Category Archives: Metrology

By Adrienne Downey, Director of Technology Research, Semico Research

In February 2012, Semico forecast 2012 semiconductor capex to reach $59.8 billion.  In December 2012, that forecast was virtually unchanged at $59.9 billion, down 5.6% from 2011.  After two years of double-digit growth (98% in 2010 and 26.2% in 2011), the semiconductor industry needed to back off and regroup.  Most concerning is that the gap between the big spenders and the small has expanded.  The top ten spenders for 2012 made up 81% of the total; this figure is up from the 76% of the total in 2011.  Overall, the top ten combined spent $48.2 billion, which is only 0.3% up from 2011.  Meanwhile, the rest of the companies went from spending $15.3 billion in 2011 to $11.7 billion in 2012, a decline of 24%.  Some of the decline can be attributed to companies like SanDisk, which, along with its partner Toshiba, delayed fab expansion projects until 2013.  Other companies like ST and TI made capacity improvements over the past few years, so spending in 2012 was mainly for maintenance.

In December 2012, most companies have still not announced capex plans for the following year.  This year is no different.  However, a handful of companies have given some indication of what they might spend next year.  For example, TSMC is forecasting 2013 capex to be slightly up compared to 2012.  Most of the other companies that have given a hint of 2013’s capex have indicated flat to down spending compared to 2012.  These companies include GLOBALFOUNDRIES, Avago, Fairchild, Micron, ON Semiconductor, SMIC, Spansion, and STMicroelectronics.  GLOBALFOUNDRIES announced its “Vision 2015” initiative to expand 300mm capacity in Singapore, but no budget was announced for the project. 

That being said, there are several construction projects that may give some indication of spending in 2013.  Samsung is retrofitting its Austin fab to switch from NAND to logic production, with mass production beginning in the second half of next year.  This is a $4 billion project spread out over 2012-2013.  Intel’s D1X and Fab 42 construction will wrap up in 2013; the company will also begin production at 14nm by the end of this year.  Samsung, TSMC, and GLOBALFOUNDRIES are also working on the 14nm and 20/22nm nodes.  UMC has Fab 12A Phases 5 and 6 under construction, with production schedule to begin in 2014.  SanDisk and Toshiba will probably increase their spending to complete the ramp of Fab 5, which they said would be complete by the end of 2013. 

Based on current indications, capital spending would seem to be flat in 2013.  However, Semico predicts healthy revenue growth this year, which may encourage more spending, particularly in the second half of the year.  This may bring total capex for 2013 into the positive range. 

By Mark Thirsk, Managing Partner, Linx Consulting LLC.

Past contributors have often noted a correlation between the semiconductor market growth and global GDP.  With careful correction this correlation can be used to forecast future IC market trends, although the process is not straightforward.

The consensus forecast for global GDP 2013 is now below trend at 2.6%, only a slight improvement over 2012, and less than the 3.2% seen in 2011.  The US approach to solving fiscal Cliff is an excellent example of the difficulty governments are having in developing strategies to address unprecedented economic problems, although political solutions, however imperfect, helps to stabilize expectations, and solidify financial markets.  In Europe, mild recession will continue through most of 2013, and Asia (excepting Japan) will likely show the best overall growth rates in the coming 12 months as measures to cool the Chinese economy are relaxed.

These extraordinary conditions in the global economy lead to wide variations in economic forecasts with an upside as high as 3.5 % growth, and a pessimistic case as low as 1%.  Against this backdrop, meaningful macroeconomic demand-side forecasts are difficult to develop.

Linx has worked with Hilltop Consulting to implement a proven macroeconomic forecasting tool that takes into account the global economic shocks and volatility to develop an Silicon area forecast for the global semiconductor industry.  Predictions for 2013 show several notable trends: 

  1. Overall Si area growth for 2013 should average approximately 6%. 
  2. The first quarter and the second half are likely to show slower growth than the second quarter.  This trend is part of a seasonality which has been swamped by economic volatility over the last 3 to 4 years. 
  3. The modest growth forecast for 2013 is predominantly demand driven since inventory levels have not shown a significant spike in 2012.

