Autumn00 vlsi reticle forcast

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VLSI’s Reticle Forecast

by G. Dan Hutcheson, VLSI Research Inc.

The mask making market has shown significant growth as chipmakers have pushed the limits of optical lithography beyond what experts thought possible only a few years ago. Reticles have been one of the keys to making the race down Moore’s curve possible. It is this importance that has been the primary market driver. The worldwide market for reticles will grow 19 percent to reach $2.4 billion this year, more than twice the 1994 level. It should grow another 29 percent in 2001, reaching $3.1 billion, and is expected to hit $4 billion by 2004 (see Figure 1). Unit volumes are also being pushed up, and are expected to grow 4 percent in 2000 and 13 percent in 2001. The difference between revenues and unit volumes is reflected in average selling prices, which are rising at a 14 percent annual clip. This growth is due to two factors: the industry is coming out of a downturn and chipmakers have an amazing appetite for technology.

Mask costs have emerged as a hot issue in recent years because of these trends. Chipmakers worry they may not be able to afford reticles in the future. This is true even though reticle revenues are still far less than two percent of chip revenues - and are growing at a rate less than the chip market itself. In contrast, the amount chipmakers spend on reticles pales in comparison to what they spend on equipment, which is more than ten times higher. The reticle market is about the size of the chip market when ICs were first entering production and Intel had yet to be founded. It is also roughly the size of the equipment market of 1980. One can see that reticle makers are delivering tremendous value to the chip industry, with productivity increases along the way, while taking relatively little in return. Nevertheless, this does not alleviate the concerns of chipmakers.

The chip and mask industries are driving away from each other. Reticle costs have skyrocketed as critical dimensions have shrunk. A sub-0.2-micron reticle costs 20 times that of a 2-micron reticle. While steep, this is a seemingly linear correlation.

However, a 0.18-micron reticle averages $19,000 and 0.13-micron reticles are running $44,000, an increase of 2.3 times for only a 30 percent reduction in critical 6

Autumn 2000

Yield Management Solutions

dimensions. Even aerial density is only up by 1.9 times; clearly the ratios are not favorable.

Meanwhile, the chip industry has moved to smaller lot sizes to address smaller market niches with differentiated products. ASIC manufacturers, in particular, will often have lot sizes as small as one to ten wafers. A 21-mask, 0.18-micron reticle set will cost in the neighborhood of $150-$200,000. So, is it a significant factor for ASIC manufacturers? Here is the amortized cost of such a reticle set per good die (PGD), using the logic benchmark of 100 good die per wafer: Wafers

Cost PGD

Typical Use for Volume

1

$1750

Very rare applications, such as satellites or development runs

10

$175

Typical ASIC runs

100

$17.50

Large ASIC runs

1000

$1.75

Typical mode of all logic production

3000

$0.58

Typical mean of all logic production

10000

$0.18

Very high-volume runs

You may think 18 cents, or even 58 cents, is not a lot.

But remember, chipmakers regularly beat up assembly line managers for a tenth of a cent. Is it really significant?

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Figure 1. Worldwide reticle forecast summar y.

I don’t think so. Especially when leading edge microprocessors go for $1,000 a pop. Do they have a choice?

Not really. They can lower reticle costs by using larger critical dimensions, but this is offset by fewer die-perwafer. ASIC makers are responding by “dumbing” down their reticles with loosened specs and dropping out some of the OPC targets and phase shifters. Some buy cheap reticles, but the cost is yield and low-speed sorts (great ad for the mask shops: “pay me now or lose later”). There’s no way around it: with lithography hitting a wall and optical the only reasonable choice, reticles are a critical technology. So, chipmakers have to pay their way.

Moore’s law is a hungry child that needs ever-better reticles to remain sated. It is also essential to the health of the reticle market that it moves to ever-tighter critical dimensions. Figure 2 shows this importance by breaking out the reticle market by critical dimensions (as printed on the wafer). It is based on the sales of individual reticles, not sets. As can be seen, almost all of the growth since 1996 has come from sales of sub-0.3 micron reticles. The pressure on reticle makers is far higher than that of any other area. While the bulk of wafer sales only recently shifted to favor 200 mm and equipment makers are shipping tools for 0.18-micron, 0.18-micron is now passé for reticle makers.

Most companies have been easily ramping 0.18-micron production using 248 nm scanners. This was true for both DRAM and logic. Reticle makers were, in large part, the enablers allowing them to paint with a brush larger than the lines themselves. Now the effort has shifted to bring 0.13-micron up by next year; they are currently working on 0.1-micron. Companies also intend to do much of this work with 248 nm scanners. Scanner technology is proving to be much more extendable than previously thought, as stepper companies push NA’s up and resist technology improves. But much hinges on the reticles themselves.

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The mask makers and their suppliers are the critical supply points here. For them to meet these requirements really pushes the mask maker’s capability. Currently, sub-0.16 micron (on-wafer CD) reticles account for only 0.2 percent of unit production and 3.4 percent of revenues. However, by 2001 they will account for 4.5 percent of units and 46 percent of revenues in the reticle market. Virtually all of these designs will require OPC and will need some level of phase shifting. Meanwhile, e-beam writing and reticle inspection tools are gasping to keep up with the requirements. Developing these tools is expensive, while potential sales volume is low.

This pushes up costs that must be passed on and included in reticle pricing.

It is the capital costs associated with the need to acquire these tools and the rapidity of their obsolescence, combined with massive increases in pixel counts as critical dimensions shrink, and rising MEEFs (Mask Error Enhancement Factor) that drive up the cost of leadingedge reticles. It is readily apparent that costs are an issue because mask makers have not made usury profits as leading-edge mask prices rise. Moreover, before this they bled for about a decade when the infamous 5X holiday hit (which was something if you were a mask maker). So, one might argue it’s their turn to make money. However, this has yet to happen.

The data shows that despite relatively high increases in average selling prices, there is still considerable price pressure on reticles. Average selling prices weighted by revenues are heavily driven by technology. Technology adds value, so they are not a real indication of what is happening to reticle prices on an individual basis.

Unweighted averages of just pricing changes by critical dimension category show prices have actually declined in every year on record up to 2000 (see Figure 3).

Moreover, they are forecasted to decline through 2004.

4600 > =0.75 Micron 0.5 to < 0.75 Micron 0.3 to < 0.5 Micron < 0.3 Micron

4100 3600 3100

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Figure 2. Reticle market trends.

Autumn 2000

Yield Management Solutions

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10%

30% Revenue Weighted Revenue Unweighted

20%

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-10%

-30% 1989

-20%

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Figure 4. Reticle diffusion rate.

-30% 1994

’95

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Figure 3. Reticle pricing trends.

Another way to look at this is the diffusion rate of reticles, which is the ratio of reticle sales to semiconductor sales (see Figure 4). If the ratio is rising, it indicates chipmakers must spend relatively more to generate the same level of semiconductor sales or less if it is declining. The ratio actually declined throughout the first half of the 1990s and only started to increase in 1996 due to the rapid decline in chip prices as the industry

entered the downturn. Nevertheless, it is still below the levels in 1989 when we started to track the market regularly. It is also well below pre-5X holiday levels (we recorded a value of 1.9 percent in 1979). If the diffusion rate were the same today, it would increase mask industry revenues by $1.4 billion or 36 percent of this hypothetical size. The mask industry’s ability to lower costs over the last 20 years has directly contributed to chip industry profitability. At the same time, it has been instrumental in keeping the chip industry abreast of the massive technology changes needed to stay on Moore’s curve.

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