Editor's note: In 2023, the semiconductor industry will face multiple challenges such as macroeconomics and geopolitics. In 2024, Jiwei launched a retrospective and prospective series, inviting industry representatives to summarize the development of the industrial chain and hot topics in the past year, and look forward to the future. Through this series, it provides an in-depth reference for the semiconductor industry and helps enterprises better respond to new development trends.
In 2023, after more than a year of inventory adjustment, the semiconductor industry is still at the bottom of the cycle, and the packaging and testing industry has also fallen into a state of exchanging price for volume.
Due to the continuous opening of the previous expansion capacity, the problem of insufficient orders from domestic semiconductor packaging and testing manufacturers is particularly prominent, and the capital expenditure also tends to be cautious, resulting in shrinking demand in the upstream equipment and material markets.
The size of the test equipment market will shrink in 2023
In the field of test equipment, under the influence of sluggish demand, the investment in fixed assets in the semiconductor testing industry has slowed down, and it has been transmitted to test equipment, and the field has also entered a depression from prosperity.
According to the SEMI report, the downward trend of semiconductor back-end process equipment (including test equipment and assembly and packaging equipment) has continued since 2022 due to the slowdown in economic growth and weak demand for semiconductors. In 2023, test equipment sales are estimated to be 15A 9% decrease to $6.3 billion.
Judging from the situation of major manufacturers, in the first three quarters of 2023, Teradyne achieved revenue of $2 billion, and the revenue in the fourth quarter is expected to be 6between $400 million and $700 million, compared to total revenue of 31 in 2022$5.5 billion, with total revenue of 370.3 billion US dollars.
Advantest, in H1 2023, Advantest achieved revenue of 217.5 billion yen. Advantest expects the test equipment market to shrink from $5.2 billion in 2022 to between $4,14.6 billion in 2023. As a result, the company expects fiscal 2023 sales of 470 billion yen, compared to total revenue of 560.2 billion yen in fiscal 2022, down 161%。
In terms of sece, the cumulative revenue for the first three quarters of fiscal 2023 was 4$9.9 billion, with cumulative revenue of $6.9 billion in the same period last yearUS$2.2 billion, a year-on-year decrease of 1972%。
Of course, the above situation is not only seen in the international giants, but also in Taiwan, China and mainland China, although the business volume is still small, but also affected by this.
Judging from the above table, because the three domestic test equipment manufacturers are mainly concentrated in the field of analog and digital-analog hybrid and power semiconductor testing, the product structure is single, and it is difficult to enjoy the industry dividends brought by AI, and the decline in performance far exceeds that of overseas enterprises.
According to Jiwei.com, due to the continuous expansion of the domestic semiconductor packaging and testing market in recent years, the overinvested production capacity continues to be opened, and the overall market demand is sluggish, especially in the fields of analog and power semiconductors, which is still in the stage of destocking, resulting in the crisis of insufficient orders for the entire industry. In the case that the original production capacity is not filled, the packaging and testing manufacturers will not expand production, which leads to a decline in the performance of the entire packaging equipment and test equipment manufacturers.
At the same time, the capital market has also turned from hot to cold like the semiconductor market, resulting in a gradual slowdown in the trend of self-built packaging and testing production lines of fabless manufacturers, and the demand for test equipment has also declined.
2024 will usher in a reversal in demand
In fact, the test equipment market is heavily dependent on customer investment cycles, so boom and bust cycles are inevitable to some extent.
Advantest said in the financial report that in terms of applications, the demand for automotive and high-performance chip testing is relatively stable, but it cannot make up for the decline in the mobile phone and PC market, and the overall recovery rate of the testing machine market is slower than the company's previous expectations. In addition, in the past three years, customers have continued to pull goods, resulting in overcapacity of testing machines in the current industrial chain, and the testing machine market is in the stage of digesting production capacity.
As mentioned above, the expected bottom** has not yet arrived, and the industry is once again pinning its hopes on achieving a demand reversal in Q2 2024.
Advantest believes that the decline in demand that is expected to start in the second half of fiscal 2022 will continue for now, but the market will eventually recover and reach its highest level in 2024.
SEM also expects that test equipment sales are expected to usher in a new situation by 2024, and it is expected to grow by 139%。Demand is expected to increase further in 2025, and test and packaging equipment is expected to grow by 17%.
It is worth noting that the domestic semiconductor packaging and testing industry seems to have a slightly insufficient confidence in the market recovery. A senior executive of a local packaging and testing factory believes that the market is gradually improving, but it is far from reaching the bottom, and it will take at least a few years for the domestic planned packaging and testing capacity to be filled. This view is also shared by another local packaging and testing manufacturer, which believes: "It will take some time to digest the over-invested production capacity of the packaging and testing industry in recent years." ”
A senior executive of a domestic testing machine manufacturer also said that we look forward to the recovery of the industry, but the capacity utilization rate of downstream packaging and testing manufacturers in eighty percent or less may not necessarily plan to expand production, at least until ninety percent or even 100% full load, will purchase equipment in batches, so even if the industry recovers, the procurement demand for test equipment will be delayed for about half a year.
Domestic substitution will be the long-term driving force
In addition to the recovery of the industry, domestic substitution is the long-term driving force for the performance growth of local test equipment manufacturers.
At present, the global semiconductor test equipment market is still mainly monopolized by Advantest of Japan, Teradyne and Kexiu of the United States, especially in the fields of digital and SOC chips and memory chips with high test difficulty, and the above fields occupy more than 90% of the market size in the test equipment market.
It is worth noting that in order to maintain its technological hegemony, the United States continues to escalate sanctions on China's semiconductor industry, and unites Japan, South Korea and Taiwan, China to carry out "camp confrontation", and the testing machine has also been included in Japan's export control list.
In this case, China's semiconductor industry is actively promoting domestic substitution. According to a senior executive of a major domestic packaging and testing factory, the company is trying its best to achieve localization, as long as there is domestic equipment that can be used, the company is giving priority to arranging certification and acceptance, and working with equipment manufacturers to optimize the equipment and promote the maturity of equipment as soon as possible.
It is foreseeable that if the above-mentioned markets can be conquered, local test equipment manufacturers can usher in greater room for growth.
It is worth mentioning that the development of digital, SOC, and storage testing machines cannot be achieved overnight. Even in the field of power semiconductors and digital-analog hybrid chips, it has taken ten years or even longer for domestic testing machines to be shipped from R&D to batch shipment.
At the same time, unlike other semiconductor industry segments, the testing machine, as a non-standardized equipment, does not have many market segment participants, and the first battle has not yet begun, and it is still in the blue ocean market. **It is not a major consideration for customers when choosing a test device, and it should not be a tool for latecomers. "For customers, the stability, reliability, performance metrics and test efficiency of the equipment, that is, the final test cost of a single chip or device, are more important than the first to do so," the executive said.
Therefore, compared with the digital, SoC and storage fields that need to be conquered for a long time, from the field of small signal devices that have been conquered, it has become the short-term goal of leading domestic test equipment manufacturers such as Huafon Measurement and Control and UMF Technology to horizontally enter high-power semiconductor devices such as IGBT, third-generation semiconductor SiC and GaN, and vertically extend to the automotive-grade chip market with strong demand for testing.