The overall picture of Si area growth breaks down into the expected performance of device segments and technology nodes.  Despite the shift to consumer electronics and mobile platforms we expect growth to be concentrated in CMOS products at ≤ 65nm with a continuing slowing of unit growth and analog and discrete devices.  Strongest growth will remain with flash memories, and advanced foundry logic devices targeted at tablets and phones.

In contrast to advanced memory and logic processing, approximately 56% of the Si production continues at design dimensions in excess of 90 nm on wafer sizes of 200 mm or smaller.  This market segment is extremely sensitive to economic volatility and has declined somewhat in the last four years.  Manufacturers of these devices are often capital constrained and extremely cost sensitive, leading to little process innovation and limited capacity expansion.

On a technology basis, despite tight capital budgets, the introduction of devices at 28 and 22 nm half pitches continues apace, and significant process challenges are driving increased complexity and resultant challenges in patterning, cleaning, and deposition throughout the device manufacturing process.  2012 is forecast to have produced more silicon area at 32 nm than any other node, and the introduction of low 20 nm half pitches and flash has continued to grow startling rates.  Significant challenges also exist in the in the advanced device markets due to geometric constraints and physical limits in scaling planar devices.  At a time when lithography is unable to scale continuing device shrinks results in added complexity in critical patterning steps and demands the addition of multiple lithography steps to achieve a single pattern level.

Manufacturers of logic and memory alike are working to develop substitute technologies for planar transistors, MIM capacitors and floating gate structures.  The broad introduction of metal gate finFETs, new types of storage cells, and three-dimensional memory stacks is still several years away, and this is driving interest in the adoption of three-dimensional packaging technologies such as through silicon vias to continue delivering increasing functionality in a package.

Despite the headwinds of increasing layer counts to compensate for the lack of high resolution lithography, and the need for new deposition technologies needed for novel processes and device architectures, we expect a small group of wafer makers to continue to chase these advanced technologies, while also pushing to implement 450 mm wafers.  Few of these technologies will see implementation in 2013, but they will be the focus of headlines as new breakthroughs are made, while the semiconductor industry continues its trend of remarkable success.

 

By Joe Cestari, President, Total Facility Solutions

A major challenge facing the industry in the coming year is how to deliver products faster without affecting budgets or compromising safety and quality. The continued technology innovations will still support investment, and the ongoing move to mobile computing is a major driver in everyone’s forecast. The bottom line is that the industry will continue to advance, with Moore’s Law and economics driving market opportunity. From a US standpoint, we must continue to invest in emerging technologies and maintain our leadership status as an R&D center of excellence — driving investment is important. We can’t continue to afford to just innovate here then provide incentives to drive manufacturing overseas. We must find a way to keep heavily IP-weighted manufacturing in the US. What has happened in New York is a great example. Previously known for high labor rates, now some of the top manufacturers in the industry are bringing their manufacturing there, proving the US is not only an innovator, but a viable producer of a quality product at a lower total cost.

Most notably, in semiconductor manufacturing, 450mm is the next big opportunity. Issues of economic scale and complexity will force fab designers, OEMs and process integrators to investigate all open avenues in the search for solutions to the huge challenges that accompany 450mm. Next generation fabs present new challenges with respect to the design of the facilities, substrate handling, tool connection, chemical distribution, water and electrical systems and other areas. A transition to a bigger wafer size will bring many opportunities – some of which include helping to evolve the way we fabricate devices, introducing different chemistries, supporting greener, more sustainable builds and improving the efficiency of the entire process infrastructure.

Right now, with 450mm in its infancy, no one really knows what to expect, especially with regards to tool installation and hook up as design packages aren’t ready yet and in some cases the tools don’t even exist. The switch faces numerous challenges, as is the nature of the business. Competing vendors will no longer have to work only with the manufacturer, but with each other to settle a standard platform, an approach that could be challenging, yet beneficial all around. There has been a need for closer collaboration throughout the semiconductor industry for some time, starting from the facility construction process. The entire industry would benefit if suppliers were more integrated in the supply chain; and our goal of delivering products faster without affecting budgets or compromising safety and quality could be better realized.

