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Consumable Equipment Components Markets – Quartz Material

CMC Asia Senimar 2017 Kuang-Han Ke

Sr. Analyst / Asia Business Manager

Nov. 2 2017

www.Techcet.com [email protected]

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Disclaimer This presentation represents the interpretation and analysis of information

generally available to the public or released by responsible agencies or individuals. Data was obtained from sources considered reliable. However, accuracy or completeness is not guaranteed. This report contains information generated by Techcet by way of primary and secondary market research methods.

[email protected] 11/2/2017

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Quartz SiO2


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Si

Outline Quartz Market Overview

Base Materials – Size and 5-year CAGR

Fabrication – Size and 5-year CAGR

Market Landscape and Regional Characteristics

Regional Pie Chart

Supplier Leadership in Asia

Forecast

Analyst Outlook

Quartz Report Slide and information



7

Quartz Market Overview

The semiconductor market experienced healthy growth in 2016 with quartz suppliers claiming overall revenue growth of 7%.

For 2016, the year started off slow, similar to 2015, and picking up later in the year, moving at good double-digit growth in Asia, and possibly some portion of the market moving at 20% in China, at the onset of big push for new fab build up there.

The survey shows that some of the American fabrication market remained flat in 2016, while the rest grew due to OEM and Chinese demands.

2017 has been a very good year due to vibrant semiconductor market.



Base Materials – Size and 5-year CAGR



Revenues totaled $262M in 2016 up 7% from 2015 and will increase by 10% to $289 M in 2017. Raised forecast by China.

Momentive is looking into the future after a come-back the last few years. Their revenue was only growing slightly for most of 2016 and recovered at 10% growth rate pace at Q4 2016 and more in 2017. Their forecast is good for the next few years.

Base materials market is monopolized in each region by major suppliers: Heraeus/Shin-Etsu, Momentive, Felihua, Tosoh, QSIL with the market shares of 48%, 31%, 10% and 8%, 2% respectively.

Heraeus Quarzglas/Shin-Etsu has started offering synthetic quartz parts at the same price as the natural quartz. This may allow them to gain new sales without having to add too much capacity.

Momentive is also offering synthetic quartz for high end market.

For Ingot and Rod/Tubing market shares see Section 5 on base materials.

A new player to watch in 2017 will be Jiangsu Pacific Quartz. US$0

US$350

2016 2017 2018 2019 2020

Fabrication – Size and 5-year CAGR 2016 WW market for fabricated parts is ~ $803M up 7% from 2015. In 2017, the market is expected to reach $880M, up 9%.

The top four fabricated components suppliers are Heraeus/Shin-Etsu, Tosoh Quartz, Ferrotec and Wonik Quartz International share close to 70% of the total fabricated quartz market. This trend has not changed much this year, and will only change slightly with the Tosoh fire in 2017.

The demand for semiconductor quartz components is largely supported by local suppliers but also highly influenced by new furnace equipment sales and etch equipment sales. Given that 2015 and 2016 have proven to be healthy sales years for OEM equipment, quartz fabricated parts have enjoyed good sales as well. 2017 is forecasted to be a good year for equipment sales, and in turn, we expect 2017 sales to be up 10%, with portions of the market in China growing at >20%.

Quartz sales to OEM is estimated to be ~$230M. 2016 is affected largely by OEM sales.



US$0

US$1,000

2016 2017 2018 2019 2020

Market Landscape and Regional Characteristics

In 2017, the following factors are in play affecting the quartz market

Overall breakneck pace in the semiconductor market, especially in Asia, and particularly in China.

~ 20 new fabs starting in China in the next 3 years will pull OEM equipment demand.

Some fabricators requests for raw quartz base material to meet quartz demand ~ 20-50% in China.

Overall new equipment OEM purchase growth has been pulling the capacity away from normal fab demand. (@17%~20% increase on ave.)

China will have new fabricators, or have existing large fabricators opening new capacity there. As new base material suppliers get qualified, more capacity will help balance situation.

12” Diffusion Quartz Tube need will come online slower due to long-time craftsman talent development lag.



Regional Pie Chart



Supplier Leadership in Asia

Reasons why they are successful :

• Former OEM mfger

• Early entrants to the market

• Integrated based material & fabricator

• Newer players gained through M&A

• Survived 2008 crisis with restructuring

• Quality, pricing & service are basics



Forecast



Analyst Outlook & Summary

1. 2017 is a breakneck year for Quartz. Machining parts can be ramped up while diffusion parts are slower to ramp up.

2. Growth of Quartz Fabrication market in 2017 is ~ 9% overall while portion of the market will face 20-50% growth, similar to 1995-1997 period experience.

3. 5-year CAGR of Quartz Base Materials Market: 2017-2018 @ 10%, 2019, 2020, 2021 @ ~4%.

4. Hot Growth Areas: China,

5. Future Challenges for Quartz suppliers: Diffusion parts craftsman development training time.

6. Question remains about 2019 pace? Can industry give an accurate enough forecast in 2019 for demand and supply planning?



Technology Trends

Technology Trends

• Next annual report (May) –

• On Technology Node

• Silicon, SiC, vs Quartz

• Quartz base material

• New Operational Technology

• Changes in Requirements

• etc.

• I welcome comments, inputs, & collaboration.



Quartz Report Slide and Information



Thank you! www.TECHCET.com

ww.cmcfabs.org

Kuang-Han Ke [email protected]

+886-918-876-478 / +1-408-585-9948 www.Techcet.com



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