Intel: $100 Billion Required for IC Manufacturing
By Mark LaPedus, SemiMD senior editor
The semiconductor industry must continue to invest in new fabs, technologies and processes to keep up with current and future IC demand. But only the chip makers with deep pockets and strong technology can play in the leading-edge and high stakes IC game.
For example, to keep up with the insatiable demand for transistors, a leading-edge chip maker may have to spend more than a staggering $100 billion on IC manufacturing and R&D costs alone over a ten-year period in the future, said William Holt, senior vice president and general manager for the Technology and Manufacturing Group at Intel Corp. (Based on historical IC unit demand and die sizes, Holt’s figures are theoretical and not actual forecasts for Intel.)
In any case, to contain soaring IC manufacturing costs, the industry must take some dramatic steps: Chip makers must continue to innovate, look for new solutions and continue stay on the two-year process technology cycle, Holt urged.
There are only a handful of companies that have the funds to stay on the leading edge. GlobalFoundries, Intel, Samsung and TSMC are among the few, it was noted.
Interestingly, during a presentation at SEMI’s Industry Strategy Symposium (ISS) at Half Moon Bay, Calif., Holt did not address one hot topic in the industry: 450mm. But he did briefly discuss the benefits of 3D chips using through-silicon-vias (TSVs).
During the presentation at ISS, Holt said the demand for transistors increased by 15x from 2005 to 2010, thanks to the “explosion of devices and data center build-out” during that period. From 2010 to 2015, the industry will need “15x more” transistors just “to manage, store and interpret data,” he said.
As a result, leading-edge chip makers cannot afford to stand still and must invest. For example, if the IC industry continues on the two-year process development cycle, the cost of manufacturing and process R&D alone for a leading-edge chip maker will run a total of some $104 billion over the next decade, Holt said.
But if the IC industry does not continue on the two-year process development cycle — and remains on the same node — the ten-year cost of manufacturing and process R&D for a leading-edge chip maker will actually increase and run $302 billion over the next ten years, he said.
In addition, some chip makers believe that Moore’s Law should slow down as a means to reduce manufacturing costs. In contrast, Holt believes that the “costs are lower with shorter process cycles.” According to Holt, the manufacturing and R&D costs for a 30-month process cycle is $17 billion, as compared to $10 billion for a two-year cycle and $4 billion for a 18-month cycle. The “optimal cycle is eight quarters,” he said.
Not surprisingly, Holt insists Moore’s Law is alive and well. But to stay on the curve, the industry must overcome several challenges and barriers. “The challenges going forward look harder,” he said, but the “perceived barriers are meant to be surmounted, circumvented or tunneled through.”
The industry, according to Holt, must look for new solutions on several fronts:
-There is a pressing need for new structures. This includes UTB SOI, finFETs, wires/dots, among others.
-There is an opportunity for new materials in transistor design. This includes III-V, carbon nanotubes, and graphene.
-The industry must re-think device density and interconnects. As part of the interconnect equation, Intel sees the benefits going to 3D chips using TSVs.
Future structures and materials enable new devices (Source: Intel)
Holt did not disclose what Intel is doing in the 3D arena. In a brief interview with SemiMD after his presentation, Holt said Intel’s stance has not changed in 450mm. The next-generation wafer size is a viable path to reduce manufacturing costs, he said.
The migration to 450mm will not happen overnight. It is an “industrywide approach,” he said. “I think this is a process.”
As reported, Intel and others are pushing 450mm with a new consortium. The recently-announced 450mm consortium, dubbed G450C, includes five IC manufacturers – with IBM and GlobalFoundries joining the original “IST” members, Intel, Samsung, and TSMC. Those companies, along with Sematech and the SUNY-Albany College of Nanoscale Science and Engineering (CNSE), will sit on a board of directors that will govern the consortium. The G450C demonstration line in Albany is targeted for 14nm design rules early 2013 with imprint technology used for test wafer patterning of over the first year.
More challenges seen for industry
From an equipment point of view, the industry faces several challenges, said Steve Newberry, vice chairman of Lam Research Corp. “Continuation of Moore’s Law is important for the industry to help reduce cost per function and to provide for increased electronics value,” Newberry said during a separate presentation at ISS.
The “semiconductor roadmap (is) facing steep technology and cost challenges,” Newberry said. The “industry needs to figure out how to continue to provide increasing performance and functionality at potentially higher cost without reducing demand or profits.”
In addition, there are “significant R&D challenges ahead with new device structures and 450mm,” he said. Therefore, “more effective supply chain R&D collaboration is needed between the biggest and most capable IC manufacturers with the biggest and most capable equipment suppliers (to) improve R&D development efficiency and cycle time.”
There are also some troubling trends, however. “The IC industry is driven by its ability to continually improve performance while simultaneously driving down cost,” according to IC Insights Inc., a research firm. “Since 1970, the price of a specific IC function has been declining at an incredible rate. The price for a million bits of DRAM memory has declined at 33 percent per year, the price for a million instructions per second (MIPS) of Intel microprocessor power has declined at approximately 30 percent per year and the price per million transistors worldwide has declined about 39 percent per year. More recently, NAND flash memory prices per million bits of memory has declined at approximately 62 percent per year.”
Semiconductor R&D spending hit $48.5 billion in 2011, up 6 percent over 2010, according to IC Insights. R&D as a percentage of revenue was 15.2 percent last year, compared to the industry average of 14.3 percent, according to the firm. Semiconductor R&D spending is expected to hit $54.1 billion in 2012, up 12 percent over 2011, according to IC Insights. R&D as a percentage of revenue is expected to hit 15.7 percent this year.
Fab costs continue to soar. The cost of a fab passed the $100 million level in the 1980s and $1 billion in the mid-1990s. Today a typical 300mm fab cost is $3.8 billion, but that will soar to $5.5 billion by 2016, according to the firm. By 2020, a fab will exceed $10 billion, according to the firm.
Design and mask costs continue to rise. “For a 22nm complex logic process, the cost of the mask set is in the range of $6 million to $10 million depending on process complexity. That compares to about $4 million for 32nm-generation devices and $2 million for 45nm-generation,” according to IC Insights.
Chip design costs continue to soar
