Demand Picks Up For 200mm

Demand is growing for both 200mm fab capacity and equipment, setting the stage for possible shortages in coming months.

But there are also some uncertainties, if not warning signs, in the 200mm market and the entire IC industry. Trade disputes, as well as the current coronavirus outbreak in China, likely will impact the chip and equipment markets. The size of the impact and the duration remains unclear for now.

Nonetheless, for years the 200mm market has been a sizeable business for chipmakers and equipment vendors alike. 200mm fabs are older facilities that process chips at mature nodes, which range from 350nm to 90nm. In total, there are more than 200 fabs worldwide that produce chips using 200mm (8-inch) diameter wafers. Today, China has several new 200mm fab projects on the drawing board.

More advanced chips are produced in fabs using larger 300mm (12-inch) wafer sizes. Many chipmakers also manufacture devices in 300mm fabs using mature processes at 65nm and above. The decision to produce a chip in a 200mm or 300mm fab depends on the device type and process.

Today, demand for 200mm fab capacity is a mixed picture. One way to quantify demand is by looking at fab utilization rates. On average, 200mm fab utilization rates at the foundries range from 80% to 100% today, depending on the company, according to estimates from SurplusGlobal, a supplier of secondary equipment. Meanwhile, 200mm fab utilization rates at the integrated device manufacturers (IDMs) range from 50% to 100%, according to SurplusGlobal. IDMs produce devices in their own fabs and sell them under their own brand names.

Demand for 200mm fab capacity is especially strong at the foundries in China, Taiwan and elsewhere. “Most 8-inch foundry fab utilization is over 90%,” said Bruce Kim, chief executive of SurplusGlobal. “We see very strong demand in the second half.”

In response, foundry vendors are building new 200mm capacity. The problem is an ongoing shortage of 200mm equipment. Today, the industry requires more than 2,000 to 3,000 new or refurbished 200mm tools or “cores” to meet 200mm fab demand, but there are less than 500 available, according to SurplusGlobal. The term core refers to a piece of used equipment that must be refurbished to make it usable.

Lam Research, TEL, Applied Materials and other equipment vendors have been building new 200mm tools to meet demand. Additionally, China-based equipment vendors are developing 200mm tools. Secondary or used equipment vendors also sell 200mm gear. Generally, though, capable 200mm equipment is hard to find and is expensive.

Fig. 1: Growth in the number of 200mm fabs. Source: SEMI

200mm boom
In the semiconductor production flow, a silicon wafer maker develops a wafer based on various diameter sizes, such as 150mm, 200mm and 300mm. The wafers are sold to chipmakers, which process them into chips in a fab.

At the leading edge, chipmakers are ramping up devices at the 16nm/14nm node and below in advanced 300mm fabs. In 300mm fabs, chipmakers also produce devices in several mature segments above 16nm/14nm, which are targeted for automotive, IoT and wireless.

Both segments are viable for different reasons. “Faster transistors are needed to make faster and lower power chips that have more transistors per dollar, said Aki Fujimura, chief executive of D2S. “Today, for IoT, lower cost with good-enough performance and integration wins over more and higher compute density.”

The demand picture varies by process nodes. For example, TSMC is experiencing strong demand with tight supply at 7nm, which is the most advanced process in production today. In contrast, there is an oversupply at 28nm.

Not all chips require 300mm fabs. Analog, MEMS, power semiconductors, RF and other chips are produced in fabs with wafer sizes at 200mm and smaller.

“Not all chips require state-of-the-art advanced devices,” said Douglas Guerrero, senior technologist at Brewer Science. “There is a growing need for everyday electronics in this category, which are being manufactured in older 200mm lines. Whether it’s a smart thermostat at home or a temperature sensor in the car, it can be done with older generation devices. Automotive seems to be one of the big drivers.”

The first 200mm fabs appeared in the 1990s, and the wafer size became the leading-edge standard for years. By 2007, there were a total of 193 200mm fabs worldwide, up from 62 in 1995, according to SEMI.

Starting in the 2000s, many chipmakers migrated from 200mm to 300mm fabs. A larger wafer means a chipmaker can process more die per substrate, which translates into productivity gains and lower costs. “This depends on the product type and technology used,” said Christian Gregor Dieseldorff, an analyst at SEMI. “In general, the wafer area of 300mm is 2.25X larger than 200mm.”

Initially, the transition to 300mm fabs was difficult, but eventually the migration paid off. “The advantages of 300mm is mainly cost-related, but there are other factors,” Dieseldorff said. “With the introduction of 300mm, new and higher standards evolved for cost-effective tools, as well as cleanrooms.”

