Rising fab costs likely to drive global R&D collaboration
07/01/2003
By Hank Hogan
AUSTIN, Texas—With semiconductor fab costs increasing 15 percent a year and R&D expenses rising faster than 20 percent a year, Sematech President and CEO Michael Polcari predicts increasing globalization of research and development, with greater cooperation among research organizations and consortia over the next few years.
During a recent Semiconductor Equipment and Materials International (SEMI) lunch, held here, Polcari said, "We are looking to collaborate more and more as we go forward," said Polcari. "We are looking to pull more suppliers in to do work in our fab. For us, the supply base is extremely critical."
The cost of bringing 157-nanometer (nm) lithographic technology into production will be about $5 billion, according to Polcari. In contrast, the cost for extreme ultraviolet—the next generation lithography with 13.5 nm wavelength sources—will be around $7.5 billion.
Given the poor revenue outlook of the last few years and ongoing industry consolidation, these upward trends are posing a substantial problem for an industry that has been taking it on the chin. "The keys to overcoming the increasing financial hurdles are executing global programs, influencing industry direction, and leveraging resources—including government funding," said Polcari.
To emphasize Polcari's final point, Austin attorney and longtime local technology civic entrepreneur Pike Powers spoke briefly to the crowd. With the state legislature in session and a budget crisis facing Texas, Powers urged the 120 semiconductor industry participants present at the luncheon to communicate with elected officials.
He appealed to the group to support the creation of a $350 million Texas enterprise fund to help pay for basic materials research and development. Such funds would be aimed at semiconductor, nanotechnology and biotechnology applications. The money would be added to research and development input from industry and elsewhere.
The funding—perhaps partly because of Powers' plea—survived the sometimes chaotic budgetary process and could be available as early as the start of the next fiscal year, which begins on September 1. The $40 million earmarked for Sematech will help offset research and development costs and also keep Sematech in Austin.
Polcari added that Sematech would avail itself of government resources when possible, but that a foray into nanotechnology wasn't in the works. The consortia, given its membership, would continue to target non-memory semiconductors. But Polcari says that this would benefit all the other devices. As he noted, "Our lithography works for those as well."