SEMICONDUCTOR

UPDATE

October 2006

McIlvaine Company

Study of Cancer in IBM Employees Finally Published

Results show increased health risk for computer factory workers. A paper suggesting that IBM factory workers are at higher risk of contracting cancer has been published after more than two years of controversy and a court battle.

The study, by professor of environmental health Richard Clapp of the Boston University School of Public Health, Massachusetts, is an analysis of nearly 32,000 people employed by IBM for at least 5 years who died between 1969 and 2001. It suggests that workers died from certain cancers, such as brain, kidney and skin cancers, at significantly higher rates than seen in the general U.S. population.

The paper, now published in Environmental Health, has had a turbulent history. The study was spurred by a lawsuit in Santa Clara County, CA, in which two former IBM employees said that the working conditions had affected their health. As part of this trial, the plaintiffs' attorneys obtained a computerized file of work history and mortality at IBM facilities. They commissioned Clapp to analyze the data and Clapp also acted as an expert witness in the case. But his results, which did not link specific chemicals to cancer risk, were not allowed into evidence by the court. IBM won the case.

Clapp's results were originally submitted to Clinics in Occupational and Environmental Medicine for publication in 2004. But the journal refused to publish it, saying the paper was original research unsuited to a journal that publishes reviews. The refusal prompted accusations that the journal had actually succumbed to pressure from IBM.

 
IBM lawyers argued in part that the data were only released for use in the court case. Clapp says a New York court gave him the go ahead this spring to finally publish the work.

Chemical Concerns
The study is the largest published thus far that examines whether people working in computer manufacturing could have higher rates of cancer, and is part of wider concerns about the health of workers in the semiconductor industry.

The study shows, for example, that male manufacturing workers were around 60-80 percent more likely to have died from cancers of the kidney, skin, brain and central nervous system.

Clapp's research does not pinpoint the specific chemicals or toxins that might be responsible for the increased cancers because there was no detailed information on which chemicals each person was exposed to in the company data. Workers in computer and semiconductor manufacturing are thought to be exposed to various chemicals, metals and sources of electromagnetic radiation.

Contradicting Reports
"Dr. Clapp prepared his study as a paid expert witness in support of unsuccessful litigation against IBM," said IBM in a statement yesterday. "It is based on flawed methodology and woefully incomplete data." Clapp says that his study was carried out using standard statistical techniques.

IBM says that Clapp's conclusions are contradicted by an IBM-funded study of more than 126,000 employees at three facilities; several papers were published on this work. IBM says this showed that workers at the three sites had lower overall mortality and cancer incidence rates than the general population.

Occupational-health expert Joseph LaDou of the University of California, San Francisco, who backs Clapp's study, says the IBM funded study did indicate an increased risk of certain cancers.

Other similar studies are already under way, including one led by the Semiconductor Industry Association examining more than 200,000 industry workers.

Carl Zeiss Opens Immersion Litho Facility

Carl Zeiss SMT has opened a new design and production facility for lithography systems. The center is dedicated mainly to the latest generation of its immersion lithography systems for semiconductor geometries down to 45nm.

The center, opened Oct. 16, is the third expansion stage to the company's lithography facilities in Oberkochen, Germany. Since groundbreaking for the first expansion stage in December 2000, the company has invested more than €450 million ($563 million) in the entire facility €300 million for equipment and machinery and €150 million for the buildings, the company said.

At the part of the facilities that was opened now, Carl Zeiss SMT will develop and manufacture its next-generation Starlith 1900i lithography optics system the company introduced today. According to the company, the system, which besides lenses also includes optical mirrors, is designed for 130nm optical wavelength and sports a numerical aperture of 1.35. The system will form the heart of a new generation of steppers from Carl Zeiss SMT's main customer ASML, a spokesperson explained.

For the production process including surface coating and final adjustments, the company operates a cleanroom with an area of several thousand square meters. The company presently sells "several hundreds" optical lithography systems per year, the spokesperson said.

After the next-generation lithography systems, represented by optical systems like the one Carl Zeiss' Starlith presented today, the semiconductor is expected to shift to EUV (Extreme Ultra Violet) technology. The development of such systems is under way also at Carl Zeiss SMT; first alpha tools have been shipped recently to customers in the U.S. and Belgium. However, the roadmap for a broad EUV roll-out is discussed controversially, and at Carl Zeiss, nobody wanted to provide a precise time frame. "We think this won't happen before the next decade", a spokesperson commented vaguely.

