Present and Future Prospects of Semiconductor Industry

Present and Future Prospects
of Semiconductor Industry
In Malaysia
By
School of Microelectronic Engineering
Presentation Outline
The Evolution of Semiconductor Technology
Industry Structure
Technology Challenges & Trends
Semiconductor Industry in Malaysia
The Evolution of Semiconductor Technology
What is Semiconductor Technology?

The technology to produce IC microchips
IC chips are the backbone of the computer industry and have spurred
related technologies such as software and internet
Every product of the information age is an offspring of IC technology
IC chips increasingly control functions in cars, TVs, VCRs, cameras,
mobile phones, toys, etc.
The Evolution of Transistor / IC

Transistor is the basic building block of ICs.
First Transistor, Bell Lab 1947

John Bardeen and Walter Brattain, demonstrated
a solid state device made from germanium. They
observed that when electrical signals were applied
to contacts on germanium, the output power was
larger than the input. These results were published
In 1948.
William Shockley, found out how the bipolar transistor
functioned and published the theory in 1949.
Three of them shared the Nobel Prize in physics in
1956,
First Transistor and Its Inventors
Semiconductor industry developed rapidly and germanium based

transistor quickly replaced vacuum tubes in electronics equipment
due to:
smaller size
lower power consumption (enable portable applications)
lower operating temperature
quicker response time
Single crystal silicon and germanium based devices introduced in
1950 and 1952 respectively (better defect control, hence higher yield).
Shockley left Bell Labs in 1956, to start his own lab in San Francisco Bay,
California. Nowadays known as Silicon Valley. His lab has attracted
talented scientist such as Robert Noyce and Gordon Moore.
Gordon Moore and Robert Noyce left Shockley in 1957 to start Fairchild
Semiconductor.
First IC Device by Jack Kilby, Texas Instruments

1958
1st fabricated by Bell Labs in 1958. Jack Kilby
demonstrated functional IC, fabricated on
germanium strip consists of;
one transistor
one capacitor
3 resistors
First Silicon IC Chip by Robert Noyce, Fairchild

Camera, 1961
Fairchild Semiconductor produced the 1st commercial
ICs in 1961. This IC consists of only 4 transistors sold
for USD 150 a piece.
NASA was the main customer.
In 1968, Robert Noyce cofounded Intel Corp. with
Andrew Groove and Gordon Moore.
IC Design: 1st IC
1st IC design by hand (Jack Kilby)
Currently, hundreds of designers work
on single product to design, validate
and lay outed will take several months
to complete with the help of CAD
tools.
Main considerations;
performance
die size
design time and cost
testability
IC Design: State of The Art IC

CMOS Inverter - basic building block of digital MOS design
Layout
Cross section
1980s Technology Wafer Cross section
Wafer Fabrication: From Design to Wafer
Typical Design Flow

HDL Coding
Testbench Development & RTL Simulation
FPGA Prototyping
Synthesis & Optimization
Gatelevel Simulation
Static Timing Analysis
Design For Testability Implementation
Floorplanning & Place Route
The Design Tools:

Software
Front End Synopsys
Back End Monterey/Cadence
Mask Artwork Cadence
Physical Verification
Post Layout Simulation
Mask Design
Fabrication & Wafer Probing
Packaging, Assembly & Test
Hardware
SUN Workstation
Typical Fabrication Flow

Main Process Modules (CMOS 1P2M 3.3V)
1.
Wells Formation
2.
Active Area Definition
3.
Device Isolation (LOCOS)
4.
Vt Adjust
5.
Polygate Definition
6.
Source & Drain Formation
7.
Pre Metal Dielectrics Deposition (PMD)
8.
Contact Definition
9.
Metal-1 Deposition & Patterning
10. Inter-Metal Dielectrics Deposition (IMD)
11. Via Definition
12. Metal-2 Deposition & Patterning
13. Passivation
14. Pad Definition
FRONT END PROCESS

(creating an electrically isolated devices)
BACK END PROCESS

(connecting the devices to form the desired
circuit function.)
Full integration may require 300-500 process steps (4 6 weeks to be completed)
IC Product Category
CMOS
BasedTechnology
Industry Structure
Semiconductor Manufacturing
A multi-dicipline processes, involved;
Circuit design
Manufacturing material
Clean room technology, processing, equipment
Wafer processing technology
Die testing
Chip packaging and final test
5 Major Industry Components
Design
Services
Mask Making
Wafer
Manufacturing
Wafer
Test
QFP
BGA
Assembly &
Final Test
SDIP
SSOP
Semiconductor Industry Structure
Full support chain of semiconductor companies

