New Dynamics Changing the Secondary Equipment Market


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New Dynamics Changing the Secondary Equipment Market

The worldwide economic slowdown, credit crisis, and new production strategies are having an enormous impact on the market for used, refurbished and remanufactured semiconductor equipment. The current market decline is contributing to an estimated 6000 used tools now on the global market, forcing price declines, yet further enabling new productivity solutions for 200 mm fabs. These were among the insights shared at the Used Equipment Business Seminar held at SEMICON Japan on December 6.

Gary Robertson from KLA-Tencor outlined the current environment for secondary equipment by describing the macro economic trends that are severely impacting the entire industry. Robertson noted how today’s global recession is reaching unprecedented proportions. In the United States, since 1945 the country has experienced ten recessions lasting from 6-16 months. The US current recession is now has been ongoing for one year and the end is not yet in sight. Every industry analyst has dramatically reduced their semiconductor revenue forecast and Capex forecasts remain grim for the next 6 months, with visibility extremely poor beyond that.

Gary Robertson, KLA-Tencor

The impact on 200 mm fabs and the secondary equipment market are profound. Many 200 mm fabs are closing--exiting the market through sale of the entire fab or offering bundled equipment sales—flooding the market with used tools of varying condition. Fabs are canceling equipment leases and returning equipment to finance companies. An estimated 6000 tools are now on the market—many in warehouses stored under improper conditions—and much of this inventory will never be sold. With the increase in supply, and the associated pressure to sell, the risk in secondary equipment purchasing is increasing. Many of the tools on the market are incomplete, harvested for spare parts, and improperly maintained. The majority of used equipment today, according to Robertson, is between 7-13 years old. Many have not been properly decommissioned and decontaminated, presenting further legal, environmental and health risks for purchasers, shipping companies, and installation and operations personnel.

Yet Robertson sees many 200 mm fabs adapt and thrive. Many of these fabs provide products for many of today’s still popular consumer electronic products. Many consumer electronics companies actively pursue an “N-2 strategy” (leading edge technology minus two generations) in managing their supply chains and sourcing devices. Production innovation is widespread in the 200 mm market, especially in analog chips, power management devices, image sensors, and new applications are emerging in biomedical, MEMS and other areas. Shrinks are still being made. “It’s a flat market with significant innovation,” says Robertson.

Used, refurbished, remanufactured, certified and other classes of secondary equipment remain essential to the production strategies for these 200 mm fabs. A recent survey by SEMI of top 200 mm fab managers indicated that secondary equipment was the number one source for productivity improvements in the future. While the total secondary market is growing, the most popular tool sets are still in short supply. According to Robertson, “the challenge for 200 mm fabs in the secondary market is to balance quality, cost, extensibility, and support.”

The significant opportunity for 200 mm fabs in “extensibility” was illustrated by Toshio Kato from Success International Corporation who demonstrated the role of secondary equipment in a “mix and match” environment in advanced LSI production. Kato explained the unique processing requirements for logic LSIs. Significant differences exist between DRAMS and logic in areas such as gate oxide (LSIs require extremely thin structures compared to DRAM) and wiring processes (logic can require 10 layer Cu and low-k ILD as opposed to DRAMS 3 layer aluminum).

Toshio Kato, Success International Corporation

Despite the added process complexities, used equipment can play a central role in transforming a 130 nm CMOS LSI line to one capable of producing 60nm and even 45 nm devices. In a step-by-step explanation, Kata concluded that 180 used tools, or 67% of the total tool set, can be used to produce 60 nm requiring 29 masks. In his example, 12 tools would need remanufacturing upgrade and 82 tools (30%) would require the latest technology only available on new tools. A similar result is possible to produce devices with more masks at 45 nm.

Kato discussed how some steps in the LSI manufacturing process, such as certain metal layers and N and P well implantation can be accomplished entirely with used equipment. Other layers requiring fine patterns will require new equipment, and several steps can be accomplished with a mix of new, used and remanufactured tools. Many of the production steps done in this 60 nm example can be accomplished with CMP, CVD, etch and wet processing equipment that are the most readily available in the used equipment market today.

Kato pointed out that to accomplish such as low capital cost solution would require detailed planning from the outset and significant design considerations, but his presentation clearly illustrated how many tools can span multiple generations of device technology. Many top suppliers like KLA-Tencor engineer their systems for with upgrade paths that can extend the life of tool well over 10 years.

Tim Hayden from Rite Track, the largest independent supplier to the mature track equipment market, stressed that risk management in the purchase of used and refurbished equipment has never been more important. Fab managers increasingly are looking to cost of ownership over the entire equipment life cycle and understand the often hidden OpEx costs in supporting legacy tools. As former president of SEC/N, the Secondary Equipment Market Consortium Network recently acquired by SEMI, he has a long history in promoting ethical behavior and respect for intellectual property rights in the secondary market.

Tim Hayden, Rite Track

SEC/N has been advancing industry education and information for over a decade. Among their accomplishments has been the creation of industry guidelines and definitions, and a code of conduct for the industry, necessary because of the nature of the secondary market. With the SEC/N acquisition, SEMI hopes to promote these accomplishments to a wider global audience, especially in Asia where much of the increased activity in the secondary market is centered. “SEC/N members have the in-depth knowledge on the secondary market and SEMI has the resources to bring to players together and to create guidelines and establish effective, global standards and guidelines,” said Hayden.

SEMI will establish a Special Interest Group for the secondary market and address other critical issues in 200/150 mm fab productivity. SEMI plans to advance the SEC/N Code of Business Conduct and secondary market guidelines, including SEMI International Standards, where appropriate. In addition, SEMI will providing platforms at SEMICON and other programs and conferences to promote global participation and best practices in 150 mm and 200 mm fab productivity.

To help in this effort, please join this Special Interest Group by writing us at productivity@semi.org