Korean suppliers offer process tools, aim at China market
11/01/2001
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Korean suppliers offer process tools, aim at China market
Asian giant China may be getting the lion's share of attention as an up-and-coming semiconductor powerhouse, but relatively tiny neighbor Korea is quietly establishing itself as a potential provider of tools and materials, with a plethora of increasingly sophisticated toolmakers within the country's borders.
Several of Korea's growing equipment and materials firms (including Atto Co. and E.O. Technics, for example) are seriously eyeing the China market for new offices, plants, and expansions.
Besides the well-known joint ventures with US and Japanese companies, and the local Korean makers of test and assembly equipment, there are now a growing number of domestic companies moving upscale to more advanced materials and front-end equipment, such as coater/developer and CVD systems. These are increasingly exporting their low-cost tools to the rest of Asia.
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Samsung seems to have largely created this local industry, with its willingness to work with new young companies. Many Korean vendors interviewed by Solid State Technology said they developed their technology with Samsung, and some of their executives came from Samsung as well.
"Samsung is the oldest company," notes Wesley W. Min, COO of Dongbu Electronics. "People there saw the opportunities earlier."
One of the fastest growing local suppliers is Dongjin Semichem, whose electronic materials sales reached $58 million (W74 billion) last year, thanks to strong demand for its LCD materials, such as resists and strippers, which account for about 60% of revenues. But the company is also strong in resist strippers for semiconductors and is introducing CMP slurries and advanced semiconductor resists.
"We expect 30% growth this year," says Jae-Hyun Kim, Electronic Materials Division manager at Donjin Semichem. "We were up 40% in the first half, but it will be less in the second half with the problems at Hynix." He says major semiconductor companies in the US and Taiwan are evaluating its 193nm resist samples, based on technology licensed from Hynix and developed with that company. Now less than 10% of revenues come from exports, but the company is considering opening a plant in Taiwan this month. Kim says Samsung just qualified the company's new pigmented photoresist for color filters for the displays in its personal digital assistants.
Gas cabinet maker Atto Co., which says it dominates the Korean gas supply market with 75% share, is expanding into new fields with a new plasma cleaner for ball grid arrays and other advanced packaging applications, and next year plans to introduce a PECVD system, now in demonstration at Samsung for 0.14µm devices.
"We can control uniformity very well, by controlling the gap and the gas flow rate," says new company president Sang Young Moon, a 23-year veteran of Samsung. Already a big exporter, Atto gets 75-80% of its $45 million (W50 billion) annual revenues from exports to SE Asia, and it is looking eagerly at the China market. The company also has a new distributor in the US, "and we're looking for a partner there," says VP Heemok (Mike) Park.
DNS Korea not only has a local manufacturing plant for Japanese parent Dai Nippon Screen, but now says it has developed its own local 300mm spin scrubber that's been sold to Samsung, Hynix, Dongbu, and Anam. "We're developing our independent technology for 12-inch equipment," says Jin-yeal Yang, assistant sales manager. "We worked with Samsung. We may well sell it overseas next year."
KDNS sales are also supported by the growing Korean LCD manufacturing base. The company gets 30% of its $80 million (W100 billion) revenues from LCD equipment. It claims 35% of the Korean market for spinners, 40% for wet stations, and 90% for spin scrubbers.
Another growing player in the front-end equipment business is Silicon Tech, whose president Saint Woo worked at Tokyo Electron in Korea for eight years before founding his own company. Woo reports that his company can make its coater developer modules 30% cheaper than the competition by using all standard parts. The company has sold 25 systems in the last eight months to major Korean companies and to Taiwan, Japan, and the US, Woo says. He expects sales to remain about level this year, as increasing sales in new fields such as optical and indium phosphide counter the dismal memory market.
Other Korean toolmakers with big export business include E.O.Technics and M.A.T. Laser toolmaker E.O. Technics gets more than 60% of revenues from exports of its laser markers to SE Asia, and it was recently touting its new wafer-scale system for marking the entire back of the wafer. Coming next is a laser cutting tool for molding compounds to replace saws. The company recently opened a new office in Shanghai. Little $7 million (W9 billion) M.A.T. also gets more than 50% of its revenues from overseas sales, with 120 of its gas scrubbers installed in Taiwan and more than 20 in the US, at such customers as IBM and NEC.
