June 25, 2008 – Toppan Printing and IBM have forged a new development agreement extending their photomask process development work to the 22nm node, continuing a longstanding partnership — but an industry insider tells WaferNEWS that there’s a strategic agenda at work that could shake up the market.

The new arrangement covers the final phase of 32nm photomask process development — including integration of Toppan’s just-debuted 32nm photomask process into the one that they are jointly developing, to potentially optimize performance — and all phases of 22nm photomask process development. Work will start this month at IBM’s photomask facility in Essex Junction, VT. The two firms have been collaborating on photomask development since mid-2005 targeting the 45nm node; an extension to 32nm work was finalized in 2007.

“We believe this joint initiative will place IBM and Toppan Printing at the forefront of advanced photomask technology development, and thus will enable us to contribute to the technological innovation in the world’s semiconductor industry,” said Naoki Adachi, president of Toppan Printing, in a statement, adding that he thinks the deal will “help Toppan Printing become the world’s premier photomask manufacturer at 22nm.”

SST Editor’s Take:

Much like Toppan’s recent disclosure of its 32nm photomask process, this news that IBM and Toppan are pushing their photomask work to 22nm generates as many questions than answers. While 45nm process technologies, particularly lithography, are likely to be stretched to the 32nm node, at 22nm several alternatives are still very much in the race (EUV, perhaps some extension of high-index immersion, imprint, e-beam/direct write, etc.). Toppan and IBM say they will focus on a 22nm photomask process based on ArF immersion, though, which will be hard to do at that level.

There may be something more strategic may be at play here, than just forging ahead in a longstanding development relationship. An industry insider exclusively tells WaferNEWS that this continued pursuit of joint photomask development activities is actually Toppan positioning itself to eventually take over the photomask operations — and it’s a question of “when,” not “if,” IBM will sell this asset. “Toppan has stayed in this thing to assure their place in line when IBM sells this asset,” the reliable source claims.

IBM’s technology was found to be well behind partner Toppan during the joint work, the source claims, and there has been a significant clash of cultures, both social and corporate. Several key people in IBM’s mask organization have left, the source says, and IBM quite possibly has neither the IP nor resources to keep competing in the mask technology area. (In related news, just this week IBM has laid off 180 workers at its Burlington, VT facility.)

Thus, so the story goes, IBM is proceeding with this JV work as “political positioning to side with Toppan in the world-wide mask-making competition,” the source tells WaferNEWS, Another commentator added that the heaviest damage may be to Photronics (which used to be more closely aligned with IBM’s photomask group). “DNP has been and remains the premier mask operation in the industry, [and] they will also continue to be,” the source notes, adding that DNP has a roughly three-year headstart in imprint mask development.

So, if industry insiders are right, another “captive” mask house will be assimilated by a world-wide mask-making behemoth. Stay tuned.