Already at a low ebb, the semiconductor industry is worried about the long-term effects of reduced efforts to shift from 8-inch to 12 inch, 300m wafers. Although semiconductor companies have already spent some $4bn on the transition from 8 inch or 200mm wafers to 12 inch, the industry slump has seen vendors delaying further investments due to a lack of demand, according to a report in Semiconductor Business News. The move is most immediately evident at the semiconductor equipment manufacturer level. Last Friday’s warning of a third quarter downturn by Applied Materials Inc didn’t help (CI No 3,450). Santa Clara- based Applied, which ranks as the biggest supplier of wafer fabrication equipment in the world, said that delays in orders from chip manufacturing clients had been more severe than originally anticipated. Alongside the 20% fall in third quarter revenues to $850m, the company said orders in the pipeline were down as low as $600m to $675m, so things are getting worse not better. The company blamed its predicament on the three most common scapegoats: Asia; the collapse of DRAM prices; and a lack of demand for personal computers. The announcement didn’t get this week’s Semicon/West show in San Francisco off to the best of starts. The report claimed that Austin, Texas-based semiconductor consortium Sematech was organizing an emergency meeting at the event to discuss the issues. Meanwhile, evidence at the show suggesting the economic crisis was actually spurring on such developments as copper interconnects and moves to 0.15 or 0.13 micron processes, in an effort to squeeze more life out of existing wafer fabrication plants. Applied Materials demonstrated its next-generation aluminum and copper interconnect technology designed for the production of gigaherz and gigabit rated devices, while its competitor, Novellus Systems Inc, signed a licensing agreement with IBM Corp for copper interconnect technology. Intel Corp, NEC Corp and others are investing in 300mm-capable plants, but these aren’t expected to move into production until 2002. Some Sematech members had originally indicated that they would begin ordering 300mm equipment from late 1999, but are unlikely to do so unless enough testing tools become available in time.