The breadth and strength of the country's chip processing industry was made evident recently in Seoul at SEDEX 2001, Korea's homegrown semiconductor equipment show. Roughly 100 local companies displayed an increasingly sophisticated range of tools and materials to a good-sized crowd of attendees.
"While Semicon Korea is international, this show is Korea only," points out Atto president Sang Young Moon.
Indeed, except for a few joint ventures, almost all the booths housed Korean companies. Among the busiest booths were those of the burgeoning support industry of local suppliers of components and subassemblies to the local toolmakers — linear motors and stages, valves and flowmeters, quartzware, lasers, etc.
Still, Korean equipment sometimes remains a hard sell, even in Korea.
"Korean equipment is okay for simple machines like ashers and ovens," says Dongbu's Min, who has just equipped his company's new foundry. "But we don't know the reliability of Korean equipment." — Paula Doe, Asian Correspondent
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Shanghai foundries coy about technology partners
Toshiba Corp. has played a role as technology provider to many of the world's foundry start-ups, including Tower Semiconductor in Israel, Worldwide Semiconductor Manufacturing Co. in Taiwan, and Dongbu Electronics Co. in Korea. Until recently it was believed, and had been widely reported, that Toshiba was also the technology partner for Shanghai-based foundry start-up Semiconductor Manufacturing International Corp. (SMIC).
As one of the few fabs worldwide to be adding capacity instead of pulling back, SMIC has become the object of desire for equipment and materials vendors facing possibly their worst downturn ever. But the question remains: Who is SMIC's technology provider? Officials at the Shanghai foundry declined to confirm whether or not Toshiba is involved. Joseph Xie, senior director of SMIC's sales and marketing operation, would say only that the foundry is working with two technology partners for 0.25µm development, one from Japan and one from the US.
Yet several industry sources say Toshiba is not involved. "Toshiba never gave any technology to them," says Sin-Hyuk Han, president of Dongbu, which has licensed 0.25-, 0.18- and 0.13µm processes from Toshiba.
Xie says SMIC intends to focus on internal technology development. To that end, the company has just recruited Simon Yang, a former Intel Corp. process technology guru, as its VP of technology development. "The talent we have in this team is world-class. We will tend to develop future technology ourselves," says Xie. "If we decide to jointly develop with other companies, we are going to play the major role instead of the supporting role."
The president of SMIC, Richard Chang, also has impressive credentials when it comes to building and operating wafer fabs. He worked for Texas Instruments for 20 years in a variety of technology transfer and wafer fab development roles. Prior to heading up SMIC in June last year, he was general manager of WSMC in Taiwan, which was acquired by Taiwan Semiconductor Manufacturing Co. in January 2000.
The mystery surrounding SMIC's source of technology also extends to its main rival in China, Grace Semiconductor Manufacturing Corp. A year ago Grace was reported to have signed medium-sized Japanese chipmaker OKI Electric as a technology partner, but an industry source in Shanghai said the only connection is that a former OKI executive was recruited as a consultant by Grace.
In the race to be the first 8-in. pure-play foundry in China, SMIC is well ahead of Grace, which isn't expected to be ready for wafer output until 4Q02. Construction work is still under way at the Grace site, located a few miles from the SMIC complex in the Pudong industrial district of Shanghai. "Grace is a little bit foggy," says an executive at a Taiwan-based equipment distributor, who is dealing with both foundries.
SMIC moved equipment into its Fab 1 in August and in late September began pilot production at 2000 wafers/month. The fab expects to be producing 25,000 wafers/month by the end of next year, according to Xie. "To ramp up to 25,000 [wafers], we need more equipment, so we will keep adding," says Xie. That's music to the ears of tool vendors currently starved for new business.
Meanwhile, Richard Chang has been busy networking with other Asian start-up foundries to explore opportunities for cooperation. Over the past year he has visited the 1st Silicon foundry in Kuching, East Malaysia, and Dongbu Electronics in Korea, according to officials at those companies.
