Semiconductor testing runs through the entire process of semiconductor production, starting from the stages of IC design and IC manufacturing process to the end of the performance testing of the chip. According to the link in the testing process, semiconductor testing is divided into design verification, front-end testing, and back-end testing.
The semiconductor testing process is a big deal for chip manufacturing because it has a significant role in improving product quality and reducing production costs. If the wafer yield is not up to standard or unstable, it will have a significant impact on the cost and revenue of the foundry, which will cause a bad impression on the brand image of the foundry. It is estimated that for every one percentage point reduction in wafer yield, foundry manufacturers will lose 1-8 million USD. As customers will prefer to choose semiconductor companies with high production yields and strong supply capabilities, reducing production defects will greatly improve the company's competitiveness.
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Design verification is used in the IC design stage, mainly using electrical detection technology to verify whether the sample realizes the predetermined design function or not.
The front-end testing ensures that each process meets the established requirements by monitoring the total processing flow, and makes corrections in time by locating the root cause of problems in production.
A New Round of Upcycle for the Semiconductor Equipment
From 1991 to 2019, the global semiconductor equipment industry and the global economy have achieved cyclical operation in synchronization. Over the past 30 years, they have experienced 8 rounds of cycles, each round lasting about 3.5 years. In the past, overcapacity, financial crises, and wars were the main reasons for the end of the upswing cycle of semiconductor equipment. The last factor to trace the last wave after 2016 was the saturation of smartphones.
At present, semiconductor equipment is in the ninth round of the upward cycle. Data show that in 2019, the growth rate of shipments of semiconductor equipment manufacturers in North American showed a positive trend in October. By February 2020, the growth rate of shipments of semiconductor equipment manufacturers in North American increased by 26 percent year-on-year.
Purchase Volume of Semiconductor Testing Equipment Depends on the Terminal Demand
Terminal application mainly includes communications and smartphones, tablet computers, and automotive electronics, and industry, most of which the development has stabilized currently. If you want to obtain new growth points, you need to achieve breakthroughs at the source of technology, that is, technological innovation drives the replacement of downstream products, thereby increasing the demand for semiconductor testing equipment. To gain new growth points in those industries, breakthroughs must be made at the source of technology, that is, technological innovation will drive the replacement of downstream products, thereby increasing the demand for semiconductor testing equipment.
Technological innovation depends on the popularity of 5G and the Internet of Things. 5G and its application, the electronic trend driven by new energy vehicles, and wearable devices will increase the demand for semiconductors in consumer electronics, automotive electronics, computers, communications and smartphones, and industry. Though the global industrial chain is affected by the epidemic in the short term to some extent, it does not pose any obstacle or threat to the construction of 5G.
Global Semiconductor Testing Equipment Is Monopolized by Oligarchs
Since the semiconductor testing equipment industry has high barriers in terms of technology, capital, and customer resource, leading companies in the industry have a first-mover advantage.
The leading companies of global semiconductor testing equipment are mainly concentrated in foreign countries, such as KLA-Tencor, Applied Materials, and Hitachi in the front-end testing field, accounting for a total of 76 percent of the market, and Advantest and Teradyne in the back-end testing field, accounting for a total of 80 percent. The global market scale of semiconductor testing equipment exceeds 80 billion USD, with front-end testing equipment reaching 40.6 billion USD and back-end testing equipment reaching 39.9 billion USD.
China Has the Largest Potential Consumer Market
The semiconductor equipment market share of China accounts for only 2 percent of the total market, with a low self-sufficiency rate of blew 10 percent. However, China mainland is the second-largest semiconductor equipment market after Taiwan, which is expected that the growth rate of semiconductor equipment sales in China mainland will reach 16 percent and 10 percent in 2020 and 2021. The rapid growth of the semiconductor equipment market in China mainland has successfully attracted the attention of world investors.
This year, the semiconductor test equipment industry in China mainland has developed rapidly, with a market size of 81.4 million USD in 2018. With the increase of semiconductor demand and the shift in the focus of global semiconductors, domestic semiconductor test equipment will usher in a growth wave. It is estimated that my country's semiconductor equipment will reach 24.3 billion USD in 2020, of which testing equipment accounts for 17 percent. The semiconductor inspection equipment in China is expected to reach 4.1 billion USD in 2020.
Domestic precision measurement has obtained shares from large funds, which deployed both front-end testing equipment and back-end testing equipment. In the field of back-end testing, it comprehensively covers SoC chip testing, memory chip testing, and LCD driver chip testing. Focused Photonics is the leader of high-end analytical instruments in China, which has comprehensive capabilities such as optoelectronics, optical design, and software algorithms, consistent with the technical foundation of existing semiconductor testing equipment. And existing testing equipment such as GC, ICP, and ICP-MS can be used in all aspects of semiconductors production, a unique technical advantage.
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