200mm Cools Off, But Not For Long

After years of acute shortages, 200mm fab capacity is finally loosening up, but the supply/demand picture could soon change with several challenges on the horizon.

200mm fabs are older facilities with more mature processes, although they still churn out a multitude of today’s critical chips, such as analog, MEMS, RF and others. From 2016 to 2018, booming demand for these and other chips caused severe shortages for both 200mm fab capacity and equipment in the market.

In the first half of 2019, the 200mm market cooled off amid a slowdown in the IC industry, trade disputes and other factors. On average, 200mm fab utilization rates hover around 75% to 85% today, compared to more than 90% last year, according to figures from SurplusGlobal, a supplier of secondary equipment. Some but not all foundry vendors have already seen their 200mm businesses bounce back—-they are running at 100% fab utilization rates.

At some point in the future, demand for 200mm fab capacity is expected to rebound, meaning device makers and foundry customers once again will scramble for capacity as in past years. And the industry will face the same problem to meet demand because there is still a shortfall of 200mm fab equipment in the market.

But finding 200mm equipment could become even more difficult over time. Today, some silicon carbide (SiC) device makers are in the early stages of migrating from 150mm (6-inch) to 200mm (8-inch) fabs. As a result, some SiC device makers will also need 200mm equipment, meaning that there will be more IC vendors scrambling to obtain 200mm gear.

Based on the latest forecast, the industry requires more than 1,000 new or refurbished 200mm tools or “cores” to meet current fab demand, according to SurplusGlobal. Today, there are less than 500 available 200mm tools on the market, according to the company. The term core refers to a piece of used equipment that must be refurbished to make it usable.

To make matters worse, many of the available 200mm systems in the market are sub-standard. “Many of those won’t even match current configurations or technology needs,” said Emerald Greig, executive vice president for the Americas & Europe at SurplusGlobal. In comparison, the 300mm market is also slow, but there is an excess of 300mm tools in the arena.

Then, if you find a new 200mm tool, prices are relatively high. “Most OEMs resumed 200mm tool manufacturing and are enjoying this market. The tool prices are similar to the 2005 level. However, the current ASPs are much lower than those of 2015,” added Bruce Kim, chief executive of SurplusGlobal.

Nonetheless, the 200mm market, which includes both fabs and equipment, will remain a viable business for some time. To address current and future 200mm demand, several foundry vendors are building new 200mm capacity. In addition, a number of equipment makers continue to build new 200mm tools for traditional CMOS applications. Some are developing 200mm systems for SiC devices.

200mm trends
The IC market is divided into several segments. At the leading edge, chipmakers are ramping up devices at the 16nm/14nm node and beyond in 300mm fabs. In 300mm fabs, chipmakers also produce chips in more mature processes.

Analog, MEMS, power semiconductors, RF and others are produced with mature processes within 200mm fabs. The mainstream wafer size for SiC devices is 150mm.

So not all chips require advanced nodes. “A lot of the devices that we use today don’t require sophisticated processes,” said Subodh Kulkarni, president and chief executive of CyberOptics. “The chips that need sophisticated processes are the latest GPUs, CPUs and memory. The majority of the world still needs generic semiconductors, and that’s not going to disappear.”

Over time, meanwhile, 200mm has become a big business in the IC industry. The first 200mm fab appeared in 1990, and the wafer size became the standard for years. Then, in the 2000s, chipmakers migrated to more advanced 300mm fabs. By 2007, 200mm reached its peak and the market declined.

In late 2015, the industry saw an unexpected demand for chips made in 200mm fabs. Since then, the 200mm market has surged and become a sweet spot for many devices. Robust demand for chips in automotive, IoT and wireless is expected to drive the production of 200mm wafers by 16% from 2019 to 2022, according to SEMI.

A typical 200mm fab produces about 40,000 wafer starts per month. These plants make wafers at various nodes, ranging from 6 microns to 65nm. In comparison, a leading-edge 300mm fab is ramping up 7nm with 5nm in R&D.

In total, the number of 200mm fabs in production is expected to increase from 188 in 2016 to 208 by 2021 and 209 by 2022, according to Christian Gregor Dieseldorff, an analyst at SEMI. The figures include integrated device manufacturers (IDMs), foundries and epitaxial wafer lines.

Fig. 1: Total number of 200mm fabs Source: SEMI/Semiconductor Engineering

“We currently have twelve 200mm facilities on our radar, including R&D and epi, which will start construction in 2019 or later,” Dieseldorff said. “Five of those are in the U.S., four are in China, two are in Europe, and one is in Taiwan.”

For years, foundry vendors have offered 200mm fab capacity for customers. GlobalFoundries, Samsung, SkyWater, SMIC, TowerJazz, TSMC, UMC and others offer various capacities and processes in the traditional 200mm CMOS-based market.

In recent times, several foundry vendors have expanded their 200mm capacities. But after a period of sizzling demand, the 200mm market slowed in the first part of 2019. Lackluster chip demand and trade disputes contributed to the woes.

