Soitec’s Steve Longoria talks with Semiconductor Manufacturing and Design about what’s changing at the leading edge of Moore’s Law and why those changes are necessary.

SEMI said North America-based manufacturers of semiconductor equipment posted $1.48 billion in orders in March 2012 (on a three-month average basis) and a book-to-bill ratio of 1.13, according to the March Book-to-Bill Report published today.  A book-to-bill of 1.13 means that $113 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in March 2012 was $1.48 billion. The bookings figure is 10.7 percent higher than the final February 2012 level of $1.34 billion, and is 6.4 percent below the $1.58 billion in orders posted in March 2011.

The three-month average of worldwide billings in March 2012 was $1.31 billion. The billings figure is 0.9 percent less than the final February 2012 level of $1.32 billion, and is 20.9 percent less than the March 2011 billings level of $1.66 billion.

“Equipment orders continue to increase and have improved to the highest reported value since July 2011,” said Denny McGuirk, president and CEO of SEMI.  ”The semiconductor equipment market outlook has strengthened since the beginning of the year as reflected in the increasing bookings rate.”

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers. Billings and bookings figures are in millions of U.S. dollars.

Source: SEMI April 2012

Magnetic Technique Used for Reliability Testing

Researchers at the Georgia Institute of Technology said they have used the force generated by magnetic repulsion to measure the adhesion strength between thin films of materials.

The approach can be used in measurements of microelectronic devices, photovoltaic cells and microelectromechanical systems (MEMS).

MAPT sample (Source: Georgia Institute of Technology

The magnetically actuated peel test (MAPT) is a non-contact approach which could assist designers in improving the resistance to thermal and mechanical stresses, said professor Suresh Sitaraman. “This technique would provide designers with the information they need to choose the right materials to meet future design specifications over the lifetimes of devices.”

The technique was used to measure the adhesion strength between layers of copper conductor and silicon dioxide insulator. They also plan to use it to study fatigue cycling failure, which occurs over time as the interface between layers is repeatedly placed under stress. The technique may also be used to study adhesion between layers in photovoltaic systems and in MEMS devices.

The research was reported in the March 30, 2012 issue of the journal Thin Solid Films.

X-Ray Technique Probes Organic Materials

North Carolina State University researchers have developed an X-ray technique which may be used to develop printable electronics, such as transistors and solar cells, based on organic polymers.

NC State physicist Harald Ade said manufacturers now use a process of trial and error. “We wanted to give them a way to characterize these materials so that they could see what they had and why it was working.”

The research team went Lawrence Berkeley National Laboratory’s Advanced Light Source (ALS) to use X-rays to determine how individual molecules within these materials organize. They found that the best-performing devices were characterized by particular molecular alignments within the materials.

The researchers’ results appear in the journal Nature Materials. The abstract says that thus far, molecular-scale ordering in soft matter could be characterized with X-ray or electron microscopy techniques only if the sample exhibited sufficient crystallinity. “Here, we show that the resonant scattering of polarized soft X-rays (P-SoXS) by molecular orbitals is not limited by crystallinity and that it can be used to probe molecular orientation down to size scales of 10 nm,” the authors said.

Multi-core Cache Techniques Extendable

Researchers have shown how multi-core processors can continue to scale, using well-known shared-cache techniques. Sponsored by the Semiconductor Research Corporation (SRC), the computer scientists said they have identified a path to scale memory communications among the cores, without having to rewrite all of the software from scratch.

The solution described by the researchers brings together a combination of identified techniques for creation of cache-coherent shared memory. The SRC-guided research allows one or more caches to hold the subset of memory locations that most recently have been written and read by the core.

“We have refuted calls for a radical design change by showing that, using already existing techniques, we can create cache coherence protocols that scale to hundreds and perhaps even thousands of cores,” they said.

-         by David Lammers

SEMI said the global semiconductor materials market increased 7 percent in 2011 compared to 2010, with record revenues in 2011 of $47.86 billion, surpassing 2010’s record revenues of $44.85.