By Rudy Kellner, VP & GM, Electronics Business Unit, FEI

Consumer demand for more power, speed and functionality in less space seems to be insatiable. Yet semiconductor manufacturers have reached the end of the era when this demand could be satisfied by simply shrinking the dimensions of fundamental planar device technologies. Now they must accommodate complex, three-dimensional (3D) device architectures and a plethora of new materials. At the package level they must develop and produce 3D designs that stack and interconnect multiple die without sacrificing yield or performance. The net result of all this innovation is a sharp increase in R&D capital intensity. In order to maintain profitability manufacturers must increase the productivity and return from their R&D investments. Moreover, time-to-market has become the new battle ground where the first to market enjoy a brief period of premium pricing and higher margins, before the battle begins again.

The decreasing size and increasing complexity of devices has driven demand for high-power transmission electron microscopes (TEMs) required to visualize and analyze structures with critical dimensions of a few tens of nanometers. Equally important, it has also driven demand for the focused ion beam/scanning electron microscope (FIB/SEM) systems needed to create ultrathin samples from precise locations on a die. We have invested heavily to improve the speed and throughput of these systems, reducing sample preparation times to less than 90 minutes with recipe-based automation and hardware innovations that streamline difficult and time-consuming sample manipulations. At the packaging level we have introduced a plasma-based FIB system with milling rates fast enough to permit package-scale edits that can save weeks in the assembly process.

As the industry continues to consolidate, the battle ground will continue to shift. Production excellence and efficiency will remain a requirement, but the spoils will go to the first to market. Accelerating R&D turns and decreasing time to yield will be the keys to success.

By Paul Lindner, Executive Technology Director, EV Group

A city’s skyline is a testament to the transformative power of technology—skyscrapers made possible only by the Bessemer steel manufacturing process introduced in the 19th century.  Now in the 21st century, the world is undergoing another major transformation, as new MEMS and 3D semiconductor manufacturing processes create the building blocks for the Internet of Things. Being able to build higher gave birth to the modern city, while being able to connect not just people, but all manner of devices, promises to be just as big a reorganization of society. Similar to skyscrapers and the Bessemer process, the infrastructure of the Internet of Things is being enabled by new low-cost, high- volume manufacturing processes.

Today, sensors are not a new technology anymore than steel was in the 19th century. What’s new is the introduction of manufacturing technologies that are lowering costs to the point where sensors transmitting information to the Internet can be affordably integrated into almost any device. Material advances have played an important role, as metal bonding technologies enable narrower seal frames and shrinks of MEMS devices. In 2013, device shrinks, new high-throughput tools and increased competition between manufacturers, as volume picks up in increasingly standardized capacity lines, will further drive the commoditization of MEMS. With Windows 8 for example providing an API for sensors, operating system requirements are also driving sensor standardization, thereby making it easier to assemble the infrastructure for the Internet of Things.

The Internet of Things, however, is about more than just gathering information through ubiquitous sensors. Huge amounts of data need to be affordably stored and analyzed, in order to be useful, which requires keeping Moore’s Law alive. Fortunately, new semiconductor 3D manufacturing technologies are poised to play a critical role in further commoditizing memory and processing power. In 2013 high volume production of true 3D technology will commence. The industry will also see intensified wafer level developments particularly around image sensors and memory, as new DRAM designs allow for monolithic integration at the wafer level. Wafer-to-wafer bonding processes, combined with built in self-test, error detection and correction  are poised to overcome one of the few remaining hurdles to high-volume, low-cost 3D manufacturing.

Although pundits can debate how the Internet of Things will transform the world, it is becoming increasingly clear that new MEMS and 3D high-volume, low-cost manufacturing technologies will accelerate a radical change to society’s cyber skyline.

