QMT Features: November 2013
Market report
Advances in nanotechnology paves way for growth in the dimensional metrology market. By Aravind Govindan, industry analyst, Frost & Sullivan

While the global economic crisis has dampened short term investment plans, organizations are planning rapid expansion in research & development in the next few years. Rapid development of cutting-edge technology has constantly pushed the envelope in terms of innovation in the semiconductor industry. Semiconductor and electronic manufacturing industries have successfully transitioned to smaller-sized products of greater efficiency to address the futuristic demand of consumers.

Until the early 2000s, the semiconductor and electronic manufacturing industry mostly generated revenue from the personal computer and consumer electronics end users. These industries still sustain demand but do not drive research & development (R&D) efforts within the semiconductor and electronic manufacturing industry. The major avenues for growth in this industry involve miniaturization and nanotechnology.

The role of fabless semiconductor, subcontract and wafer fabrication companies plays a significant role in developing highly efficient microelectromechanical systems (MEMS). These companies continue to invest heavily on research & development and quality inspection tools. Frost & Sullivan’s research titled “Analysis of Global Dimensional Metrology Market in Electronic Manufacturing” highlights innovation in nanotechnologies as a key driver for high-precision metrology equipment.

The growth of nanotechnology use in the electronic manufacturing industry requires economic and sustainable manufacturing of innovative and energy-efficient products with complex structures. The role of miniaturization is increasing demand for higher accuracy micrometer (ìm) and nanometre (nm) scale measurements. Research indicates that 3D-resolution capability and multi-sensor systems are ideal for measuring the nanostructured surfaces of different materials.

In the highly-competitive semiconductor industry, customer satisfaction plays a vital role in end-user decision making. The two major factors that determine customer satisfaction include product quality and price, with quality being instrumental in gaining customer acceptance. The increase in number of regulatory standards governing product quality in various industries is reflective of this trend’s significance.

Some of the key standards that influence the electronic manufacturing industry are:

•    The International Organization of Standards Technical Specification TS 229, which provides key quality criteria for nanotechnologies. This quality specification of standard cover design, development, modelling and simulations, testing methodologies, and metrology
•    American Society for Testing Material (ASTM) E56 (E2456-06) provides the key quality specifications for complete nanotechnology.

The emergence of stringent quality norms requires end users to adopt design, manufacturing and quality process methodologies that can help achieve standard compliance and enable profitability. This has increased the uptake of metrology solutions in recent years in the electronic manufacturing industry.

Dimensional metrology machines aid in reviewing manufacturing defects and make necessary changes in an efficient and timely manner. Successful implementation of dimensional metrology has reduced product recalls and increased profitability of semiconductor manufacturers. There is growing opportunity from fabless semiconductors from consumer electronic research and development firms wanting to purchase dimensional metrology machines. Frost & Sullivan’s research indicates that emphasis on product quality compliance is likely to be the biggest drivers for dimensional metrology market in electronic manufacturing.

The uncertain global economic environment is likely to impede investments and impact growth.
On the other hand uncertainty in global economic environment is likely to impede investments and impact growth of dimensional metrology in this industry. Japan is the third-largest semiconductor manufacturer in the world.  The tsunami had a devastating impact on medium-term growth opportunities of the semiconductor industry. In 2011, the semiconductor industry sales in Japan declined by 7.9 percent. Manufacturing plants of leading semiconductor companies such as Shin-Etsu Handotai (SEH), Mitsubishi, Texas Instruments, and Sony Group were affected by the Tsunami. Texas Instruments’ in Miho suffered substantial damage, requiring approximately 3 months of repairs before reaching full production capability. Short fall in production and supply chain issues delayed the delivery of products to the end users, which affected the semiconductor sales in Japan during 2011. The uncertainty surrounding Eurozone economies in 2011 concerned several companies and economies across the globe. This development foretold extreme economic uncertainty in Europe and had dire repercussions for the rest of the globe. However, the global economic scenario is expected to undergo a gradual recovery, and increased end-user investments in dimensional metrology equipment can be expected over the short term period, i.e., two–three years.

