World News
12/01/2000
WORLDWIDE HIGHLIGHTS
Feels like '95: DQ, SIA see 37% semi growth this year
Market researcher Dataquest, San Jose, CA, says total chip revenues this year will rise to $231.6 billion, 37% over 1999 levels. The Semiconductor Industry Association also expects the global chip market to grow 37%, but says sales will hit $205 billion this year and possibly $319 billion by 2003. The strong growth mirrors market movement in 1995, when chip sales grew 38%.
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Dataquest does not see the next downturn (a mild one at that) appearing until 2003. A return to moderate growth is expected in 2004 (see table). The communications and PC markets are driving this year's growth, with all device categories seeing double digit increases. Dataquest analyst Dean Freeman said he expects 20 new fab announcements in the 2000-2002 period, due to under-building of fabs in the last two years. Freeman said 11 300mm fabs already have been announced for construction through 2002. It's unclear however whether the market will be able to fill these fabs to capacity, he said. The tool market will continue growing until 2003, see a two-year slowdown, and then resume rising in 2005 to $47 billion, according to Freeman's forecast.
2001 capex plans roll in
Semiconductor capital spending in 2001 will grow 10-15% over this year, say several market researchers and analysts after lowering growth expectations for 2001. Tool vendors have begun to see some order pushouts, and analysts from Morgan Stanley Dean Witter and Chase H&Q say the 20-30% capital spending growth rate anticipated earlier this year is unrealistic given end market weaknesses. VLSI Research, San Jose, CA, has said equipment bookings "are softening now, even though plans show increases for both this year and next."
Micron Technology, Boise, ID, has increased its capital budget for FY01 by 63% to $2.3 billion, marking a $900 million increase over capital spending in FY00. The chipmaker is continuing pre-preparation work for a 300mm pilot line at its Lehi, UT, site, where it now has back-end testing operations. In Japan, Micron will take over ownership of its KMT Semiconductor joint venture with Kobe Steel, which is exiting the semiconductor business. Micron is purchasing a 75% stake in KMT, Nishiwaki, Hyogo prefecture, for $125 million and will assume another $325 million in KMT debt.
Taiwan foundry TSMC will trim spending next year by $100 million to $3.8 billion from $3.9 billion this year. The firm has not disclosed 2001 spending plans for its affiliates; in 2000, its affiliates spent an estimated $1.1 billion. TSMC raised its planned capacity for next year to 4.79 million wafers (in 8-in. equivalents), up from a previous estimate of 4.76 million wafers.
Competing Taiwanese foundry UMC, meanwhile, will raise spending plans next year by $100 million to $2.9 billion, up from $2.8 billion this year. Annual capacity will rise to 2.6 million 8-in. equivalent wafers in 2001, marking a 45% increase over this year's 1.8 million.
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Spending worth noting
STMicroelectronics, Geneva, expects capital spending this year to top $3 billion, more than double 1999's $1.35 billion budget. The firm hasn't disclosed spending budgets for next year, but said it plans to "invest significantly in 2001." The spending increases have been earmarked for adding capacity in 4Q00 and throughout 2001-02.
Go, fabless firms, go!
The Fabless Semiconductor Association (FSA), San Jose, CA, reports that fabless companies will consume 54% more wafers this year than they did in 1999. Likewise, FSA's projections for 2001 show wafer demand growing 55%. According to the FSA's mid-year report, the participants surveyed — representing roughly a third of the entire fabless community — are seeing strong demand from the communications, computing, and consumer product sectors, and are worried that foundry capacity will not keep pace with demand, resulting in a capacity shortfall.
Cancer panel formed, at last
The Semiconductor Industry Association (SIA) has appointed an independent panel to review existing data on possible cancer risks in the US chipmaking industry. The SIA originally planned to appoint the panel in January of this year. David Wegman, an occupational health research scientist from the University of Massachusetts, Lowell, chairs a panel of six scientists who comprise the Science Advisory Committee. Two representatives from the National Institute for Occupational Safety and Health will work closely with the panel. The study comes as National Semiconductor and IBM face civil suits charging that workplace exposures to chemicals has led to development of cancer and other health problems among workers.
