The industry has been in a “super-cycle” for the last several years, driven by demand from IoT, automotive, mobile devices and memory for data centers, both NAND and DRAM. Capital expenditures over that period have exceeded most expectations, all tied to dramatic increases in the amount of data being created, stored and manipulated. Even as memory for data centers and handsets has begun to cool, a decrease in ASPs has resulted in increased memory content in other consumer and industrial segments. Now, AI and “deep learning” are adding to that demand in their effort to create a “smart world”. The net result is a growing and sustained demand for more silicon. Right now, the market is in a soft patch that may linger for another six months, but market fundamentals are strong. The current softness is due, at least in part, to ongoing geo-political uncertainties that are difficult to predict, but we do not expect it to result in a traditional semiconductor industry downturn.
Historically, growth in our industry has been driven by technology inflections points. The next inflection point will likely be 5G networks. Starting in 2019 and ramping hard in 2020, 5G will unquestionably drive the development and adoption of myriad new technologies. Another trend that will impact the industry, especially our segment, is the explosive growth of electronics in automotive applications and that industry’s drive to attain zero failure rates. Closely related is an expanded emphasis across all applications on improving reliability versus the traditional focus on yield. Typical yields have been quite good, but the focus has now shifted to reliability which leads to downstream device failures. Addressing these challenges will require innovative techniques that look for non-conventional defects and dramatically increased levels of inspection and process control.
Our customers are being asked to innovate at an unprecedented pace as they try to satisfy consumer demand for new technologies while also implementing the new manufacturing and packaging processes that advanced devices require. For Rudolph, and our customers, this represents a significant opportunity to drive new technology adoption. On the hardware front, larger, heterogeneous packages will require large field lithography with requirements that are quite different from front-end lithography. Inspection and metrology systems will have to deal with thinner films, smaller features and smaller defects-of-interest. Our software efforts are centered on smart manufacturing and supply chain management, driven by sophisticated approaches to data management and analysis. As one of few companies with experience and expertise spanning processes from bare wafers to final packaging and testing, we believe we are uniquely positioned to help our customers capitalize on these opportunities for innovation.