Dr. Robert Castellano, The Information Network.
NEW TRIPOLI, USA: Record growth in 1H 2010 in the semiconductor photomask market has stopped and has begun nose-diving according to our report: Mask Making, Inspection, and Repair: Market Analysis and Strategic Issues
2010 will go down in history as a year when a 25 percent growth in the semiconductor photomask business in the first half of the year will be followed by -25 percent growth in the second half of the year. We anticipate 0 percent growth for the global market for all of 2010.
2010 was earmarked as a year of technology purchases, meaning that semiconductor manufacturing was geared to new designs rather than for increases in capacity. Unfortunately, mask sets are planned in the design stage and once in production, replacements occur only with new designs and shrinks, capacity increases, and breakage.
The growth in photomask production for 2010 already occurred. Merchant photomask sales for 2010 will exhibit revenues of $1.6 billion. Add another $900 million for captive photomask sales.
While the semiconductor market is anticipated to grow strongly in 2010, demand for photomasks is directly a function of design activity rather than sales volume from products using photomasks. Therefore, an increase in the semiconductor market does not necessarily translate to an increase in photomask sales.
Most designs for state-of-the-art semiconductors were done in 2009 and mask sets were made in the first half of 2010. Without a bright macroeconomic outlook, we won’t see much capacity expansion in 2011. We’ve already reported that our leading indicators, which correlate with semiconductor revenues, have moderated. The bright spot is that designs for the next technology node, 28nm, is underway, which will lead to growth in 2011 for the semiconductor photomask industry.
A 65 nanometer mask set is comprised of 40 photomasks, five of which are critical (45 nm design rule) and 15 subcritical (90 nm design rule). A 65 nanometer mask set can cost 1.8 times that of a 90 nanometer set, while a 45 nanometer mask set can cost 2.2 times that of a 65 nanometer set. Hence, there was rampant revenue growth in the first half of 2010 on high demand for high-priced photomasks.
DNP is widely recognized as the leading player in the industry for advanced photomasks, and held a 36% share of the global market in 2009.