Economic pressures in the semiconductor industry have led to an increase in semiconductor manufacturing facility closures. While some of these closures result from changing manufacturing strategies, in most cases manufacturers decommission fabs to reduce costs. Closures may be temporary or permanent. In a temporary closure, assets must be converted to an inactive state that both minimizes cost and enhances the ability to resume the operation.

A fab closure plan has three objectives:

• minimize decommissioning costs,
• preserve and enhance the value of existing assets, and
• reduce potential long-term risks and liabilities.

Just like the construction of a fab, decommissioning will always entail the same sequence of activities and events – only the size or scope of each event will differ. As in fab construction, the temptation to short-cut a decommissioning activity could lead to additional costs or penalties later and may jeopardize future uses of the facility.

Accelerating technology changes and increasing device size reductions require continuous improvement of manufacturing technology. With nearly 200 semiconductor fabs over 15 years old, the need to decommission facilities that have outlived their technology is likely to continue. Other reasons to consider closure are excess capacity, high operating cost and strategic fit.

Management is often reluctant to reduce staff and curtail manufacturing activity. They tend to address simple impacts first and more complex actions later. The authors observe the following management priorities for reducing activities.

Of these priorities, actions 4 through 8 involve some level of decommissioning and asset preservation.

Deciding when

The decision to decommission a fab requires planning and analysis. A good way to determine the appropriate time for closure is to analyze the situation using a factory model.

Factory model analysis can help identify personnel and skill requirements, equipment requirements, waste products, salvageable products and materials, environmental, health and safety issues, and costs. It can also consider ramp-down strategies, break-even points and decommissioning sequences, allowing what-if analysis for comparison of alternatives. This analysis can be facilitated using a factory model1 to simulate the operation of a fab under many operating strategies. In addition to operational analysis, simulation can identify short-term (3 to 12 month) trends in projected cash flow and income.

What needs to be done?

Fab decommissioning is not a decision that is easily made. The decision process typically has two phases:

1. Financial and operational analyses
2. Implementation

Financial and operational analyses
Details of financial and operational analyses are beyond the scope of this article. Some suggestions for the type of questions that need to be answered in this phase include:

• What other manufacturing options are available?
• What is the minimum acceptable level of manufacturing activity?
• What are alternative uses of the facility?
• How will each option impact the company?

Factory models can assist managers in developing a decommissioning and asset preservation strategy.

* What other manufacturing options are

available?

* What is the minimum acceptable level of manufacturing activity?

* What are alternative uses of the facility?

* How will each option impact the company?

Factory models can assist managers in developing a decommissioning and asset preservation strategy.

Implementation
After the decision has been made to decommission a facility, implementation planning can proceed. This plan should include the following steps:

• Develop a work plan for closure, including the sequence for shutting down facility systems.
• Complete a cost estimate for the plan.
• Determine safety guidelines and decontamination targets.
• Obtain regulatory approval.
• Identify and secure the following services:
  – Decontamination and cleanup, analytical testing, waste disposal, training and equipment removal and disposition.

• Secure appropriate permits.
• Prepare the facility for safe decommissioning activity, including the removal of all chemicals and gases.
  – Which systems must remain on?
  – Which systems must be shut-down and locked-out?

• Establish a decontamination area.
• Create a safe area for cleaned equipment.
• Perform the decommissioning activities.
• Test all assets for cleanliness.
• Document the project and prepare a final report.
• Provide support for subsequent uses of the assets.

Who should do the work?

To be successful, a decommissioning effort should be planned and coordinated as carefully as new construction. Many firms have utilized the expertise of design and construction service providers to develop a closure plan and provide some or all of the services necessary to implement the plan.

Facility owners may choose to have much of the decommissioning performed by on-site staff to reduce costs. However, some decommissioning tasks require skills that the on-site staff may not possess. Specialized services, such as hazardous waste removal, may also be required. Design/construction teams have a network of project managers, staff engineering, technical support and contractors on which owners can draw to implement their closure plans.

Daren Dance is the manager of applications research and development for Wright Williams & Kelly (WWK), a cost reduction modeling and management consulting services company. He coordinates WWK's development of new cost of ownership modeling applications and is responsible for supporting custom applications of existing products and services, and providing technical and training support to customers.

He is chairman of the SEMI (Semiconductor Equipment and Materials International) cost modeling standards subcommittee.

Dan Wilkowsky is a senior environmental manager with IDC's environmental and regulatory affairs group. He has specialized expertise in site selection and permitting, environmental, health and safety auditing, design of waste treatment and abatement systems, chemical recycling, and environmental management systems.

References

1. Factory Commander: Cost and Resource Modeling User's Guide, WWK, 1998.