Intel to join 300mm crowd

Electronic News, Feb 9, 1998 by Dylan McGrath

Hillsboro, Ore.--Intel is ready to announce plans to build a 300 millimeter development and pilot manufacturing facility here, Electronic News has learned.

However, some industry observers expect that, despite Intel's entry, U.S. semiconductor companies will have at most one 300mm production fab in operation by the year 2000. Even that fab, Texas Instruments' DMOS 6 facility in Dallas, is still a long way from being equipped and a TI spokesperson said no time line has been established for selecting equipment.

Although, the official word is yet to come--Intel officials remain tight-lipped about the impending announcement--George Burns of Strategic Marketing Associates (SMA), a research and consulting firm that tracks capital spending in the semiconductor industry, has been reporting for weeks that Intel will break ground on a 300mm facility in Hillsboro.

According to Mr. Burns, Intel will announce a $1.5 billion, 300mm development and pilot facility capable of processing 8,000 wafers per month. Mr. Burns said the announcement should come by the end of the quarter, with ground being broken early this year, and the fab should be operational in 1999. According to one source, the announcement could be made by the end of this month. Intel would not comment on the report.

Meanwhile, TI engineers continue observations at Sematech's I300I development project. "We sent some people down there, and they've been watching carefully as they (I300I) evaluate the equipment," said Melody Wolfe, a spokesperson for TI.

While DMOS 6 is the only U.S. production fab that is expected to be online by 2000, IBM, Intel, Motorola and TI will all have pilot activity by the year 2000. It is unlikely, according to SMA, that any non-U.S. companies will have production facilities by 2000. While Germany's Siemens joined Motorola in announcing a joint venture (JV) 300mm development facility in Dresden, Germany last month, it appears the Asian financial crisis is delaying many facilities planned by Asian companies.

IBM has a $700 million, 300mm development facility for advanced memory and logic at 0.18/0.15-micron under construction in East Fishkill, N.Y., and it should be operational by the end of this year. IBM plans to start construction on a 300mm production facility for advanced memory and logic two years after the East Fishkill project becomes operational, SMA said.

Motorola has three pending 300mm projects. They are: a $1.3 billion R&D facility in West Creek, Va. scheduled to break ground in May; a $1.5 billion MPU facility--also in West Creek--that is being designed to be 300mm capable; and Semiconductor 300, the JV with Siemens which should be in production by mid-1999.

TI already has one R&D facility in operation in Dallas, Mr. Burns said. RD 1, which opened in July 1997, is capable of processing 2,000 DSP, mixed signal and MPU wafers per month. "It's an R&D lab," Mr. Burns said. "They probably aren't making any production wafers there. But they are developing a process."

The DMOS 6 building is complete, but TI continues to wait on equipment. Production, according to SMA, should come by the end of 1999. Once the equipment set is purchased, DMOS 6 will cost roughly $1.6 billion and will be capable of processing 16,000 DSP wafers per month. SMA reports TI's AMOS 3, a $1.5 billion, 300mm advanced memory fab to be built in Avezzano, Italy, has been placed on hold until DMOS 6 comes on line.

While industry insiders once pointed to 1998 as the year of 300mm, it's all but unanimous that 12-inch wafers won't play a major role in the industry this year. "We're really not going to see a large amount of 300mm until 2001 or 2002," said G. Dan Hutcheson, president of VLSI Research. Mr. Hutcheson said the continued worldwide over-capacity is also holding back 300mm investment by DRAM producers, and companies haven't seen the need to dramatically increase the number of devices they can produce. Without tight capacity, he said, 300mm seems like less of a necessity. The Asian financial crisis put a holding pattern on 300mm, he said. "It's a solution for a problem that doesn't exist right now."

According to Mr. Burns, equipment companies will feel the crunch of the lack of 300mm production fabs. After spending billions of dollars to develop 300mm equipment, he said, equipment companies will have to wait even longer to cash in on the fruits of their labor now that 300mm has been pushed back.