By Christian Gregor Dieseldorff, director, SEMI Industry Research & Statistics, San Jose, CA USA  

Despite difficult times, growing demand for mobile devices (such as tablets and phones) inspires an improved outlook for chip sales in 2013.  Various forecasts range from 4% to 16% revenue growth for 2013 (average of forecasts 7%). As observed in the past, chip sales and capex typically ride the same roller coaster; however, 2013 appears to be another year of uncertainty. While chip sales may rise in 2013, expectations for equipment range from timid 5% growth down to double-digit decreases — definitely not the same roller coaster.

The largest spenders on fab equipment are Samsung, TSMC and Intel.  As of mid-December 2012, some of these companies still have not made any official announcement about 2013 capex plans.

The SEMI Consensus Forecast and the SEMI World Fab Forecast, with data collected from two different methodologies, point to the same conclusion.  The year-end Consensus Forecast for wafer processing predicts 0% growth (flat) for 2013.  Meanwhile, the World Fab Forecast report for Front End Fabs (published November 2012) also shows 0% growth (flat) for 2013 and total fab equipment spending hovering at US$ 32.4 billion (including Discretes and LEDs, used equipment and in-house equipment).  The projected number of facilities equipping will drop, from 212 in 2012 to 182 in 2013. Fab equipment spending saw a drastic dip in 2H12 and, accounting for seasonal weakness and near-term uncertainty, will be even lower in 1Q13.  Examining equipment spending by product type, System LSI is expected to lag in 2013. Spending for Flash declined rapidly in 2H12 (by over 40%) but is expected to pick up by 2H13. The foundry sector is also expected to increase in 2013, led by major player TSMC, as well as Samsung, Globalfoundries and UMC.

While fab construction spending slowed in 2012, at -15%, SEMI data projects an increase of 3.7% in 2013 (from $5.6 billion in 2012 to $5.8 billion in 2013).  The World Fab Forecast tracks 34 fab construction projects for 2013 (down from 51 in 2012).  An additional 10 new construction projects (with various probabilities) may start in 2013. The largest increase for construction spending in 2013 is expected to be for dedicated foundries and Flash-related facilities.

In 2012, many device manufacturers stopped adding new capacity due to declining average selling prices and high inventories. This is most pronounced in the Flash sector, as seen with Sandisk since the beginning of 2012, and both Samsung and Toshiba starting 3Q12.

Breaking down the industry by product type, capacity growth for System LSI is expected to decrease in 2013. Flash capacity additions dragged in 2H12. But more activity is expected for Flash by mid-2013, with nearly 6% growth. The data also point to a rapid increase of installed capacity for new technology nodes, not only for 28nm but also from 24nm to 18nm and first ramps for 17nm to 13nm in 2013.

If the global economy and GDP begin to improve, and chip sales actually do increase in the higher single-digit range, equipment spending is expected to ride the same roller coaster, going even higher for 2013.

December 29, 2012 – Industry watchers have been lowering their outlooks for 2013 over the past few weeks, but there’s one set of opinions that still see optimism for an industry rebound in 2013 — chip industry executives themselves.

In its annual study, KPMG found three quarters of semiconductor executives polled believe they will see revenue growth in the next fiscal year — that’s up from 63% in last year’s survey. Two-thirds expect to hire more workers (vs. 48% in 2011), and 71% say annual industry profitability will increase in 2013. Overall their sentiment is for a recovery that builds up steam especially heading into the second half of the year.

KPMG’s Global Semiconductor Survey, conducted in September, surveyed 152 semiconductor industry business leaders (primarily senior-level execs) at device, foundry, and fabless manufacturers, half of whom have annual revenue of $1 billion or more. Overall, its "Semiconductor Business Confidence Index" climbs to 57, stepping across the 50/50 threshold into optimism vs. the index of 46 recorded a year ago. Among its other findings:

— More activity, inside and out. Seventy-three percent of respondents expect to increase capital spending over the next fiscal year, up from 51% a year ago — and 24% expect to increase spending by 10% or more, vs. 10% of respondents in late 2011. Just 6% of respondents expect capital spending cuts, s. 18% a year ago. Similarly, 77% of execs expect semiconductor-related R&D spending to increase in 2013, up from just 65% a year ago. And two thirds of execs expect more merger and acquisition deals in fiscal 2013, up from 62% a year ago looking into 2012’s crystal ball.

