Opportunity and challenge in China semi inspection and metrology

Tag : Hand Tool Bits


With China being one of the key hubs for semiconductor productionand key market for semiconductor sales, leading process control andyield management tool supplier KLA-Tencor believes the businesspotential from corresponding inspection and metrology tools isguaranteed. While seeing substantial business opportunities in theregion, the equipment vendor also identified some challenges inestablishing a foothold in China.
Digitimes recently had the opportunity to talk with company Chinapresident Su Hua to share his comments about the equipment marketin China.
Q: Can you talk about the equipment market for inspection andmetrology in China?
A: Demand for IC inspection and metrology will have consistent growthalongside with process node shrinks, as growing challenges fromimmersion lithography and double patterning require more inspectionand metrology tools. Also, when wafer size migrate from 8- to12-inch, or even 18-inches, the larger wafer sizes imply growingcomplexity.
China-based foundries are also catching up in terms of technologyadvancement. Foundries are gradually moving logic IC productionfrom 90nm to 65nm or 45nm, and a Wuxi-based vendor is also movingmemory production to 50nm. Advancement among these players in bothlogic and memory ICs signifies that advanced technology is comingto China. We regard this as a positive signal for the IC inspectionand metrology tool industry.
With semiconductor makers facing increased challenges as productionbecomes more complex, yield is the very first issue that has to beaddressed, especially when the market cycles are becoming moregeared toward consumer electronics products. For example, pricecompetition in the DRAM industry is severe, so the result is thatthere is a competition among vendors for yield enhancement. But forDRAM, detecting defects is like flying over the Great Wall andtrying to spot a coin on it.
So, while most first-tier foundries generally accept the concept of"yield enables success", they still must spendconsiderable efforts to enhance their product yields. What's nextfor the market, is for the manufactureures and equipment vendors tocreate a mutually beneficial value system whereby all parties canachieve a win-win situation for a positive return on capitalexpenditure (capex).
Q: What do you think about the China semiconductor market? And canyou tell the difference between the markets in China and Taiwan?
A: The leading role that Taiwan players has in the foundry businessis unquestioned and I believe the region's competitive edge will bemaintained.
In terms of the end-user market, the China market is huge, with amajority of demand stemming from the consumer electronics segment.Despite the consumer electronics market in China outpacing growthin other regions, the self-sufficiency rate for IC production inChina is lacking. And with demand growing at a fast pace, this gapwill enlarge in the near future, which is one of the reasonsprompting me to believe that the China market will deliversubstantial growth in the longer term as producers looks to shrinkthis gap .
Secondly, the China government is supportive concerningsemiconductor production. Amid such an encouraging environment,local vendors such as Semiconductor Manufacturing InternationalCorporation (SMIC) have developed a new business model that is rarein Taiwan. [Editors' note: SMIC has partnerships with provincial governmentsin China for fab operation but the fabs are owned on behalf ofthese provincial governments.]
Of course, the China semiconductor market is also exposed to somechallenges that some other regions do not have. China-based ICdesign houses are still in their start-up stage with the entiresupply chain needed to be strengthened in terms of integrity anddensity. For an equipment vendor, having customers spread across abig country implies more resources are required for logistics,customs and technology support. All these factors increase thedifficulties of operation.
Q: Leading semiconductor equipment vendors such as Applied Materialsand Tokyo Electron (TEL) have announced their extended presence tothe photovoltaic (PV) sector. Does KLA-Tencor have similar plan?
A: The PV industry has attracted much investment from semiconductorcompanies. As most industry players think the semiconductor marketis mature and will only have single digit production value growthin 2008, the PV industry offers larger potential growth.
KLA-Tencor does not yet have an official presence in the PVindustry. While our acquisition of Belgium-based company ICOSVision Systems, which mainly focuses on packaging and interconnectinspection solutions, on the one hand marks a consistent verticalintegration for our business. It should be noted that ICOS also hassolutions for inspection of PV solar technologies.