“According to Independent Market Researcher SMITH ZANDER, the global industry registered a compounded annual growth rate (CAGR) of 7.77% between 2013 and 2017, growing from US$305.58bil (RM962.91bil) to US$412.22bil (RM1.77 trillion), a clear indication of its growth.SMITH ZANDER further forecasted that the global semiconductor industry, measured in terms of global semiconductor sales, is set to grow to US$505.64bil (RM2.17 trillion) by 2022 from US$412.22bil (RM1.77 trillion) in 2017, registering a CAGR of 4.17% during this period.”
Mi Equipment riding high on advanced level semiconductor packaging
AS a technology enabler in its role for the entire electronics value chain, the semiconductor industry is widely recognised as a key driver for economic growth. The longer term prospects are positive as technology innovation advances.According to Independent Market Researcher SMITH ZANDER, the global industry registered a compounded annual growth rate (CAGR) of 7.77% between 2013 and 2017, growing from US$305.58bil (RM962.91bil) to US$412.22bil (RM1.77 trillion), a clear indication of its growth.SMITH ZANDER further forecasted that the global semiconductor industry, measured in terms of global semiconductor sales, is set to grow to US$505.64bil (RM2.17 trillion) by 2022 from US$412.22bil (RM1.77 trillion) in 2017, registering a CAGR of 4.17% during this period.Meanwhile, leading outsourced semiconductor assembly and test companies (OSATs) have been building up FOWLP capabilities to defend their market shares and serve the rising demand, especially in mobile applications, for these packages.
The implementation of FOWLP is expected to impact related equipment and materials market in the years to come.The impact on the semiconductor industry stemming from the recent dispute between China and United States is unknown for now, but it is unlikely to see much changes in the short or medium term as it is not easy to unwind the entire global supply chain which has taken decades to develop.While consolidation of OSATs globally may see a reduction on equipment spending, the impact of global polarisation could be positive for semiconductor equipment suppliers because of the additional supply chain to serve new players in new locations.Currently, wafer level chip scale packaging (WLCSP) is one of the most advanced form of packaging used in the semiconductor industry. This is because of its strength in performance and the cost advantages it delivers for smartphones, tablets and other applications that require high functionality and low power consumption in small form factor.
This is expected to result in a further increase in the demand for semiconductor equipment to support the manufacturing of mobile and wireless devices, further driving the growth of the WLCSP sorting machine industry.There was still growth in worldwide sales of semiconductor equipment amounting to US$56.6bil in 2017, a year-over-year increase of 37% from 2016 sales of US$41.2bil.Based on data published by SEMI, South Korea overtook Taiwan and claimed the largest market for semiconductor equipment for the first time in 2017. China maintained the third largest market position for the second year in a row.Annual spending rates increased for South Korea, China, Japan, Europe and North America. The assembly and packaging segment increased 29% and total test equipment sales climbed 27%.The market for wafer level packaging (WLP) is gaining traction and is still considered unsaturated, leaving a lot of room for future expansion and growth.Given the demand of higher contents with the same or reduced size of devices and affection for higher performance, miniaturisation of more powerful chip through advanced technological packaging has become even more crucial.
Penang-based Mi Equipment Holdings Bhd, is in the right space with its focus on WL-CSP which has only entered the market in 2010s.It has the knowledge and innovation to be part of the technological advancement amidst the evolution of chip testing and assembly by way of supplying its machines, having found its market niche focusing on equipment that concentrates on WLP.Mi Equipment reckons the barrier of entry into advanced level packaging is higher, and as such, there’s less competition. Moreover, it believes WLP will be at the centre stage of semiconductor packaging, going forward to replace the conventional packaging, thus its positioning in the semiconductor equipment sector.Since it burst into the global scene, a mere four years ago, Mi Equipment has managed to keep abreast of stiff competition in the semiconductor industry against leading equipmentmanufacturers from Japan and Europe.
This is probably due to its engineering and technical expertise through continuous R&D efforts to develop products that are able to meet the ever-increasing demands of the semiconductor industry. The company boasts its very own in-house brand of WLSCP sorting machines, the Mi and Li series, designed to provide high accuracy, quality and speed.At present, there is no close local competitor as Mi Equipment is one of the largest WLP players domestically, and possibly one of the largest in the South-East Asia region from a sales volume perspective.On a global front, Mi Equipment’s competitors would be advanced semiconductor equipment makers such as ASM, Muhlbauer and Ueno Seiki. Four out of five largest OSATs globally are its key customers. For the financial year ended Dec 31, 2017, 83% of its revenue was derived abroad with some 64% of sales derived from North-East Asia.The next two years will be very exciting for the company as it is a phase of rapid expansion.
One can expect to see it adopting a broader, more comprehensive product portfolio, as there are plans to introduce new series of machines with different functionalities to its product line-up.The R&D works are already under way in designing and conceptualising a new product platform. Most notably, Mi Equipment will be relocating existing operations to its new Bayan Lepas factory when it is completed in the first quarter of 2019, which boasts a larger production floor space that will increase production capacity by four times.It is also venturing into the manufacturing of precision fabricated parts, such as precision steel, aluminium, engineering plastic components, to complement and support its existing business.