Issue

Asia Focus

05/01/1999

ISS-Japan roundup: roadmaps, minilines, and forecasts

Discussions at ISS Japan '99, recently held in Narita, Japan, revealed an aggressive new technology roadmap from Fujitsu, a number of DRAM developments, and an update on the activities of the Japan roadmapping group.

ISS-Japan roundup: roadmaps, minilines, and forecasts

Attendance of 170 was down slightly from last year, but better than conference sponsor Semi-Japan had expected. Forecasts presented during the event indicate a recovery in 1999 for the worldwide semiconductor market. "1997 was expected to be the beginning of a recovery from the recession, but we saw stagnation again in 1998," said K. Kamahara, chairman of the World Semiconductor Trade Statistics Japan Council (WSTS) and manager of semiconductor planning and marketing for Mitsubishi Electric. WSTS expects the chip market to grow at a 12% CAGR by 2001, gradually catching up with the traditional 15% long term growth trend, Kamahara said.

"Other ISS '99 highlights:

Fujitsu is envisioning a rapid introduction of the next three technology generations. Production at 130 nm will begin by the end of 2000, 100 nm by the middle of 2001, and 70 nm by the end of 2002, noted Toshihiko Ono, executive VP of Fujitsu's LSI Manufacturing Group. For efficient logic LSI manufacturing, Fujitsu will centralize metallization processes into its Wakamatsu Plant in Fukushima Prefecture; currently each plant has its own metallization process for logic. Wafer and assembly processes will be done at the same location, with a chip-scale packaging line. Fujitsu representatives also discussed the possibility of using "minilines"-fabs which would run 5000 to 10,000 wafers/month- in the future depending on customer orders.

The DRAM market is also expected to see a return to more healthy growth patterns, according to H. Wakabayashi, director and senior analyst of Dresdner Kleinwort Benson Securities, Tokyo Branch. "The semiconductor industry is undergoing its own Big Bang," he said at the conference. "The tightest market conditions since the advent of DRAMs are likely to leave only four to five DRAM producers worldwide. We believe the DRAM market turned the corner in July. Both 16-Mbit and 64-Mbit spot prices are now rebounding and suppliers are regaining control over OEM pricing."

Terry Higashi, CEO of Tokyo Electron Ltd. (TEL), said at a discussion session that "TEL feels the necessity of development of small throughput equipment for minilines." He noted that several Japanese semiconductor houses have recently requested that TEL do so.

Wakabayashi noted, "Supplies are tightening as Korean manufacturers trim 16-Mbit and 64-Mbit output, and Japanese producers mothball domestic 16-Mbit fabs. Demand is expanding rapidly as PC shipments firm, and existing owners add memory on the back of Windows 98."

The Semiconductor Technology Roadmap committee of Japan (STRJ) plans to establish a Japanese version of the Semiconductor Industry Association's Roadmap by the end of the year. STRJ chairman and NEC's chief engineer Akihiko Morino introduced the activities of STRJ, which was formed last year by the Electronic Industries Association of Japan (EIAJ). Currently, the STRJ has 10 working groups for design, test, front-end process, interconnect, lithography, process integration and device structure, assembly and packaging, factory integration, ES&H, modeling, and simulation. Another working group will be added this year to study defect detection.

In addition, Wakabayashi said inventories have normalized and in 3Q98, demand growth outpaced supply growth. "We anticipate supply shortages of 5% in 1999 and 15% in 2000 as a result of declining supplies (major capital spending cuts by Korean, Japanese, and Taiwanese producers will leave few sub-0.25-?m lines) and the start of full demand for synchronous and 128-Mbit DRAMs."

While discussing the dynamics of Singapore's future semiconductor industry, Philip Yeo, chairman of the Economic Development Board of Singapore, said Singapore will introduce high growth and high value products; promote niche semiconductor companies with expertise in design and marketing, which can use Singapore as a manufacturing HQ; and promote and nurture key supporting industries. Singapore intends to cover all aspects of the semiconductor business by integrating not only assembly and wafer processing, but also LSI design and equipment supply, he said.

