ERSOs Children grow up

02/01/1997

ERSO`s children grow up

Ed Korczynski, West Coast Editor

After years of playing technology catch-up, Taiwan`s semiconductor manufacturers have reached a level of maturity. Though still a distant fourth in worldwide semiconductor production with approximately 3% market share, Taiwan is rapidly investing in capacity and is beginning to transition from being a technology "fast follower" to being one of the pack.

Process technology, which formerly could only be acquired by establishing a joint venture with an established international chip maker, can now be developed locally. Through partnerships, operation of foundries, and experience overseas (primarily in the US), Taiwanese engineers and managers have learned what it takes to compete in the majors.

The drive to increase capacity is in part due to the huge gap between local supply and local demand for ICs. In 1995, the island was only able to produce 20% of its US$8.4 billion IC consumption. SEMI market statistics show that total IC production, including the value of Taiwan`s dominant foundries, is projected to triple from approximately US$5 billion in 1995 to over US$15 billion by the year 2000.

Companies in Taiwan have reported plans to complete over 15 new equivalent 200-mm wafer production facilities in the next two years to accommodate the anticipated growth (see table). Fabs have taken up all the space within the first two designated areas of Hsinchu industrial park, and the third area is rapidly being filled with new 200-mm facilities (Fig. 1). Local IC design and manufacturing accounted for approximately 17% of the country`s 1995 gross domestic product.

George Yang, former deputy director of the Hsinchu Science-Based Industrial Park, said the country plans to increase overall R&D spending from 1.7% of GDP to nearly 2.5% by the year 2000. Government plans also include special tax holidays and credits, the creation of special shipping zones, and the construction of 20-30 new industrial parks.

Since Hsinchu is now effectively full, 658 hectares have been set aside in Tainan for a new technology-based industrial park that will allow for continued growth into the 21st century. The government is investing NT$32 billion (US$1.2 billion) to develop the park; phase one is scheduled for completion in 2003 and phase two should be finished seven years later. Fabs are expected to generate NT$900 billion (US$33.3 billion) in revenues over their first 15 years of occupancy. Most companies, including Taiwan Semiconductor Manufacturing Co. (TSMC), The United Microelectronics Corp. (UMC), Winbond, Mosel-Vitelic, TI-Acer, and Powerchip, have signed up for space. TSMC`s Fab6 and UMC`s Fab4 will reportedly be the first onsite, though specific start-up dates are not yet finalized. Tainan is located approximately 3-4 hours south of Hsinchu and 1/2 hour from Kaohsiung.

Figure 1. Fabs have taken up all the space within the first two designated areas of Hsinchu industrial park, and the third area is rapidly being filled with new 200-mm facilities.

Hsinchu office space near the science-based industrial park is also at a premium. Since the industry has grown rapidly, field support offices were established by most leading international equipment manufacturers. SEMI reports that more than half of its 1800 member companies do business in Taiwan. Trained personnel are in very short supply.

SEMI opened a permanent office in Hsinchu and sponsored the first full SEMICON/Taiwan conference and exhibition in September of last year in response to overwhelming demand (see Solid State Technology`s November Asia/Pacific supplement, p. S46). The show featured nearly 500 booths from 12 countries, and over 200 booth requests had to be denied due to limited space. SEMI is working to increase exhibit space 50% for this year`s show.

Figure 2. TSMC`s CMOS technology roadmap for mixed mode, logic, and SRAM. The dashed boxes indicate the R&D plan only, but no production commitment. 1P3M-3P2M are TSMC`s internal process designations.

Local prowess

Taiwan has been experiencing the "reverse brain-drain." A tremendous number of Taiwanese nationals with strong educational, research, and processing experience in the US have returned home in the last decade. They brought with them the skills required to build a world-class industry in a relatively short period.

Still, joint ventures continue to provide new technology and reduced risk. Siemens Semiconductor Group and Mosel-Vitelic have formed the Promos Technology joint venture to produce 64-Mbit DRAMs. Macronix, already a ROM supplier for Nintendo, will continue to work with the Japanese company to develop multimedia and communications chips.

Figure 3. TSMC`s CMOS technology roadmap for DRAM and nonvolatile flash. The dashed boxes indicate the R&D plan only, but no production commitment. 1P3M-4P3M are TSMC`s internal process designations.

TSMC, the world`s largest pure foundry company, has set an aggressive goal of developing a complete 0.25-?m process by 1998 (Figs. 2 and 3). Though the company used to lag behind the leading edge in process technology by one or two years, it has caught up so that its recently qualified Fab4 offers 0.35-?m capability.

J.B. Chen, senior director of TMSC Fab4, is bullish on the speed of his company`s technology development. "TSMC may well be the first in the world to achieve full 0.25 micron production," he stated. "The official roadmap says the first or second quarter of 1998, but I think we`ll be earlier. Some companies may have pilot lines running before us, but we`ll be at the front of volume production for the next generation."

