Mask market sees rapid growth

Electronic News, March 24, 1997

Williamsburg, Va.--Findings from market research firm The Information Network on the worldwide merchant photomask market bear out what mask makers were already telling Electronic News: after a period of "stagnancy," the mask market is changing and expanding at a rapid pace.

The group found the U.S. merchant photomask market in 1996 was $355 million, up 40.9 percent from 1995's $252 million. Photronics was the U.S. market leader with a 42.8 percent share and close competitor Du Pont Photomasks, Inc. (DPI) was right behind with a 41.7 percent share, according to the report.

The European market for captive and merchant mask production recorded sales of $168 million in 1996, up 35.6 percent over 1995's $123 million. The firm said the increase "reflected the swing out of a sustained recession and production of a more complete line-up of ICs, including microprocessors. DPI was the market leader in Europe in 1996 with a 42.7 percent share.

Growth should continue, the report states, with more complex semiconductors entering the mainstream every 18 months. More expansion will come from:

* Larger chips dictating larger masks (and so larger reticles to hold them). Increasing from a five-inch to a six-inch reticle increases the usable space by 40 percent, making it possible to double and even quadruple the number of chips per reticle. A five-inch reticle can only image one Pentium microprocessor, while a six-inch reticle can image four.

* Increased levels of integration are combining several discrete semiconductors into one. Each time another function is added to the chip, another mask set is required.

* Each generation of ICs is manufactured through various iterations of die shrinks as experience in production increases yields. A table in the report shows a 16-megabit DRAM with a minimum feature size of 0.45-micron is eventually shrunk to 0.40-micron. The initial 256MB DRAM with minimum feature sizes of 0.25-micron will eventually be shrunk to 0.20-micron. New mask sets will be required for each die shrink.

* Current generations of microprocessors are being manufactured with numerous variations. There is, for example, the 25- and 33MHz 486SX, 33- and 50MHz 486DX, 66- and 100MHz 486DX2 and a host of low-power MPUs for portables. And variations of these devices are used for embedded applications. Each variations here requires a different mask set, as well.

The Information Network accounts for strong growth in the European market by noting: the heavy investments of the region's three major manufacturers (Philips, SGS-Thomson Microelectronics and Siemens); the growth exceeding 90 percent for certain small EU manufacturers, e.g. Micronas, Thesys and System Microelectronic Innovation; the region's leadership in telecom and automotive components; and the fact that U.S. companies in Europe are exhibiting strong consumption of masks.

The firm reports for 1996 in Europe, National Semiconductor's consumption was up 14 percent to $4 million, Motorola's was up 33 percent to $6 million, that of AT&T (Lucent) was up 50 percent to $1.5 million, and Intel's was up 100 percent to $2 million.

The report also discusses the fact that certain entities "are no longer subsidizing the (U.S.) mask industry, leaving expensive R&D programs to the mask industry participants, which cannot afford to fund these programs alone." It cites IBM and AT&T, the Department of Defense and its Defense Advanced Research Projects Agency (DARPA) and Sematech as those entities.

The report is titled Mask Making, Inspection and Repair: Market Analysis and Strategic Issues, and is available for $850 from the company.