World News
01/01/2001
WORLDWIDE HIGHLIGHTS
Re-adjusting market attitudes
Two leading equipment makers cautioned that spending by DRAM makers and foundry companies may soften this year. Industry bellwether Applied Materials, Santa Clara, CA, expects to see semiconductor capital spending growth on the order of 20%, down from earlier projections of 30%, with the scaled-back spending a result of a slowdown in the telecommunications sector. The tool giant also expects to see global 2001 300mm spending total $6 billion to $8 billion. Lam Research, Fremont, CA, meanwhile, expects to see industry 300mm spending this year of $3.3 billion to $3.4 billion. The company says the overall capital spending outlook for 2001 is clouded.
Infineon: Sky not falling Despite a softening outlook for 2001, German DRAM maker Infineon Technologies remains positive about the year. The chipmaker says it expects to grow significantly above the industry average, though it wasn't immune to weaker demand and lower prices in its memory business at the end of 2000. Infineon expects a market rebound in 2Q-3Q01 "based on the industry's limited capacity expansion not being able to satisfy demand." Current forecasts call for Infineon's 2001 capex to come in at roughly 30% of revenues.
Analysts from SG Cowen Securities expect European chipmakers will be strong spenders this year, with Infineon, STMicroelectronics, and Philips together investing more than $7 billion.
Worldwide revenues rising
Market researcher The Information Network, New Tripoli, PA, forecasts worldwide revenues for semiconductor processing equipment will rise 45.9% this year to $65.2 billion. Robert Castellano, president of The Information Network, said the perceived slowdown in the cellular handset and computer marketplace will soften any downturn the equipment market may see, as semiconductor manufacturers will spread out equipment purchases.
New IC industry mantra: Always prepared
In the latest update to the McClean Report, market analyst Bill McClean, president of IC Insights, Scottsdale, AZ, notes that the IC industry is in its sixth market cycle since 1970. "Of all the IC industry cycles since 1970, Cycle 6's downturn portion is by far the most anticipated," he said. McClean reports that the industry is more interested in anticipating the next downturn than the duration of the current upturn. McClean believes long leadtime anticipation of upturns and downturns could reshape future IC industry cycles, with chipmakers moving more quickly to adjust spending levels in response to market conditions. He also notes that the 1999-2000 upturn "has been boosted by very strong worldwide GDP results" (see related chart in "Me and my shadow" below).
Chipworks likes ICE
Integrated Circuit Engineering Corp. (ICE), former home to much of the IC Insights team, will become part of Canadian reverse engineering firm Chipworks, which plans to acquire the Scottsdale, AZ, outfit. Chipworks, which will get ICE's reverse engineering, market analysis, and training capabilities in the deal, thinks the buy will make it the world's largest reverse engineering company serving the microelectronics market. The deal may breathe new life into ICE's offerings; the prominent supplier of market intelligence has been shaken by a series of management shifts in recent years, including the departure of market forecasting guru Bill McClean. Chipworks says it won't make any significant changes to ICE in 2001.
Nikon launches CMP tool
Japanese lithography giant Nikon says it will begin selling CMP tools this spring, and hopes to capture 15% market share by 2005. Nikon joins the ranks of Applied Materials, Ebara, SpeedFam-IPEC, and Lam in the fierce CMP marketplace. Nikon brings massive lens polishing technology to CMP; its tool will use a face-up wafer configuration (conventional in lens polishing), and an indexing table technique adopted from Okamoto Machine Tool Works.
USA
Ball bonder firm Kulicke and Soffa Industries, Willow Grove, PA said it signed a $65 million deal to buy probe card supplier Probe Technology Corp., Santa Clara, CA. This is the firm's second move in a strategy to expand into the test arena. The company also plans to acquire Cerprobe Corp. in a $225 million deal.
CyberOptics Corp., Minneapolis, MN, has acquired privately held machine vision components supplier Imagenation Corp. The deal follows CyberOptics's acquisition of reflective laser wafer-mapping sensor supplier Hama Sensors last year. CyberOptics will maintain Imagenation's offices in Portland, OR.
