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Solid State Technology's WaferNEWS - www.wafernews.com
June 21

Welcome to WaferNEWS, the semiconductor manufacturing industry's weekly briefing of key business and technology trends, from the editors of Solid State Technology.




ISSUE CONTENTS

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UP FRONT FEATURES
Intel, TSMC fire up new 300mm production


TECH TALK
Xilinx, UMC unveil triple-oxide 90nm FPGA

Sopra taps IMEC's thin-film technology


INDUSTRY NEWS
Elpida wants Japan to tax Hynix chips

Applied moves back into CVD furnaces with Torrex deal

VLSI: Orders down, sales up, capacity still tight

SEMI: Chip equipment demand stays strong in 1Q

Renesas to restructure frontend ops

AMD seeks dual processors by 2005

Hynix sells system IC business


SPANNING THE GLOBE
China, Costa Rica, Japan, Portugal, Taiwan


WaferNEWS FAB 50


TESTING TESTING
RF Micro begins in-house packaging


:: UP FRONT FEATURES

:: Intel, TSMC fire up new 300mm production

Intel Corp.'s Fab 24 facility in Leixlip, Ireland, has begun production of 300mm wafers using 90nm process technology, the company has announced. It's Intel's fourth 300mm facility, joining sites in Oregon and New Mexico, and the third to incorporate 90nm technology.

Last month Intel announced it would invest 1.6 billion euros (nearly $2 billion) to expand the Leixlip operations to enable 65nm process technologies, with production slated to begin in 1H06. Earlier this year, the company also began converting its Fab 12 200mm wafer fab in Chandler, AZ, to a 300mm/65nm facility, expected to be completed by late 2005.

Meanwhile, TSMC said its Fab 14 plant has successfully produced high-yield 300mm wafers at levels equaling those from its Fab 12 operations, just 90 days after initial installation of process equipment.

TSMC also said it has boosted production at its Fab 6 facility to a record 70,000 200mm wafers/month, exceeding its planned 2Q04 capacity by 10%. Half of the wafers were manufactured using 0.13-micron process technologies, with a significantly increased percentage of wafers using low-k dielectrics, the company said.

Together, the two facilities in Hsinchu's Tainan Science Industrial Park are expected to contribute 17% of the company's total wafer capacity by the end of this year, and reach 25% by the end of 2005.


:: TECH TALK

:: Xilinx, UMC unveil triple-oxide 90nm FPGA

Xilinx Inc., San Jose, CA, and Taiwan foundry UMC have announced production of FPGAs using 90nm triple-oxide technology. Xilinx said it already has received initial wafers using the triple-oxide 90nm technology, which will be used in its Virtex-4 FPGA product family, and reportedly will cut power consumption in half compared with previous devices. Xilinx is using UMC for volume production of several 90nm products; the duo first developed 90nm FPGAs in March 2003.
:: Sopra taps IMEC's thin-film technology

Sopra, a French supplier of metrology tools for thin films, has licensed ellipsometric porosimetry (EP) patents from European research center IMEC. Sopra plans to incorporate the R&D EP technology, which monitors porosity, pore size distribution, surface area, and pore interconnectivity in thin films, into a commercial tool to be introduced this summer. Sopra's forthcoming product will offer several EP models with gradual automation capabilities, from manual EP5 to models with mapping capabilities for 200mm and 300mm wafers, said Sopra CEO Marc Stehle.

"Ellipsometric porosimetry has been a key enabler to study low-k materials properties as well as some of their integration issues," added Rudi Cartuyvels, IMEC director of interconnect technologies and technology options.
:: INDUSTRY NEWS

:: Elpida wants Japan to tax Hynix chips

Memory firm Elpida Memory Inc. and the Japanese business of Micron Technology Inc. have petitioned the Japanese government to impose countervailing duties on imports of DRAM chips from Hynix, according to news reports. The South Korean firm has long been accused of receiving government subsidies, a concern that led the US and European Union to impose similar duties last year of 45% and 35%, respectively.

The Japanese Ministry of Finance, along with the Ministry of Economy, Trade and Industry, could take up to two months to consider the chipmakers' request, and possibly another year for an investigation, according to Reuters and the Nihon Keizai Shimbun. Elpida, the joint venture between Hitachi and NEC, currently ranks sixth in the DRAM market with 4.3% share; Hynix is fourth with 14.7%.

:: Applied moves back into CVD furnaces with Torrex deal

On June 14, Applied Materials Inc., Santa Clara, CA, announced it had acquired all of the outstanding stock of Torrex, Livermore, CA. The amount of the cash purchase was not disclosed.

The deal puts Applied back into CVD furnaces, "which they have not had since before 1987," noted Dean Freeman, principal analyst at Gartner Dataquest. "This is a move into the dielectric ALD space with a mini-batch system." Freeman also cited Applied's strong position in the metal ALD sector with single-wafer modules that attach to the Endura system, and he noted that the purchase also gives Applied high-k dielectric IP.

Because the first applications emerging in the dielectric ALD space are for DRAM and flash capacitors, the films are rather thick, so ALD isn't necessary -- yet -- suggests Freeman. However, the Torrex system is capable of doing both CVD and ALD, "so this acquisition allows Applied to move into that market space, where they currently don't have a product," he said.

