Challenge of 300 mm Semiconductor Wafer Transition "A Matter of Economics, not Technology," SEMI Says; SEMI 300 mm Initiative Team Reports on Global Meetings Designed to Define the Issues Involved in $14 Billion Transition.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--June 11, 1996--The global semiconductor industry's drive to produce computer chips at lower costs by converting production to larger wafers within this decade is threatened not by a lack of technology but by a lack of financial commitment of circuit manufacturers to the equipment and materials companies they need to make the conversion.

While the past two conversions, first to 150 millimeter (6-inch) and then to 200 mm (8-inch,) were funded by individual device manufacturers (IBM and Intel), the semiconductor industry is expecting the supplier side of the industry to fund development of the next conversion.

A team organized by Semiconductor Equipment and Materials International (SEMI) to mobilize suppliers to the global semiconductor industry for the hoped-for transition from the present 200 mm wafers to larger, more cost-effective 300 mm (12-inch) wafers said here today that it seems no technology "show stoppers" in the path of the transition, only financial ones.

The SEMI 300 mm Initiative management team reported at a press conference the initial conclusions drawn from six months of interviews with top executives from circuit manufacturers and their suppliers in Europe, Korea and throughout the United States. The team leaves in two weeks for Japan for similar industry meetings there.

"We are well on our way to defining the real issues involved in the conversion, and in many cases they differ from the industry's original expectations," stated Tom Reed, vice president of SEMI and leader of the team. "No one, including SEMI, disagrees with the purpose of the transition, which is expected to lower the cost of producing semiconductors enough to drive new applications and increase the overall market size into the next century. The challenge to SEMI is to coordinate the conversion, which is expected to cost some $14 billion by the end of the decade, so that our member companies have a realistic expectation of when they will see a return on this investment."

Ronald Horwath, who headed the 300 mm effort at the SEMATECH consortium in Austin, Texas, before joining SEMI earlier this year as 300 mm special programs director, said that three primary issues were identified from the interviews.

"The first is the availability of enough silicon to support the 300 mm development effort, since there has been much discussion in the industry of a potential silicon shortage," Horwath said. "Our finding is that the issue is not `availability' but `affordability,' since the 300 mm test wafers for tool development currently cost approximately $1,500 each and qualifying a single tool, such as a plasma etch system, can require as many as 1,000 or more test wafers. Give a silicon supplier a confirmed purchase order and in 8-12 weeks you can get 300 mm wafers today in lots of up to 100 per month for equipment evaluations."

He said that some executives interviewed felt that a possible resolution of this issue might involve some type of "partnering" to provide for the sharing of test wafers for various wafer processing steps, either between device manufacturers and their key suppliers or between non-competing equipment manufacturers.

A second issue is the availability of 300 mm equipment since it has been widely reported that equipment suppliers are unwilling to invest their own funds in development of new tools. "Our finding is that the equipment and materials industry is willing to invest in the technology required to make the conversion by the end of this century, but only when their customers make the commitments to assure them a return on their investment within a reasonable timeframe," Horwath said. He added that the 35 equipment suppliers visited by the SEMI team are currently funding development up to the "Alpha" benchtop feasibility stage, and many already have such systems completed, but they are not willing to carry development to completion without a financial commitment for one or more customers.

"We have a real `chicken and egg' situation that can only be overcome with sufficient funding or partnership agreements from the circuit manufacturers that will assure equipment suppliers of a timely return-on-investment on development costs," Horwath said.

The third issue identified by the team stems from a misconception that there are insurmountable technological problems associated with the processing of 300 mm wafers, but Horwath said that is simply not the case any more than in past transitions to larger wafer sizes.

"The transition to 300 mm wafers is taking place concurrently with a shift in device geometries, since the semiconductor industry has made it clear that their first use of the larger wafers will be in production of 0.25 micron (256 Megabit) devices but they want the same equipment to take them beyond that to the 0.18 micron (1 Gigabit) generation of semiconductors," Horwath said. "Those challenges would be the same with today's 150 mm or 200 mm wafers; thus, we find that the technology obstacles faced by the industry are independent of wafer size."

Based in Mountain View, Calif., SEMI is an international trade association serving 1,650 companies participating in the $55 billion semiconductor and flat panel display equipment and materials markets. SEMI maintains offices in Tokyo, Seoul, Taiwan, Singapore, Brussels and Moscow as well as U.S. offices in Austin, Boston and Washington, D.C.

CONTACT: SEMI

Chris Greenfield, 415/940-6977

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Mathews & Clark

Walt Mathews, 408/736-1120