Diodes, a manufacturer and supplier of discrete semiconductors, is planning to acquire Missouri-based Fabtech. The deal includes a 5-in. wafer foundry that specializes in Schottky products and a 16,000 ft2 cleanroom within a 70,000 ft2 manufacturing facility formerly owned by AT&T. FabTech will be acquired from Lite-On Power Semiconductor Corp. for approximately $25 million, with an additional earn-out for meeting specified earnings targets over a four-year period.
Microchip Technology, Chandler, AZ, plans to acquire TelCom Semiconductor in a stock-for-stock deal valued at approximately $300 million. TelCom makes high performance linear and mixed-signal ICs; the merger is expected to help expand Microchip's portfolio of standalone analog offerings. Following the deal's closing, TelCom will become a subsidiary of Microchip.
Uniroyal Technology subsidiary Sterling Semiconductor, Sarasota, FL, is installing additional silicon carbide (SiC) production equipment to increase its SiC wafer production by a factor of 10 in 2001. The company has also announced plans to add additional crystal growth furnaces to expand the R&D effort.
IBM Microelectronics has acquired a minority stake in Kymata Ltd., and the two firms have set a multiyear agreement to produce next-generation optical networking chips for high-speed e-business applications. Under the agreement,
IBM licenses its pump laser and silicon oxynitride (SiON) process technologies to Kymata. Sample products are expected to be available early this year.
Spin-on dielectric and metallization target supplier Honeywell Electronic Materials (HEM), Sunnyvale, CA, will become part of the General Electric conglomerate pending the closing of GE's deal to acquire HEM parent Honeywell. HEM, in the meantime, has divested its copper foil business and scaled back operations at its Advanced Substrate Technology & Interconnects unit. HEM plans to grow revenues 50% by 2003 to $1.5 billion, and invest heavily in low-k and metallization technologies. The former operations of materials firms AlliedSignal and Johnson Matthey Electronics — now part of Honeywell — will become part of GE after the deal's closing.
By 2005 the world market for cleanrooms is expected to grow to some $5 billion, according to a report by the McIIvaine Company. Semiconductor industry orders will account for a large portion of the $5 billion figure. In 1999, the semiconductor industry ordered $700 million in cleanroom hardware. In 2000, the chip industry is expected to account for $1.1 billion in cleanroom bookings.
The US National Institute of Standards and Technology's Advanced Technology Program has awarded $13.7 million in funding for a project to develop advanced wafer inspection technology for next-generation lithography applications at the 50nm and 70nm nodes. A team of researchers from Carnegie-Mellon University, KLA-Tencor Corp., and Tropel Corp. will work to develop an optical patterned wafer inspection tool capable of detecting defects as small as 35nm, with a throughput as much as 18x faster than existing optical wafer inspection tools.
Johnson Matthey, Wayne, PA, has formed a new unit to help increase its fuel processing and gas purification product and technology offerings. The new unit, dubbed Gas Processing Technology, is a global business unit within the company's Catalyst and Chemicals Division and will focus on the need for gas purification for semiconductor wafer fabrication.
Fremont, CA-based Sapphire Software has spun out its semiconductor business unit into a separate company named Sapphire Automation Inc. This move comes one year after the company decided to spin off its other two business units—one is now an Internet company called Ordercare, and the other is a networking company called Catteleya Systems. Sapphire Automation has also established Lotus Automation, Mumbai, India, a subsidiary focused on offshore software development and maintenance.
Sumitomo Electric Industries, Japan, says it will begin initial production at its first US semiconductor wafer manufacturing facility in Hillsboro, OR, in August. Production will focus on 150mm GaAs wafers used in wireless communication devices; a second phase will include production of indium phosphide wafers. The first phase of the project will cost $20 million.
Mattson Technology, Fremont, CA, said its stockholders have approved the company's request to issue the additional stock needed to complete the acquisition of STEAG Electronic Systems' semiconductor equipment division and the merger of CFM Technologies. The company expects the deal between the three companies to wrap up this month. CFM's shareholders approved the merger plan with Mattson.