IC Design
Centers/
IC Design
EDA Providers
Centers/
EDA
MySem, MyMS, Intel, Altera,Cadence, Synopsis
Providers
st
IC
IC Manufacturers
Manufacturers MySem, Silterra, 1 Silicon, Infineon
Mask Shops
TMC Taiwan, Dupont Singapore, Photronic

Singapore
Unisem, Carsem, Malaysian Pacific Industries, ASE,

Packaging
Packaging &&
Testing
Companies National Semiconductor, Freescale, AIC etc.
Testing
Companies
Supporting
Companies
Applied Materials, ASM, Varian, Verteq, Tel,

Hitachi Kokosai, SEH etc
Semiconductor Manufacturing Business Models

IDM Model
Fablite Model
Marketing/
Sales
(B2C)
Marketing/
Sales
(B2B)
Design/IP
Systems
Design/IP
Systems
Manufacturing
Manufacturing
Companies: IBM, Intel, Texas

Instruments
Pros: Control over their own
roadmap
Cons: Cost, risk, swings in
utilization
Prerequisite: Must be a $7B+ to
support
Aggressive manufacturing.
Fabless Model
Marketing/
Sales
(B2B)
Foundry
partners
Design/IP
Systems
Manufacturing
Companies: Motorola, Infineon, ADI

Pros: Have some control over process
technology, yet chance to have access to
leading edge technology.
Cons: Once decision is made to reduce or
Stop investment, ability to reverse is difficult.
In 1990 only 7 fabless companies existed ; Today more than 100 fabless companies exist
worldwide
Many companies such as Motorola, TI, Tosibha, LSI Logic plan to outsource > 50% of its
production
Second & third tier IDMs would be forced to adopt a pure fabless model or fablite strategy to
remain viable
Organic fabless growth fabless growth consistently outpaces overall industry
Foundry
partners
Why Fabless?
Model allows necessary focus on
system/design level for success
Manage the risk related to the high cost of
building and maintaining a fab
Economies of scale/efficiency
Fabless companies are expected to account
for more than 60% of the total semiconductor
revenues by 2010
Fabless company funding sequentially
increased 62 percent year-over-year in 2004
Fabless Facts Revenue Growth

Semi Industry (in
millions)
The fabless sector has continuously achieved faster growth than the
overall industry.
Fabless
(In millions)
Source - FSA
Technology Trends & Challenges
Moores Law
Moores Law, Intel Product
IC Integration Scale
Feature Size and Wafer Size
Road Map Semiconductor Industry
Technology Improvement Trends

TREND
EXAMPLE
Integration
Level
Number of Components/ Chip
Cost
Cost per function/ Increased

functionality at incremental cost
Speed
Microprocessor Clock rate
Power
Increased battery life through design

of low power ICs in Mobile devices
Compactness
Introduction of concepts like System

On Chip to reduce size and weight of
the
product
with
increased
functionalities
Nonvolatile Memory
Functionality
Technology Advancements Comparison

Technology Parameters
1975
1997
2003
Chip Complexity (Index to 1)
10
100
Feature Size Reduction

(micrometer)
0.25
0.08
Chip Size Increase (mm2)
30
150
600
Wafer Diameter (mm)
50
200
300
Facility Automation (%)
60
80
Die Yield (% good)
40
85
95
Line Yield (% good)
40
85
95
Assembly/ Test Yield (%)
90
99
99
Key Inferences
Continuously increasing
density of transistors on
single chip
More functionality on a
single chip
More yield at lower costs
Reduction of costs through
facility automation
Increase in the number of
chips per wafer
Technology Challenges (Opportunities)

Key Challenges
Description
Challenges in design with increased density (reduced line width)
Chips with increasing heterogeneity (integration)
Design
Complexity in interaction between design levels

Difficulties of convergence and predictability of the design
process
Challenges in designing mixed signal designs and RF design due
to convergence products
Challenges of low power and current requirements (proper
doping to reduce the current leakage)
Material
Material with High K dielectric constant to increase device

performance
There is need for a new, large-area substrate for wafers with more
than 300 mm diameter
New materials for gates and dielectrics make gate etching
process more difficult.

