Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (36461)	8/9/2000 8:24:08 PM
From: mitch-c	Read Replies (3) \| Respond to of 70976

When they said "low key", I had no clue what they meant. It could have been a Pokemon character for all I knew. :) I still don't know what it is, but it sounds as though AMAT's selling everything that's not nailed down. It'll be fun to read WSJ and other reports as they come out. Pat, it's fairly straightforward once you understand it. Think of it as a high-tech pizza business ... chipmakers across the world cook sand pizzas (silicon wafers) with different recipes and toppings, then sell 'em by the slice (finished chips). Applied Materials sells very high-tech automatic pizza ovens. To extend the pizza analogy, Sue Billat and the CC referred to three industry trends: First, 300mm wafers; Second, Copper and Low-K di-electric materials; Third, .18 micron line widths. One at a time, here we go. 300mm vs. 200mm is easy - if you cook a medium-size pizza (12 inches diameter) instead of a small (8 inches), you get more slices to sell for a given trip through the oven. This is a straightforward economy of scale. Doing the math, you get roughly 2 to 2.5 more small square slices to sell, at something less than twice the cost to cook 'em. However, you need to replace all your ovens ... which is really good news for our oven maker. <g> Copper and Low-K dielectrics are a bit tougher to visualize. Consider a pizza with three basic layers - crust, sauce, and cheese. Your recipe puts the toppings in the sauce, under the cheese. Using copper as a higher grade of "sauce" material means you get the same taste, but use less than the current aluminum "sauce" - a production economy. Now figure that you're building multiple layers of toppings - a Mondo Supreme of crust / cheese / sauce / cheese / sauce / cheese / sauce / cheese, one layer at a time. You can't let the sauce from one layer to bleed into the next. To stop that, you have to use lots of cheese between sauce layers - or a much more solid and consistent cheese. That's the idea of a low-K dielectric; it's a really good insulator material, so you use less of it to separate electrical layers. It's another economy where higher quality ingredients let you use less of them. Finally, we come to the submicron line widths. In our multi-layer pizza, we're also putting the toppings in the sauce. Instead of squeezing out the sauce, we need to draw an outline where the toppings are supposed to go, then cut channels in the cheese for the sauce to go between them. The closer and tighter we can cut those channels, the more toppings we can fit on each layer ... and each pizza can produce lots of smaller slices that taste just as good. That's another economy of scale, which lets us make more slices to sell per oven trip, so we're always looking for a sharper knife. So, for our pizza recipe, we cut out the right size crust (wafer); we spray on the cheese (CVD - Chemical Vapor Deposition, or PVD - Physical Vapor Deposition); we smooth it out (CMP - Chemical/Mechanical Polishing); we lay out and cut the sauce channels (Lithography and Etching); we spray on the sauce and toppings (more CVD, PVD, or Ion Implantation); and then add another cheese layer and continue from there for as many layers as we need. When we're done, we cut up the pizza, wrap up the slices, and sell them. In the chip world, each of these things happens in a different oven! The wafer must be moved among all those process steps somehow. Applied Materials specializes not only in each of those processes, but builds custom clusters of ovens around robotic wafer handlers to maximize cycle efficiency. They also keep looking for other ways of making better sand pizzas, and either develop the ideas themselves, or buy out companies that already have. To put things in a bit more perspective, each 12-inch "supreme" can become as valuable as a luxury car, and each oven cluster costs as much as a corporate jet. We are not talking chump change, here - it's a very lucrative business ... and they just said business is better that ever. If you can't tell from the drool on my keyboard, it's dinnertime here in Austin. <g> Hope this helps clear up the buzzwords! - Mitch (the other one from Austin)