Worldwide Highlights
04/01/1999
The Siemens-Motorola Semiconductor300 (SC300) joint venture in Dresden has produced its first fully functional 64-Mbit DRAMs on 300-mm wafers, about two months ahead of schedule. Plans for 1999 call for SC300 to develop a better characterization of its 0.25-?m process, provide feedback to tool suppliers, and prepare for trial production at smaller design rules. The 64-Mbit devices, identical to parts in production by Siemens on 200-mm wafers, have two metal layers and about 20 mask levels.
The National Electronics Manufacturing Institute, Herndon, VA, has updated its electronics manufacturing roadmap, and now sees flip-chip pitch moving on a two-year generational cycle, scaled to IC feature sizes. From 1999's 180-um, pitch is expected to drop to 150 um in 2001, 130 um in 2003, and 70 um by 2009. In the roadmap document, NEMI said the migration from wire bonding to flip chip technology will continue, as will the transition from ceramic substrates to organic. Wafer bumping is seen as critical for the implementation of flip chip, with eutectic tin/lead bumps on organic substrates the current benchmark.
The market for CMP polishers is poised for 35.7% growth this year, by far outpacing the 10.3% rise expected for the front-end market as a whole, according to a new report from market researcher The Information Network, New Tripoli, PA. Last year, the CMP polisher market's soaring growth rates were stunted by the industry-wide downturn, and the sector grew only 3.2%.
USA
Applied Materials, Santa Clara, CA, beat analysts' expectations in its most recent quarterly report (see "Quarterly Briefs, page 18) and posted healthy 1Q99 bookings of $1.03 billion, a 50% leap over 4Q98 bookings of $684 million. Merrill Lynch analyst Mark FitzGerald noted that Applied's order surge in 1Q99 was "fueled by the return of capacity buys" and represented the largest volume of new orders for Applied since 1Q98. "Last quarter, orders were dominated by technology buys but in 1Q99 an estimated 50% of new orders were for capacity buys."
Chips were down in '98. Global semiconductor sales totaled $125.6 billion in 1998, dropping 8.4% from the $137.2 billion the industry logged in 1997, said the SIA and the World Semiconductor Trade Statistics organization. Month-to-month billings in December were flat at $11.31 billion (see table), following three consecutive months of improving sales. While business in the month slowed due to year-end holiday closures, market analysts continue to report generally strong PC buying trends; DRAM prices have also firmed up, suggesting that semiconductor revenues may be in line to continue their upward trend.
Steag Electronic Systems GmbH, Essen, Germany has acquired RTP systems maker AG Associates, San Jose, CA, after paying $5.50/share for 5.7 million, or 91%, of AG's outstanding shares. Kirk Johnson, AG CFO, said the deal is roughly valued at between $42 million-$43 million when Steag's assumption of AG's bank debt is considered.
Electro Scientific Industries has acquired MicroVision Corp., an 11-year- old supplier of vision-based inspection and handling tools. The deal is valued at about $42 million; ESI, Portland, OR, exchanged 1.02 million of its shares for all of MicroVision's capital stock. The company has about 70 employees, reported 1998 revenues of $14 million and has been "nicely profitable," said Joe Reinhart, ESI's VP of business development.
Tool bookings on upswing. In a sign of improving health for the semiconductor equipment industry, orders at North American tool suppliers in January rose to $957.7 million, by far surpassing shipments of $868 million, according to preliminary figures from the Semi trade association (see table). The resulting book-to-bill ratio was 1.10, above unity for the first time since December 1997. Orders have been steadily rising for the past four months. January's figures mark a 10% month-to-month rise from December 1998's revised $869 million, but still remain 30% below the year-ago level. Three-month average shipments dipped three percent below December's revised $895.2 million and are 41% below the January 1998 level.
Watkins-Johnson Co., Palo Alto, CA, is planning to sell its semiconductor equipment group to Silicon Valley Group. A letter of intent has been signed, but the two companies still must secure a definitive agreement. The acquisition proposal includes W-J's atmospheric pressure CVD product line and real estate in Scotts Valley, CA, and Kawasaki, Japan. Not included is W-J's discontinued high-density plasma CVD equipment program.
