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To: Wowzer who wrote (3849)	1/14/2000 8:18:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 5867

Spending on wafer fab materials starts to grow again, says analyst By J. Robert Lineback Semiconductor Business News (01/14/00, 05:09:16 PM EDT) PEBBLE BEACH, Calif. -- Revenues for chip-processing materials are getting a much-needed lift from the year-old semiconductor recovery and the industry's move to 0.18-micron design rules, said a research analysts during a marketing session here this week. Spending on wafer fab materials will grow 9.4% to $13.6 billion in 2000 compared to $12.4 billion in 1999, said Daniel J. Rose of Rose Associates at the annual Industry Strategy Symposium, sponsored by the Semiconductor Equipment and Materials International (SEMI) trade group. He predicted that revenue growth in blank silicon wafers and photomasks will be the strongest this year, at 17.3% and 13.4% respectively. The weakest growth rates will be in wet chemicals (3%) and photoresist materials (6%), according to his forecast (see table below). The initial 1996 slump and weak market conditions in the year that followed left many material suppliers weakened, resulting in a "rash of acquisitions," said Rose during his ISS presentation. Silicon materials companies are now seeing some of the first price increases on wafers in three years, he told the conference. Prices for 200-mm diameter wafer used for 0.18-micron processes are rising 10-12% in current negotiations between IC makers and suppliers, he said (see Jan. 12 story). Photomask revenues are also rebounding after a "pause" in 1998, according to Rose. He predicted that photomask revenues will reach $2.567 billion in 2000 compared to $2.264 billion in 1999. "New circuit designs incur enormous additional costs in processing complex phase-shift masks with optical proximity correction (OPC) techniques," said the veteran materials analyst, based in Los Altos, Calif. But Rose also warned that photoresist suppliers still face huge hurdles as they attempt to create new chemical formulations for 193-nanometer photolithography. "We believe photoresists may be the weak link in the materials food chain during the next five years, as IC makers are depending upon 248-nm and extended 193-nm formulations to satisfy future requirements," he said. "Very little work is being done on 157-nm formulations, even though they are scheduled to be in full production within five years." Spending on photoresist will reach $748 million in 2000, an increase of 7% from $699 million in 1999, Rose predicted. Photoresist ancillaries will add another $489 million in revenues to that total in 2000, an increase of 4% from $468 million in 1999, he said. Wet chemical revenues are expected to grow just 3% to $699 million compared to $680 million in 1999, and gas sales will grow 8% to $1.634 billion this year vs. $1.515 billion last year. Where money will go for wafer fab materials Materials 1999 2000 2001 2002 Silicon wafers $5.883 billion $6.475 billion $7.598 billion $8.344 billion Other wafer substrates $572 million $612 million $661 million $707 million Photomasks $2.264 billion $2.567 billion $2.927 billion $3.278 billion Photoresists $699 million $748 million $837 million $938 million Photoresist ancillaries $468 million $489 million $513 million $539 million Wet chemicals $680 million $699 million $728 million $758 million Gases $1.515 billion $1.634 billion $1.764 billion $1.931 billion Deposition materials $313 million $335 million $355 million $377 million Total $12.394 billion $13.559 billion $15.383 billion $16.872 billion Source: Rose Associates semibiznews.com