USA
Novellus Systems, San Jose, CA, plans to move into the surface preparation sector with a bid to acquire photoresist and residue removal supplier Gasonics International. The stock-for-stock deal, valued at $347 million, will give Novellus expertise in strip, clean, and surface preparation, pre-deposition processes that Novellus CEO Rick Hill sees as critical. "A key element in successful deposition is a well-prepared and clean surface," Hill said. Gasonics gains access to Novellus' infrastructure and Asian customer base. The combined revenues of the new entity are expected to be $2.25 billion in 2001. With Gasonics, Novellus will form a new surface preparation business unit following the deal's closing, expected in 1Q01.
Kulicke & Soffa Industries, Willow Grove, PA, will buy IC test supplier Cerprobe, Gilbert, AZ, in a deal valued at $225 million. The acquisition will allow K&S to expand offerings into the wafer probe and IC socket areas. Boards from both companies have given their approvals to the combination.
In an $11.3 million deal, test equipment producer Credence Systems, Fremont, CA, has acquired NewMillennia Solutions, an Irvine, CA, supplier of design-for-test (DFT) technology. Plans call for the two companies to use DFT to develop cost-effective test solutions for high-volume system-on-chip manufacturing.
PRI Automation, Billerica, MA has bought Commotion Technology, a developer of motion control software for robotic devices in a deal valued at $2 million. Commotion Technology's Java-based motion control software is used in products developed by PRI's OEM System Division and will become the standard platform for robotic control programming in other PRI products.
LTX Corp., Westwood, MA, has made an equity investment in StepTech, a privately held supplier of chip testing gear. The two companies also have inked a strategic agreement to bring LTX's Fusion platform to the high-volume commodity and consumer IC markets. The agreement will help LTX move the Fusion offering beyond single-platform testing.
Trio-Tech International, San Fernando, CA, has nixed plans to purchase the KeyTek business of Thermo-Electron Corp. The company rethought its plans because of uncertainty in the global electronics markets and the high price tag of the proposed acquisition.
Praxair, Danbury, CT, and Supercritical Systems, Fremont, CA, will jointly develop supercritical carbon dioxide wafer cleaning technology. Praxair will develop a CO2 supply and exhaust gas management system for Supercritical's process equipment. Supercritical is working on a single-wafer cleaning technology using supercritical CO2 to remove photoresist and etch residue from low-k dielectric films and high-aspect ratio vias/trenches. The company will begin beta testing within the next year and expects its CO2 supply and exhaust gas management systems to come to market in early 2001.
A shortage of plumbers and electricians has caused microprocessor giant Intel to delay the opening of its new 200mm fab in Colorado Springs, CO. Intel originally planned to open the fab in November, but now expects the facility to open early next year. Intel plans to manufacture flash and logic chips there using 0.18µm design rules.
Agilent Technologies, Palo Alto, CA, is building a new 6-in. wafer fab line at its Fort Collins, CO, plant to produce E-pHEMT (enhancement-mode pseudomorphic high-electron-mobility transistor)-based power products. Initial production will begin by the end of 2002 at a capacity of 48,000, 6-in. wafers/year.
Applied Films Corp., Longmont, CO, plans to acquire the large area coating (LAC) unit of Swiss firm Unaxis in a cash and stock deal. Unaxis will get $60 million and 673,353 shares of Applied Films' stock for the LAC division, which makes PVD tools for the FPD industry. LAC includes Balzers Process Systems' former display coatings business and Leybold's web coating, architectural, and container barrier coatings groups.
The US Department of Justice is investigating Applied Materials' technology licensing practices. Officials from the Santa Clara, CA, equipment Goliath said the investigation "appears to be a routine inquiry into a small part of Applied Materials' business." The company believes its licensing practices are in full compliance with the law.
ATMI, Danbury, CT, intends to expand its gallium arsenide (GaAs) epi capacity. ATMI's new 50,000 ft2 facility in Phoenix, AZ, will contain 11 Aixtron 2600 MOVPE high throughput reactors with space planned for eight more. One of the main reasons for the expansion is the growth of mobile handsets and other wireless devices, which use GaAs chips.