Key Challenges
Fabrication
Assembly and
Packaging
Description
Concurrent development of circuits and processes using test
element groups (TEGs) & simulation
Robust circuit and processes factoring manufacturing fluctuations
Defective product analysis and counter measure prototyping by
means of quick turnaround time(QTAT)
Declining number of masks leading to increase in number of chips
per wafer:
Reducing chip size
Expanding the area from which chips can be obtained
Manufacturing of increased wafer diameter of 300 mm
Lower cost materials and processes to meet new requirements
Reliability under thermal cycling (stress and moisture)
Compatibility with harsh environments (automotive)
Increasing reliability for soldering process
New materials for Opto packaging

Key Challenges
Defect Reduction
Description
Need for new failure analysis as the traditional failure analysis is likely to
be inadequate due to:
Classification speed of defects
The number of defects that can be handled
Speed of chemical element analysis
UV defect inspection equipment for wafers failing at 130 nm node
Achieving low test costs and high test reliability
New test requirements for technology >100nm
Testing
Ability to test for cross talk induced failures caused by high-density

interconnect
Testing embedded mixed analog/ digital circuits
Use of design for test (DFT) for testing high-speed devices
Need for higher order DFT for SoC testing
The International Technology Roadmap for Semiconductors, known throughout

the world as the ITRS, is the fifteen-year assessment of the semiconductor industrys
future technology requirements. These future needs drive present-day strategies for
world-wide research and development among manufacturers research facilities,
universities, and national labs.
www.itrs.net
ITRS 2006 Update

Executive Summary
System Drivers
Design
Test & Test Equipment
Process Integration, Devices & Structures
RF & A/MS Technologies for Wireless Communication
Emerging Research Devices was not updated for 2006, refer to 2005 Chapter
Front End Processes
Lithography
Interconnect
Factory Integration
Assembly & Packaging
Environment, Safety & Health
Yield Enhancement
Metrology
Modeling & Simulation
New ICT Era : Nanocomputing
Semiconductor Industry- Past Trends

Year over Year Semiconductor Industry Growth Rates
10 year CAGR
between 10% & 20%
Worst ever
Semiconductor
industry downturn
witnessed in 2001-02
Industry witnessed a
ve growth rate of
around 30% during
the downturn
Revival of
semiconductor
industry in 2004
Source: World Semiconductor Trade Statistics

Semiconductor Industry- Manufacturing Trends

Outsourcing of Semiconductor Manufacturing showing strong trends
Major indicators of
Semiconductor industry
like Foundry Revenues,
CAPEX spending
witnessing downward
trend in 2001& 2002
Foundry Revenues, CAPEX
spending &
Semiconductor Revenues
graph in consonant with
each other
EDA revenues increasing
consistently (except
during downturn) as
continuous advancing
technology forcing
industry to upgrade EDA
tools
Source: World Semiconductor Trade Statistics (WSTS)

Semiconductor Industry Forecasts

Revenues in $ Billion
Growth Rate
World wide semiconductor

revenue expected to rise to
$199 billion from $166 billion in
2003
Chip market is expected to
decline by 2.3%in 2006 due to
overcapacity
New growth cycle expected to
commence in 2007
Source: Frost and Sullivan
Revenues expected to reach

$266 billion by 2008
Semiconductor CAPEX Spending
2003
2004
2005
2006
2007
2008
Semiconductor Capital
Spending
29,661
44,763
50,767
43,058
35,693
39,872
Growth (%)
7.5
50.9
13.4
-15.2
-17.1
11.7
Capital Equipment
22,824
37,317
42,912
35,230
27,806
32,439
Growth (%)
10.3
63.5
15
-17.9
-21.1
16.7
Wafer Fab Equipment
16,742
27,364
31,144
25,848
20,598
23,176
Growth (%)
3.5
63.4
13.8
-17
-20.3
12.5
Packaging and
Assembly Equipment
3,060
4,994
5,114
3,602
2,949
3,988
Growth (%)
30.5
63.2
2.4
-29.6
-18.1
35.2
Automated Test
Equipment
3,021
4,960
6,655
5,780
4,260
5,275
Growth (%)
39.4
64.2
34.2
-13.1
-26.3
23.8
All Revenue Figures are in $Millions

Source: WSTS & SIA
Semiconductor Industry in Malaysia
Electronic Industry Structure

