Semiconductor companies have long been trading secondhand semiconductor equipment, but geopolitical tension and government policies have stimulated the demand so significantly that people are seeing a void to fill.
Moov, a secondary marketplace platform for semiconductor equipment headquartered in Tempe, Arizona and San Francisco, California, recently set up an office in Taipei, Taiwan. To understand the scale of the market, the challenges of ensuring secure and quality transactions, and how the company addresses those issues, DIGITIMES Asia requested an interview with Moov co-founder and CEO, Steven Zhou, who replied to our questions in text as follows:
Q1: What motivated co-founders' decision to establish Moov? Why set up an office in Taiwan? Are there a lot of demands for secondhand semiconductor equipment here in Taiwan or in mainland China? How is the demand to find channels to sell old machines?
Both my cofounder, Maxam Yeung, and I come from the equipment industry. We spent over a decade at top asset trading firms, where we experienced the challenges of a fragmented equipment resale market firsthand: bad actors, inefficiencies, and inaccurate information. We started Moov to solve these challenges and make purchasing pre-owned equipment a viable part of semiconductor manufacturers' supply chain strategy.
Our solution is a unified, data-driven, global secondary marketplace for semiconductor equipment and an ecosystem of aftermarket partners to help make the process of buying or selling equipment fast, easy, and reliable from anywhere in the world.
The importance of Taiwan to Moov, the semiconductor industry, and the world cannot be understated. As I'm sure you know, Taiwan produces over 60% of the world's chips. TSMC accounts for 54% of the world's chips itself. We see an immense opportunity to both help Taiwan's foundry ecosystem source used equipment and help local companies offload idle assets.
Moov's decision to have a local presence here speaks to our philosophy as a company – we're not "disruptors." That is, we're from the industry, with decades and billions of dollars' worth of combined experience with strategic acquisition and disposition of semiconductor equipment. While we're committed to adding data and automation to a hitherto fragmented, offline transaction in order to make it easy, reliable, and transparent to buy and sell used equipment – we're also committed to the human experience of working with Moov. We realize there is no substitute for an on-the-ground presence when it comes to guaranteeing superior service, building local logistics and service provider partnerships, and simply demonstrating to the companies headquartered in the region that we are committed to the region for the long haul.
Q2: You mentioned in your press release that you are able to provide transparency in procurement processes. How do you manage to do that?
Great question! To begin, Moov is a global digital marketplace with high volumes of equipment transactions every year. As such, we have amassed a large data set on used equipment to help make market dynamics, like resale value, more transparent to both buyers and sellers. We have built several features and services geared toward making the experience of buying and selling equipment more predictable and reliable for both buyers and sellers. These include:
Pricing recommendations – so both parties can understand the resale market value of tools and optimize their budgets accordingly.
Listing verification – all tools listed on our marketplace are verified so that buyers don't waste their time on inaccurate or old listings.
Buyer verification and transaction support – to minimize risk to sellers.
Digital inspection - services that make it easier for fabs to inspect equipment that may be located across the globe.
The industry's only buy-back guarantee – so that buyers can rest easy knowing that if they are not satisfied with their equipment, they can return it.
Real-time logistics tracking – so that buyers can see where their asset is and what environmental conditions it's being stored in en route.
Q3: Since semiconductor equipment makers such as ASML or Applied Materials have a long lead time producing machines for their customers, that reflects the hot demand for equipment. Are there sufficient supplies of secondhand chip equipment in the market?
Long lead times for new equipment from OEMs have definitely driven increased demand for used equipment, especially for older technology nodes. That said, Moov's global marketplace for used equipment recently crossed the $4bn mark in total value of active listings – and we only represent a percentage of the global secondary market – so it's safe to say that there is a robust supply of pre-owned equipment available. There are several reasons for this. A core dynamic of this industry is that production cycles for a specific chip or component at a specific fabrication center may be as short as a couple of years, while the lifespan for these tools is more like a couple of decades. Often, fabrication centers need to be able to make space on the fab floor for new tooling and do not have a process in place to recirculate idle equipment – so this equipment ends up in warehouses.
In short, there is sufficient supply – the challenge is in motivating manufacturers to recirculate idle assets. That's where Moov comes in. Our marketplace makes it easy for manufacturers to manage, list, and sell idle assets on their own while our enterprise partnerships division offers entirely white-glove service to offload the process for companies looking to outsource asset management at scale or for expert support on complex strategic procurement and disposition projects.
Q4: What are the obstacles to trading used semiconductor equipment across borders?
Global logistics has certainly been more challenging over the past few years, but we credit the strength of our global ecosystem of logistics and service providers and the often-herculean efforts of our customer success team to ensure that the experience of buying through Moov beats out all competition when it comes to speed and reliability.
Another challenge is trade restrictions and regulations. Obviously, we're operating in a very intense global business environment, and it is more important than ever for manufacturers to work with supply chain partners they can trust. Moov has a stellar compliance team that guides our policies and procedures in line with the latest regulations. Part of these procedures include a buyer certification process aimed at ensuring all end users and end uses for equipment purchased on Moov's marketplace are compliant with the latest restrictions and regulations. Helping de-risk international transactions is part of the support that differentiates Moov as a truly end-to-end global marketplace, and not a broker or point solution.
Q5: Now since China is also producing its own chip equipment, how does Moov sees the prospect of business opportunities in the China market?
There are a lot of factors at play here. Trade restrictions and regulations are reshaping semiconductor supply chains. At the same time, there's immense public and private investment to expand manufacturing capacity around the globe. In terms of how China ramping up equipment production will impact the secondary market for equipment, the honest answer is, it's too soon to say. What is clear is that the global semiconductor market is evolving, perhaps faster than ever before. I suspect we'll see new entrants emerge on the global stage when it comes to semiconductor manufacturing capacity, new opportunities, and new challenges. To weather these changes and thrive in this state of flux, it will be more important than ever for semiconductor manufacturers to have a nimbler approach to procuring equipment and recouping capital on idle assets. That's the need and opportunity Moov fills.
Steven Zhou (R) and Maxam Yeung. Credit: Moov