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Technology Stocks : Speedfam [SFAM] Lovers Unite ! -- Ignore unavailable to you. Want to Upgrade?

To: blake_paterson who wrote (3245)	11/22/1998 1:32:00 PM
From: Mr. Sam	Respond to of 3736

<<1. Given the chip industry's apparent focus on shrinkage and re-use to grow production (vs. added capacity), where do you see the CMP market going (re: upside) for the next year? Will these trends prevent a strong upward spike for CMP?>> Blake, it is difficult to add significant CMP capacity to an existing fab. There's just no space for it. Essentially all new fabs will have CMP, but only a few old fabs without CMP will be upgraded to include it. Any fabs that were built during the last upturn that never got fully populated with tools might also be able to buy new CMP tools. Remember, though, that the smaller the geometries get, the more essential CMP is. While some technologies (wet etching and cleans, for example) can be extended from 0.5 micron to 0.35 to 0.25 to 0.18, the planarization gets increasingly difficult without CMP as the geometries shrink. Remember, too, that the new technologies often use shallow trench isolation and have increasing numbers of metal layers. Some also include poly polishing, local interconnect, and/or dual damascene. All of these enhancements increase the need for polishing capacity. A fab that decides to do a new technology without CMP gives up a significant amount of performance. <<2. Will SFAM's significant continued investment in 300 mm CMP yield any benefits in the next 6 quarters?>> 300 mm is an investment that all suppliers must make in order to have a chance at being around 5 years from now. If we've got to make the investment eventually, then we might as well do it now so that we can compete to get into the fabs of some of the early adopters, giving us a head start at fine-tuning your product in a production environment and creating reduced risk to later adopters of the 300 mm technology should they choose our product. That said, were 300 mm a business unit on its own, it would lose money every quarter for 2 years or so. The break-even quarter, considering all the cumulative losses that would need to be recovered, might be 3 or so years down the road. That's been the pattern with the last several wafer transitions. Still, as I said, we've got to make the investment. Tools for 200 mm wafers will only decline from here as a percentage of the new equipment market. Mr. Sam