EDITOR'S PAGE

Economodeling

The terms maturity and maturation pop up more and more in discussions about the semiconductor industry. The chip world is getting older and somewhat wiser, as manufacturing process control techniques and overall productivity have drastically improved. One central theme has emerged in the last few years: economics has replaced technology as the industry's driving force. With age come responsibilities, and one of those duties is the need for a working economic model to accompany the ongoing technology roadmapping. Then equipment and materials suppliers and their customers can get a handle on, as Sematech's Frank Robertson puts it, "understanding the implications of the various paces of possible progress."

I spoke with the consortium's chief operating officer in late June after he returned from Korea and the first joint meeting of the International Sematech board and execs from many of the leading tool companies. One of the key agenda items was the introduction of an "industry economic model" that will help foster an understanding of how the costs of development and returns on investment affect both the equipment houses and their chipmaking counterparts, with an eye toward rapidly shifting industry trends and what propels improved productivity. Wafer process costs, device density, and speed of manufacturing ramps will be measured in order to analyze the cost per electronic function.

"The model deals with the projecting forward [of new applications] that will continue to drive expansion of the industry and that fuels all of our manufacturing investments and development costs," explains Robertson. "The bottom line is that we have to optimize that growth and productivity, and we are looking at industry trends and dynamics. From an overall perspective, the cost to improve productivity is included in the model such that you may be able to improve the density of your devices, but if it costs you too much to do so, you don't improve the cost per function."

The model is meant to provide an overall industry perspective, not replace or compete with the strategic plans of the companies themselves. "Certainly the individual business plans of [Sematech] member companies and suppliers are going to be generated on a much more detailed analysis of their own situations. We are not going to make collective decisions about those sorts of things, but rather try and understand the impacts and make sure the industry has a common understanding of those impacts."

In an effort to include all elements of the industry, Robertson says that "one of the outputs of the meeting was that we needed to incorporate the materials suppliers and some other key infrastructure into the discussion.... The [various] segments of the industry are certainly impacted differently by the [technology] acceleration and that is reflected in our economic modeling. What we haven't done yet is to resolve some of those differences to the point where we can really talk about them quantitatively. That's one of the major areas we're going to try and work on next."

Learning from the examples of older, more mature industries is one of the primary methods for developing the economic model, Robertson notes. "We are going to be benchmarking outside the semiconductor industry and looking at maturation... There are other models that we can look at, in particular the impact that foundries are having on the industry and analogous situations outside the industry to benchmark. Given that the foundries business is growing very quickly, and a number of semiconductor devicemakers' strategies include expanding their use of foundries, this is a way we might be able to smooth the large increments of capacity that even 200-mm but certainly 300-mm fabs will represent."

As the industry grows up, it's ironic and gratifying that Sematech, an organization originally created to "save" U.S. chipmakers, has matured into a unifying force for the global semiconductor community, using tools such as the economic model to help identify common causes and foster mutually beneficial efforts to advance the industry as a whole.

Tom Cheyney
Editor

tom.cheyney@cancom.com
http://www.micromagazine.com

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