The Zacks Electronics – Manufacturing Machinery industry is expected to benefit from increased capital spending on high-performance computing, artificial intelligence, advanced packaging and memory by semiconductor manufacturers. The rising need for data center, notebooks (due to coronavirus-induced remote working and learning) and gaming (pandemic-induced demand) are driving memory demand. Axcelis Technologies ACLS, Entegris ENTG and Veeco Instruments VECO are gaining from the above-mentioned trends. These companies provide solutions to semiconductor manufacturers and OEMs. Although weak smartphone demand has been a concern, strength in cloud & data center, healthcare solutions and gaming has been a key catalyst.
Industry Description
The Zacks Electronics – Manufacturing Machinery industry comprises companies that provide a range of solutions to address the needs of wafer processing facilities as well as device packaging and test facilities of semiconductor manufacturing processes. The solutions offered by the industry participants include thin-film processing systems, photonics, process control tools (that perform macro defect inspections and metrology), metal organic chemical vapor deposition, advanced packaging lithography, wet etch and clean, laser annealing, and 3D wafer inspection systems. A few industry participants also offer microcontamination control products and advanced materials handling solutions. Notably, contamination-free transportation, storage and delivery of materials have gained immense significance in recent times.
3 Trends Shaping the Future of the Electronics Industry
Miniaturization Enhances Prospects: Industry participants are benefiting from the ongoing transition in semiconductor manufacturing technology. The demand for advanced packaging that enables the miniaturization of electronic products remains strong. The consistent shift to smaller dimensions and the rapid adoption of new device architecture like FinFET transistors and 3D-NAND, along with increasing utilization of new manufacturing materials to increase transistor and bit density, are driving demand for solutions provided by the industry players. Moreover, the emergence of techniques like wafer level packaging is driving the need for a high-purity manufacturing environment free of contaminants. The rising demand for clean processing as well as wafer carrier cleaning and conditioning tools is a key catalyst for the industry participants.
Complex Process Driving Demand: The requirement of faster, more powerful and more energy-efficient semiconductors is expected to increase rapidly on the robust adoption of cloud computing, IoT and AI. Semiconductor manufacturers like Intel, Samsung, Taiwan Semiconductors are primarily looking to maximize manufacturing yields at lower costs. This is actually making semiconductor manufacturing processes more complex and in turn driving demand for solutions offered by the industry participants. The rapid adoption of IoT-supported factory automation solutions is also a contributing factor. Further, increasing deployment of 5G and the growing demand for edge computing are the key catalysts. However, U.S.-China trade tensions and the impact of coronavirus on consumer appetite for next-gen smartphones and digital cameras are some notable headwinds.
Strong NAND, DRAM & SSD Demand: The improving demand for NAND and DRAM is a positive for the industry participants. Moreover, strong SSD demand driven by data center and cloud spending is a key catalyst. DRAM is also expected to benefit from strong demand in the data center, enterprise and cloud
