Ed’s Threads 080111Musings by Ed Korczynski on January 11, 2008
Flood of used 200mm tools
Semico Research, working with affiliated Semiconductor Partners
, has released a new study of the near-term forecast for used 200mm wafer processing tools soon to flood the market. In addition to identifying companies that are likely to either purchase or sell a fab and their expansion or divestiture plans, this study includes five-year device forecasts by technology node and detailed wafer demand. The market for used equipment is expected to grow from $300 million in 2007 to more than $8 billion in 2009.
"As leading edge digital memory and logic manufacturers build 300mm fabs for process technologies of 65nm or less, this will obsolete their 200mm fabs at 130nm or 90nm and some of their 300mm fans at 90nm. Analog and mixed signal manufacturers will have a need for these fabs to meet for expansion to satisfy the growing analog, mixed signal, and RF markets," explained Morry Marshall, Partner, Strategic Technologies at Semiconductor Partners.
The number of used tools forecasted in this study may be estimated by considering the average selling prices (ASP), and this varies widely depending upon tool categories. Tom Cheyney’s well written recent ChipShots blog
mentions the standard 10%-20% cost of new tools, which certainly has been the historic average. Unfortunately, we’re entering into a new era where the lessons from history may not hold.
The upper limit of used tool sales prices comes from unique specialty process tools, needed to expand capacity on existing lines, which are no longer sold new. Like a legendary musical instrument (e.g., Fender Stratocaster pre-CBS
electric guitar, or Selmer Mark VI
saxophone) with only so many made, any still working are highly functional, and if you’ve built your business using them you’re willing to pay a premium price to keep using them. In the last year, I have heard of rebuilt 150mm tools with warranties selling for >$1.5M. In some cases this could be >200% of what had been the new sales price.
The lower limit of used tool sales prices comes from mainstream memory and logic fabs lacking uniqueness in the toolset. Since the used-tool ASPs are primarily determined by the supply/demand balance, a supply glut can lead to what-the-market-will-bear prices below 10% of new. If a seller tries to hold out for a more "reasonable" price only to find no takers, the line has to be shutdown and sold "as is" for even less money.
A working fab is a proven thing. There is risk in shutting down, decontaminating, shipping, and re-setting up a line, but at least if you start with a working line you have some baseline reference. A shuttered fab is full of extra risk. Every process chamber must be re-checked and proven; every gas line feeding every tool is now suspect. How much is a shuttered line worth? About two years ago I spoke with the general manager of a Chinese fab about used 200mm toolsets and supply and demand. He told me that he’s routinely approached by people wanting to sell lines for ~US$50M, and he tells them to not bother him until the price drops to $25M.
So who might be buying used 200mm lines? The Semico report mentions the general truism that, "Production of some device types, such as discretes or MCUs, will not move forward appreciably to more advanced technology nodes." MEMS and discrete chips have been produced in recent years primarily on 150mm silicon wafers, but STMicroelectronics
now like 200mm silicon wafers for dedicated MEMS production. MCUs for appliances, automotives, and general industrial applications may be industry entry points for new IC fab companies based on China (and eventually India, after infrastructure issues are eventually resolved
). Philips likes 200mm for integrated passives and MEMS for advanced packaging, primarily through "PASSI" branded passives integration
. So there is certainly demand. But the lingering impression is that it won’t keep up with the supply glut, and it will be a classic "buyer’s market."
A recent example of this dynamic is Atmel's sale of the 200mm tools
in its North Tynesides, UK fab last year. Atmel originally tried to sell the entire facility to a company that would keep the line running in the UK. Leading broker of fabs Colliers ATREG was retained to try to make a deal happen
with the constraint that there was "no opportunity to acquire the tools separately." At the end, TSMC bought the tools only for $82M, with expectation that they will add capacity in Shanghai, China
The Semico report forecasts the value of available used equipment for the next four years (2008-2012) to be $5.4B, $8.2B, $6.5B, and $3.9B, for a total of $24B in value. For ASPs of ~15% of new prices, the corresponding equivalent in new tool sales value would be $160B. A rough guesstimate from these numbers would seem to imply >100 fabs with ~20k wspm at 0.13-0.25μm minimum linewidth capacity will flood the market over the next four years. For relative scale, with the SEMI Silicon Manufacturers’ Group forecasting ~10B square inches of silicon being processed for semiconductors each year
, this translates into >800 fully loaded fabs globally running wafers in 200mm-equivalents.
With 20-40 extra fabs for sale each year, it seems certain that used tool ASPs will have to drop and the revenues to sellers and brokers may not be as high as forecast. Regardless of ultimate pricing, all of these tools under consideration are highly productive (most are still currently cranking out production) and most will eventually find a home.
The industry may be able to use most of these tools to manufacture MEMS, discrete devices, integrated passives, and silicon interposers. If a used 200mm tool glut floods over to mainstream CMOS, however, then it could permanently disrupt global pricing for MCUs and other logic ICs.
Labels: 200mm, fab, flood, forecast, semiconductor, used equipment
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080111: Flood of used 200mm tools