INDUSTRY NEWS

New head of silicon house foresees 5­19% rise in wafer reclaim prices

The financial benefits of the recent business upturn in the semiconductor industry are ready to trickle down to the wafer reclaim business, the new president of a silicon provider believes.

Robert Swor, president of TTI Silicon, thinks reclaim vendors will see some of the long green that their brethren in the rest of the semiconductor industry have been raking in. He foresees "a basic round of 5 to 19% increases on both test wafers and reclaim products." When he was promoted to his current post in September, Swor noted that reclaim prices "are one of the few areas that have not enjoyed the boom in the semiconductor industry."

At the time of Swor's promotion, TTI Silicon began expanding capacity by 50% at its plant in Vancouver, WA, in anticipation of increased business. The company leased an additional 10,000 sq ft of manufacturing space and has ordered additional polishing equipment and analytical tools such as parametric equipment and particle-testing gear. Since the initial expansion announcement, TTI has received another round of financing "to take capacity up another 33%," Swor says.

"Just with the doubling of capacity we ought to be able to get to 15­17% market share by the fourth quarter of 2001," Swor maintains, adding that TTI has approximately a 10% share now. TTI is active in three businesses: reclaim, virgin test wafers, and silicon brokerage. "We're the only company that does all three, probably in the world," says the executive.

TTI specializes in 6- and 8-in. wafers. Swor says the small, privately owned company doesn't see enough sales volume yet to justify moving into the 12-in. market. He thinks TTI will need at least two years before considering a move into 300-mm wafers. "It's slowly getting there. The phone rings every day with five to 10 calls for 300-mm wafers, but no one is asking for enough of them."

The 40-year industry veteran attributes the predicted run-up in reclaim prices to an unprecedented lack of 8-in. capacity. He notes that "almost no capacity was put in place in 2000. Up until recently there's been lots of 8-in. wafer capacity in the world. The semiconductor guys have been able to keep 8-in. prime wafer prices down, which keeps 8-in. test wafer prices down, and by extension that forces reclaim prices down. That has all started to change a bit."

Silicon providers have for years suffered from "terrible margins," Swor notes. A surprising aspect of the trend toward higher wafer prices is that TTI "didn't lose any customers" when the company announced its price increases. "For the most part they were accepted. Because we're a second-level [player], that fact is telling us that the big guys are starting to tell the semiconductor companies, 'maybe we're not going to give you as many test wafers.' "

Besides the cost savings, "the key in reclaim," as Swor puts it, is whether "you can provide a wafer that is as clean and as low in metals as a prime wafer. If you can do what the major reclaimers can do. . .you can penetrate. You can get in the door. You might have to knock two or three more times than [the competition.]" TTI is competing with several large Japanese and American silicon vendors, Swor explains.

"There are certain fabs and certain companies that still have an inherent distrust of reclaim wafers, mainly because of metals contamination," he notes. "I think that attitude is changing. The business is only 10 years old."

Asked for some ballpark figures on the higher wafer costs, Swor says 8-in. polished polysilicon wafers will probably sell for $45 to $90, test wafers for $45­$50, and reclaim wafers for $18­$22.

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