Total wafer fabrication materials and packaging materials were $24.2 billion and $23.67 billion, respectively. Comparable revenues for these segments in 2010 were $23.05 billion for wafer fabrication materials and $21.80 billion for packaging materials.

“Steady revenue growth in all materials categories contributed to the year-over-year growth of the total semiconductor materials market, though currency effects were a contributing factor to this growth,” SEMI said in a press release.

For the second year in a row, Taiwan is the largest consumer of semiconductor materials with $10.04 billion in total sales due to its large foundry and advanced packaging base. The materials market in Japan contracted 1 percent, while all other regional materials markets experienced modest growth.

The market in South Korea was driven by fab materials, while the market in China was driven by packaging materials in 2011.

2010-2011 Semiconductor Materials Market by World Region
(Dollars in U.S. billions; Percentage Year-over-Year)

Source: SEMI April 2012
Note: Figures may not add due to rounding. The Rest of World region aggregates Singapore, Malaysia, Philippines, other areas of Southeast Asia and smaller global markets.

By David Lammers

The wire bonding industry is in the midst of a transition from gold to copper wires, often coated with palladium to avoid oxidation. Now, a company called Red Micro Wire claims it can cut costs and support scaling with a glass-coated wire which is cast, not drawn.

RMW uses a casting technique. (Source: RMW)

The wire used in wire bonding is a $6 billion market, said Danny Hacohen, director of business development at Red Micro Wire (RMW), which has operations in Israel and Singapore. Due to the high price of gold, the assembly industry is transitioning quickly to copper wires, which have good electrical properties but which often require a coating of palladium, itself a metal with a volatile price. While copper wires at 18-20 microns work well, scaling to the next-gen 14-15 micron diameter and below may be difficult, he said.

RMW has developed a semiconductor-use wire technology, based on wire-production ideas first created at an Israeli company called WNT. RMC CEO Shimon Dahan said Pd-coated copper is a good solution, but RWM’s wire will be 25-30 percent cheaper. “About 18-20 percent of a back-end operation is the material costs, so they are very eager to find something to reduce overall costs,” said Dahan, who earlier held senior positions at foundry Tower Semiconductor.

RWM’s wire is a cast wire, rather than a drawn wire. It is coated simultaneously with glass, with no diffusion between the glass and the metal core. “We use a glass sleeve mold, and the trick is to control the temperatures,” said Hacohen. While the initial mass market is for a glass-coated copper wire, the company also plans to supply niche markets with gold, silver, and platinum wires.

Besides cutting costs, Hacohen said RWM’s wire can be cast at smaller diameters than drawn copper wiring. Going beyond the 14-micron-diameter wire down the road will be “very complicated and very difficult” for conventional techniques, he said. Another advantage is that the glass-coated wires will not suffer from oxidation during storage, extending the shelf life. And the RMW reduces electrical shorts, he said.

The company shipped its first material in February from its Haifa, Israel facility, where the first casting tool is located. The tools are surprisingly small – only 3 by 2 meters in size – and can produce up to 25 kilometers of wire a month. RWM will sell wire, and does not initially intend to license its technology, as many startups do. Dahan said the company will not sell the tools either, at least according to current plans.

Shimon Dahan

Dahan said RWM is working with several customers, including an integrated semiconductor vendor which does both front-end and back-end operations, with more than $10 billion in annual revenues.

But chip-level reliability testing “is still in front of us. We have had no failures and no problems with the testing we have done, but chip-level reliability testing has yet to be completed,” Dahan acknowledged, adding that “it is not trivial to take a new wire and get it running.”

RMW is owned by Red Equipment, a secondary equipment vendor with 2011 revenues of about $50 million. “The experience we have had at Red Equipment gives us knowledge of the semiconductor market, including sales and service. We know how to work together with our customers to reduce costs,” Dahan said.

(Source: Red Micro Wire)

Semiconductor fab equipment spending is expected to remain level in 2012 but surge to record levels next year, according to the latest SEMI World Fab Forecast report.  Eight companies, including Samsung and Intel, will keep their fab equipment spending level above $2 billion in 2012.

Fab equipment spending is estimated at $38.85 billion for 2012 and a record $45.50 billion for 2013.