TSMC is a world leader in computer integrated manufacturing (CIM). It has extended the concept of the foundry facility to what it terms a "virtual fab." Customers have complete access to their production and shipping schedules, and can know precisely where each lot of work in progress (WIP) is located in the fab. A custom CIM data-server allows WIP location information to be accessed over modem lines, so that customers can control the work flow lot-by-lot as if it was running in their own fab.

The establishment of the National Nano Device Laboratory (NDL) is an indication of the maturity of local technology. NDL serves to develop advanced processes, and to provide graduate student training, process R&D foundry support, and materials and device analysis for Taiwan`s IC industry. The facility has been operational since 1992 and just completed its 0.25-?m project, including work in a variety of microelectronic disciplines:

 optical and electron beam lithography

 etching and chemical cleaning

 high temperature processes

 chemical vapor deposition (CVD)

 backend process (including CMP)

 measurement and simulation

 Si and SiGe epitaxy

ERSO`s leading role

One example of processing maturity is the dramatically changed process development role played by the Industrial Technology Research Institute (ITRI)`s Electronics Research & Service Organization (ERSO). ERSO was established in 1974 to lead a five-year IC pilot plant project culminating in the establishment of UMC. UMC was spun-off with staff and equipment from ERSO to be the first full IC manufacturer in Taiwan. TSMC was spun-off in 1985 with ERSO`s 1.6-?m process. Vanguard International Semiconductor, Taiwan`s first 200-mm wafer fab, was split from ERSO in 1994 to commercialize 0.7- and 0.5-?m memory technology.

Now ERSO`s charter has changed (see SST January, AsiaFocus, p. 40). ERSO`s children have grown up and no longer need guidance and direction. The established fabs can now look to ERSO as a partner in process development, and as an efficient way for pooled resources to work on long-range projects. Currently ERSO is working on 0.18-?m process modules, with approximately NT$2 billion (US$74 million) in government funding. Industry`s support is also critical to the success of the deep-submicron project.

Besides capital contributions from most of the island`s fabs, research is assisted by contributions of key capital equipment. TSMC has contributed a complete CMP system, and Japanese equipment supplier Ulvac has donated a long-throw physical vapor deposition cluster for advanced metallization research. ERSO hopes to receive additional equipment contributions, since the market value of the Ulvac tool is NT$100 million (US$3.7 million), which is equivalent to 5% of the organization`s funding for this development cycle.

The change in ERSO`s role has had an interesting effect on the dynamics of selling process equipment in Taiwan. As recently as five years ago, when Vanguard was still within ERSO, companies interested in introducing a new tool or process to companies in Taiwan first needed to pass inspection at ERSO. Extensive beta-site tests could be expected, and only after the product was proven at ERSO could a company expect an easy time selling to other companies in Hsinchu. Since all of the fabs are within a few kilometers of each other, word of success or failure travels fast.

Now, with mature fabs competing for market share, Taiwanese IC manufacturers have enough experience to evaluate new technology on their own and can`t afford to wait six to 12 months for another organization to qualify a new tool. For a successful new product introduction in Taiwan, equipment manufacturers no longer have the luxury of proving the process at one or two sites (ERSO and possibly TSMC) and then expecting that other companies will accept these results. Because of more companies to be demonstrated to, a much larger investment (including samples and field application efforts) is now required for equipment sales.

LCD manufacturing

The local notebook computer manufacturing industry is still very dependent upon Japanese imports of liquid crystal displays

(LCDs). In 1995, 94% of colored supertwisted nematic and thin-film transistor (TFT) substrates were imported from Japan. As in the development of native IC manufacturing, the desire to increase production of microelectronic subcomponents is leading to a LCD industry.

Since there is similarity between semiconductor and flat panel manufacturing, UMC is entering the flat panel display (FPD) business through its Unipac Optoelectronics subsidiary. UMC will decommission its 100-mm, 1.5-?m Fab1 semiconductor production line this year to make room for an approximately US$300 million 12.1-in. TFT LCD line capable of producing 15,000-20,000 units monthly. Prime VIEW International (PVI) will also manufacture 18,000 12.1-in. TFT LCD substrates/month in its approximately US$200 million facility under construction. Both companies will consider forming joint ventures with Japanese LCD makers and local Taiwanese firms in order to lower investment risks.

Conclusion

Taiwan`s IC production capability is rapidly increasing in both capacity and maturity. Almost all existing companies have new sub-half-micron, 200-mm wafer fabs under design or construction. Support for the local electronics manufacturers is one of the strongest drivers. Government investments in core IC and LCD technology, land, and general business incentives provide a fertile environment in which to grow a thriving industry. n

ED KORCZYNSKI is West Coast Editor for Solid State Technology. He received his BS degree in Materials Science and Engineering from the Massachusetts Institute of Technology. Solid State Technology, 1700 S. Winchester Blvd., Suite 210, Campbell, CA; ph 408/370-4833, e-mail [email protected].