— The US is tops again. Execs placed the US ahead of China in the most important geographic markets for semiconductor revenue growth three years out — for a third consecutive year, fewer see China as their most important market. Next in priority are Europe, Korea, and then Taiwan — which two years ago was ranked 2nd and slightly ahead of the US, but might be losing favor due to exposure to softer Japanese and Chinese economies, according to Gary Matuszak, global chair of KPMG’s Technology, Media and Telecommunications practice. Also, "significantly" fewer chip execs viewed China as a top-three hiring market in 2013; it’s still in first place, but the US and Europe are gaining favor.

— Consumer is king, redux. Consumer applications are officially the most important revenue driver, as viewed by the chip execs over the next fiscal year; computing now ranks third, behind wireless. "Unlike past recoveries, this one won’t be driven by wireless handsets and wireless communications alone," said Matuszak. Other revenue-driving apps — industrial, medical, automotive (with many sub-applications in body electronics, communications convergence, and safety), and power management (a big feature in wireless devices) — were emphasized by more chip execs in this year’s survey than in the past three years. That’s a clear indication how semiconductors have proliferated beyond traditional wireless and computing applications, such as mobile commerce and various automotive functionalities, added Ron Steger, global chair of KPMG’s Semiconductor practice. Also getting a big push from semi execs: "renewal energy" such as battery technologies, listed by 53% of execs as an important revenue driver over the next three years, up from just 36% a year ago.

Percentage of survey respondents who expect their company’s semiconductor-
related capital spending to increase over the next fiscal year. (Source: KPMG)

December 28, 2012 – The FlexTech Alliance has awarded 4D Technology (Tucson, AZ) a contract to develop an optical system that addresses a shortcoming in roll-to-roll (R2R) electronics manufacturing: in situ, high-resolution mapping of surface topography and defects on a moving, flexible web. The $956K development project, expected to be completed in early 2014, will enable new, real-time levels of process control and yield enhancement, according to the groups.

Surface metrology and defect detection of web materials in R2R are well-known needs for flexible electronics manufacturing. This project’s primary focus is on analyzing and measuring transparent substrates, but the partners claim it will be applicable to translucent and reflective materials. Suppliers and customers of web materials will be able to agree upon and implement practical specifications and quality metrics to ensure consistent materials (incoming and outgoing) at the lowest possible cost.

Surface roughness, defect density, and cleanliness, key parameters for R2R substrates, are difficult to measure with high-resolution on moving substrates, noted Malcolm J. Thompson, chief technical advisor to the FlexTech Alliance. “This project with 4D Technology was initiated in order to upgrade the equipment industry’s capability to provide a metrology tool that can be integrated into a manufacturing line.”

“The new metrology system, as an on-line instrument, will register, identify and classify defects for pre-processing and post-processing of transparent flexible web materials. This will help overcome current manufacturing obstacles by replacing qualitative specs and visual inspection methods with quantitative specs supported by data acquisition and analysis,” added James Millerd, PhD, president of 4D Technology.

December 20, 2012 – Global spending on wafer fab equipment (WFE) is now on pace to finish 2012 with a -17% annual decline, and 2013 now looks like it’ll only be slightly better at a -10% dropoff, before the next cyclical spending upturn begins in 2014, according to an updated forecast from Gartner.

The firm now sees 2012 WFE investments coming in at about $29.9B, a -17.4% decline from 2011. That compares with an earlier projection of a -13% decline made in October, which was itself a downward revision (-9% in June, -11% in March). Those numbers are slightly steeper, but the trend is similar, to SEMI’s recent projections which also predict a rebound coming in 2014.

