Mr Andrew Goh, President of South East Asia Operations, Novellus Systems, speaks to Robin Lange, Managing Editor, EDN Asia, on the current semiconductor landscape in the region. Excerpts:
EDN Asia: The Southeast Asia region is currently witnessing solid growth and continued investments in the latest advanced wafer processing equipment. Would this, coupled with Novellus Systems having sold its 100th 300 mm VECTOR Express plasma enhanced chemical vapor deposition system to TECH Semiconductor, be clear evidence that, despite reports to the contrary, there is no slowdown this year in the DRAM market?
Goh: We cannot comment on the business of any customer. However, on a global scale, we expect demand for DRAM to continue to be strong driven by continuing consumer and corporate demand for computers. VISTA has emerged as a driver and in the coming quarters we are likely to see rising consumer demand fuelled by back to school spending and Christmas shopping.
At the same time capacity expansion for DRAM has also slowed, contributing to reduction in excess capacity, thus helping to stabilize the market and even raise prices in the coming months.
EDN Asia: Last year, Novellus set up its headquarters here in Singapore to be closer to its customers in Asia, for servicing and billing purposes. Given that the company’s net sales for last year’s fourth quarter were $363.5 million, which was down $29.8 million or 7.6 percent from third quarter, have developments in the region turned out as expected?
Goh: The semiconductor industry is a cyclical business – so our quarterly numbers may vary but this does not impact our long-term vision for the region. With more than 60 percent of our sales coming from Asia, proximity to customers was the main reason we set up our international headquarters in Singapore last year. We’ve been very satisfied with our achievements in Singapore since then, which include new functions such as finance operations for Novellus worldwide, as well as human resource and procurement functions for Asia. We have been able to improve our customer support and service, as evidenced by the awards and recognition from multiple customers. Our Annual Technical Symposium in the region also saw the largest customer turn-out last year.
EDN Asia: According to SEMI, the wafer processing equipment market in Southeast Asia is expected to grow at a rate of 7 percent in 2008, with Singapore leading the charge. Please comment on this bullish sentiment.
Goh: The growth rate is from SEMI, so they are best equipped to elaborate on the sentiment. However, we do expect Southeast Asia to be a growth region for semiconductor manufacturing in the coming years. Much of this growth will be driven by foundries and memory makers as they continue to invest in the region. In Singapore, the semiconductor landscape changed dramatically in 2007 with big memory makers such as Micron and IMFS. The new investments in the region will support the continuous growth of the semiconductor industry for the next few years. Meanwhile, the foundries in the region have reported high utilization and many customers are in transition to produce higher margin advanced technology products. This move to advanced technology nodes is expected to help improve their bottom-line and drive growth in the region.
EDN Asia: Would the advanced semiconductor manufacturing industry be facing any challenges this year or next, especially in the light of the anticipated dip of the US economy into a recession?
Goh: We have not seen much of an impact in the Singapore market so far and expect 2008 to be a growth year in the region. With that said, the semiconductor industry has always been cyclical and influenced by macro economic trends. While volatility is part of our business, we believe the industry as a whole has become much more rational. At the same time, our visibility into the future is limited and restricted to the guidance we provide per quarter.