Going forward, there are signs of a rebound. “The slowdown of 8-inch demand should be a short-term issue due to the ongoing inventory correction from the consumer and automotive segments. The trade war uncertainty has also clouded our visibility,” said Steven Liu, senior vice president of marketing at UMC. “However, we expect Q2 to be the trough, with some improvement coming in the second half.”

Tracking 200mm fab capacity is complex and involves several variables. First, supply and demand are closely tied to the IC business cycles. Layered on top of that is a migration factor. Some chip types will continue to be produced in 200mm fabs for the foreseeable future. Still other chips are migrating from 200mm to 300mm plants.

“Several applications enjoy a sweet spot in 200mm manufacturing, mainly discretes, MEMS and PMICs,” Liu said. “Some products will benefit from the migration to 300mm wafers, such as MCUs and gradually large- display driver ICs.”

Foundry vendors would like to move as many chips from 200mm to 300mm fabs as possible. Generally, the industry has an excess of 300mm capacity and equipment.

That may play a role in whether a vendor moves ahead with a planned 200mm fab, or builds a 300mm facility instead. “In China, there are still planned 200mm fabs as well as planned 300mm fabs,” SurplusGlobal’s Greig said. “Some companies may decide to bring up a 300mm fab based on tool availability. There is currently an excess supply of 300mm equipment, making this a buyers’ market.”

Where to buy 200mm tools
At some point, meanwhile, IDMs and foundries will expand their 200mm capacities. So where can you buy 200mm equipment?

Chipmakers can buy new or refurbished 200mm gear from equipment makers, used/refurbished equipment companies, brokers, and through online sites such as eBay. Some chipmakers also sell used equipment on the open market.

Not all 200mm tools are alike, however. Some offer new tools, while others refurbish existing ones. There are even cases of firms that sell systems that are sub-standard or simply don’t work.

In all cases, buyers should examine the equipment in person. The tool may still incorporate antiquated components and software. Some will sell the tool “as is” with no service agreement.

One of the first places to look for 200mm gear is from the fab equipment makers. Recently, Applied Materials, KLA, Lam and others have been making new 200mm tools. Generally, the equipment from the original OEMs incorporates the latest components, but they also carry a premium.

The secondary or used equipment companies are another source. Some specialize in one tool type, while others sell a range of systems. A few make their own tools.

Dissecting the market
The equipment market is split into different sectors, such as lithography, deposition, etch and inspection. The equipment in each sector may be targeted for a different market.

Lithography, the art of patterning the tiny feature sizes on wafers, is sometimes the most difficult 200mm tool to procure in the market. “We see some slowdown worldwide. But in general, there is a shortage of 200mm photolithography tools, so demand is still there,” said Stuart Pinkney, vice president of sales for Europe and the U.S. at Nikon, a supplier of lithography equipment. “Lead times on the newer tools are unfortunately stretching. This is more of a function of the product mix situation in our factory.”

Supplies of older 200mm lithography tools are drying up. “Tools that do become available generally need a lot of work. They have may have been harvested by previous owners and are generally not in good shape,” Pinkney said.

Several companies make and sell 200mm deposition and etch equipment. Deposition involves putting thin films on surfaces. Etch tools remove materials.

Many suppliers of these tools continue to build new 200mm systems for several applications. “You have RF devices and power management ICs. These are built traditionally on 200mm-type applications,” said Patrick Martin, business development manager at Applied Materials, a supplier of deposition, etch and other equipment. “What we are trying to address is what we traditionally call a core market. These are core tools that sell in 200mm. It’s a market that we’ve maintained, and it is addressed in a different way.”

Demand remains strong for these systems. “From a total market perspective, the demand for 200mm equipment is certainly outstripping availability,” said David Haynes, senior director of strategic marketing for Lam Research, a provider of deposition and etch systems.

Lam develops 200mm tools for several markets. “Lam has a proactive approach to acquiring 200mm cores for refurbishment and thus we are able to meet customer requirements when others cannot,” Haynes said. “At the same time, Lam has never stopped manufacturing most of our 200mm products and so has maintained the supply chain and infrastructure to build new tools when required.”

Others see demand for different applications. “Our first-half demand was good for 200mm and smaller wafer sizes, notably on wide bandgap semiconductors for high-performance power devices,” said Kevin Crofton, president of SPTS Technologies and executive vice president at Orbotech. “For the second half, we are seeing a pick-up in all sectors, in particular, RF power amplifiers and filtering for 5G infrastructure, which are 200mm and 150mm wafer activities.”

Recently, KLA completed its previously announced acquisition of SPTS/Orbotech. SPTS offers 200mm deposition and etch tools. “We never stopped building new process equipment for 200mm and smaller wafer sizes,” Crofton said. “MEMS, RF, photonics and power semis are made on silicon and other substrates based on 200mm, 150mm and 100mm.”

Inspection and metrology, meanwhile, also are critical in 200mm fabs. Inspection equipment finds defects in chips, while metrology is used to measure structures.