Chipmakers Unite in Move to 45nm

The 45nm process technology node keeps heating up as more players make their moves. In late August, Chartered Semiconductor Manufacturing, IBM, Infineon and Samsung — the most visible alliance collaborating on the development of advanced process technologies for 90-, 65- and 45nm logic chips — announced development of their first functional chips based on a low-power, 45nm process technology. The circuits are targeted at next-generation communication systems.

The chips were produced at IBM Corp.'s 300mm fab in East Fishkill, New York. Verified blocks of standard library cells and I/O elements were provided by Infineon Technologies AG.

Alliance members said their 45nm process is compatible across various fabs within the four companies. The low-power process is expected to be installed and qualified at Chartered, IBM and Samsung manufacturing facilities by the end of 2007.

Earlier this year, Intel Corp. disclosed initial details of its 45nm process and claimed it had produced the world's first chips based on the technology. It is expected to be ready for mass production in the second half of 2007. Intel has also announced three 300mm fabs capable of 45nm chip production, including the D1D plant in Oregon, Fab 32 in Arizona and Fab 28 in Israel. In 2005, Intel invested more than $4 billion on new fabs and upgrades to existing ones.

Bidding to get a jump on its foundry rivals, Taiwan Semiconductor Manufacturing Co. Ltd also recently disclosed the first details of its new 45nm process, due to go into production in Q3 2007. The foundry's 10-metal-layer technology permits gate lengths down to 26nm, according to TSMC.

Other 45nm Plans
For its part, Texas Instruments Inc. plans to sample devices based on its yet-to-be-announced 45nm process in 2007, with production due in 2008, said Peter Rickert, platform manager for application-specific products at the company.

Meanwhile, Renesas Technology Corp. and Matsushita Electric Industrial Co. Ltd have advanced their collaboration in 45nm process development into a full integration test stage.

Matsushita and Mitsubishi Electric Corp. started joint process development back in 1998. The collaboration was taken over by Renesas after that company was formed by the merger of Mitsubishi's and Hitachi's IC operations. Through the joint R&D work, 130-, 90- and 65nm processes have been developed. Collaboration on a 45nm process started last October and is slated to be completed in the latter part of 2007. Both companies will prepare to begin volume production based on 45nm process technology starting April 2008.

Elsewhere, Toshiba, Sony and NEC Electronics have R&D activities aimed at developing 45nm process technology.

ST India to Raise Manpower More than 20 Percent
STMicroelectronics (ST) India plans to increase its engineering manpower count by 300 to more than 1,800 engineers during 2006, a growth of more than 20 per cent. Earlier, in February this year, ST India had opened a large R&D facility in Greater Noida, on a 100,000 square meter area, with a capacity for seating 5,000 employees. The company had also announced a plan to invest around Rs.140 crore ($30 million) in local operations over the next two years.

The thrust areas of ST India’s R&D include development and industrialization of high value SoCs (system on chip), embedded systems, domain-specific IPs, and reference designs, serving application segments such as digital consumer electronics, telecommunications, imaging, automobile multimedia, computer peripherals, and industrial control. ST India has filed 380 patent applications till date, and has been granted 50 patents worldwide.

During the next 12 months, several products are lined up for development, with a stronger emphasis on peripherals and automotive electronics apart from its ongoing activities. To meet that demand, the count of design engineers will be increased further by around 300 engineers, during the next 12 months.

Apache Plans to Expand Indian Operations
Apache Design Solutions Inc. announced its plans to expand its recently-started operations in India to play a more major role in the company's global plans.

Apache said it plans to double its head count in India in 2007, and may look into the possibility of adding a second R&D centre somewhere in the country.

Veteran EDA executive and former Cadence Designs Systems Inc. sales executive Prashant Pahade has been tapped to head Indian operations as the company's managing director. Joint research programs with select local institutes are also planned, according to the company.

"India has been recognized as a region with engineering expertise in the high-technology semiconductor and IC markets," said Apache CEO Andrew Yang. "All the major EDA companies already have operations in India, and the bigger ones such as Cadence are known to employ about a thousand engineering staff at the Indian subsidiary operations."

Hynix and STMicroelectronics Open Largest Semiconductor Complex in China

Hynix and STMicroelectronics have officially opened their $2 billion Joint Venture 200mm and 300mm fab complex in Wuxi City, Jiangsu Province, China.

With the total complex the size of 22 American football fields and over 700,000 square feet of built and planned manufacturing facilities, according to construction project manager, CH2M Hill, the complex is believed to be the largest in China and the first front-end facilities in China for both companies.