Surging demand
The 200mm market was quiet until 2015, when there was a sudden surge in demand for chips based on more mature processes. Many devices could be made in older 200mm fabs.

Because the industry didn’t maintain its historical investments in 200mm fabs, chipmakers had a shortfall of 200mm capacity. From 2016 to 2018, 200mm fab capacity was sold out at the foundries. In some cases, customers weren’t able to meet product demand.

Prior to the boom, a few equipment vendors were developing new 200mm systems. Generally, though, 200mm tools were in short supply. Many of the available 200mm systems were outdated or unusable. Spare parts were hard to find.

Then, amid the boom period, many equipment vendors began to develop new 200mm tools. Vendors took older tools and refurbished them or built new ones from scratch.

Used equipment vendors also expanded their 200mm efforts. Generally, these vendors buy used tools on the open market and refurbish them. Even online sites like eBay became a source for equipment.

Problems began to surface. There are many reputable suppliers of new or secondary 200mm gear. But some equipment buyers, which were scrambling for tools, bought systems without inspecting them. In some cases, the tool worked. But at times, the system was substandard and/or simply failed.

Fab capacity trends
There are several ways to look at the 200mm market. One is to break the market out into two parts—fab capacity and equipment.

In the first part of the equation, IDMs, foundries and customers must keep a close eye on both 200mm and 300mm fab capacity for planning purposes. That way you can meet demand now and in the future.

Tracking 200mm fab capacity 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 a long time. Still other chips are migrating from 200mm to 300mm plants.

“From a worldwide market perspective, power-related products, such as power management ICs (PMICs) and discretes, as well as RF switches, MCUs and display driver ICs are still major pillars to 200mm manufacturing. MEMS will also stay in 200mm,” said Steven Liu, vice president of corporate marketing at UMC. “However, we see MCUs that require more performance have moved or are gradually moving to 300mm, as well as some RF switch and PMIC products.”

Keeping track of the fab base is also challenging. In total, 62 IC companies own one or more 200mm fabs today, according to IC Insights. In comparison, 25 companies have 300mm fabs, according to IC Insights. This includes both IDMs and foundries.

On the foundry front, GlobalFoundries, Samsung, SkyWater, SMIC, TowerJazz, TSMC, UMC and others make devices for outside customers in 200mm fabs. Many foundry vendors also have 300mm fabs.

Not all 200mm fabs are alike. Each company runs different products and processes in a fab. The output also varies. “This all depends on the type of products,” SEMI’s Dieseldorff said. “The installed capacity for each fab varies from 140,000 wafers per month (wpm) down to less than 10,000 wpm for small companies. About 40,000 wpm is a good average value.”

In total, the number of 200mm fabs in production worldwide is expected to increase from 189 in 2016 to 213 in 2022, according to SEMI. In 200mm, worldwide installed capacity is expected to hit 6.4 million wpm by 2022, up from 5.8 million wpm in 2019, according to SEMI.

Several new 200mm fabs are in the works today, mainly in China. “Including R&D, epi and others, we have 16 facilities on the radar to start construction in 2019 or later,” Dieseldorff said.

Demand for 200mm fab capacity is a moving target. For example, the 200mm market cooled off in the first half of 2019, but it bounced back late last year.

That has carried over to the first part of 2020. For example, UMC’s 200mm fab utilization rates were running in the mid-90% range in the first quarter of 2020. “We are expecting to see higher 8-inch utilization rates after Q1 2020,” said Jason Wang, co-president of UMC, in a recent conference call.

Unlike 200mm, 300mm foundry capacity for mature nodes isn’t sold out. “We think the market for 300mm mature processes is still growing steadily from a global market perspective,” UMC’s Liu said.

200mm, meanwhile, continues to expand, as a new collection of vendors will soon enter the fray. Today, silicon carbide (SiC) device makers are in production in 150mm (6-inch) fabs. Cree, Rohm and STMicroelectronics are in the planning stages to build 200mm SiC fabs.

The push towards 200mm is being driven by the electric vehicle market. Many electric vehicles are using SiC power devices in various parts of the car.

“As estimated demand for silicon carbide material could grow to more than $20 billion by 2030, the industry is in the process of figuring out how to meet these anticipated demands, which includes the move from 150mm to 200mm fabs. We will start seeing the transition begin within the industry in the next 3 to 5 years,” said Cengiz Balkas, senior vice president and general manager at Wolfspeed, a Cree Company.

This, of course, will require 200mm fab tools, which may present some challenges for SiC vendors. “To support our growth plans, Cree will be purchasing tools that are both 150mm- and 200mm-capable. We will be buying a mix of new and used tools, which is common for this type of build out and do not foresee any issues finding the necessary tools to facilitate the increased capacity,” Balkas said.

