Asset Recovery and Remarketing

Transcription

1 SEC/N AMC International ELA Equipment Management Conference Phoenix, Arizona - February 24, 2004 Speaker: Gary Alexander Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry GFA February 24, 2004

2 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International Overview A Bit of History Challenges & Opportunities The Future GFA February 24,

3 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International In the early 1990 s, semiconductor manufacturers started becoming concerned about the evolution of the used equipment business and their future involvement with OEMs, brokers, refurbishers, and other service providers. The SEMATECH member companies established a surplus equipment council in 1991 to facilitate intermember trade and address common issues. The idea for a third party association for semiconductor used equipment grew out of this effort. GFA February 24,

4 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International The used equipment market place evolved most rapidly in the United States because the culture has historically embraced maximizing return on investment (ROI) and the benefits of competitors strategically working together. Historically, buyers have favored using their limited capital to buy used equipment during industry recoveries, and this one is no exception. Equipment was plentiful, prices were relatively low, and there is limited new technology coming on in the immediate future. GFA February 24,

5 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International The estimated size of the international market for used semiconductor equipment was USD 2.0 billion in 2000, USD 1.2 billion in 2001, close to USD 2.0 billion last year, and we think exceeded USD 2.0 billion in The global evolution of the used equipment business has added a much more complex third dimension to this marketplace. GFA February 24,

6 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International A Third Dimension Traditional Two Dimensional Middleman Buyer Seller International Three Dimensional Middleman GFA February 24, 2004 Buyer Seller Culture 6

7 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International Image Education The two biggest challenges facing the international asset recovery and remarketing industry today! GFA February 24,

8 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International Global Challenges 1. Image & Education 2. Environmental, Health, and Safety 3. Rules of the Market Place 4. Governments and Laws 5. Lack of Synergy GFA February 24,

9 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International Global Challenges China A very different culture. Emphasis on price, not total cost Different interpretation of IP & contracts Tremendous need but little emphasis on education Arbitrary customs procedures Fluctuating restrictions against technologies Ambiguous rules regarding used equipment GFA February 24,

10 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International Global Opportunity China Over 1.4 billion people in PRC #1 market for consumer products in 2003 (DVD players, DVD-ROM drives, Desktop PCs, Notebook PCs, Mobile phones, PDAs, Color TVs, car stereos) Chip demand 5 times greater than internal supply 9.5% of world chip supply in Projected to be 15.6% by % of all equipment going into China was previously install elsewhere. Largest market GFA February 24,

11 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International The Future Characteristics: Continuous growth and cycles More internationally matrixed More integrated & networked More mature and better informed Overall image enhancement GFA February 24,

12 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International The Future Direction: Inter-industry paradigm shift Asset Recovery & Remarketing Industry Increased government involvement Evolution of standards and certification Need for more and better education GFA February 24,

13 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International The Future Leadership: SEC/N (Surplus Equipment Consortium / Network, Inc.) SSEC and JEITA AMC International ADIR (Asset Decommissioning & Investment Recovery) GFA February 24,

14 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International SEC/N (Surplus Equipment Consortium / Network, Inc.) International, used equipment trade association for semiconductor and SMT/PCB industry Goals / Objectives 1. Standards, guidelines, terms and definitions 2. Ethics and respect for intellectual property rights 3. Education of the market place 4. Forum for opportunities, issues and networking Established in Recently reincorporated as a member driven, nonprofit association GFA February 24,

15 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International SSEC & JEITA SEMATECH Surplus Equipment Council (SSEC) 1. First used equipment effort in the semiconductor industry (1991) 2. The inspiration for the establishment of SEC/N Japan Electronics & Information Technology Industries Association (JEITA) 1. Represents the device manufacturers of Japan 2. JEITA Used Equipment Council organized along the lines of the SSEC (2001) GFA February 24,

16 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International AMC International Established in 2003 in support of various secondary market related opportunities 1. SEC/N Executive director functions 2. Asset Recovery and Remarketing Program 3. SEMI Arizona Steering Committee 4. ADIR Program 5. International consulting (associations, companies, publications and government agencies) Only known inter-industry / international effort on behalf of the secondary market in existence today GFA February 24,

17 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International ADIR (Asset Decommissioning & Investment Recovery) Initiated in 2003 in response to the SEMI Decommissioning and Decontamination Task Force s recommendation for the development a tiered, global training program which addresses industry education and operational training and certification Being developed through the ASU, Del E. Webb School of Construction, under the CREATE Program (Construction Research and Education for Advanced Technology Environments) Program Overview: 1. Introduction to Asset Decommissioning and Investment Recovery 2. Executive Management Seminar 3. Operational Management Workshop 4. Decommissioning and Decontamination Certificate Program GFA February 24,

