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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (83187)	6/10/1999 2:04:00 AM
From: Barry Grossman	Read Replies (1) \| Respond to of 186894

Paul and thread: June 10, 1999 Intel Will Raise the Ante in Chip-Manufacturing Technology By JOHN MARKOFF nytimes.com SAN FRANCISCO -- The Intel Corporation, the largest maker of computer chips, said Wednesday that it would upgrade its manufacturing plants to produce far more powerful processors while significantly cutting manufacturing costs. -------------------------------------------------------------------------------- Related Articles The IA-64 Chip: Intel Breaks the Mold (April 8, 1999) Philips Makes Offer to Buy VLSI, a U.S. Chip Maker (February 27, 1999) -------------------------------------------------------------------------------- Intel's new generation of plants will use silicon wafers, the raw material of computer chips that are 12 inches in diameters compared with 8 inches today. That 50 percent increase in diameter amounts to a 225 percent increase in the surface area of each wafer, the company said. That translates into a significant savings in the cost of each chip. Intel, which is based in Santa Clara, Calif., is not the first major semiconductor company to commit to using 12-inch wafers. However, because Intel sets the pace for the industry, its decision is certain to force other chip makers to move to next-generation chip fabrication. "This is what was needed to set the industry moving," said Risto Puhakki, vice president for operations, at VLSI Research, a San Jose, Calif., market research firm. "You get many more chips per wafer, and the revenue stream is based on the number of chips that can be made." Intel officials said the company would begin building its first new factory based on the new equipment next year and that it expected to produce commercial chips based on 12-inch wafers in 2001. Silicon chips are made in batches of several hundred per wafer by machines call steppers, which etch circuits into the silicon. After the wafers have been etched, they are sliced into individual chips, known as "dies." Intel officials said that more than doubling the surface area available on each wafer would cut manufacturing costs by 30 percent. "This is going to make our capital costs shrink back to where they were six or seven years ago," said Michael Splinter, senior vice president and general manager of Intel's Technology and Manufacturing Group. "You get a bigger pizza and you get a lot more slices." Cost savings have become increasingly important in this highly competitive industry, which must continually fight spiraling costs inherent in the pace of technological change predicted by Moore's Law. In the late 1960's, Gordon Moore, Intel's cofounder, observed that the number of transistors that could be put on a single silicon die was doubling roughly every 18 months. -------------------------------------------------------------------------------- Cost savings have become increasingly important in this highly competitive industry. -------------------------------------------------------------------------------- Since then, the industry has managed to stay on that performance curve only by building ever more costly factories. Intel plans to deploy the new technology first in a research and development factory in Hillsboro, Ore., that will include a so-called clean room -- a sterile environment free of dust and other airborne contaminants -- of approximately 120,000 square feet. The company said the plant would cost about $1.2 billion over the next several years. The new plants will help the company move from today's 0.18-micron chips to 0.13-micron chips. A micron, one-millionth of a meter, is the unit of measurement for the width of the tiniest wire that can be etched into the wafer. A human hair is 75 to 100 microns wide. This higher chip density will enable Intel to build significantly faster microprocessors with as many as 50 million transistors, compared with today's 10 to 15 million transistors. Siemens A.G. and the Motorola Corporation are already building a prototype 12-inch wafer factory in Germany, and Puhakki said Samsung, the Korean electronics company, had also begun aggressively pursuing the new 12-inch wafer technology. Intel's announcement is certain to touch off a new battle for dominance among companies that make equipment for manufacturing chips. Intel currently buys its stepper machines principally from the Japanese manufacturer Nikon and secondarily from the Silicon Valley Group, Puhakki said.