While the outlook for fab equipment spending in 2012 was negative two months ago, key spenders like Samsung increased spending to record levels. Hynix also increased spending in 2012 by 23 percent to about $3.75 billion, while UMC increased spending from $1.6 billion to $2.0 billion. In addition, Intel increased spending much more than expected, to a historic high of about $12.5 billion.  If macroeconomic factors improve and other companies adjust their capex plans, then equipment spending for 2012 could even cross into positive territory, SEMI said.

Figure 1: Source: SEMI World Fab Forecast February 28, 2012 edition

The spending trend is expected to continue into 2013 especially for the foundry, system LSI, MPU and NAND sectors. Companies continue to invest in upgrades and leading-edge technologies, and a few are ramping up fab capacity.  SEMI’s latest World Fab Forecast (Feb. 28, 2012) lists 192 facilities with equipment spending in 2012.

2010 was a good year for fab construction but 2011 was even better with a 24 percent increase YoY to $6.4 billion. For 2012, spending on construction is expected to decline by about 28 percent to $4.5 billion. The World Fab Forecast shows an even further decline in 2013.

“Coming out of the downturn from 2010 on, yearly capacity growth is 5 to 10 percent and is expected to stay modest for the foreseeable future. However, SEMI’s fab data shows rapid increases in fab equipment spending for some segments leading also to an increase in installed capacity,” SEMI reported.

While installed capacity for DRAM is expected to level out, flash capacity is growing rapidly between 2010 and 2013.  The dedicated foundry sector will also undergo growth in installed capacity with key contributors TSMC, Globalfoundries and UMC.

Lower construction spending compared to recent years, especially on new fabs, raises some concern about available capacity beyond 2013.  Overall, the industry has tried to control installed capacity since coming out of the 2009 downturn. Now due to increasing demand, some segments, such as flash, foundry, and System LSI, are experiencing a boost in installed capacity.

Market research firm IC Insights (Scottsdale, Ariz.) said 49 semiconductor wafer fabs were closed between 2009-2011. The firm’s Global Wafer Capacity report concluded that since mid-2007 the IC industry has been paring down its older capacity, with the decline picking up speed in 2009 and continuing through 2010 and 2011 as suppliers closed or upgraded fabs.

While a few of the fabs are being refurbished for production on larger wafers or converted to image sensor production, most were closed as the industry turned to newer 300mm fabs as the more cost-efficient manufacturing platform.

Nearly half (21 fabs, or 43 percent) from 2009-2011 were 150mm wafer fabs, and another 13 were 200mm fabs. Qimonda went out of business in early 2009, and its 300mm wafer fabs – including the Qimonda wafer fab in Sandston, Va. — “became the first of their kind to cease commercial operations,” said Trevor Yancey, a vice president at IC Insights.

Seventeen fabs were closed in Japan and another 17 in North America, followed by Europe with 12 and South Korea with three. One of the wafer fab closures in Japan was a 300mm IC fab, operated by Sony, which is being retrofitted as an image sensor fab for Sony.

At the other end of the spectrum, a total of three 100mm wafer fabs were closed in the three-year span, including fabs owned by DALSA in Bromont, Ontario, Canada; ON Semiconductor in Piestany, Slovak Republic; and Diodes in Oldham, England.

By Mark LaPedus and David Lammers

The consolidation of Japan’s semiconductor industry continues to accelerate, and GlobalFoundries may be playing a key role in a complex deal reportedly involving Renesas, Fujitsu, Panasonic, GlobalFoundries, and, perhaps, Elpida.

According to a report in the Tuesday (Feb. 7) edition of the Nihon Kezai Shimbun (Nikkei), Japan’s largest business-oriented newspaper, Renesas Electronics Corp. , Fujitsu Ltd., and Panasonic  Corp. are in talks to spin out their System LSI design and development operations into a separate company. That fabless entity would work with another manufacturing-related spinout, managed by GlobalFoundries, which would take over two fabs now owned by Renesas and Fujitsu.

