Semiconductor Business News, c 1998, CMP Media Inc.
June 15, 1998
Hyundai struggles to keep up in
DRAMs
By Jack Robertson
ICHON, South Korea -- Hyundai Electronics Industries Co. Ltd.
still expects to be able to keep up with the rest of the global
industry in the current shift to 0.25-micron chip processing, but it
will have a hard time funding the rest of its capital programs - and
that includes 300-mm wafer production.
The chip maker has slashed its semiconductor capital equipment
budget this year to less than $500 million, down more than
two-thirds from last year's $1.5 billion.
"Fortunately we had purchased a large portion of the
quarter-micron equipment under last year's capital investment,"
said Kye-Hwan Oh, executive vice president. "We will have
enough in the 1998 capital budget to complete the ramp-up," he
said.
In an interview in his office here, the head of Hyundai's
semiconductor operation told Semiconductor Business News that
the company will finish converting its Fabs 6 and 7 in South Korea
to full quarter-micron production by the end of the year and will
start producing similar feature-size chips in its new U.S. fab in
Eugene, Ore., by the first half of 1999.
But the picture darkens after quarter-micron. Oh conceded that
Hyundai faces major challenges stretching its shrunken capital
equipment spending to meet other demands for developing the
next-generation 256-megabit and 1-gigabit DRAMs, wideband
DRAMs, and moving to the next-generation's copper
interconnects and low dielectric materials.
"But we have no choice," Oh declared. "We intend to remain a
world-class DRAM supplier [so we will have] to develop all these
technologies," the Hyundai executive maintained.
One development program that could be hurt by the company's
cutback in capital spending is the next-generation 300-mm wafer.
This year's budget only provides "very limited funding" for internal
300-mm wafer development at Hyundai. For the time being, Oh
said, Hyundai has no plans to build a full 300-mm pilot line. "We
are a member of [Sematech's] International 300-mm Initiative," he
said, "and will get the needed experience from I300I that we
would have obtained from our own pilot line."
Oh couldn't forecast when Hyundai might start building its own
300-mm wafer-production fab. "At this point, a 300-mm fab is
too costly," he noted. "But we are staying abreast of the
technology [in order to be ready] when market conditions are
right to move into the larger-size wafers."
But sooner or later, Oh acknowledged, Hyundai "must have
300-mm fabs" to remain competitive in DRAMs.
Despite moving full-speed ahead to quarter-micron processing,
Oh agreed with some earlier industry assessments that bringing up
quarter-micron lines "isn't easy. Quarter-micron is proving to be
more difficult than many people realized," the Hyundai executive
said. Many chip makers, including Hyundai rival Samsung
Electronics Co. Ltd., took longer to bring up 0.25-micron
processing than they originally had projected.
But Hyundai has now overcome all of the technical problems it
faced in the switch to 0.25-micron and is now starting to ramp up
deep-UV production. The chip maker has mastered its own
dry-etch processing for the next-generation lithography using an
argon fluoride 193-nanometer system. "That helps us greatly in
bringing on deep-UV wafer production," Oh said. The South
Korean company is currently in negotiations to license two tool
makers to build systems incorporating its dry-etch processing.
Hyundai is also working in a development project with DuPont
Photomasks Inc. in Round Rock, Tex., to come up with
next-generation phase-shift masks to push deep-UV lithography
down to 0.18-micron feature size.
One Hyundai project that lost its funding because of the drastic
cutback in this year's capital funding was its megafab in Scotland,
which was put on hold last year after South Korea's financial crisis
erupted. "We are actively looking for investment partners to join
us so we can get back on track with the Scotland fab," Oh said.
"Do you know any?" he asked.
The big cuts made this year in capital spending by Hyundai and
most of the South Korean and Japanese chip makers, however,
won't eliminate the glut of DRAMs on the market, Oh said.
Design shrinks by DRAM suppliers will continue to flood the
market with more chips than it can absorb even with growing
demand, he said. "I expect the DRAM supply this year to be
more than double last year's production [and] that still exceeds
demand." Oh doesn't see "supply getting into better balance with
demand until sometime in 1999."
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