Despite the pending merger of ASM Lithography and Silicon Valley Group, The Information Network, New Tripoli, PA, expects Nikon will continue to be the leading supplier of lithography equipment. The market researcher said Nikon sold 270 tools in 1999, while ASML and SVG sold a combined 245 tools. "We see no market share erosion for Nikon in 2000," said Robert Castellano, president of The Information Network. "Nikon had been losing market share to ASML because of the slow semiconductor market in Japan in recent years. The Asian market is growing strongly, which should stem the downturn for Nikon." In contrast, ASML and SVG think their combined operations will give them the leading market position.
Millipore Corp., Bedford, MA, will divide itself into two separate companies, broken out along market areas. Millipore will maintain a focus on the bioscience market, with the new Millipore Microelectronics Company focusing on the microelectronics field. Millipore is planning a public offering of up to 20% of the new microelectronics company during the second quarter of next year.
Corning has upgraded the 193nm laser damage testing facility in its semiconductor materials metrology laboratory at Sullivan Park Research Center in Corning, NY. The new system will use a 2000Hz lithographic laser. Corning expects to better understand how radiation at 193nm affects the physical and optical properties of HPFS glass material and calcium fluoride crystals. Corning will provide feedback to both its customers and the semiconductor microlithography industry based on its findings.
Ausimont USA, Thorofare, NJ, and Air Products and Chemicals, Lehigh Valley, PA, have formed an alliance to market and supply Ausimont's Sifren 46 to the North American semiconductor market. Sifren 46 is a specialty gas that provides high etch rates, good aspect ratio control and high selectivity to photoresist in critical dielectric etch applications. The product was developed with Applied Materials. Under the alliance, Air Products will serve as the exclusive North American distributor of Sifren 46 with the capability to supply customers in other geographies.
 Cabot's new slurry manufacturing plant in Aurora, IL. |
CMP slurry and pad supplier Cabot Microelectronics, has opened a new 170,000 ft2 manufacturing facility in Aurora, IL. The new plant features multiple production lines and has the capacity for future expansion of more than 300%.
JAPAN
Komatsu Electronic Metals, Tokyo, plans to double production of 200mm silicon wafers at its Taiwan facility to 200,000 wafers/month by 2001. Komatsu is manufacturing 400,000 wafers/month at its 200mm wafer production plant in Japan.
Fujitsu, Tokyo, plans to increase flash memory production to 100 million chips/month in 2002, up from 15 million chips/month this year. Fujitsu and AMD are constructing the third plant for their Fujitsu AMD Semiconductor Ltd. joint venture in Aizu Wakamatsu, Fukushima prefecture; it will begin operations next summer with 0.18µm 64Mbit flash memories. Fujitsu's own plant in Gresham, OR will triple production of flash memories for the joint venture to 30,000 wafers/month by the end of 2002.
Sewing machine firm Brother Industries, Nagoya, is teaming with Tokyo Electron Ltd. Yamanashi to manufacture some modules of LCD manufacturing equipment for TEL. Brother will produce 100 modules for TEL within this fiscal year. TEL has been seeking partners to bolster equipment production because of high demand for LCD/semiconductor tools.
The Electronic Industries Association of Japan and the Japan Electronic Industry Development Association plan to merge. The deal is expected to result in a more powerful organization. The combined association will be known as Japan Electronics and Information Technology Industries Association.
Due to growth in the semiconductor industry in Japan, NEC and Lucent Technologies have disbanded their semiconductor marketing firm. The firm, Lucent Technology Semiconductor Marketing, was launched in 1992, with Lucent owning 51% and NEC holding the remaining 49%.
NEC Electron Devices recently said that all 14 of its electron device (mainly semiconductor) manufacturing sites in Japan have achieved zero emissions. Of the company's 3800 tons of waste/month more than 99% is re-used by NEC Electron or other companies.
ASIA PACIFIC
In an investment deal valued at $2 million, Singapore's SingaTrust has taken a 6.3% stake in metrology applications provider Surface/Interface, Sunnyvale, CA. SingaTrust will acquire 822,000 shares of Surface/Interface's preferred stock. The move is part of SingaTrust's effort to gain access to a number of leading-edge technologies that it will offer to customers in the Singapore region. SingaTrust also has become Knights Technology's distributor for the Asia region.
Applied Epi, St. Paul, MN, has designated Ample Technology Center (ATC), Hayward, CA, as its sales representative in the emerging China and Hong Kong region. ATC has represented US-based high technology equipment and instrument manufacturers in China since 1991. It will service Applied Epi's systems and provide spare parts to Chinese customers through its Beijing and Shanghai offices.
