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To: DJBEINO who wrote (29118)	2/28/1998 2:14:00 PM
From: DJBEINO	Respond to of 53903

. . . and stalls 300-mm-fab starts Electronic Engineering Times, Friday, February 27, 1998 at 23:20 by Margaret Ryan New York - Asia's economic turmoil has put plans for as many as 20 semiconductor fabs on hold, setting the semiconductor-equipment industry up for depressed sales this year and pushing the transition to 300-mm (12-inch) wafers out to the year 2000 or later. That was the conclusion of financial analysts and equipment suppliers at SEMInvest '98, the Semiconductor Equipment and Materials International's second annual investment conference held in New York last month. Seeking a silver lining in the gloomy outlook, analysts and vendors predicted that this year's pain will likely lead to a strong recovery and double-digit growth for equipment sales in 1999. What's more, a stronger global semiconductor industry could emerge from the ashes of the meltdown in Asia, where investments in fab capacity were motivated more by a quest for market share than by actual demand, some analysts said. The full impact of Asia's economic woes was a subject of debate at the New York conference. "The deterioration of investor confidence is seen as an overdue correction in Asian markets," said James C. Morgan, chairman and chief executive officer of Applied Materials Inc. (Santa Clara, Calif.) in a luncheon address. "If the Koreans and Japanese are not in a position to invest in capacity, this gap will be filled by other providers." A panel of financial analysts was less optimistic about short-term prospects. Jonathan Joseph, principal at NationsBanc Montgomery Securities, noted that DRAM manufacturers began cutting spending in 1997 to the tune of 20 percent over the previous year's totals, and said he expects them to reduce capital spending as much as 50 percent in 1998. DRAM makers are delaying ramp-up of new fabs. According to Jay Deahna, semiconductor analyst for Morgan Stanley Dean Witter, as many as 20 fabs have been postponed over the past six months, 17 of them DRAM fabs. Given the predictions of zero to negative sales growth, it's natural for equipment companies to ponder what future technological transition will create the next boom. One trend expected to do so is the shift to 300-mm wafer technology. However, that transition seems increasingly distant. Executives and analysts agreed that chip manufacturers are preoccupied with lithography "shrinks" to take them to 0.25- and 0.18-micron technology, and seem hesitant to invest in extremely high-cost 300-mm fabs until they see a major manufacturer do it first. Chip makers are similarly wary of the additional time it will take to get a totally automated 300-mm fab up and running. Pilot flies solo Analyst Deahna went so far as to predict volume production on 300-mm lines may not begin until 2003. Willem Maris, chief executive officer at ASM Lithography, agreed. He noted that Siemens-Motorola is the only manufacturer with a 300-mm pilot line to date, and he suggested it will be late 1999 before that facility is ready to handle volume production. Applied Materials was one of the first companies to invest in developing 300-mm equipment. Applied's Morgan said the company is confident the early work will pay off in the long run. "The delay [to 300 mm] is not a bad thing for us," said Morgan. "We've already invested in the technology, but the problem is when do you recover your investment?" Morgan agreed with ASM's Maris that many IC makers will build prototype 300-mm lines early but said no one is ready to lead the way. "Everybody wants to be second," Morgan said. Before moving to 300 mm, IC makers will wring all the performance they can from their 200-mm lines, which are moving to 0.25 micron. Major hurdles arise in lithography and metrology at 0.18 micron and below. "At that level, aluminum and silicon oxide no longer work," said Brad Mattson, president of materials company Mattson Technology Inc. "Between 0.25 and 0.18 [micron], we will see some unprecedented technology shifts" that will force the 300-mm shift to "take a backseat." While analysts agreed the semiconductor industry, especially Asian DRAM manufacturers, will cut back this year, they said the cuts would ease overcapacity. That, in turn, could stabilize prices and put money back in chip makers' pockets to buy equipment in 1999. Rogers said a steep decline in equipment buying now will mean a rash of purchases next year. "The deeper the cuts in DRAM, the happier I am," he said, predicting capital spending cuts as high a 30 percent this year. "It sets us up for a better 1999." -Additional reporting by Rick Boyd-Merritt. Copyright c 1998 CMP Media Inc.