As 200mm Equipment Market Revs Up, New Gains for Used Tools
Demand for legacy tools remains strong, but the supply of used platforms is drying up, prompting some suppliers to build new.
The law of supply and demand is holding true in the market for equipment capable of processing 200mm and smaller wafers. Over the past few years, the brisk production of sensors, MEMS, power ICs and other devices which do not require leading-edge processes, has resulted in rising demand for 200mm tools.
For nearly a decade, that market has been synonymous with "used" or "refurbished" equipment, and indeed the vast majority of 200mm platforms sold are refurbished, usually with some development or re-engineering to modernize them. While many equipment OEMs have sold or transferred all or part of their legacy equipment operations to third-party manufacturers, some continue to build and sell many of their own 200mm products.
Increasingly, however, Applied Materials is making more brand-new 200mm equipment to keep customers supplied with the tools they need, according to Cody Harlow, a director at the company’s Applied Global Services manufacturing operation in Austin, Texas.
One of Harlow’s responsibilities is scouring the world for the 200mm equipment no longer needed by chip manufacturers. These "cores" are taken apart and rebuilt at the Austin manufacturing facility, and increasingly, are being fitted with new chambers capable of the more contemporary deposition, etch, and other processes required by customers. Often, refurbished cores are also updated with software and other upgrades, resulting from Applied’s continued 200mm development initiatives to enable more sophisticated processing capabilities.
Cody Harlow, Applied Materials Director of AGS Manufacturing Operations at the company’s Austin, TX facility.
During the past decade, the largest chip makers in both the microprocessor and memory arenas have closed the majority of their 200mm wafer fabs. A virtuous cycle ensued, with large chipmakers putting "a steady stream of tools" on the market, making it possible to give these tools "a new lease on life," Harlow said.
A few years ago, as Applied experienced a growing demand for 200mm tools—fuelled by growth in emerging technology applications—the company began stocking its warehouses with platforms that were on the market at the time. That stockpile has helped ease the supply crunch, Harlow said.
Market Pull from Smartphones
Demand for 200mm equipment continues to be particularly strong from both IDMs and foundries producing components used in smart phones, including wireless communications ICs and filters. Market research firm IC Insights (Scottsdale, Arizona) sees a continuing shift away from a PC-centric chip industry to one focused on supplying mobile systems. Cellphone IC revenues are projected to grow by a CAGR of 8.7% between 2013 and 2018. Many companies serving this market continue to expand capacity at their 200mm fabs. Other companies which use 150mm and smaller-diameter gallium arsenide substrates to produce amplifiers and other communications ICs are expanding fab capacity as well.
And soon to come on strong are the myriad sources of demand from the Internet of Things (IoT), where IC Insights sees a CAGR of 22.3% during the 2013 - 2018 period.
Many of those solutions will be made on 200mm wafers, with improved processes optimized for low power consumption.
Kevin Yang, director of product management at GLOBALFOUNDRIES in Singapore, said that IoT and wearable devices are driving ultra-low-power extensions to several mature technology nodes. For GLOBALFOUNDRIES, its product portfolio includes ultra-low power offerings spanning from 180nm down to the very latest process: the 14nm LPP process, based on a FinFET architecture.
"For mature nodes, we are constantly innovating with a 'More-than-Moore' approach by adding extensions such as analog, power management, radio frequency, and embedded non-volatile memory, as well as ultra-low-leakage/ultra-low power and MEMS," Yang said.
The increasing demand from smartphones, wearables, and the IoT has coincided with tight supplies of used 200mm equipment. According to Harlow, "The memory fabs always had 200mm equipment to sell, but it is not there anymore. The dynamic we are seeing right now is that the availability of used equipment on the market is drying up. There is definitely a shortage of supply on the market."
Finding Tools To Buy
As the largest equipment refurbisher, Applied Materials often gets the first call from chipmakers and equipment brokers which have used tools to sell. "I always want to be the guy they call first," Harlow said. “And I don’t want to give the wrong impression—we are buying cores. But there is just not ample equipment to purchase right now. If in past years there were a hundred cores of any tool type or configuration for sale out there, today there might be just five or ten—and many of those might be non-standard designs which require reconfiguration to meet today’s needs.
The result: acquiring used equipment "is much pricier. It has effectively doubled in the last six months, and often the configurations available are only a partial match to the demand," Harlow added. Harlow attends the major SEMICON shows around the world, and recently returned from the 2015 SEMICON Korea show empty-handed. "I usually buy ten to 15 used tools there, but at this latest show I couldn’t find anything to buy."
Dan Tracy, senior director of industry research & statistics at SEMI (San Jose, California), said that demand for 200mm equipment has perked-up from a year ago. “In the middle of last year, third-party companies were bemoaning the state of their businesses. A year later, they are very busy. Business is good for them.”
Tracy said business conditions "picked up around June of last year, with a lot of it driven by the foundries adding to their 200mm fabs."
China, where SEMI counts 16 200mm fabs, has been particularly hot. That nation’s largest foundry, along with Taiwan’s two major foundries, all have publically announced expansion of their 200mm fabs in China.
These foundries and others are looking ahead to demand from the IoT, where many of the devices, including MEMS-based sensors, do not require leading-edge design rules. "A lot of the Internet of Things devices, including wearables, have sensors which are not large in terms of die area. IoT devices tend to be quite small, compared with memories or microprocessors, and they don’t require leading-edge processes," Tracy said.
Tom Salmon, SEMI vice president of global member services and standards, said SEMI’s recently-published Secondary Fab Equipment Market Report estimates that combined 150mm and 200mm fab capacity represents approximately 40 percent of the total installed fab capacity. Led by foundries, SEMI predicts that 200mm fab capacity will increase by 7 percent in the 2012-2016 time period.
Harlow emphasized that Applied Materials is able to supply its customers, either with refurbished or new equipment for selected products. "Where we come into play for our customers is we can offer choices. We are able to build new 200mm equipment on some products. As this shift has occurred, driving-up the prices for used cores, we have reached a crossover point, where in some cases it is cheaper to build new than to chase these higher prices. But either way, the customer has options, thanks to continued aggressive investments in new processes, chamber and sub-system design, hardware and software configurations."
Because of the company’s economies of scale, "our prices have not skyrocketed. We are still able to provide a competitive cost solution," Harlow said.
Harlow noted that customers still prefer to buy lower-priced refurbished tools. "Has the customer switched over and said, 'we want new equipment'? Not really. They still want refurbished tools that cost less. But next year, I think we may see a lot of customers ask for new equipment based on the lack of core tools and associated price increases that will come with the scarcity of supply."
For more information contact Mike_Rosa@amat.com.