Market Sizing Overview: Gradual recovery of economy is likely to expedite market growth
The global dimensional metrology market in the electronic manufacturing industry accounted for $190.9 million in 2012 and is expected to reach $255.3 million in 2017 at a CAGR of 5.0%.Owing to the European crisis and the tsunami in Japan, the global dimensional metrology market experienced a marginal decline in growth in 2011. This was on account of delays in new investments, and erratic consumer behaviour for electronic products. However, the slow global economic recovery generated major portion of revenues from developed economies of Europe and North America. In 2011, the economic woes in the Eurozone and the general negative outlook surrounding the global economy did not have a major impact on market growth.

Research indicates that the key market participants such as Nikon Metrology, Mitutoyo Corporation, Quality Vision International, and Carl Zeiss have witnessed a positive trend in 2012. Although with the debt crisis in Europe spreading across to major economies such as Italy and Spain, the global economic climate is anticipated to experience rough market conditions in the short term. Dimensional metrology finds significant opportunity in fabless semiconductor companies. These fabless semiconductor companies engage only in R&D activities and use dimensional metrology products for quality inspection, which will aid the market in the long run. With the gradual recovery of the global economy, manufacturers and end users will be encouraged to make dimensional metrology investments for uplifting their quality inspection process.

Product overview: flexibility and ability to use vision measuring machines in wider application areas drives opportunities.  
Frost & Sullivan’s research on this industry included technologies such as coordinate measuring machines (CMMs), optical digitizer and scanners and vision measuring machines (VMMs). The bridge-type coordinate measuring machines, VMMs and scanners are ideal for quality inspection in electronic manufacturing industry. Flexibility and portability advantages of scanners and vision measuring technologies limit growth of CMM market in electronic manufacturing. The industry trend towards miniaturization places greater requirements on the capabilities of a metrology system.

The VMM segment comprises of measuring microscopes, profile projectors, and multi-sensor systems. Measuring microscopes are used for measuring electronic circuits and the components on a circuit board. However, it loses out to multi-sensor systems due to its wider application range.  

Multi-sensors are extensively used in the measurement of chips, printed circuit boards (PCBs), and masks. Frost & Sullivan’s research indicates that multi-sensor system product segment generated 43.9 percent of the dimensional metrology market in the electronic manufacturing industry.

Market Structure: The market share is expected to remain fragmented in the coming years.
Frost & Sullivan’s research indicates that the dimensional metrology market for electronic manufacturing applications is largely fragmented. In 2012, leading companies such as Nikon Metrology, Mitutoyo Corporation and Quality Vision International captured approximately 30 percent of the market

Dimensional metrology companies continue to focus on conventional end users such as automotive and aerospace which continue to generate sizeable revenues in comparison with niche opportunities in the electronics space. Longer sales cycles and lower demand for high-end metrology machines are deterrents for new vendors wanting to penetrate this space.

Frost & Sullivan’s research indicates that growing demand for customized dimensional metrology in the electronic manufacturing industry is likely to grow in the following years. Such growing opportunities are exciting leading dimensional metrology companies to build personal relationships with electronic manufacturing end users. Currently, leading companies are leveraging those relationships in educating end users the benefits of high-end dimensional metrology solutions. Such tactical approach by leading dimensional metrology companies is likely to increase their revenues and change the disseminated market structure marginally.

Conclusion: Need for low-cost dimensional metrology products will fuel growth
Electronic manufacturing companies in developed economies have been at the forefront of adopting dimensional metrology to streamline the quality process and improve manufacturing efficiency. However, fluctuating economic performance in North American and European region has created challenges for dimensional metrology companies in generating sustainable growth rates from the electronic manufacturing industry. The current positive economic growth is likely to fade the impact of this restraint and bring in positive and sustainable growth rates to the dimensional metrology market. Although, there is an uptake of latest dimensional metrology products such as multi-sensor system in developed regions; the low-costs products such as scanners are likely to remain as ideal products for electronic manufacturing companies located in Asia-Pacific. In the following years to capitalize on the growing market opportunities in Asia-Pacific, market participants will have to continue building regional resellers who will help in selling standalone dimensional metrology products to electronic manufacturing industry.l
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