‘Effective Rebirth’ of ASICs Good News for Photomask Makers: Photronics
The semiconductor industry is in a “renewed drive” amid the chip crunch to install more factory capacity at “the mature nodes” for automotive, industrial and IoT applications, and “as the chip market leads, the photomask market follows,” said Photronics CEO Peter Kirlin on an earnings call Wednesday for fiscal Q4 ended Oct. 31. Photronics manufactures photomasks for producing chips and flat panels, and analysts consider the company a bellwether of semiconductor and display industry health. The stock soared 26% higher Wednesday, closing at $17.91.
More Photronics chip customers “are now differentiating their products based on design, rather than next-node technology,” said Kirlin. “This is very exciting for a mask maker, as we believe we are witnessing the effective rebirth of the ASIC market.” The photomask content in ASICs, short for application-specific integrated circuits, was “always by far the best of any product line,” he said. The reemergence of ASICs has taken “even seasoned executives by surprise,” he said.
The market growth in mainstream nodes is further “sustainable” due to growing nationalism within the semiconductor industry,” said Kirlin. After navigating the “external shocks” of trade wars and COVID-19 factory lockdowns, “companies are rethinking their reliance on manufacturing in other countries,” he said. That’s driving “renewed investment in domestic chip manufacturing,” with emphasis on mainstream nodes, he said. “We have seen this in Asia, and are now seeing it in the U.S. and Europe.”
There was “a bit of a pause” in the past year in panel makers’ “pivot” toward AMOLED display production at the expense of LCD, because they wanted to take advantage of record-high LCD panel prices, said Chief Technology Officer Chris Progler. The trend to add new capacity for AMOLED “now continues,” and the shift should be “unabated for the next three, five years,” he said. There’s more “lithography” in AMOLED panels than in LCD, so that’s “a positive trend” for photomask makers, he said.
Photronics also sees “more complex technologies going into TVs” under “a bunch of acronyms,” including “QNED,” for quantum nano emitting diode display technology, said Progler. QNED displays use gallium nitride-based blue-light-emitting nanorod LEDs in place of OLED as the blue light source (see 2010080037).
Most of the newer complex TV technologies are being pushed by Korean panel makers LG Display and Samsung Display as a means of product differentiation, said Progler. They’re mainly LCD-based, and geared toward larger screen TV panel fabs, Gen 8 and above, he said. “They’re adding functionality that’s requiring more lithography,” and that’s another positive trend for photomask makers, he said.
MicroLED technology is “getting a lot of attention,” but it still “seems quite some way from being used for large-format displays,” said Progler. “The mask content in microLED remains a little bit unclear.” The circuitry to drive microLED displays was originally promised to be “very, very simple,” but “we’re seeing already that that promise wasn’t really accurate,” he said. “We do think the microLED trend, once it’s finally adopted for mass production, which is still a ways off for larger displays, will be a positive trend for masks as well.”
CEO Kirlin knows of one Photronics customer “who will go nameless” and is building a 110-inch microLED TV fashioned from 50 printed circuit boards “on the back,” he said. “They have a specific project underway right now to replace those PCBs” with thin-film transistors fashioned from tow-temperature polycrystalline silicon, he said. “Just as is the case with the most complex AMOLED displays, to build this very complex transistor array requires 25 mask levels. So if that market happens to go that way, that would be great. We would absolutely love that.”