And what of the anonymous SMIC technology partners? All will be revealed in December at the official opening of the foundry, according to Xie. At that time, SMIC will also name some of its key customers, which include IDMs and fabless chipmakers from Japan and the US.
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JEITA sets up used equipment exchange
JEITA's semiconductor subcommittee hopes to create a vital market for used equipment in Japan with a new web-based exchange. The Japan Electronics and Information Technology Industries Association will use the Japanese semiconductor web venture Semiconductor Portal to manage the online sales site.
JEITA estimates Japan's used equipment market is only some $15-$250 million (20-30 billion yen) out of a worldwide total of perhaps $2.5 billion (300 billion yen), as the Japanese have been reluctant to consider using other companies' cast off tools. But the recent round of restructurings leaves companies with a glut of excess equipment. Hard times are forcing companies to rethink production.
The online equipment exchange is free, but open only to registered users of approved rank and authority at appropriate organizations, who agree to treat any information from the site about who wants to buy or sell what equipment as a corporate trade secret. The trade group says it plans to set standards for things like contamination like those of the Surplus Equipment Consortium Network (SEC/N) in the US.Companies with their logos on the site include NEC, Fujitsu, Toshiba, Mitsubishi Electric, Oki, Rohm, Sanyo, Epson, Sony, and Panasonic.
Japan's Semiconductor Portal has recently started charging a $200 annual subscription fee for access to its site. — Paula Doe, Asian Correspondent
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Korea grows $2B semiconductor supply industry
The US still dominates Korea's semiconductor equipment market, with 48% share, keeping Japan to only 29%, despite its closeness to Korea and strength in memory technology. Growing Korean suppliers now account for 13% of sales in their domestic market, nearly half as much as the Japanese, and significantly more than the 5% share sold by suppliers from the European Union. Korean suppliers control the local materials market, however, selling 56% of semiconductor materials in Korea. Japanese companies supply most of the rest, with a 29% market share. The US has a mere 6% of the market, the EU only 1%.
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Asia Pacific Briefs
Nikon now says it expects to sell 90 steppers in the six months from October through March, and had expected it would move only 160 units in the six months of April through September. That's down about 30% from the 350 it projected in May. The company also says it now expects to just break even on total sales of $3.8 billion for the current fiscal year, a 10% reduction from earlier projections. Nikon also says the research consortium Selete has ordered a Nikon e-beam stepper to evaluate in parallel with F2 excimer laser tools. It plans to deliver the tool in 2003. Nikkei Microdevices' website notes that since Nikon has the only e-beam system around, it was a foregone conclusion that Selete would evaluate and develop the tool, but Nikon's announcement is intended to show how far along its tool is and drum up support for its approach. Users see the e-beam tool as most useful for low-volume production of devices like system chips. Nikon says it aims to ship production systems from 2004 with target throughput of 30-40 wafers/hour at 70nm, extendible to 35nm. To manufacture fewer steppers in the second fiscal half, Nikon will trim 500 contract workers, reducing its total from 1500 to 1000.
Hitachi, Tokyo, Japan, projects its semiconductor sales will be down 23% for the year through March 2002. The company has already suspended some operations at its Kofu fab, and will temporarily suspend operations on some lines at Naka, Takasaki, Kodaira and Hitachi Hokkai, reducing its active lines from 19 to 13. It will close down five assembly and test facilities by March 2003, reducing its total from 13 to eight. Hitachi Nippon Steel Semiconductor Singapore will reduce DRAM production in accordance with demand. Trecenti Technologies will start making system chips as well as SRAMs and flash memory. Aiming to reduce fixed costs by 20%, the company will cut 2000 workers from its semiconductor business in Japan, though some of those will be transferred to other units. Other savings will apparently come mostly from cutting back on equipment. Hitachi also aims to cut procurement costs by 20% by going to a net-based centralized purchasing system. Hitachi's R&D lab says it will start supplying e-beam technology to make 25nm patterns to research organizations in Japan in November. The company says that being able to easily make patterns of this size should help speed up nanotechnology research.