The Push-Pull of 300 mm Continues

Since 1994, the industry has endured many starts and stops regarding 300 mm manufacturing, and the current state of affairs is no exception. According to a recent report from iSuppli Corp. (San Jose), there are 14 300 mm fabs ready for production, three of which are pure-play foundries. There are five foundries and 17 fabs owned by IDMs being developed that have a high probability of completing construction and ramping into limited production within the next two years. The fabs are essentially waiting for high-volume chip demand to return.

The in-depth report, titled "The Promised Land Is Still 300 mm Away," and released in March, addresses not just the schedule for 300 mm capacity, but tougher questions as well:

• Will 90 nm capability be available on 200 mm wafers?
• Does 300 mm manufacturing fit better in a foundry model or an IDM model?
• Can manufacturers effectively use 300 mm wafers to serve device segments that are not high-volume?
• What are the key drivers for 300 mm fab site selection?

According to the report, wafer size increases and shrinking process design rules are still the key enablers of cost reduction in semiconductor manufacturing. However, the collapse of the semiconductor market in 2001 considerably slowed 300 mm activities, as companies focused more effort on improving the productivity of 200 mm fabs and maintaining rapid shrinks in feature size.

The report states: "It is clearly evident now that the original premise for 300 mm conversion needs to be challenged." It is not necessary for all companies to make the transition to 300 mm wafers, particularly for small-volume products. Because of the slump in semiconductor demand, the operators of 300 mm fabs must be prepared for partial utilization for a span of up to two years, according to iSuppli. The company forecasts that, by 2010, ~20% of semiconductor devices will be produced on 300 mm wafers. Today's level is ~4%.

iSuppli contends that high starting wafer costs continue to be an impediment to 300 mm adoption, though the price has come down considerably since first introduction.

Memory manufacturers are among the first companies to take advantage of 300 mm. Not surprisingly, all the 300 mm wafer capacity is dedicated to the highest-performance chips and 130 and 90 nm design rules. To date, no company has announced plans to manufacture sub-100 nm devices on 200 mm wafers.

The leading foundries — TSMC (Hsinchu, Taiwan), UMC (Hsinchu) and Chartered Semiconductor (Singapore) — are being very aggressive technologically and are moving into 300 mm very quickly. iSuppli believes the foundries should develop a model more friendly to low-volume chips to better drive 300 mm implementation. iSuppli forecasts that, somewhere around mid-2004, full capacity will be demanded at the first 300 mm facilities. Foundries are using new strategies such as multiple mask layers on one reticle and running multi-client wafers in the same batch to improve manufacturing efficiency.

The report addresses the changing IDM business model too. It cites STMicroelectronics (Geneva, Switzerland) as a leading company that outsources only its most mature products. Other companies, such as Texas Instruments (TI, Dallas), choose to outsource their leading-edge devices, then bring them back in-house when they have gained market acceptance. Over the past two years, IDMs that had outsourced many of their products brought the capacity back in-house to help fill their fabs and reduce costs.

The majority of 300 mm capacity by 2005 is likely to be spread across Asia, mostly in Taiwan and Japan. Since labor costs have become a diminishing fraction of fab operating costs, companies are not choosing sites largely based on labor cost but rather tax benefits offered in a particular region as well as infrastructure.