Applied cited Torrex's FlexStar system for its "breakthrough performance" over traditional hot-wall furnaces for atomic-layer deposition (ALD) and low-pressure chemical vapor deposition (LPCVD) applications. It also reportedly can process up to 50 wafers at a time in a stacked single-wafer environment, and can handle both 200mm and 300mm wafers. -- Debra Vogler, Senior Technical Editor

:: VLSI: Orders down, sales up, capacity still tight

Demand fell for the second consecutive month in May, but an increase in shipments and near-maximum capacity utilization levels are pulling the industry along a rapid growth pace, according to the latest data from VLSI Research.

:: SEMI: Chip equipment demand stays strong in 1Q

Worldwide semiconductor manufacturing equipment billings topped $9.14 billion in 1Q04, a 65% jump from 1Q03 and 42% higher than 4Q03, "supporting the outlook for a robust growth year for the semiconductor equipment market," according to SEMI.

:: Renesas to restructure frontend ops

Renesas Technology Corp., the chipmaking JV between Hitachi and Mitsubishi Electric, said it plans to restructure its frontend manufacturing business, resulting in the closure of Renesas Semiconductor Europe, the company's facility in Alsdorf, Germany, by the end of this year.

:: AMD seeks dual processors by 2005

AMD has completed the design of its AMD 64 dual-core processors and plans to launch the technology by mid-2005, right about the time Intel is expected to bring its dual-core chips to market.

:: Hynix sells system IC business

Hynix Semiconductor has agreed to sell its system IC division to a newly founded group, pending shareholders' approval. The South Korean business will be renamed System Semiconductor Ltd., a group formed by CVC Asia Pacific Ltd. and Citigroup Venture Capital Equity Partners, which facilitated the $822 million sale of Hynix's nonmemory business several weeks ago.

:: SPANNING THE GLOBE

:: CHINA

CSMC Technologies Corp. hopes to raise nearly $88 million in its IPO later this month in Hong Kong, according to Dow Jones. Proceeds will be used to fund capacity expansion at CSMC's Fab 1 facility in Wuxi to nearly 60,000 150mm wafers/month, as well as construction of a 200mm Fab 2 facility.
:: CHINA

Second-tier chipmaker Vanguard International Semiconductor Corp. plans to reduce its capitalization by nearly 50% (roughly $410 million) in order to write off losses, according to the Taiwan Economic News. Vanguard is in the midst of a campaign to increase capital expenditures from $127 million to $179 million this year, mainly to boost production to 60,000 200mm wafers/month, as well as incorporate new 0.18-micron and 0.15-micron process technologies alongside the company's mainstay 0.25-micron processes.
:: COSTA RICA

Intel Corp. has inaugurated a new $110 million chip assembly facility in Costa Rica. The plant, first proposed in October 2003, was built to accommodate the company's 856-G chipset for use in Pentium 4 processors. It is the second Costa Rican facility for Intel, which now employs about 2800 workers in the country.
:: JAPAN

Komatsu Electronic Metals Co. said it plans to increase output of 300mm wafers at its Nagasaki facility by 30,000 wafers/month by 2H05, according to the Nihon Keizai Shimbun. The 1.1 billion yen (roughly $10 million) expansion will boost overall production at its Nagasaki and Miyazaki facilities to 75,000 wafers/month.
:: JAPAN

Toshiba Corp. plans to transfer part of its power transistor business, including product development, design, and manufacturing and marketing of high-capacity power module products, to Mitsubishi Electric, according to Japanese wire reports. The operations consists of only a few percent of Toshiba's total discrete business. Toshiba will continue to supply high-voltage modules to its industrial and power systems and services business.
:: PORTUGAL

Infineon Technologies AG is set to open its newly expanded memory chip assembly and test facility in Porto, in which it has invested 230 million euros (about $277 million) in a second module at the site. Work began in late 2003, with full capacity of 600 million chips/year expected by mid-2006, double the current capacity and accommodating roughly 35%-40% of the company's global memory chip production. In March of this year the European Union approved 41.5 million euros (about $50 million) in aid for the expansion. In total, Infineon has spent about 560 million euros ($675 million) on the two modules at the site since 1996.
:: TAIWAN

Taiwan's semiconductor sector topped $7.11 billion in 1Q04, a 42.1% increase from 1Q03, according to a government report. Chip manufacturing was up 46.6% to $4.06 billion -- that includes contract production, which rose 42.5% year-on-year to $2.58 billion. Chip design ($1.71 billion) rose 38%, as did packaging ($990 million), while test rose 49.2% to $360 million. For all of 2004, Taiwan's semiconductor industry is projected to grow to a record $29.67 billion, up from $24.3 billion in 2003.
:: WaferNEWS FAB 50

Click here for a full listing of Fab 50 companies.

:: WaferNEWS Financials
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:: TESTING TESTING

:: RF Micro begins in-house packaging

RF Micro Devices Inc., Greensboro, NC, a provider of radio-frequency ICs, has established an assembly facility at its test and tape/reel operations in Beijing, China, to provide internal module packaging capabilities. The new capabilities, slated to be fully operational by the end of this year, provide the company's first guaranteed in-house assembly capacity -- all other capacity is sourced from assembly houses. It also will lower manufacturing costs and reduce cycle times to third-party suppliers, as well as provide proximity to handset production increasingly centered in Asia, the company stated.






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