18 Asset Recovery and Remarketing The Semiconductor and Electronics Manufacturing Industry SEC/N AMC International Asset Recovery & Remarketing - An Exciting Opportunity Based on need, availability, cost, and an increasing acceptance, the future opportunities in asset recovery and remarket are both growing and exciting. The Asset Recovery and Remarketing Industry Future success will require a global awareness, a desire to educate, an ecumenical talent, patience and understanding, and the ability to think outside of the box GFA February 24,

19 ELA Equipment Management Conference Phoenix, AZ February 24, 2004 Speaker: Steve Grundon

20 Agenda Market Information Definition of Electronic Manufacturing Equipment Size of the Market Characteristics of the Market Linkage to the Economy Equipment Examples Secondary Market Characteristics Why Customers Acquire Used Equipment Market Participants Useful Life of Equipment FMV Value Spectrum Market Issues

21 Electronic Manufacturing Market Information

22 What is electronic manufacturing equipment? Definition: Equipment used to manufacture, test or assemble integrated circuits. Semiconductor Production Equipment Automated Test Equipment ( ATE ) Printed Circuit Board Assembly Equipment

23 Electronics Market Overview Figures represent projected 2003 Segments GLOBAL New Equip. Growth-5yr Used Semiconductor $19 18% $1.5 ATE $6 15% $.25 PCB Assembly $3 5% $.25 Market Totals $ % $2 EQUIPMENT PROFILE Lithography, deposition, etch, ion implant. Memory, logic and mixed signal test Pick & place, testers, screen printers and solder re-flow $=Billions Industries Semiconductor Computer Telecommunication Consumer Electronics Foundries Semiconductor Mfg. Foundries Contract Assemblers Semiconductor Mfg. Contract Assemblers

24 Semiconductor Equipment Market

25 Electronics Market is Global

26 The Semiconductor Market Is Global North America Japan Taiwan Europe ROW Korea In billions 0 '01 Actual '03 '05 Source: SEMI 7/02

27 The electronics market is cyclical

28 Characteristics of the Electronic Manufacturing Market Equipment has a long useful life Equipment is essential to the business Non-commodity characteristics of secondary market Large, global market Built-in change mechanisms Expertise required to predict residual values due to non-commodity nature of equipment and industry cycles Impact of internet on spot pricing

29 Semiconductor Market Has A Strong Linkage To The U.S. Economy IC Content % Electronics % of GNP '00 Source: VLSI Research, Inc 2001

30 Examples of Leading Vendors Semiconductor Production Equipment Applied Materials Nikon Canon ASM Lithography Novellus Lam Research Tokyo Electron Varian Perkin Elmer Automated Test Equipment Teradyne Credence Agilent Advantest Process Diagnostics KLA-Tencor Applied Materials Hitachi

31 Cost For Individual Tools Equipment Type 6 Wafers 8 Wafers 12 Wafers Steppers $ 4.0mm $ 12.0mm $ 15.0mm Oxide Etch $ 1.9mm $ 2.5mm $ 4.0mm Coat/Dev $ 1.5mm $ 2.0mm $ 3.0mm Wet Chem $ 1.4mm $ 2.5mm $ 3.5mm Thermal $ 1.3mm $ 3.5mm $ 5.0mm Metalization $ 1.3mm $ 4.5mm $ 7.0mm Metrology $ 1.3mm $ 1.2mm $ 1.5mm Metal Etch $ 1.0mm $ 3.0mm $ 4.0mm Implant $ 1.0mm $ 3.5mm $ 5.0mm

32 Electronic Equipment Examples Applied Materials-Endura Lam Research-9400 Advantest-T5375 Fuji CP 643E

33 Example-Inside the fab

34 The Cost For State-Of-The Art Fabs Continues To Increase FAB Cost '02 In millions

35 Electronic Manufacturing Secondary Market Characteristics

36 USED MATH less Cost of New Equipment (Cost of Used Equipment) SAVINGS

37 Used Equipment Market Participants Vendor (Spec or Trade) Seller of Used Equipment Used Equipment Dealer/Broker End-User Direct (Sematech) Internal (Intranets) Auction Finance Companies

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39 Competitive &trailing edge equipment will continue to be used in 2006 Thousands of 200mm Equivalent Wafers > Process Technology Linewidth Source: VLSI Research 8/02

40 Secondary Market Dynamics # of Transactions Value Received Retail Wholesale Auction

41 Type of FMV TIP Electronics Fair Market Value - A Range of Values % of New Dollars New Equipment 100% $3.6mm Value-in place Retail-refurb Retail as-is 55% 50% 25% $2.0mm $1.8mm $ 900k Wholesale 17% $600k Applied Materials Endura Example- Model introduced in 1993; This tool acquired new in 1997

42 If you think you re having a bad day!

43 Secondary Market Issues Software Re-licensing Other Intellectual property Environmental Vendor Participation Communication Standards (proposal T & C s) Ethics Market Data (i.e. size and segmentation of market)

44 Thank You Questions Contact Information Jim Jenks Dennis Goodline Steve Grundon