INDUSTRY NEWS

Service-savvy suppliers cater to cost-conscious chip customers

The client's stepper sat idle, an exorbitant example of the dictum that time equals money. The DUV lithography system "had a very serious problem that kept the tool down," recalls Devon Kinkead of Extraction Systems. "We found [the problem], I'd say, in about a week and a half. It was a very insidious kind of problem, and without real-time data I bet we would have taken three months [to solve it].

"In fact," continues the company president and CEO, "I don't know how you would have found it. They might have had to just ship the tool back. It was a tiny internal leak, a few-parts-per-billion gas leak. It wasn't the gas per se that was especially the problem. It was some of the oils that the gas had come into contact with that were ultimately contaminating the process. By real-time monitoring and by deductively perusing the data we could systematically shrink the source zone down."

E-SERVICE: Eaton says Web-based Smart plan, left, delivers spare parts more economically than traditional stocking model, above. Images courtesy of Eaton Seo.

Working with the customer, Extraction was able to reduce the extent of the contamination "by a factor of five concentration within 12 hours." A goldbricking DUV lithography tool can burn money at a rate of up to $150,000 per hour, according to Extraction's estimate. "For one particular tool at 150 grand an hour, that's a big chunk of revenues," Kinkead points out.

The fact that Extraction's pilot-line chipmaking client didn't need to crate the system off to its maker is a testimonial, Kinkead would say, to the effectiveness of the vendor's new Minimal Investment Program (MIP). For a fixed price, Extraction Systems offers customers turnkey technological services for solving airborne molecular contamination problems in DUV lithography systems using chemically amplified photoresists.

ON TRACK: Interface enables Eaton clients to custom manage inventory over secure Web site.

The program is just one example among several recent ones of suppliers and service providers offering new or enhanced services that help their clients reduce production costs, allowing them, in the now-popular phrase, to focus on their core competency.

Eaton's Semiconductor Equipment Operations and Praxair are two more equipment or materials manufacturers that have either enhanced existing customer-service offerings or established new ones. Eaton recently put its four-year-old spares management and replenishment tracking, or Smart, program on the World Wide Web, and Praxair has signed agreements with three companies to extend its Point One program. When it began in June 1998, the program offered a single point of service for gas and chemical distribution systems and related equipment. The enhanced services encompass air handling, cleanroom systems, mechanical construction, and ultrapure materials fabrication.

'The days of replacing filters were quickly coming to an end.' —Devon Kinkead, Extraction Systems

Keeping clients' costs down is one of the reasons the Eaton unit, which manufactures ion implanters and other process tools, started its program four years ago, says Marcia Rabb, marketing manager. "With the Web the first advantage is that we can roll out [the program] worldwide. That was something that was not an option before."

Rabb says Eaton has "built a virtual warehouse" with several "transaction screens" on its Web site. The site's customized inventory management system tracks use of consumable parts at a client's facility to make sure that supplies arrive at the precise moment they're needed. The consumables, she adds, include "everything that touches the beam and the implanter. We're providing OEM-quality consumables that are there at the time a technician is going to do a scheduled maintenance."

Average savings are 2% per month, extrapolated to 24% annually. Transaction costs are reduced as well. At the end of the year each client receives a complete report of all the parts it used for each tool and their exact utilization dates. Motorola has been using the Smart program at its MOS 3 fab in Austin, TX. Barry Chambers, the equipment section manager, says the chipmaker has "experienced a reduction in inventory carrying costs, transaction costs, and lead times."

Eaton began beta tests for the Smart program in late 1998. Since then, Rabb says the program has been placed in approximately 20% of the fabs in the United States. Eaton hopes to snare more international customers with its new Web-based model. The enhanced model enables customers to "track the actual cost of consumables by a tool" so they can determine "where they're spending their money. Now, we've set everything up so customers can look at it on the screen, print it to a browser, or actually download it into a spreadsheet to analyze it." Improvements to the service include a simplified method for retrieving status reports, Rabb adds.

Praxair recently joined with Daw Technologies, Dynamic Systems, and ISinc to expand its Point One fab integration services. Daw builds cleanrooms and related clean manufacturing environments, supplying air-handling systems, ceilings, and flooring. Dynamic is a turnkey mechanical construction company specializing in ultra-high-purity environments, and ISinc specializes in the design of construction packages using advanced modeling and space-management tools.

