by Pete Singer, Editor-in-Chief, Solid State Technology

May 6, 2008 – An update on AMD’s “lean” manufacturing strategy in its Dresden, Germany chipmaking operations was the highlight of an opening-day keynote at this year’s Advanced Semiconductor Manufacturing Conference (ASMC) in Cambridge, MA.

“Lean focuses on the increase of value from the customer perspective while avoiding waste in all processes of the organization through continuous improvement,” said Doug Grose, SVP of manufacturing.

The manufacturing concept, similar to ones embraced at Toyota and Porsche, was initially introduced at the company’s Fab 30 facility in Dresden, a 200mm facility being converted to 300mm as an adjunct to its newer Fab 36, to be scaled up “sometime in 2009,” Grose said. He listed several measures of success over the past ~3 years from AMD’s adoption of lean principles (much of which was documented in his keynote at last year’s SEMICON West): 31% increased capacity, 72% hike in labor productivity, 26% reduced monthly wafer cost, and 23% reduced cycle times/mask layer.

This time, though, Grose cited several specific examples of how AMD applied lean principles to its C4 chip bumping process to improve process workflow; to mainstream processing to reduce preventive maintenance; to joint development work with suppliers to improve equipment uptime and spare parts availability; and in its Singapore backend assembly/packaging/test operations to dramatically reduce costs and manufacturing footprint.

For example, in the company’s bump/test facility where it utilizes a C4 chip bumping process, it has reduced preventive maintenance (PM) of mainstream equipment platform by 93%. “Traditionally, we had looked at this in a very classical sense of tool farms, putting together all of the wet processes in one place and batching up as we move through,” Grose said. Adopting a lean implementation meant creating “more of a linear flow,” he said, adding that the production line has become more predictable in terms of output beyond a list of key performance indicators (see Table).

Involving fewer steps and improving capacity has helped AMD do things in a much more predictable way, Grose said (see before and after sketches of the workflow, below). “We actually took work out of how we did things,” he said, changing from a patchwork of weekly/biweekly/monthly/semi-annual PM “to a much more continuous, every month, PM schedule.” Work is done in a 12-hr shift to ensure no handoffs on either side and a much cleaner process, he said. Also, new tools and support were designed with kits to swap out and improve the time to get the tools back online, he said.

Best preventive maintenance practices include:

– Revised PM content, eliminated waste,
– Extended frequency between PMs,
– Re-arrangement of PM even over the year,
– PMs only as long as a working shift,
– Usage of swap kits, Introduction of support tools,
– Re-design of parts and components of the tool, and
– Remote health check and failure analytics (FDC).

Grose also described how AMD implemented lean concepts with equipment supplier Semitool to improve equipment uptime and spare parts availability. The companies participated in a number of workshops at Semitool’s facilities, and then brought the same team to Dresden “to work on what was important to us” — e.g., a build-to-order Semitool process, improved parts quality/availability, and applying lessons learned to future hardware design for AMD-specific needs.

And lean manufacturing has helped AMD dramatically reduce costs in its Singapore back-end assembly, packaging, and test operations, e.g., improvements in how materials are transported. About half of AMD’s production costs come after the fab, Grose noted, so “between assembly and putting packages together and testing, it’s about a 50-50 ratio for microprocessors.” By rearchitecting the backend-of-the line, AMD has reduced cycle time, improved efficiency and output, and reduced inventory, he said. “We physically shrunk the footprint down so that we now have expansions room without having to go out and buy new buildings or lease expansion space.” In fact, retail cost savings in 2007 from the Singapore operations amounted to $1.1M in labor, $5.2M in reduced inventories, $37.4M in capex and other savings (e.g., cost avoidance and absorbed contract manufacturing), and $12.0M in repair and maintenance (cost avoidance).

“Lean is continuous. There is no final victory, no end-point,” Grose concluded. “It is a journey, and it is about continuous improvement.” — P.S.