"A joint venture of this magnitude is likely to be the largest of its kind between a Korean and European company," said Carlo Bozotti, President and CEO of STMicroelectronics. "It will bring both partners significant benefits of scale and complementarity. Guaranteed access to cost-competitive DRAM and jointly developed NAND products and technologies reinforces ST's leading position in package-level integration (PLI). By stacking multiple memory chips in a single package, this important technology of PLI allows our customers in China and worldwide to increase memory density and device reliability, while saving space in mobile handsets and other consumer and industrial applications."

Currently, two fabs have been built, each with approximately 160,000 square feet of cleanroom space. The 300mm facility is estimated to have a monthly capacity of approximately 55,000 wafer starts per month (wspm). The 200mm facility is estimated to have a capacity of 80,000wspm when fully ramped.

According to the JV partners, the 200mm fab is currently ramped to 50,000wspm after starting volume production in July 2006 and is being used for DRAM production on 90nm and 110nm process technologies. The 300mm facility has started ramping in October 2006 and will be used for both NAND Flash and DRAM production. Initial production is being allocated to NAND Flash for STMicroelectronics and uses 60nm SLC (Single-Level Cell) and MLC (Multi-Level Cell) NAND process technology. However, production will quickly move to the 55nm node, according to STMicroelectronics. Hynix will also use the 300mm facility for both DRAM and NAND production, though the timeframe has not been disclosed.

"In 2005, the NAND Flash market grew faster than any segment in the history of the semiconductor market, driven by a spiraling demand for storage space in mobile phones, digital cameras, and portable audio players," said Mario Licciardello, STMicroelectronics' Corporate Vice President and General Manager of the Memory Product Group. "The ramp up of the 300mm production with 60nm SLC (Single-Level Cell) and MLC (Multi-Level Cell) NAND technology, rapidly moving to 55nm and below, will help ST match this growth and meet our customers' demand for high-performance and cost-competitive memory solutions in the mobile and digital consumer markets."

The $2 billion joint-venture fabs, which broke ground in April 2005, are financed with equity from STMicroelectronics and Hynix on a 1/3 - 2/3 basis respectively, with plans for several more fabs and support buildings at the Wuxi site, though no timescales have yet been announced. The 300mm JV fab is the first in China to be built by overseas companies.

Xilinx Opens Development Center in India

Xilinx Inc. announced the opening of its own development center in India, located in a 33,000-sq ft facility in CyberPearl, Hyderabad. The facility will initially have about 75 staff and has the capacity to hold up to 300 employees to support the company's growth plans in India over the next several years

STMicro, Hynix to Open US$2B China Plant

Hynix Semiconductor Inc. and STMicroelectronics NV plan to start making memory chips on advanced production lines at a US$2 billion chip plant in China.

The project, which was inaugurated in November of 2004, will be one of the most advanced chip facilities in China, producing DRAM (dynamic RAM) as well as NAND flash memory chips on 300-millimeter silicon wafers. The companies will hold an opening ceremony next Tuesday, Oct. 10, according to an official at Hynix, the South Korean chip maker.

Hynix ST Semiconductor Ltd., which is the name of the joint venture, was built in Wuxi City, a few hours from Shanghai. The company is just the second in China to start producing chips on 300mm silicon wafers, from which thousands of chips can be made. The 300mm technology isn't easy to import into China due to U.S. export restrictions on machinery with the potential to produce items used by China's military, such as advanced chips used in missile guidance systems.

The 300mm chip making technology enables companies to produce far more chips on a single wafer than on older, 200mm wafers, thereby greatly increasing monthly output at semiconductor factories. But the size advantage comes at almost double and sometimes triple the cost of a 200mm chip factory. The joint venture company is 67 percent owned by Hynix and 33 percent by STMicro. The companies expect the new plant to feed memory chips to the burgeoning contract PC and consumer electronics makers in China.

LSI Logic to Boost Design Center Investment in India

LSI Logic disclosed that it will invest hundreds of millions of dollars over the next decade in design centers in the eastern Indian city of Kolkata.

The company's two centers in the country currently employ about 300 engineers. LSI said it plans to ramp up hiring and may also establish a third Indian center.

LSI began operations in India two years ago and outsources design work to a half-dozen Indian companies. "We will grow both our captive centers and our outsourcing here as we continue to build on our global engineering capabilities," said Philip Brace, LSI's senior vice president, corporate planning and marketing.

Two chip designs have been taped out at the Indian centers over the past two years, Brace said, adding that they are LSI's largest outside the United States.

The company has launched a 65nm ASIC project and has implemented 15-million-gate 90nm ASICs. "Software for a next-generation DVD-R for a top tier customer is now being done here," said Rajiv Kapur, managing director of LSI Logic India. "India is involved in all our major product groups."