The report said that if the deal goes through, perhaps sometime in March, the ventures would be receiving funding from the Innovation Network Corp. of Japan (INCJ), a deep-pocketed Japanese investment fund. The consolidation would be finalized in about a year, the story said.

The Nikkei report said the manufacturing spinout would take over Renesas’ Tsuruoka Fab, in Yamagata prefecture (a former NEC fab), and Fujitsu’s logic fab in Mie prefecture. The manufacturing spinout would contract for manufacturing-related services with a new company GlobalFoundries is setting up in Japan. The report makes no mention of any Panasonic manufacturing assets. Renesas operates several others fabs in Japan, making MCUs and discretes, which apparently would not be rolled into the manufacturing spinout.

(Source: Nikkei, Feb. 7)

The story (and the accompanying diagram, at right) also claims that the manufacturing spinout is interested in buying Elpida’s DRAM fab in Hiroshima. In a later report, Nikkei said Elpida officials will meet with GlobalFoundries executives soon to discuss the sale of the Hiroshima fab, but Elpida later said the story was incorrect. The story said Elpida would move DRAM manufacturing to Taiwan.

A GlobalFoundries spokesman said the merger report is “based on rumor and speculation, and therefore we can’t offer any comment.” He noted that there have been earlier rumors about GlobalFoundries buying a fab in Taiwan, and separate reports that GlobalFoundries would buy the Qimonda DRAM facility in Dresden. “We don’t have any announcements to make on this front,” he said.

The report said the ventures would receive funding from the Innovation Network Corp. of Japan (INCJ).

Formed in 2009, the INCJ is a public-private partnership and investment fund. The INCJ says it has an investment capability of approximately 900 billion yen ($10 billion).

Corporate partners in the group include Asahi Kasei, Osaka Gas, Sharp, Shoko Chukin Bank, Sumitomo, Takeda Pharmaceutical, Tokyo Electric Power, Toshiba,  JGC, Development Bank of Japan, Panasonic, East Japan Railway, Hitachi,  Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, General Electric Company of Japan,  and JX Nippon Oil & Energy.

The venture unit is no stranger to forming new entities. Last year, for example, INCJ, Hitachi, Sony and Toshiba signed a deal to merge their small- and medium-sized display businesses, which are operated by subsidiaries of Hitachi, Sony and Toshiba, in a new company to be established and operated by INCJ. The new entity is called Japan Display Inc.

Last month, the INCJ established a special purpose company in which it will invest in voice search technology for use in video streaming Web Sites. The technology is the result of research and development conducted by the National Institute of Advanced Industrial Science and Technology (AIST) and a previously established venture business based on AIST technology transfers.

Renesas was established in 2007 when Hitachi, Ltd. and Mitsubishi Electric Corp. merged their respective MCU-oriented chip units. In 2010, Japan’s NEC Electronics Corp., once the world’s largest IC vendor, merged its logic operations into the newly established Renesas Electronics Corp. In 1999, NEC and Hitachi shed their respective DRAM operations and formed Elpida Memory Inc. Hit with an oversupply of DRAM as consumer’s have switched to NAND-oriented tablets and smartphones, Elpida has been in merger talks with Micron Technology.

The shakeout

Over the years, Japan has lost its footing — and share — in the IC industry. In 1985, NEC was the world’s largest chip maker with sales of $2.1 billion, according to IC Insights Inc. Four other Japanese companies were ranked among the top 10, according to the firm. By 1990, Japanese semiconductor companies occupied the top three positions, led by NEC, which more than doubled its semiconductor sales over the five-year span to $4.8 billion. Six Japanese companies were represented among the top 10 semiconductor suppliers in 1990, according to the firm.

For 2011, IC Insights counted five U.S. companies, two South Korean firms, one European, and two Japanese companies among the top 10 semiconductor suppliers. Renesas and Toshiba were still in the top 10.

Indeed, there has been a massive restructuring — and shakeout — in Japan’s chip industry. In many respects, Japanese chip makers have been slow to react to the rapid changes in the IC industry.  For too long, Fujitsu, Renesas, Toshiba and other suppliers of logic chips and ASICs were tied to their integrated device manufacturing (IDM) fab strategies and were reluctant to change.