KLA-Tencor, San Jose, CA, has set up a new capital venture group, and says it's prepared to invest $500,000 to $2 million in startup companies. KLA-Tencor will fund the $50 million project, but says the venture group, known as KT Venture Group, will operate as an independent unit.
Samsung Semiconductor, San Jose, CA, wants to grow its TFT LCD panel business by expanding into non-notebook markets. The company has introduced two new panels developed for the Internet appliance, entertainment, medical and industrial markets, and has entered into relationships with All American, Jaco, and Reptron as part of the effort. Samsung's 10.4 in. and 17 in. panels were specifically designed to capture these markets.
MEMS test firm ETEC, West Peabody, MA, has signed a strategic alliance with Korea's Yujin Robotics Co., to produce MEMS test systems. As part of the agreement, Yujin will distribute ETEC's products in Asia. The venture will be staffed by engineers from both companies, headquartered at Yujin's facilities in Seoul, Korea.
EUROPE
Hydroxylamine free base (HAFB) supplier BASF said it will increase HAFB capacity by 50% at its Ludwigshafen, Germany, site this quarter. Sufficient supply of hydroxylamine, a key residue remover ingredient, has been in question since mid-2000, when Nisshin Chemical's hydroxylamine plant exploded. Officials from removal chemistry firm EKC Technology say this expansion, along with similar plans by Honeywell and Nisshin, should help ease the shortages that led to remover rationing among customers.
Wafer supplier Wacker Siltronic AG, Burghausen, Germany, plans to buy a 55% stake in NSC Electron, Tokyo. The deal is expected to position Wacker as the second largest wafer supplier, behind leader Shin-Etsu Handotai Co.
German lens supplier Carl Zeiss is expanding its production capacity for lithography optics to meet both increasing demand and challenges for the production of 193nm, 157nm, and EUVL systems. The project is valued at DEM 200 million (about 100 million euros). Production at the new facility may begin as early as this summer.
JAPAN
Total output of compound semiconductor materials in Japan for the first half of FY00 rose to 33.3 billion yen (about US$310 million), an increase of 25% over the same period a year ago, according to a new report from Japan's New Functional Compound Semiconductor Association. Indium phosphide output showed the most growth at 3.28 billion yen, up 57% from year-ago levels. Gallium arsenide output was 19.26 billion yen, up 27% from last year. Gallium phosphide totaled 9.81 billion yen, up 15%.
Sony, Tokyo, will begin initial operations at its 300mm fab this year in Kumamoto, Kyushu Island, where it will run two minilines for viewfinder LCDs and CCD imagers. The fab will begin with 300mm wafer capacity of 500 or 1000 wafers/month; capacity will be increased gradually over the next three years.
The decision to launch 300mm operations is due in part to skyrocketing demand for digital cameras and LCD viewfinders. Sony is studying the feasibility of setting up another 300mm fab with minilines. The existing line will use Sony's environmentally friendly single-wafer spin cleaning procedure called SCROD (single wafer spin cleaning with repetitive use of ozonized water and dilute HF).
Sharp and UMC's Nippon Foundry Inc. (NFI) have signed a long-term foundry agreement to meet Sharp's fast-rising demand for flash memory and other devices. Sharp will invest US$64 million (about 7 billion yen) in NFI to ensure that it has access to the capacity it needs. The initial capacity agreement is for 6000 8-in. wafers/month, and potentially 10,000 wafers/month by 2002. Production will take place at NFI's Tateyama, Chiba facility in Japan beginning in 2H01.
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Dai Nippon Screen, Kyoto, will build a 300mm wet station manufacturing facility at its Hikone Plant, Shiga prefecture. The facility is expected to be operational by this spring, and produce 100 wet station units/year. Dai Nippon said its annual 300mm wet station capacity will be 130 to 140 units, which includes production at its Yasu Plant near Kyoto.
Sumitomo Heavy Industries, Tokyo, has developed an x-ray lithography tool capable of producing 25nm or smaller lines. The tool, developed with the help of the University of Wisconsin, uses the company's own synchrotron radiation source and is in operation at its Tanashi Works facility.
