We see the split effect as ESI shows strength going into tomorrows split. I also see good reports from book to bill. Generally, everything seems to be on a roll. Finally, the market and business environment are coming together to make this company shine.
Do you know whether they are providing any memory yield equipment to the flash industry? This group is certainly going to higher capacities and they've got the shortages to be keenly interested in improving their numbers.
Anyway, thought this article about ESI's best customers, the Koreans would be appropriate to the ESI discussion.
Regards, Mark
Koreans Snap up Equipment
Semicon Korea reveals gear buying binge
By Ahn Mi-Young
Seoul, South Korea--This year, both Hyundai MicroElectronics and Samsung Semiconductor will open up their wallets and make record purchases of capital equipment, said executives attending the Semicon Korea 2000 trade show here last week.
Most of the equipment purchased by Samsung Electronics is going into its $1.8 billion Fab 10, which will produce 128Mbit and 256Mbit SDRAM and 128Mbit Rambus DRAM beginning sometime after March 2001. As for Hyundai, $1.2 billion out of the $1.7 billion worth of equipment it plans to buy this year will be spent in upgrading its 0.25-micron production lines to 0.15- to 0.18-micron as part of its effort to improve the yields of the recently combined DRAM lines of Hyundai and the former LG Semicon.
All of this will result in the largest-ever chunk of equipment orders by South Korean manufacturers, much to the delight of vendors like Applied Materials and Advantest.
"In 1999, it cleared up from the cloudy days of 1998,' said a spokesman for Applied Materials Korea, Chunan, South Korea, a subsidiary of Applied Materials Inc., Santa Clara, Calif. "This year, we will have another sunny day out there.'
Despite this, semiconductor vendors said they detect no widespread crunch in capacity. A Samsung spokesman said the company has even detected some oversupply in 64Mbit and 128Mbit SDRAM, whose prices have been falling of late. The only real shortage is in flash memory, according to a general manager of Hyundai Electronics, who asked not to be identified.
Flash memory is now in heavy demand for applications ranging from cell phones to digital cameras to MP3 players, prompting both Samsung and Hyundai to vow to double their flash memory capacity.
There are three ways of expanding flash memory capacity, noted the Hyundai general manager. One is to upgrade a production line so that it can produce more. Secondly, a firm can produce more flash memory by reducing DRAM production on a given line. Thirdly, the firm can add a fab.
With memories of the severe overcapacity situation of 1996 and 1998 still fresh, South Korean manufacturers are loathe to take the third option.
"This year, we are going to use the first two ways, but we won't add a fab,' the general manager said.
Upgrading production lines for producing more flash memory is going to take a lot more testing equipment on the back-end, but virtually no new equipment on the front-end, said a manager at Tokyo Electron Korea. This means that testing equipment leaders like Teradyne Inc. and Advantest Corp. stand to be the first to grab orders for expanded flash memory lines at Hyundai and Samsung.
Except for Samsung's Fab 10, which will come into partial operation during the fourth quarter, South Korea's two big chipmakers won't add any new fabs during 2000.
"This year at least, we won't have any new fabs,' said Jin Ji-Soo, deputy general manager of Hyundai. However, in the longer term, Hyundai will be moving from 8-inch wafer processing to 12-inch lines. The company expects to begin production on 12-inch wafers in 2002, Ji-Soo said. This means that Hyundai should be a big equipment capital spender in 2001 when it starts constructing a new fab for the 12-inch wafer line.
"(For the 12-inch wafer line) we will have to change most of our equipment,' Ji-Soo noted.
The two main vendors of front-end equipment in South Korea, Applied Materials and Tokyo Electron Ltd., stand to benefit greatly from orders from Samsung for Fab 10. Stepper vendors--ASM Lithography Holding N.V. (ASML), Nikon and Canon--also stand to gain both from Samsung's Fab 10 and Hyundai's move to upgrade lines via die-shrinks.
"(In upgrading production lines) we have little equipment to replace on the back-end, except for the Rambus lines, which need several pieces of testing equipment on the back-end,' Ji-Soo said. "We have to replace most of the major steppers on the front-end, if we are to upgrade DRAM lines.'
This means Hyundai will have to buy a lot of steppers, each worth $6 million.
As for the stepper market in Korea, newcomer ASML, based in The Netherlands, has picked up market share in the past three years, while Nikon and Canon of Japan lost ground.
However, the Japanese vendors now are fighting back and are beginning to recover some of the market share they lost to ASML, according to another semiconductor company manager.
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