The environment has softened significantly in just the past few weeks, Gartner says, as the macroeconomic suffering takes a toll on consumer spending, which trickles down to overall capital spending (equipment plus facilities services, etc.) — which Gartner now sees declining -10.7% in 2012 vs. its -9.3% forecast in the third quarter. That will be followed by another -14.7% decline in 2013, as semiconductor manufacturers deal with excess capacity and a slow macroeconomy.

"Although a period of inventory correction that led to lowered production levels in the first half of 2012 appears to be over, inventories remain at critical levels," Johnson warned. "High inventories, combined with overall market weakness, will continue to depress utilization rates into the first half of 2013."

The year started off strong for wafer fab equipment spending as chipmakers ramped sub-30nm production and needed new tools to prop up yields, but as yields improve that equipment demand is softening, explains Bob Johnson, research VP at Gartner. Overall yields will touch bottom below 80% by the end of 2012 and slowly creep up to around 85% by the end of 2013, Gartner says; leading-edge utilization will be a bit higher as always, moving from mid-80% up to the low-90% range over the same period.

There’s hope on the horizon, though. Memory and logic spending should realign in 2014 with "substantial increases" in investments, followed by a flat to slightly positive 2015. look for a new WFE growth cycle starting in 2014, and lasting through 2016.

Here’s how Gartner sees things shaping out near-term, by technology investment:

— Memory: Continuing to be weak through 2013, with maintenance-level investments for DRAM and a slightly down NAND market until supply and demand are in balance.

— Foundry: Spending will increase 7.4% in 2013, as both IDMs and semiconductor assembly/test services (SATS) companies absorb spending declines.

— Logic: The only positive driver for capital investments in 2012 increasing just 3%, Gartner notes, thanks to the aforementioned sub-30nm ramp. Smartphones and media tablets won’t be enough to bring up utilization levels to where chipmakers need them, though, Johnson notes.

Projected global spending on semiconductor manufacturing equipment, in US $M. (Source: Gartner)

Abingdon, England—Oxford Instruments (OXIG:LSE) has acquired Asylum Research (Santa Barbara, CA), a maker of scanning probe microscopes (SPM) with subsidiaries in the UK, Germany, and Taiwan. Its products are used by academic and industrial customers across the world for a wide range of materials and bioscience applications.

Asylum Research is being acquired from its management for an initial debt free, cash free consideration of $32 million with a deferred element of up to $48 million payable over three years depending on performance. Asylum Research generated Earnings Before Interest and Taxation (EBIT) of $1.1 million in 2011 from revenue of $19.6 million, and had gross assets of $6.2 million. The acquisition will be funded from existing facilities and is expected to be completed before the end of December 2012.

The acquisition of Asylum Research is in line with Oxford Instruments’ 14 Cubed objectives, to achieve a 14% average compound annual growth rate in revenues and a 14% return on sales by the year ending March 2014.  This acquisition contributes to the planned acquisition element of the revenue growth objective. While Asylum Research is expected to deliver less than the 14% targeted margin in this and the next financial year, following the acquisition the 14 Cubed margin target for the Group remains unchanged.

Approximately 60% of Asylum Research turnover comes from customers working in the materials science area where the customer base and routes to market are shared with Oxford Instruments. This opens opportunities for market synergies and the development of new integrated products. The remainder of Asylum Research’s turnover is in the bio-nano area where SPM instruments are used for research into soft materials such as DNA. This market provides a new growth opportunity for Oxford Instruments.

Jonathan Flint, Chief Executive of Oxford Instruments, noted, "The acquisition of Asylum Research significantly increases our footprint in the nanotechnology space and complements our strong position in electron microscopes with a presence in another fundamental nanotechnology measurement technique. The acquisition also gives us access to the rapidly growing bio-nano market as it allows customers to perform analysis of organic samples in their natural liquid environments, something which cannot readily be done using electron microscopes.