Can be classified into 3 sub-sectors (MIDA);
electronics components
semiconductor device (35 -40% of total electronic exports)
linear & digital ICs, memories, MCU, opto-e etc
capacitors, relay, switches, transformers etc.
consumer electronics
audio products, VCD players, phones
industrial electronics
public phone exchanges, satellite receivers, transmission eq.
Semiconductor Production Output

Increased considerably from <3 billion units / annum in 1980 to
18 billion units / annum in 2004.
In 1990-2003 period, average increament per annum ~ 16.5%,
much stronger growth in 2004 (28.2%)
Earning from exports, from RM35.5 billion in 1996 to RM89.3 billion
in 2004.
Semiconductor Production Output

MALAYSIA: Production of Semiconductors (Million Units)
Source : MIDA
Year
Output
1989
2,262
1990
2,565
1991
2,689
1992
3,121
1993
3,491
1994
3,410
1995
4,757
1996
5,237
1997
7,432
1998
8,951
1999
9,959
2000
16,373
2001
13,524
2002
15,036
2003
15,958
2004
18,228
Semiconductor Exports
MALAYSIA: Exports of Semiconductors
Year
Exports (RM Million)
1996
35.5
1997
40.8
1998
54.4
1999
65.4
2000
71.1
2001
60.5
2002
72.9
2003
85.1
2004
89.2
Source : MIDA
THE SEMICONDUCTOR INDUSTRY

IN MALAYSIA As at 2004
Number of Companies 40
MAJOR COMPANIES:
ASSEMBLY AND TESTING
Intel, AMD, Motorola, Agilent, Texas Instrument, National Semiconductor, Fairchild,
Hitachi, NEC Toshiba, Fujitsu, Infineon Technologies, STMicroelectronics, ASE
Electronics, MPI (Carsem), Unisem, Globetronics, AIC, ChipPac.
SILICON WAFER PROCESSING
MEMC Electronics Material, ShinEtsu, Wacker NSCE
WAFER FABRICATION
SCG Industries, MIMOS, Silterra, 1st Silicon, Infineon Technologies (New)
CHIP DESIGN
Altera Corporation, MIMOS
MAJOR SUPPORTING INDUSTRIES:
LEADFRAMES
MPI (Dynacraft), M-SMM Electronics, Shinko, Kyushu Matsushita Electric, Mitsui HighTec, Possehl Besi Electronic, AKN Technology.
BONDING WIRES
Tanaka Electronics, Malaysian Electronics Materials
BURN IN AND TESTING SERVICES
TS Matrix, KESM Industries, KESP
Source: MIDA
Developed rapidly to become one of the countrys major industries

within the manufacturing sector since the establishment of the 1 st
semiconductor plant in Penang (1972)
Played a major role towards countrys industrialization (30% of
current manufacturing output and 25% of countrys manufactured
exports).
Progressing from labor-intensive operations to state of the art
robotic manufacturing that produce the latest product.
Nevertheless, manufacturing activities are still dominated by the
the lower end assembly and test.
Malaysia Presence in the Value Chain

Optical
Logical
Design
EDA Tools
R&D
Design &
Development
Test
Equipment
Photo-resists
Masking
Fabrication
Product
Design
Lead
Frame
Dicing
Packaging
Physical
Design
Testing
Product
Manufacturing
Precision
Components
Fabrication
Equipment
Limited Current Competence

Need to be strengthened
EMS
Bonding
Chemical and Ultra
pure gases
Strong Current Competence
Consumer
Electronics
Components
Substrate
Wafer
Processing
PC &
Peripherals
Plastic
Molding
End
Product
Industrial
Electronics
Automotive
Bio-medical
Others
Competence to be developed
End user presence
Embarking to move up further into the higher technology value chain

chip making;
Wafer Fabrication (Foundry)
MIMOS Fab 1995
1st Silicon Feb 2001, Owned by Sarawak Gov (RM 6.5B)
Silterra Malaysia Mac 2001, Owned by Khazanah (RM4.5B)
Infineon Technologies 2005, Siemen AG
Chip Design
MIMOS (MyMS)
Altera Corp
Agilent Technologies
Motorola (MSC)
Intel Design Centre
Add Value, Focus

Industry Status
Integrated Value Chain

Electronic Products
Semiconductor Assembly & Test
Consumer Electronics (MNCs, Local)

MNCs, Local
(Major Share in Global Exports)
Silterra,1st Silicon, MIMOS
Wafer Fabrication
Design
Silicon Wafer Manufacturing
Industrial Electronics (MNCs, Local)
MIMOS/Universities
MNCs
Source: MIMOS Analysis based on IMP2 Report
Increase Local Content

