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.

Technology Stocks : MEMC INT'L. (WFR -NYSE) The Sleeping Giant? -- Ignore unavailable to you. Want to Upgrade?

To: Timothy W Adams who wrote (4228)	2/19/1999 5:44:00 AM
From: Carl R.	Read Replies (1) \| Respond to of 4697

I asked that same question some time ago, and the information I was able to find led me to believe that they have a reputation in the industry as the low-quality, low-price supplier. With this niche they should suffer more in a glut and recover later, but should still be nicely profitable in a surplus. True to form, they were very profitable when there was a surplus, but have suffered quite badly during the glut. I don't work in the industry, so I have no personal knowledge, but their financial performance leads to believe that they do fit in the low-price niche. Carl

To: Timothy W Adams who wrote (4228)	2/23/1999 3:07:00 PM
From: Andrew Vance	Read Replies (2) \| Respond to of 4697

It has been my experience that WFR supplied us with some of the highest quality of wafers avaiable in the industry based on the tight specifications we required. When I was working at my previous employer, we had WFR as our primary source of rpime wafers and used other companies for test wafers. If memory serves me correct, we were using Siltec (was taken over), Wacker, and were looking at Unisil. this about covers all the non Japanaes companies at the time. Every company has its share of bad moments. the WFR fire at one facility did impact the quality for awhile just as other issues affected other companies. we had our share of resistivity issues with all vendors and with stacking faults causing gate oxide intergrity issues down the road. I think most of the wafer(silicon) providers has denuded zone process control issues. we seem to only remeber the negatives about certain companies and let those issues act as an albatross for years to come. As far as pricing is concerned, it has been a dog eat dog feast and famine issue for years. The cost of wafers is constantly being monitored based on supply and demand. INTC had its Pentium Chips at exorbitant prices since they were almost a monopoly. Now that AMD is firmly on the scene, INTC was forced to drop its prices. Does this make AMD the low cost low quality provider? AMD offered lower prices for a myriad of reasons like market share penetration, and more cost effective manufacturing practices that allowed for lower prices. WFR, like all the silcion providers had and have their share of problems which are usually factory specific and/or process specific. that is why quality is consistently monitored for these vendors with real time feedback systems. Almost every commodity out in the IC sector is monitored on a weekly or monthly basis. Some commodities like chemicals are done quarterly. If I were to be generic about quality, low cost, etc. I could probably provide you with a definitive reason why the higher priced reticle provider, DPMI is far inferior to that of DPMI. Like many fabs, we used both vendors and gave one or the other primary vendor status. this meant anything form a 50-50 split of business to an 80-20 split, depending on quarterly performance of service and quality. DPMI was always the lead sled dog and then PLAB caught up and surpassed DPMI for a good while. We were then getting higher quality at lower cost with better service. We eventually went to 100% PLAB as the industry went into its downturn and we consolidated vendors. With that said, DPMI seems to be the favored company these days as the ramp up has begun out of this downturn. Advanced technology, pricing, quality, etc. allowed them to get a foot in the door again and a turnaround situation may be in the makings again. this would not be the first or last time something like that happens. All of this is cyclical in nature and is actually the means by which most of these commodity suppliers improve their performance. I will not challenge the MU observation other than to say the specification set forth by MU for their products might be better provided for by someone other than WFR, at this point in time. for a long time, Wacker was my favorite company. And finally, I might go as far as to concede that WFR is as bad as it is being professed. All that means is that it is their turn in the barrel as the bad boy. This means they belly up to the bar, make the corrections and improvements, get out of the dog house and let another company be the problem child. Note: ASML is now the #2 stepper supplier behind Nikon, moving up a notch. I could tell you horror stories about the lenses in their original steppers that went undetected and made it out into the field. It would curdle your milk on how many lenses were eventually replaced and what their real yield was on lenses they received and put into the field. This did not stop them from gaining marketshare or introducing improved systems. As amatter of fact, ASML is not the highest priced stepper out in the market. Bad wafers are either contaminated, have stacking faults, misoriented, doping uniformity issues, electrical variability, flatness, thickness, etc. All of these result in or could result in measurable yield degradation. This yield loss is quantifiable by doing side by side evaluations. If there are 200 die per wafer and you suffer a 1% yield loss, and you die cost is $5-$15, you are talking about anywhere from $10-$45 lost per wafer. This would justify paying the extra dollars for the better silicon. And if this were true, WFR would be essentially shutdown and their competitors would be running at migh higher capacities. Please note that I used die cost and not die revenue. These number a much higher if you use die revenues of $10 to hundreds of dollars. Then there is the issue of prime versus test wafers. Based on stringent specifications, wafers that are manufactured are split into these two groups. bottom Line, those wafers that do not meet the stringent specs become test wafers, which have looser specs. the final fallout is the garbage. Every vendor is consistently trying to increase the ingot yield to maximize the prime zone and minimize the scrap zone. Sorry for the diatribe but we seem to always remember the negatives and tend to see isolated incidents as the norm. If WFR silicon was that pathetic and even slightly inferior to another supplier, I could almost guarantee that every user would convert immediately over to the better supplier (after the appropriate qualifications). Andrew Vance RadarView Newsletter stepman@hotmail.com