The partnership frees semiconductor manufacturers from having to juggle the schedules of numerous independently operating suppliers when the chipmaker is developing a new fab, asserts Mark McClear, Praxair's worldwide marketing director. "When you're building a billion-dollar fab you may have five, six, or seven project managers on site—one for piping, one for electrical, one for gas, one for chemical and water, and on and on. These guys are all competing for space, they're competing for resources and even for labor in some of these local markets that are even more remote. Under one corporate umbrella you eliminate that competition and people running into one another and the inefficiencies that causes." Eliminating these inefficiencies can save clients 5% to 10% on overall fab construction, McClear estimates.

A program offering a single point of contact such as Point One has a positive impact on yields, the executive claims. He uses two scenarios to illustrate this point. "Let's say in the old scenario 10 years ago the gas company would sell you a bottled gas, guarantee its specs, and say, 'Thank you very much.' In 1999 with Point One and Praxair we sell you the gas. We also manufacture the gas cabinets that the gas goes into. We also have the site service technician to do the hook-up and purging of the cylinder." With the partners pitching in, the fab integration concept entails bottling, transportation, and connecting the piping "to the actual Applied Materials or Lam Research tool. . . ."

Essentially, the fab integration concept is a natural yield-enhancement service, McClear says. The site team remaining behind is responsible for maintaining proper operations. "We just don't come into a place, put a pipe in, certify the line with an analyzer, and leave." The site team conducts "ongoing preventive maintenance to make sure that contamination problems are taken care of."

Adds McClear: "We're not coming at this from just a gas perspective, we're coming at it from a more holistic perspective."

Opinions vary on whether these offerings represent the beginnings of a trend driven by the downturn in the semiconductor industry. McClear is in the yes column. "Yes, I do," he says. "I think that customers are looking for cost reductions. We put this together to step up and take a leadership role."

Rabb believes the industry's poor condition is less of a factor driving Eaton's reasons than chipmakers' typical need to keep a lid on production expenses. "You're definitely right on target whenever you talk about reducing costs. Because of rising costs in general and then the practical costs, there is definitely a very big movement to drive down costs at every opportunity. That's one of the reasons that we did start the program about four years ago."

"I think the trend in general is toward consolidation," asserts Kinkead. He later adds, "On the surface that seems like a reasonable argument. The problem we have seen, and one reason why we're growing so rapidly and been gaining market share, is that this really is an area that lives outside the core competency of a track or scanner or stepper manufacturer. Their core competency is in optics." Likewise, "the track people are really magnificent mechanical engineers.

"The way you leverage costs in the marketplace is to combine these technologies," notes the executive, who credits an "epiphany" that caused the brain trust at the Massachusetts-based firm to rethink its business strategy. "The first thing that caused the strategic change in our thought processes was when our R&D director showed us some data on our next-generation filtration system." Kinkead notes that Extraction Systems "never had much business in replacement filters, because we've always had the longest-life filters in the market."

So here comes the research head with data that point to one unavoidable fact, Kinkead recalls wryly. "The days of replacing filters were quickly coming to an end, which caused us to pause a moment and contemplate our business model. Most filter companies, if they view themselves critically from a business perspective, have a recurring revenue stream that provides some fundamentally financial basis for the business. When your technology director walks in and says, 'I'm going to put an end to all that,' it causes you to rethink your strategy."

Using insurance company actuarial tables, the company took the second step in this wrenching process. It began when Extraction Systems "began to develop the cost algorithm associated with this new technology. As we did comparative cost-of-ownership models [we found] there was really quite a bit of leverage we could gain on our competition. . . ." It didn't escape the attention of Kinkead and others at the company that "at the time of the program the marketplace was pretty much scraping bottom.

"All of these pieces kind of came together, from all respects, when we looked at the data from the technological to the financial to the market," he continues. "As customers' staffs got tighter the idea of 'here-I'll-pay-you-a-certain-amount-of-money-you-just-handle-this-for-me' also factored into this."

The system has worked so well that a kind of mission-creep, in military parlance, has occurred in some instances. "The customer can pull us into areas that are really outside of our contract," Kinkead says. "I know for a fact on a certain situation I was almost feeling I was contracted to repair a stepper."

Extraction's MIP program can save a chipmaker $954,000 over three years on a typical 10-unit DUV module, according to Kinkead. "The way you guarantee that the customer realizes that cost benefit is through this sort of minimal investment program."

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