Dawning of a New World for chipmaking

07/01/2002

Semicon West 2002 should mark the dawn of a new industry revival, and it should be a very strong one at that.

It's Semicon West again — this time, cheer up! Last year, the mood at Semicon West was downright somber. One large empty booth featured an apologetic sign with peaceful background music — it was like attending a wake! Since then, at least recently, the mood has clearly changed. Last fall, at Semicon Southwest, everyone was still desperately looking for signs of hope after the tragedy of September 11, and not finding many. At Semi Europa in Munich this spring there was a new refrain: "There are a few bright spots out there, but we're not sure if it's going to last." Since then, the economic signals are suggesting that the upturn will continue to gather momentum.

Semicon West 2002 should mark the dawn of a new industry revival, and it should be a very strong one at that. But while this recovery may be dynamic, it will also be leading the industry in new directions. First let's look at why it should be so strong, and then explore some of the major shifts.

World economies are steadily recovering from a downturn triggered by a short, shallow US recession. As the recovery takes hold, discretionary funds will go toward buying new electronic devices and equipment, although there may be some different ones than in the past. DVDs and game boxes are among the leading drivers, for example, and a variety of wireless devices for web access as well as notebook computers should also be hot, while the new flat screens are attracting desktop PC buyers. The US economy is poised for a very strong recovery, with interest rates low and minimal inflation, productivity rising at record rates, corporations lean and mean, and consumer confidence rising from the bottom. Once businesses see better profits, they will resume the information technology buildup that stalled nearly three years back. In fact, with low prices for rapidly improving technology, and many long-deferred requests to upgrade networks, computers, storage, and factory automation, IT buying may come back at a record pace. Corporations will be concentrating on smoother broadband networking and better access to stored information using smart software, as well as more capable, small footprint PCs.

Asia, which was a big driver of the technology surge in the late '90s, may also make a surprisingly strong comeback. South Korea bit the bullet on weak banks, scaling back so that it could clean the books while letting weak companies die or sell out so the country could get ready for another era of super growth. China is developing faster than most observers expected, with lots of help from Taiwan and programs to provide a suitable infrastructure for a rapid buildup in chipmaking and electronics manufacturing. Taiwan's foundries continued to invest, and led the way toward 300mm wafer processing and cutting edge processing, even through the downturn. Now their moves are paying off. Japan shifted its fab resources away from DRAMs and commodity products much more toward systems chips, and tool buying there has begun to rise even though the overall economy is still struggling. Europe is capitalizing on its strengths in mixed signal chips and RF devices while spurring the move toward new generations of wireless web access devices.

This all adds up to a formula for dynamic growth, but there will be some major differences. Many of the smaller integrated device manufacturers (IDMs) are shutting down old fabs rather than upgrading, depending on foundries instead. Larger IDMs are also allocating more of their work to foundries, using them to provide the extra capacity that will be needed in an up cycle rather than overinvesting in new 300mm fabs themselves.

But there are problems in getting all the complex chips needed for the hot new devices using the foundry/fabless design model. Pushing the technology has required extensive use of reticle enhancement techniques (RETs), and this has led to much more costly mask sets. Short runs of specialized chips are not very compatible with mass production on 300mm wafers. Multi-project wafers, containing an assortment of chips rather than all being one design, offer one potential solution. Designers will have to come up with new tailorable systems chip designs containing the most commonly needed devices, including processor, memory, bus, modem, and some analog and converter circuits, and perhaps some field programmable logic, so that many applications are possible. Making advanced lithography work well may require more constraints on designs, and require circuit designers to work more closely with process engineers and maskmakers.

With the rise of 300mm fabs, the industry is automating toward the "lights out" factory model. Software is playing a much more significant role in improving processes and yield. Metrology is moving onto the production line to help control processes and provide data for tool monitoring as well as yield improvement.

Of course all these changes will again challenge the industry to come up with new solutions, and, as usual, the deadline was yesterday. But with change comes opportunity. Take advantage of it. Check out all the new ideas you'll see all over the show floor and in the technical presentations. Things are starting to hum again — so cheer up!

Robert Haavind
Editor in Chief