All of LSI Logic's VLSI CAD software "has been developed using components from the Indian centers, while the company's global ASIC development uses libraries developed here for all technologies," Kapur added.

Most of LSI's Indian staff is based in the country, with about 50 working out of the Kolkata center on storage software development. Both centers will be expanded, but LSI said timely of launching the third center remains unknown

SunPower Invests in Joint Venture with Woongjin Coway

SunPower Corporation, a Silicon Valley-based manufacturer of the world's highest-efficiency, commercially-available solar cells and solar panels, today announced that it will invest in a joint venture with Woongjin Coway to manufacture mono-crystalline silicon ingots. This joint venture will operate in Korea, with polysilicon to be supplied primarily from DC Chemical, Korea's largest chemical company, with whom SunPower has previously announced a major supply agreement.

SunPower expects to purchase approximately $250 million of silicon ingot from the joint venture through a five-year supply agreement, which SunPower expects to execute upon formation of the joint venture. The venture is expected to begin manufacturing in the second half of 2007, and is projected to grow at a rate consistent with increasing polysilicon supply from DC Chemical. SunPower will contribute approximately $5 million of capital and technology expertise, and will sell polysilicon to the joint venture, and procure silicon ingot from the joint venture. SunPower's joint venture partner, Woongjin Coway, is a Korean equipment manufacturer and one of Korea's leading providers of environmental products. Woongjin Coway will contribute a similar level of capital, as well as operations and Korean marketing expertise.

UK Research Center Moves into New Facility

The University of Sheffield in the UK has invested £10 million in a new Nanoscience and Technology Centre that will provide state-of-the-art research facilities for III-V technology and – it is hoped – improve industrial links in the region.

Moving into the new building is the National Centre for III-V Technologies, the UK’s key academic facility for compound semiconductor research.  Set up by the UK government’s Engineering and Physical Sciences Research Council (EPSRC), the Sheffield facility has been working on III-V materials for over 25 years. The expansion capacity will help to not only to maintain and expand existing research, but to accelerate new areas such as biophotonics and to form stronger links with industry. Apart from the semiconductor equipment, a cleanroom, and product test laboratories, the new center includes a suite of business incubator offices to help foster those links.

Shin-Etsu Expands 300mm Silicon Wafer Production Capacity

Shin-Etsu Chemical Co Ltd has announced a new plan to expand its monthly production capacity of 300mm silicon wafers to 1,000,000 by the fall of 2007 utilizing its group's strength as the world's largest manufacturer supplying 300mm wafers, for which global demand is rapidly growing.

Construction to expand facilities has already started. This expansion will enable the company to establish a production system, which will meet the rapidly growing customers' demand worldwide, and to fulfill its responsibilities as the world's maker of 300mm silicon wafers.

The company had been working to implement its plan to expand its group's total production capacity of 300mm silicon wafer to 500,000/month by the fall of 2006; however, due to the continuation of robust demand, this project was completed earlier than planned and its group's total production capacity has been currently increased to 700,000/month. Furthermore, since semiconductor customers are expected to newly construct or expand their production lines that make use of 300mm wafers, the company has now decided to establish a production system of 1 million wafers/month by the fall of 2007.

The investment amount made for an additional capacity of 300,000 wafers will be ¥120 billion, and the accumulated amount invested in the 300mm wafer business by the company, including that of this investment, is expected to reach about ¥400 billion, all of which is covered by the company's own funds. As of the end of August 2006, Shin-Etsu Chemical had cash reserves of about ¥530 billion.

This latest expansion plan was decided upon by the company after taking into consideration all kinds of risks, including natural disasters such as earthquakes, damage caused by winds and floods and other such risks. The expansion plan will be carried out at Shin-Etsu Handotai's Shirakawa Plant, which has been playing a role in high-precision wafer processing; Shin-Etsu Handotai America (SEH America); and Mimasu Semiconductor Industry Co Ltd, which became a Shin-Etsu Group company this year.

Hynix Semiconductor Will Raise $471 Million

Hynix said that the bonds have a five-year maturity and a conversion price of 47,060 won ($49) per bond. "The move is part of our plan to expand and build new facilities," a Hynix spokesman said.  In June the company raised $300 million via a global depositary receipt issue, while creditors reached an accord on a $1.51 billion share sale.

Hynix has five chip-producing domestic lines and plans to build three more by 2010 in South Korea. It launched a 300mm research and development fabrication line for chips to speed up development of new products.

The company was on the verge of collapse in 2000 but creditors injected a total of $4.6 billion in 2001 and 2002 to rescue it.