EUROPE
In a $160 million investment, Philips Semiconductors, Eindhoven, The Netherlands, and Standard MEMS will build an 8-in. fab for MEMS and discrete ICs in Itzehoe, Germany. The fab will have a capacity of 300,000 wafers/year and will begin production in 2H02. Philips and Standard MEMS will share output. Fraunhofer Institute for Silicon Technology and venture capital firm MGB Schleswig-Holstein are financial partners. Standard MEMS also is buying a 6-in. fab in Milpitas, CA, from Xicor for $12.5 million.
French silicon-on-insulator supplier SOITEC plans to develop single-crystalline-on-insulator wafers for Kopin Corp., Taunton, MA, which will use the wafers to produce its microdisplay products. SOITEC says the work will open the use of its Smart Cut technology to generate "silicon-on-anything, a new market segment with huge potential."
In a new manufacturing alliance, X-FAB Semiconductor Foundries Group, Erfurt, Germany, will provide BiCMOS solutions for advanced radio frequency devices to Microtune. In the deal, Microtune gains access to X-FAB's newly developed 0.6µm double-poly, double-metal BiCMOS technology process. This highly specialized, high-yield process is targeted for cost-sensitive, high-performance analog and mixed-signal silicon ICs, including those for RF broadband communications.
Israel's government has approved of a $250 million grant for Tower Semiconductor, Migdal Haemek, Israel. The funding will help Tower build its second wafer fab, and represents 20% of the total $1.25 billion Fab 2 project costs. Alliance Semiconductor and SanDisk also have invested in the project.
Optoelectronic IC supplier Kymata has acquired Netherlands-based TMP B.V., a MEMS manufacturer. TMP's business strategy will remain unchanged as a result of the deal; the company will continue to offer low-stress nitride depositions, deep dry-etching, and other services.
Belgian research outfit IMEC says at least 10 chipmakers are preparing to join its 157nm lithography development program, including AMD, Infineon, Intel, Micron, Motorola, Philips, Samsung, STMicroelectronics, and UMC. The 157nm lithography generation is seen as the most likely litho candidate for the critical layers at the 70nm node, but photoresist, process development, and resolution enhancement techniques still need to be developed. Japan tool supplier TEL has joined the effort, and will supply its Clean Track ACT8 to IMEC's 157nm litho cell, which is expected to be running in mid 2001.
A stress-free alternative to CMP
Addressing one of the main challenges in the use of low-k materials for ICs with linewidths of 0.13µm and beyond, the Ultra SFP electro-polishing system from startup company ACM Research Inc. is a stress-free alternative to CMP. ACM also has introduced the Ultra ECP copper electroplating system. See p. 138 for more details.
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How Kinetics got its groove
True, downturns spur industry consolidation, but this is not your typical big-fish-eats-little fish story. After becoming a small part of water giant USFilter (1998), an even smaller part of French conglomerate Vivendi (1999), and acquiring 14 firms in less than two years, high-purity process systems supplier Kinetics is alone again following a $550 million management/investor buyout. Only now, Kinetics boasts $1 billion in revenues and a global base. Don't look for the Santa Clara, CA, company to continue the merger mania that captured the likes of Unit Instruments and Insync, says Dan Rubin, president of Kinetics' electronics division (the firm also has smaller operations in the biopharm and industrial sectors). Growth going forward, as before USFilter, will be organic, though tuck-in acquisitions supporting Kinetics' strategy to "surround the tool" with water, chemical, and gas delivery systems are possible.
Hitting the IPO market
Microprocessor newcomer Transmeta is eyeing an initial stock offering to raise $220 million in proceeds for working capital. The firm plans to offer13 million shares at $16-$18/share. The company is aiming its line of processors to compete with offerings from Intel and AMD.
Applied Epi, St. Paul, MN, wants to raise $97 million in an IPO. Proceeds will be used for facility expansions, distributions to existing shareholders, working capital, and acquisitions, according to filings with the Securities and Exchange Commission.
Wafer probing tool supplier Cascade Microtech, Beaverton, OR, expects to raise $69 million in an IPO. Funds will be used to support operations and capital expenditures.