TAIWAN
Taiwan Semiconductor Manufacturing Co. (TSMC) will pay up to $500 million (not more than $6/share) to buy nearly all of the outstanding shares of the Camas, WA-based WaferTech foundry. In the deal, TSMC's stake in WaferTech will grow from 66.89% to 99%. TSMC has reached agreements in principle with WaferTech's other major shareholders, including ADI, Altera Corp., and ISSI.
Taiwan Semiconductor Manufacturing Co. also has earmarked NT$3,435 million (US$106.7 million) for the design and shell construction of Fab 15, a new 300mm fab in the Tainan Science-Based Industrial Park in southern Taiwan. Basic construction on the facility began at the end of 2000. The foundry has produced its first 300mm wafers at its pilot line in Fab 6.
A transformer fire near Taiwan's Hsinchu Science Industrial Park recently caused some of the wafer fabs within the area to reduce production rates. Though the impact is believed to be minimal, UMC reported that its supplier of nitrogen gas — United Industrial Gases — temporarily suspended supply, causing the foundry to rely on backup nitrogen supply for several hours. Power supply issues are critical for companies in Hsinchu. TSMC recently allocated funds to expand capacity of emergency generators installed at its fabs in a move to ensure uninterrupted foundry services in the event of power outages.
ASIA-PACIFIC
Micron Technology has begun construction of a new test and assembly facility at the Tampines Industrial Cresent in Singapore. The 400,000 ft2 facility, which will house package assembly, testing, and module assembly, is scheduled for completion by early 2002.
Samsung Electronics Co. has signed a patent license agreement with Rambus for SDRAM, double data rate (DDR) SDRAM memory and controllers that directly interface with these types of memory. Five companies — Samsung, NEC, Toshiba, Hitachi, and Oki — have now signed SDRAM and DDR SDRAM agreements with Rambus.
IBM is investing $300 million to build an organic chip packaging manufacturing facility in Shanghai, China. The investment is part of the firm's $5 billion worldwide investment program. The new facility will produce electronic cards and high technology chip carriers incorporating IBM's Surface Laminar circuitry (SLC) and HyperBGA packaging technologies used in wired and wireless networking applications, Web servers, and pervasive computing market segments.
Fairchild Semiconductor has opened a new 6-in. fab line in Puchon, South Korea to manufacture power semiconductors. The new fourth line (D-Line) will complement the company's three existing wafer fabs at the Puchon site, and will feature Class 1 cleanroom capability. Fairchild has invested $80 million in the fab, which produces 17,000 wafers/month. More than 50% of the semiconductors produced in Puchon are exported.
Clarification
In the October feature, "low-k thin films analyzed using automated SEM sample preparation," on p. 167, we inadvertantly used the name AlliedSignal when it should have read Honeywell Electronic Materials.
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Me and my shadow: Semi growth follows GDP movement
Here's another indicator for the semiconductor industry forecast file, courtesy of the Morgan Stanley Dean Witter Research team. For the past 30 years, there has been a general correlation between movement in the global GDP and chip industry growth. Since 1998, MSDW notes, global GDP has climbed from the low end of its historical range to the upper end (excluding extraordinary growth in the early 70s); likewise, the chip industry has rebounded from 1998's downturn. Global GDP growth is seen hitting just under 5% in 2000, with chips expected to grow 35-40%. MSDW, however, already has twice lowered its global GDP forecasts for this year, to 3.8%, causing the team to temper optimism for 2001 semi industry performance, and in turn, capital spending. —C.L.
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Understanding the litho equipment market
Several factors shape the lithography equipment sector compared to the total equipment market, including the huge cost of the equipment, the volatility of tool sales, the major players, and the extendibility/ limits of current optical technology. For some interpretations of market data and future predictions, which depend on an understanding of these changing forces, see "The lithography equipment marketplace" on p. 58.
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Monthly market barometers
North American semiconductor tool sales and orders rebounded in October, with Semi reporting a flat month-to-month book-to-bill ratio of 1.17 Chip sales and fab utilization held steady.
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Sales up, bookings down
The Semiconductor Equipment Association of Japan (SEAJ) said sales of equipment from Japanese producers rose 59% in September, but bookings continued on a month-to-month decline.