Buying equipment
At some point, IDMs and foundries will expand their 200mm capacities. “2019 was a slower year, but its clear 2020/21 will be much stronger,” said Stuart Pinkney, vice president of sales and marketing at Nikon Precision Europe. “While we see some capacity now at 200mm fabs, we understand this will be consumed as the year continues, thus supporting the push for the equipment.”

So where can you buy 200mm equipment? One option is to go directly through a fab equipment vendor or OEM, many of which have divisions that sell new and refurbished tools. OEMs develop 200mm tools with the latest features, but they also charge a higher price.

A group of China-based equipment vendors also sells 200mm tools. In China, the government is pushing chipmakers to buy equipment from these vendors.

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

Brokers and online sites such as eBay also sell used equipment. Some chipmakers also sell used gear on the open market.

Equipment buyers should take the following steps to procure gear:

• Do your homework. There are many places to buy tools, but finding the right supplier is sometimes difficult.
• Examine the equipment in person. The tool might look sound, but it may end up being substandard.
• Make sure there are spare parts.
• Look into a service plan or warranty.

Finding the right tool for the job is also critical. But there are a multitude of suppliers to choose from. It’s difficult to list all companies and their offerings. One way to look at the market is to highlight a few companies and explore the issues at hand.

For example, lithography tools are often the most difficult 200mm systems to procure in the market. Lithography is the art of patterning the tiny feature sizes on wafers.

Nikon and others provide both new and refurbished 200mm lithography tools. Nikon offers 365nm and 248nm platforms.

“A shortage of 200mm equipment continues,” Nikon’s Pinkney said. “We don’t see any significant change in the overall environment, either from new equipment or in terms of core tools coming to the market. We believe this situation will continue through calendar year 2020.”

The situation is similar for 300mm lithography tools for mature nodes. “Our tools for the mature nodes are capable of both 200mm and 300mm processing,” Pinkney said. “The same issues exist in terms of availability of litho tools.”

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

There are several different types of deposition and etch systems. Some tool types are harder to find than others. It’s a case-by-case basis, although vendors must be prepared for any supply/demand cycle.

“We have a proactive team focused on identifying and acquiring 200mm system cores to fuel our factory refurbishment operations,” said David Haynes, managing director of strategic marketing at Lam Research. “Because we have always remained committed to serving the 200mm market, we have retained the manufacturing capacity and supply chain to support this business and meet market demand, even during significant ramps in the industry. However, despite our proactive approach, it isn’t always possible to find the cores needed in the open market. That’s where our ability to build new tools is critical to ensure we can supply the products our customers need whenever they need them.”

Lam continues to manufacture deposition, etch, cleaning tools and other products for 200mm fabs. Some deposition and photoresist strip systems were introduced to the market as 300mm-only solutions. “We have since released 200mm versions to provide our customers with enhanced technical performance and productivity at 200mm,” Haynes said.

The dynamics for 300mm tools are different. “The market for refurbished 300mm process tools remains extremely buoyant. Compared to 200mm, there are more 300mm tools available for refurbishment, but finding high-quality cores with the correct specification can nevertheless be challenging,” Haynes said. “However, when the right core isn’t available, we have the capability to build older generations of tools from new as well as used systems. These are new builds using some refurbished parts returned as part of our customer upgrade programs.”

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

Suppliers of these systems are seeing demand for 200mm gear. “The market is growing steadily with the same capacity as last year. Phone makers are currently driving additional demand for high-end mature market tools, and automotive demand is expected to grow again,” said Wilbert Odisho, vice president and general manager at KLA.

KLA re-manufacturers many legacy tools, particularly blank wafer inspection and film measurement. “We’re also actively acquiring older tools to refurbish. Our customers are aware of the equipment shortages and have been very proactive about submitting purchase orders well in advance. We don’t see any issue with meeting the 200mm demands and forecasts for 2020,” Odisho said.

Demand also is picking up for 300mm tools. “We see new mature 300mm fabs being built especially in China, operating mainly at 65nm and higher design nodes. We work with partners and customers to acquire and refurbish 300mm core tools, but we also offer new 300mm tools that address the demands of the mature market,” Odisho said.

Conclusion
Clearly, the 200mm market is vibrant, and will remain viable for the foreseeable future. So the industry must continue to invest in both 200mm fab capacity and equipment.

That’s the big challenge. The profits and margins aren’t as big as 300mm. But 200mm is difficult to ignore, even if it doesn’t make a sizable dent on the bottom line.

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