USFilter Corp. has acquired mass flow controller firm Unit Instruments, Yorba Linda, CA, and gas panel and subassemblies supplier Insync Systems, Milpitas, CA. In a related move, USFilter has also reorganized its Kinetics Group, creating a new division for the Unit and Insync operations. Unit shareholders will receive 0.43609 shares of USFilter stock for each Unit share held. The acquisition of privately-held Insync wrapped up several months ago. Management teams from both companies are expected to play roles at USFilter.
Motorola will outsource supply of four-, five- and six-inch silicon wafers to Mitsubishi Silicon America, Salem, OR, under a new agreement between the firms. The supply, currently handled by Motorola's internal wafer-making operation, will be a mixture of heavily doped and epitaxial wafers, with more than half on the epi side.
CMP slurry and pad supplier Rodel, Phoenix, AZ, will become the exclusive marketing arm for a slurry-free CMP process under development at 3M. The first commercial offerings stemming from the alliance are envisioned by year-end, and are expected to include pads for conventional rotary CMP tools as well as newer web-format (continuous pad feed) polishers. Separately, Rohm and Haas Co. has increased its ownership in Rodel to 48%, and expects to gain a third seat on the CMP materials firm's board sometime this year. The move is part of Rohm and Haas's effort to grow its electronic materials business, and follows its initial purchase of a 25% Rodel stake in 1997.
ECD supplier Semitool, Kalispell, MT, has signed a nonexclusive technical development agreement with CMP firm SpeedFam International, Chandler, AZ, to develop integrated copper interconnect solutions. This is Semitool's third alliance for copper processing development.
CMP waste firm Lucid Treatment Systems has established a 2000-ft2 R&D lab for testing CMP waste and water saving techniques. The lab, based in Hollister, CA, also has the capability of simulating CMP polisher effluent flows. An additional 4500-ft2 site will be used for engineering, project management, field service, sales and marketing, and training.
Ibis Technology Corp., Danvers, MA, has developed a new silicon-on-insulator substrate targeted at system-on-chip applications. The new substrate, dubbed Advantox-SI, allows integration of SOI circuit modules with bulk circuit modules by creating selective SOI regions in defined areas. The substrates are compatible with current trench isolation processes and provide enough planarity for use with advanced lithography processes. Customer evaluations are underway. The firm has also sold two Ibis 1000 implanters to a chipmaker for about $8 million.
JMAR Technologies, San Diego, CA, has been awarded a $500,000 DARPA contract to design, build, and evaluate advanced x-ray optical components for its x-ray lithography program. Under the contract, JMAR will receive leading-edge resonance reflection collimators developed under Lawrence Livermore National Laboratory's advanced x-ray optics program. JMAR plans to integrate the collimators with its picosecond x-ray lithography source, and see whether they improve the overall efficiency and resolution capability of the lithography process.
SAL Inc., South Burlington, VT, has received an order for an x-ray lithography stepper from a non-US organization, which will use the tool for the manufacture of micromachine devices. Delivery is planned for the end of FY99.
GaSonics International, San Jose, CA, has received an order from AlliedSignal Electronic Materials, Los Gatos, CA, for a single-wafer photoresist removal system, which will be used for the development and characterization of various low-k materials in AlliedSignal's integration facility in Sunnyvale, CA. GaSonics has also received an order for a system configured with a dual photoresist removal module from a chip company.
After restructuring operations earlier this year, Sputtered Films Inc., Santa Barbara, CA, is planning to outsource a portion of its equipment manufacturing to Derlan Inc., and hopes to license a three-year old PVD technology set. CEO Andrew Clarke said operations at the company are stabilizing, with the outlook for business improving. In January, the company reduced its workforce by 20%; it now employs about 75.
Shareholders of Varian Associates, Palo Alto, CA, have approved its plan to spin off its semiconductor and instruments businesses. The new semiconductor equipment operation will be known as Varian Semiconductor Equipment Associates, and will be a NASDAQ-listed company under the symbol VSEA.