Many of these companies were saddled with too much fab capacity during the down cycles and were hit with massive losses. As a result, many were cash-strapped and unable to invest in new fabs and leading-edge processes. And many were slow to embrace fab-lite strategies when they finally did engage with the silicon foundries.

Unable to react to the changes — and hit by massive losses — Renesas, Fujitsu and Panasonic  face the ongoing trend in Japan: consolidation. And Japan’s lone DRAM maker, Elpida, faces an uncertain future amid huge losses and massive debt.

Late last month, Renesas posted a net loss of 2.4 billion yen ($31.2 million) on sales of 222.9 billion yen ($2.9 billion) in the third quarter. “Owing to semiconductor market downturn affected by stagnant global economy and the impact of Thailand’s flood as well as continuous trend of yen appreciation, semiconductor sales for the three months ended Dec. 31, 2011 were below the company’s expectation,’’ according to Renesas.

Renesas also announced revisions to its forecasts for the fiscal year ending March 31, 2012. Net sales are expected to total 885.0 billion yen ($11.6 billion), down 83.0 billion yen ($1 billion) from the previous forecast announced on Oct. 31, 2011. Net loss for the year is expected to be 57.0 billion yen ($741.2 million).

Late last month, Fujitsu reported a consolidated net loss of 4.3 billion yen ($55 million) for the third quarter of fiscal 2011, representing a deterioration of 20.8 billion yen ($270.4 million) from the corresponding period of fiscal 2010. Third-quarter net sales totaled 1.079 trillion yen ($13.842 million), down 1.5 percent from the corresponding period of the previous fiscal year. Sales of LSI devices and electronic components were hit by weak demand, according to Fujitsu.

In its components and device unit, Panasonic’s sales decreased by 15 percent amid a loss. “This result was due mainly to sluggish sales in semiconductors as well as declines in sales of general components and batteries,” according to Panasonic.

Panasonic issued a pro forma comment on the Nikkei report of the System LSI merger.  “The media report is not based on any official announcements by Panasonic. Though the company has been studying various plans for growth strategy of the business, nothing has been decided,” Panasonic said in a statement.

Kenji Tsuda, who has written several books about Japan’s semiconductor industry, said the merger appears to be a kind of “shotgun wedding” proposal, with the Ministry of Economics, Trade, and Industry (METI) probably thrusting the idea on reluctant managers at the three semiconductor operations involved.

“Now, global chip companies such as Infineon, NXP and Freescale are independent from their former parent companies. That is quite different from the Japanese semiconductor operations, which remain quite traditional,” said Tsuda.

He estimated that in the case of Renesas, 92% of its shares are controlled by NEC, Hitachi and Mitsubishi, even though it is listed as a public company on the Tokyo Stock Exchange.

Japan falters in chip rankings (Source: IC Insights)

By David Lammers

KLA-Tencor executives said their company enjoyed a record burst of orders in recent weeks and is scrambling to fill them.

Rick Wallace

“The big story in December is that we saw a resurgence in bookings, up 95 percent compared with the September quarter,” CEO Rick Wallace said in a conference call Thursday, following release of fiscal second quarter results. Many of the orders for the December-ending quarter came in the final two weeks of the quarter, resulting in $950 million in bookings for the quarter, the second-highest in the company’s history. Revenues for the December-ending quarter were $642 million.

“We begin 2012 with great optimism,” Wallace said, adding that “our biggest challenge now is meeting demand.” Vendors are maxed out and “factories are full and trying to keep up,” he said. CFO Mark Dentinger added that KLA-Tencor is hiring again but plans to increase the work force by only 1 percent or so.

KLA-Tencor recently announced a suite of new and upgraded wafer inspection tools, covering the brightfield, darkfield, and e-beam wafer inspection sectors. The new tools coincide with foundry customers scrambling to figure out how to boost yields for 28nm wafers, he said.

Foundries face high expectations from customers in the smart phone and tablet markets, many of which are introducing 28nm SoC processors with larger die sizes than in previous generations. The larger die, and the challenges of finding defects and controlling processes at the tighter design rules, are proving challenging for foundries. That is driving them to buy more wafer inspection and metrology tools.