“We’ve seen a bit of a lull in the first half of the year, but we’re definitely witnessing a bounce back, even from large IDMs, who are expanding their 200mm lines to serve growth in IoT and automotive,” said Wilbert Odisho, vice president and general manager at KLA, a provider of inspection and metrology gear.

“Many equipment companies are finding it difficult buying back tools to refurbish, but a majority of KLA’s systems shipped this year will be newly built relaunched systems,” Odisho said. “Supplementing our refurbished business with relaunched systems reduces our dependency on the availability of old tools.”

Meanwhile, CyberOptics sells measurement devices and sensors, which are subsystems that are integrated into various fab tools at 150mm, 200mm and 300mm wafers sizes. “Semiconductor fabs, whether 200mm or 300mm, need effective tool set-up and maintenance methods that are accurate, precise and fast in order to speed up equipment qualification, minimize costly maintenance downtimes, and ultimately improve yields,” CyberOptics’ Kulkarni said.

What about SiC?
Equipment vendors face some challenges in meeting demand for the traditional 200mm customer base. Now, some SiC device makers are making the transition to 200mm fabs, thereby presenting some new challenges for tool vendors.

SiC, a compound semiconductor material based on silicon and carbon, is used to make specialized power semiconductors for high-voltage applications, such as electric vehicles, power supplies and solar inverters.

The shift toward 200mm fabs is aimed at reducing the cost of SiC-based power semiconductor devices. When moving to a new wafer size, you get 2.2X more die per wafer. A larger wafer size reduces the production costs.

Cree plans to invest up to $1 billion to increase its SiC fab and wafer capacities. As part of the plan, Cree is developing the world’s first 200mm SiC fab.

“Cree will turn its existing North Fab facility into a fully automotive-certified 200mm line,” said Cengiz Balkas, senior vice president and general manager of Wolfspeed, a Cree Company. “The investment leverages an existing building and state-of the-art, mostly refurbished 200mm equipment to build out the production facility.”

Rohm also is working on 200mm SiC fabs. At the earliest, 200mm SiC fabs won’t move into production until 2022, according to IHS, so 150mm will remain the mainstream SiC wafer size for some time.

Nonetheless, as with any wafer size change, both device and equipment makers face some challenges. It may require new types of equipment. “Cree uses highly specialized tools that are custom-designed and built internally and specific to our proprietary processes in our wafer materials business,” Balkas said. “Our device fabrication lines will use industry-standard tools.”

Based on past events, the transition from 150mm to 200mm won’t be easy. Most SiC device vendors struggled to make the recent transition from 100mm to 150mm fabs amid defect issues in the arena.

“Although a few suppliers have demonstrated 200mm SiC wafers with low defect density, there is a shortage of 150mm SiC wafers with low defect density. So the current investments are targeting 150mm SiC wafers,” said Ajit Paranjpe, CTO at Veeco. “Thus, it is unlikely that we will see 200mm SiC in high-volume production in the near future. Once the 150mm SiC wafer shortage has been addressed, a gradual transition to 200mm SiC wafers could occur.”

SiC is a challenging technology. In the production flow, high-purity SiC materials are lowered into a crucible and heated. This, in turn, creates an ingot, which is then pulled and sliced into SiC substrates. Then, a thin epitaxial layer is grown on the substrate using a deposition process. The resulting substrate is then processed in the fab to make a power device.

It’s challenging to make 150mm SiC substrates with low defectivity. The challenges escalate at 200mm. “The bottleneck for 200mm SiC primarily is the wafer growth and SiC epi growth,” Paranjpe said. “The other steps can be performed using existing 200mm processing capability, although fabs may have to invest to upgrade from 150mm to 200mm.”

Today, the SiC industry is working on the 200mm challenges. “200mm SiC production inevitably will become important in driving economies of scale as product volumes ramp,” Lam’s Haynes said. “Today, there are still challenges around wafer availability, cost and defect density, but suppliers and end users are working hard to overcome these barriers.”

Some 200mm tools for traditional CMOS applications can be repurposed to meet the requirements for SiC. “But this often requires process optimization and changes to the wafer transport systems because SiC is transparent to common IR sensing beams,” Haynes said. “In other cases, the unique properties of SiC means that new process capabilities need to be developed at 200mm.”

Others see similar issues. “The equipment we have installed for 100mm and 150mm can be upgraded to 200mm,” SPTS’ Crofton said. “For process equipment vendors who mainly serve the CMOS front-end, 200mm equipment cannot be simply transferred to wide bandgap semiconductors; there are important differences. GaN, for instance, is very sensitive to plasma damage and new processes and hardware need to be developed.”

Inspection tools are also key. Finding defects is difficult on 150mm SiC devices. 200mm will present some new challenges. “We’re starting to see requirements for 200mm-capable SiC systems,” KLA’s Odisho said. “Since SiC requirements are often different from those of standard semi tools, upgrades or new 200mm tools will be required.”

Clearly, 200mm is a vibrant market. It’s not as glamorous as leading-edge processes, but 200mm will remain a good business. The big question is whether vendors can keep up during the boom cycles. That makes it critical is to continue investing during downturns.

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