by Katherine Derbyshire, contributing editor, Solid State Technology
July 15, 2008 – There’s a certain amount of schizophrenia around SEMICON West this year. On one hand, the photovoltaic sector is growing like kudzu. Growth exceeds 50%, money is pouring into the sector, and solar is one of the few industries that actually benefits from high energy prices. The future looks very bright indeed.
Meanwhile, the mainstream integrated circuit market is mired in an extended downturn. The book-to-bill ratio is well below 1.0, has languished there for months, and is continuing to decline. The future looks grim.
Yet, as Tom Caulfield, Novellus EVP/sales & marketing, pointed out in a packed house in the Yerba Buena theater (now named for Novellus in a sponsorship deal), the underlying electronics industry is doing fine. PC growth is healthy, and laptops and smartphones are booming. Sales are up 10% from last year in unit terms. In revenue terms, though, growth is a more modest 4.3%. And therein lies the problem. Average selling prices are declining, and with them the returns that manufacturers need to fund further growth.
Making things even more difficult for equipment makers, the industry is in the middle of a consolidation phase. While the top 10 spenders accounted for 52% of capital equipment purchases in 2002, now they command 74% of the purchases. They are buying different kinds of equipment, too. In the late 1990s, logic accounted for two-thirds of capital purchases, Caulfield said, but now the trend is almost exactly reversed, with memory commanding 60% of the equipment market.
Memory and logic processes are different. The transition from aluminum to copper wiring, already old news in the logic sector, is only now taking place for memory devices. With that transition come new opportunities. According to Tim Archer, SVP/GM for Novellus’ PECVD products, the transition from aluminum to copper adds 30% more PECVD layers. In high-density plasma deposition, Kaihan Ashtiani, VP/GM for gap fill, noted that memory accounts for 68% of the market — and the top two memory manufacturers combine for 37% of HDP sales, more than all logic and foundry companies together (see figure below).
Novellus says it is aggressively pursuing the memory market, introducing compact, high throughput tools for both HDP and PECVD. For HDP applications, its new Speed Max system delivers 50% more throughput than Novellus’ previous generation, according to Ashtiani, and 68% more than competing systems. A 50k wafer/day megafab would need 28% less floor space for PECVD with Novellus’ tools. For PECVD, Archer said, the upgraded Vector Extreme specifically targeting ashable hardmasks offers a blazingly fast 3800 wafer passes/day and processes up to 250 wafers/hour, similarly offering 25% better capital productivity, and requiring 40% fewer tools per fab.
The outlook for these tools is full of uncertainty — as an unusually long “Safe Harbor” statement before the presentation warned. A megafab represents a huge capital outlay; manufacturers may be more inclined to build them in modular stages. Nor is there any assurance that Novellus will meet its very aggressive market share targets in the sector. Still, the remarkable shift from a logic- to memory-dominated industry shows no signs of abating. Each of the million-plus iPhones sold this weekend came with at least 8GB of flash memory. Lower NAND flash prices lead directly to increased sales, as more people carry more of their lives in their pockets. Any company that can help support that growth can expect to have a bright future. — K.D.