““Expectations for 28nm are overheated right now. It is imperative for the foundries to go after yield improvements, and we have the tools which can help them with that,” Wallace said.

After several years in which SoC die sizes have remained relatively constant, die sizes are increasing for logic ICs used in smart phones and tablets. And yields improvements are critical. That puts KLA-Tencor “right in the sweet spot” of where foundries are spending, Wallace said, noting that foundries accounted for 57 percent of the company’s business for the December quarter. NAND vendors also are spending more on metrology and process control, particularly as the NAND devices move to more vertical structures.

For logic, about half of KLA-Tencor’s bookings are from customers building PC and server processors, and half from foundries driven largely by smart phones and tablets. While the types of defects are similar to those seen in the 40nm generation, defects are smaller and often require new tools, he said.

One analyst asked if investments in process control will increase sharply as a percentage of total wafer fab equipment spending. Wallace said his company expects its served market opportunity to increase slightly this year to 14 percent of an expected WFE of roughly $30 billion this year. WFE capex for 2012 could be flat to down 10 percent for this year, with the macroeconomic picture making forecasting more difficult than usual. Process control and metrology will outperform the rest of the equipment industry this year, as it did last year, he said.

KLA-Tencor has about a billion dollars in orders which have not yet shipped, and one analyst asked if the company’s backlog could stretch out this year. Wallace said that, depending on the product, it takes from three to nine months for tools to ship after an order is placed.

By David Lammers

The concerns about the worldwide macroeconomic situation, which weighed so heavily on the semiconductor equipment industry for most of the second half of 2011, are continuing to worry executives at Lam Research Corp.

In a call following release of the company’s calendar year fourth quarter 2011 financials, newly installed CEO Martin Anstice said Lam now forecasts wafer fab equipment spending for 2012 to be flat to slightly down, in the $30B range, which is an improvement over the company’s expectation of a few months ago of minus 5-20 percent for WFE spending this year. With semiconductor sales forecast to be in the range of $310-315 billion this year, it would appear that 2012 could be a decent year for the industry overall and for a combined Lam-Novellus in 2012.

Hanging overhead, however, are worries about debt in the Eurozone, a possible slowdown in Asia, including China, and tepid expectations for the U.S. economy this year as well. “The macroeconomic environment is very unstable,” said Anstice, citing a recent IMF warning about the Eurozone debt crisis as evidence.

On the technical front, with semiconductor companies facing big decisions about their device architectures and processes this year, Anstice said Lam faces a “critical year.” In both etch and single-wafer cleans, semiconductor companies are deciding which equipment companies to rely on. In high-aspect-ratio single-wafer clean and drying steps, and for the dielectric and conductor etch steps in finFETs, 3D NAND structures, and others, customers are making important technical and supplier choices, he said.

“We are at a significant inflection point, with customers making very focused investment decisions about their critical device architectures and processes this year that will impact our 2013 and 2014 revenues,” Anstice said.

Also, the semiconductor industry’s spending is becoming more concentrated, as evidenced by the large capex increase announced recently by Samsung Electronics. Without naming customers, the Lam executives said the current quarter, ending in March, will see an unusual concentration in shipments to one or two customers. Traditionally, customers placing very large orders have more pricing leverage, and Anstice spent much of Wednesday’s conference call fielding questions on how the company’s gross margins will fare giving the higher concentration of spending. Lam forecasts its gross margins in the March-ending quarter to be about 41 percent.

Lam is changing the definition of its foundry segment to go beyond pure-play foundries, now including companies which “make available” their logic capacity for use by foundry customers, an obvious reference to Samsung’s current strategy. For the March-ending quarter, he said Lam expects to ship at least 50 percent of its product to the foundry segment.

Over the past few months, Lam executives have been asking customers to provide their expectations for the merged Lam-Novellus corporation. “We’ve been encouraging customers to tell us what they see as the strengths and weaknesses of both companies,” he said, adding that Lam is “encouraging customers to engage with us in collaborative models.”