1998
1999
2000
2001
2002
24,612.1
29,681.8
36,411.6
45,232.3
51,132.1
0.5
0.7
5.0
10.0
25.0
Projected Total Indigenous

value (RM million)
92.3
155.8
1,365.4
3,392.4
9,587.3
Projected Indigenous
Design value (RM million)
12.3
20.8
182.1
452.3
1,278.3
Projected Malaysian
Semiconductor Demand
(RM million)
Targeted Indigenous
Product Content (%)
Assumptions
Value of design: 10% of product value
Profit margin: 25% of product value
Source: MIMOS Analysis
National Strategy
R&D Centre
Infrastructure
New materials
Methodology
D & M process
Expertise
Universities
Products
Industry
Technology
Growth
KSFs & Challenges for Malaysia

Success Factors
R&D, Design &
Development and
Fabrication
Challenges
Absence of a highly evolved R&D/design environment
Current factor conditions (Education system)
High costs of setting up niche research institution (s)
Close proximity of other technology centers like, Taiwan, South
Korea, Japan, Singapore, Israel, India
Sustainable world class

manufacturing facility
with global process
standards
Low exposure to international clients; regionally focused with spare

manufacturing capacity
Rapid & successful R&D

and process innovation in
semiconductor fab &
packaging
Competencies in fabrication and packaging NOT translated into

creation of process innovations
Retain MNC companies

currently engaged in
packaging, assembly and
testing
MNCs looking for presence of value add activities in existing

locations; Need strong RSI and factor conditions
Strong RSI Presence
Local companies and SMEs need to continuously upgrade to meet

international quality standards and maintain competitiveness
Capital intensive nature calling for regular investment for upgrading
Need for Packaging and testing excellence center
Strategies to remain in the country driven by HQ
Conclusion
Semiconductor technology is a strategic knowledge in the ICT era
Semiconductor industry is the key to the countrys competitiveness
and growth.
Chip design and wafer fabrication are the KSF in securing the country
as a major semiconductor based component / product producer.

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Present and Future Prospects

School of Microelectronic Engineering

The Evolution of Semiconductor Technology

School of Microelectronic Engineering

What is Semiconductor Technology?

School of Microelectronic Engineering

The Evolution of Transistor / IC

School of Microelectronic Engineering

First Transistor, Bell Lab 1947

School of Microelectronic Engineering

First Transistor and Its Inventors

School of Microelectronic Engineering

Semiconductor industry developed rapidly and germanium based

School of Microelectronic Engineering

School of Microelectronic Engineering

First IC Device by Jack Kilby, Texas Instruments

School of Microelectronic Engineering

First Silicon IC Chip by Robert Noyce, Fairchild

School of Microelectronic Engineering

IC Design: State of The Art IC

1980s Technology Wafer Cross section

1990s Technology Wafer Cross section

2000s Technology Wafer Cross section

Wafer Fabrication: From Design to Wafer

School of Microelectronic Engineering

Typical Design Flow

The Design Tools:

School of Microelectronic Engineering

Typical Fabrication Flow

FRONT END PROCESS

BACK END PROCESS

Full integration may require 300-500 process steps (4 6 weeks to be completed)

School of Microelectronic Engineering

School of Microelectronic Engineering

School of Microelectronic Engineering

School of Microelectronic Engineering

5 Major Industry Components

School of Microelectronic Engineering

Semiconductor Industry Structure

School of Microelectronic Engineering

Full support chain of semiconductor companies

MySem, MyMS, Intel, Altera,Cadence, Synopsis

TMC Taiwan, Dupont Singapore, Photronic

Unisem, Carsem, Malaysian Pacific Industries, ASE,

School of Microelectronic Engineering

Applied Materials, ASM, Varian, Verteq, Tel,

Semiconductor Manufacturing Business Models

Companies: IBM, Intel, Texas

Companies: Motorola, Infineon, ADI

School of Microelectronic Engineering

Fabless Facts Revenue Growth

Technology Trends & Challenges

School of Microelectronic Engineering

School of Microelectronic Engineering

Moores Law, Intel Product

School of Microelectronic Engineering

School of Microelectronic Engineering

Feature Size and Wafer Size

School of Microelectronic Engineering

Road Map Semiconductor Industry

School of Microelectronic Engineering

Technology Improvement Trends

Number of Components/ Chip

Cost per function/ Increased