Thoughts on the Post-COVID-19 Semiconductor Super Cycle by Emerald Greig of SurplusGLOBAL

How Emerald Greig is using SurplusGLOBAL to provide a one-stop solution for equipment, services and parts. 

First of all, how are you and your family doing in these COVID-19 times?

Emerald Greig: My family is doing well. We are spread out in Arizona and Texas, both COVID-19 “hotbeds” at the start of the pandemic. My children and parents live in different cities in Texas, so it was difficult not being able to be with them. Fortunately, we have all recently gotten our first vaccine shots, and my parents both received the J&J single-shot vaccine. We are looking forward to being together sometime this summer.

Tell us about you, your career, how you joined SurplusGLOBAL?

Emerald Greig: I joined a rotational engineering program at Motorola after completing my master’s degree. This was a great program where you were able to select 4 different areas to work, learn and complete a project. After 1 year, I choose a position as a lithography engineer at the first 200mm manufacturing fab being built in the United States, located in Austin, Texas. Being part of a start-up was amazing and one of the greatest experiences I have had in my professional career. The work was intense, the hours-long, but everyone was working toward the same goal. The things I learned during this time have helped me throughout my career. I then went into supply chain management, where I used my technical knowledge to support organizations manufacturing very different technologies. I then moved to Phx, AZ, to manage technology transfer in an external manufacturing organization with ONSemi. After that, I left the “manufacturing” side of the business and joined GE Capital doing equipment trading. This led me to join SurplusGLOBAL in 2012.

How does the coronavirus pandemic affect your business finances?

Emerald Greig: At the beginning of the pandemic, we were quite worried. Factories and businesses slowed down due to quarantine directives. Overall, capital spending slowed down as companies were assessing their situation. However, the increase of employees WFM created a surge in demand for connectivity, WiFi routers, computers, etc. With this dramatic increase in demand, factories were required to increase their capacity. SurplusGLOBAL is benefitting from that demand.

What is your thought on the Post COVID-19 in the semiconductor industry?

Emerald Greig: As we head into Q2 of 2021, it seems that the world is finally approaching “normalcy.” But I don’t believe our lives and businesses will ever be the same. Travel is unlikely to return to the same level as pre-COVID 19 for many years. I’m sure many companies will establish tighter travel policies and budgets as virtual conferencing has proven to be beneficial and cost-effective. Patients and doctors who were skeptical of telemedicine embrace it, and although it’s not perfect, it has filled a needed gap. Online learning essentially happened over a weekend and will now be part of many curriculums and programs.

All of these elements have spurred our semiconductor industry into a “supercycle.” Demand for chips is leading to an increased demand for semiconductor equipment. Capital expenditure in 2020 surpassed $63B, and the forecast for 2021 will be over $70B. The secondary equipment market typically makes up about 5%-10% of that.

How has this impacted the prices of chip-making equipment and especially for old chip-making equipment?

Emerald Greig: The semiconductor industry has been experiencing an equipment shortage for some time. It is difficult for original equipment manufacturers (OEMs) to support such a large variety of products and technologies. Some companies use the equipment for manufacturing 150mm, 200mm, and 300mm wafers. Fabs still run 30-year-old technology on 150mm wafers, while the latest technology is manufactured on 300mm wafers. We’ve also seen new technologies like silicon carbide (SiC) being developed on these smaller wafer sizes.

Unfortunately, some OEMs stopped making 150mm and 200mm some time ago and have only recently jumped back into the market. These OEMs have had to balance technological advances, pricing, and manufacturing capacity to meet this demand since their primary focus is on 300mm equipment. Third-party refurbished equipment suppliers have also experienced an increase in demand over the last several years. We see it increasing at all technology levels over the next three to five years. This translates to increased equipment pricing for both new and used equipment, as well as increased lead times.

How is the company responding to the increase in demand for equipment?

Emerald Greig: One of the advantages we bring to the secondary equipment market is our ability to “recycle” technology. We continuously search for opportunities to purchase large packages of tools from companies that are transitioning technology nodes, moving from 200mm to 300mm wafer size, or changing product lines.

We spend approximately $65-$100 million each year on purchasing equipment and, in some cases storing it for the right customer. For instance, a memory company may be changing technology nodes and no longer needs its equipment. This use to happen on a predictable schedule. Instead of scrapping that equipment, SurplusGLOBAL purchases, and stores it. Sometimes we only need to store it for one month before relocating it. However, in many cases, we store it for one year or more. We may power it on at a later date if it is in good condition. In some cases, we work with an OEM or 3rd party to have it refurbished and ready for a new customer.

In response to the need for more secondary market equipment, we have opened up additional offices in Japan and Singapore to stay close to and better support our customers in those regions. Finally, our biggest and most recent endeavor is building our Semiconductor Equipment Cluster, which opens in July 2021.

Learn more about SurplusGLOBAL Cluster. 

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https://www.surplusglobal.com/SG/Cluster/Introduction/en/