300 mm: The Year in Review

George A. Lee, Lee-Horwath & Associates LLP -- Semiconductor International, 12/1/1998

H urry up and wait! A phrase familiar to anyone who has been involved with large entities, institutions, governments, military or whatever, aptly describes the global 300 mm transition. Those who have been riding this 300 mm express train since 1996 now find themselves parked on a sidetrack, wondering what went wrong with the schedule. Did they misread it, or were those who prepared it out of touch with reality? After all, the industry has been here before in past transitions, confident that it would reach its destination, late and at great expense, but reach it all the same.

The original expectation was for the first 300 mm pilot lines to be operational by 1998. Over ambitious as they now prove to be, these expectations were based on the prevailing need for increased productivity to offset the near zero profits being realized by the makers of memory chips.

The materials and equipment industry obliged the then conventional wisdom, and the 300 mm transition was off and running. What was not anticipated was the Asian economic crisis, excess capacity of existing fabs and the resultant flattening of demand for memory. All of these factors, coupled with increasing ability to shrink device features on existing 200 mm wafers, pushed out by two to three years the timing for the larger wafer diameter and resultant productivity increase.

Many industry experts urged caution, reporting on the transition as it progressed, but mindful of the huge effort and expense needed to reach the goal of fully operational fabs by 1999-2000. A goal, in hindsight, not achievable if all tools and materials were to be available in sufficient quantities at affordable prices in time to populate fabs, fabs not yet on the drawing board. Many industry forecasts offered early in 1998 were cautiously optimistic, down from those issued in 1997, but not at all reflective of the precipitous avalanche that was awaiting the industry. This slide would sweep every component of the industry with it, especially the need for increased capacity. Along with the overall slump there was a reevaluation and doubting of the need for a larger wafer diameter in the foreseeable future.

Like any large moving mass, the slowing down and redirecting of the 300 mm transition was not without its difficulties. The equipment and materials sector had expended huge amounts of energy, time and money to make certain that they were ready for 300 mm demand as soon as their customers, the device manufacturers, raised the green flag. Instead the caution flag was raised; everyone slowed down; there were hazards on the track. The industry is about to enter 1999, and the green flag has yet to be displayed; there are still impediments to progress in its path. Many are confident that there are indications that the race might be re-started any year now. To keep ones' engines running while the industry strives to evaluate the market's timing for recovery and additional capacity is stressing the very fabric of which equipment and materials suppliers are made. Inventories of 300 mm-ready equipment, though not available for every sector of wafer production, are sufficient to initiate pilot production and process evaluation needs.

All that is needed to inject a sense of optimism into the industry is a signal from device manufacturers that they see the market regaining health and vitality and are ready to begin to discuss their future needs.

Semiconductor manufacturers must work hand in hand with suppliers, sharing forecasts and assisting in every way possible if they are to be assured the necessary tools and materials when the upturn comes, and it will come sooner rather than later.

One opportunity for the improved health of the industry is the introduction of the affordable flat panel display. Increased demand will manifest itself, as desktop computer manufacturers respond to the opportunity and challenge of a growing market for reduced profile displays. This could bring about a change in computer design, as manufacturers strive to take advantage of the first fundamental change in desktop system design in years.

The impact of this design evolution could create demand for these "space saver" computers, granted only one leg of the recovery stool, but possibly enough to encourage device manufactures to begin to seriously address the issue of material, equipment and fab requirements. Enter the need for increased capacity and resultant productivity, and you might possibly see the re-emergence of the 300 mm transition. The track clearing needed to re-start the race!