (CAGR) between 2005 and 2010, according to a new five-year forecast from IC Insights of Scottsdale, Arizona. Paving the way for this revenue growth is an intensifying race to develop and mass-produce highly luminous white LEDs for indoor solid-state lighting systems. Total unit shipments of LED devices will climb to about 64 billion in 2010, up from 27.4 billion in 2005. That’s gonna require a whole lot of equipment and materials.

Helping our members diversify into new markets is a key challenge for SEMI. Typically, we try to highlight emerging markets at one of executive conferences, such as ISS or SBC. Sometimes we will create a dedicated event to serve our members such as FPD China or the PV Fab Managers Forum. Another common approach to helping our members diversify include partnership events such as FPD International and Intersolar North America. Our market research, standards, EHS, and public policy groups within SEMI also search for ways to enhance new market opportunities.

Picking the right new market, and using our limited time, energy and resources to help members profit from it is one of the most difficult and challenging responsibilities we have at SEMI. If you know of an emerging market that SEMI can help accelerate on behalf of our members, please let us know. Facing a bleak year in capex spending for semiconductors, a little diversification is something we all could do a little more of.

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