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

To: Big Bucks who wrote (23241)	8/24/1998 3:30:00 PM
From: marc henschke	Read Replies (2) \| Respond to of 70976

Jumbo Simoleons: Wasn't the extremely profitable year experienced by the semi-equips in 1997 largely attributable to technology upgrades to .25 micron equipment rather than to the building of new fabs? In theory, why couldn't similar profitability be achieved over the next few years even before any large scale migration to 300 mm?

To: Big Bucks who wrote (23241)	8/24/1998 3:34:00 PM
From: Katherine Derbyshire	Read Replies (2) \| Respond to of 70976

>>Fabs still need to produce revenue even while they are upgrading to the next technology level, this is typically done by replacing 1 or 2 pieces of equipment at a time and bringing it online and qualifying it to the new specifications. This qualification takes time to verify performance and fine tune system operation and insure manufacturability at the improved performance level. As the new equipment and process is brought online it is typically reserved for the new product thus making it unavailable for the older products to minimize potential issues of cross contamination or yield contamination. << Yes, all of those things are true. That's why it is extremely difficult to do a radical shift within the context of an existing fab. For example, to shift one layer of metal from aluminum to copper damascene, you have to: replace aluminum deposition systems with copper systems for barrier, seed, and fill replace aluminum etch systems with oxide etch systems add copper CMP take necessary contamination control measures so that you don't kill all your transistors by spraying copper and/or slurry particles all over the place All of these tools and their supporting infrastructure have to be in place and qualified before you can run even one product wafer with copper wiring. I'm arguing that given the "incremental" changes and lost production required to make the low-k, copper, and DUV shifts in an existing fab, it is probably cheaper in the long run to just start from scratch. >>FWIW, pilot lines are typically very small R&D facilities that are used to identify equipment deficiencies, enhance productivity, and improve chip/equipment performance and yields. This is where future equipment buys are decided based on various vendor tool evaluations in the pilot line.<< Yes, I understand that. My point was that the amount of 300mm pilot activity going on suggests that 300mm production will occur sooner that you're predicting. >>I would be surprised to hear of another new 200mm fab being built, since it would/could be competing in 2+ years with 300mm fabs that will use economics of scale to make 200mm competition unprofitable except in niche specialty markets.<< Wait a minute. You can't have it both ways. If a 200mm fab will be competing with 300mm in 2 years, then someone's got to start building 300 mm pretty soon. And if 300mm won't come online until 2002, then (barring a collapse) there's got to be some additional 200mm capacity built between now and then. As far as current construction projects go, Intel plans capital spending of $4.5 billion in fiscal 1998. I'd say they've got at least one fab in the works in addition to the one in Ireland that opened already. intel.com There are also a number of projects still going on in Asia, particularly Taiwan and mainland China (joint ventures). Katherine