Japan
As part of a company restructuring, Toshiba, Tokyo, is shutting down of its pilot production lines in its Tamagawa Works, Kawasaki, and closing the Microelectronics Center of Toshiba America Electronic Components, Sunnyvale, CA. New lines will be started at Toshiba's volume production lines in Oita, Yokkaichi, Kita-Kyushu, and Himeji; production at the US ASIC operation will be transferred to the company's Oita plant, and to Iwate Toshiba Electronics Co., Iwate Prefecture. The changes were expected to be in place by the end of March.
Sony Corp., Tokyo, plans to double its sales of semiconductors (including LCDs, which fall under the same business unit) to ?560 billion (US$4.8 billion) by the end of 2002 and make annual capital investments of some ?60 billion. If growth can be achieved, it would move Sony up several notches on the list of top Japanese chipmakers. Based on FY98 sales estimates, Sony is in ninth place; Hitachi, the third-largest firm, expects current year sales of ?600 billion.
Asia/Pacific
Kulicke & Soffa, Willow Grove, PA, will shift full manufacturing of its ball bonder lines to Asia by mid-2000 in an effort to reduce manufacturing costs. K&S expects to save on components and subassemblies as well as shipping. Relocation incentives are also anticipated. A specific site has not been identified, but several are under consideration. The company has also spent $8 million to acquire X-LAM, a multilevel laminate technology, from Micro Module Systems, Cupertino, CA.
Europe
Philips Semiconductors, Eindhoven, The Netherlands, is planning $915 million in capital spending this year, up about 85% from 1998 spending of $495 million. Details about which Philips' facilities would be receiving the investments were unavailable.
STMicroelectronics is planning equipment purchases this year to outfit 200-mm fab shells in Rousset, France, and Agrate, Italy. Pascale Pistorio, president, said a 20% increase over 1998 "seems reasonable," given current expectations for improving conditions in the chip market. ST spent about $900 million in 1998, according to estimates by IC Insights, Scottsdale, AZ.
ASM International, Bilthoven, The Netherlands, will merge ASM America's epitaxy and RTP product manufacturing lines into the manufacturing and assembly operations of its ASM Europe subsidiary. ASMI expects to complete the manufacturing transfer by the end of 3Q99. In addition, Comdisco and ASMI have established a series of lease agreements for demonstration versions of ASMI's Advance 400 vertical furnaces, including both 200-mm and 300-mm generations. The agreements are essentially sale lease-back deals, but allow ASMI, through ASM Europe, to sublease the systems to customers for evaluation.
Kopin Corp. has signed a multiyear deal with Aixtron AG, Aachen, Germany, to purchase multiple high volume reactors; the systems will support production of Kopin's GaAs heterojunction bipolar transistor device wafers. Two systems will be shipped this year.
ASM Lithography, Veldhoven, The Netherlands, has received orders from Motorola's Semiconductor Products Sector for multiple deep-UV and i-line step and scan systems. The first phase of the volume agreement is valued at $50 million. Samsung Electronics has also placed orders for a number of ASML's advanced photolithography systems.
Rest of world
Orbotech, Yavne, Israel, has purchased FPD automated optical inspection (AOI) toolmaker KLA Acrotec Co., a joint venture between Japan Energy Corp. and KLA-Tencor. Orbotech paid about $13.6 million to acquire all KLA Acrotec shares and has also taken a $12 million charge to settle a nine-year old AOI-related patent suit with KLA-Tencor.
FINANCIAL BRIEFS
Semi has started publishing its own stock index, a 62-company listing. semindex premiered in February on the Web at www.semindex.org, and will be continuously updated.
French silicon-on-insulator supplier Soitec is now a public firm, having made a $57 million IPO on the Nouveau Marche section of the Paris Stock Exchange. Funds will be used to facilitate rampup of production capacity; Shin-Etsu Handotai bought shares to maintain its 12% stake and Japanese distributor Seika Corp. also invested.
EMCORE Corp., Somerset, NJ, is proposing a $75 million public stock offering, in part to help repay debt owed to its chairman and other creditors. About $23 million of the proceeds will be used to repay outstanding bank debt, and $9.4 million to repay subordinated notes. Of the $23 million owed, $5 million will be used to repay a debt taken to reimburse Chairman Thomas Russell the $3 million he previously advanced to the company for working capital. In addition, Russell holds approximately $8.7 million of the subordinated notes being repaid.