TSMC to spend less in '99

Taiwan Semiconductor Manufacturing Co., the world's largest dedicated foundry fab operator, will reduce capital spending in 1999 by 30%, as it digests excess capacity installed last year. The company currently plans to invest NT$17 billion, or about US$526 million.

The TSMC announcement is indicative of the overcapacity situation facing many foundries. Dataquest recently estimated that there was about 34% too much capacity in 1998, and said this would likely drop to 25% this year, assuming spending restraint on the part of the foundries.

TSMC said total wafer output would expand 7% over 1998 levels, with most of the addition (and most capital spending) at 0.25-?m and 0.18-?m process technologies. These geometries will account for 24% of output capacity this year, compared to 6% percent last year.

Byron Walker, analyst at Warburg Dillon Read, noted in his weekly SoundBytes report that about $400 million of TSMC's budget would go to 0.25-?m lines, and that the new spending estimate compared to a $750 million forecast just a quarter ago. "The change is probably due to the equipment delay in Fab 6 (Tainan) and the 7% targeted capacity increment is presumably expected to come from capital efficiency (as per Intel). However, TSMC did add that capex could be accelerated in six to eight months' time if the industry truly turns and that in addition to a few orders, extra reservations have been placed- just in case," added Walker.

Separately, TSMC has selected planning and scheduling software for its Fab 5 from PRI Automation, Billerica, MA, software, along with its material handling and overhead monorail wafer transport systems, wafer stockers, and material control software already in place at Fab 5, gives TSMC a complete wafer flow solution. -P.N.D.

Japan's government to fund

The Japanese government budget for fiscal year 1999, which began April 1, will include ?8.36 billion (about US$73 million) for the Ministry of International Trade and Industry's (MITI's) semiconductor and LCD-related research budget.

Among the major projects that have been earmarked are:

ASET (Advanced Super Electronics Technology) semiconductor process development (mainly lithography and mask making), ?2.3 billion (about US$20 million).

ASET's low power reflection-type LCD development project, ?2.2 billion.

LCD-related process development,

High density system integration research, ?1 billion.
Next-generation ferroelectric RAM development, ?454 million.
Vacuum chamber cleaning technology development, aimed at eliminating PFC gases, ?600 million.
Dry etching gas and technology development, also for elimination of PFC gases, ?1.5 billion.
Survey of semiconductor and information/telecommunications technology trends, ?39 million. Most of this funding will be used for Japanese semiconductor roadmap development (see "ISS Japan roundup," p. 32).
System LSI development support for small companies, ?549.9 million.

Shin-Etsu to buy Hitachi's wafer operations

As part of the ongoing restructuring of its semiconductor business, Hitachi has sold its internal silicon crystal development center and manufacturing operation to Shin-Etsu Chemical, parent firm of wafer supplier Shin-Etsu Handotai (SEH). The purchase is effective this month. Hitachi's wafer operation is valued at about ?10 billion (US$90 million). As a result of the deal, two of Hitachi's wafer manufacturing lines will be shut down.

ASIA BRIEFS

Nanometrics, Sunnyvale, CA, is planning to open a new sales, service and manufacturing facility in Suwon, Korea in the first quarter of 1999. Nanometrics Korea, will house the equipment, inventory and processes needed to manufacture its Metra overlay registration measurement tools. Completed overlay/CD metrology systems will be rolling off the production line in the later part of the quarter. The facility is the firm's second facility outside the U.S.; the first was established in Japan in 1984.

Advanced Energy Industries, Fort Collins, CO, has opened a new sales and service office near Seoul, South Korea, and has ended its relationship with its Korean distributors. Joseph Monkowski, senior VP of sales and marketing, said the decision to establish a direct presence in Korea was based in part on "emerging industrial applications" opportunities in the region.