All posts by Chris

My Last Meal

Today, my oldest daughter stayed home sick with a cold. The younger one didn’t want to go to preschool when her sister was staying home. That pretty much ruined my plans for Christmas shopping today. I stayed home while my wife went grocery shopping. At 2 pm I took the younger daughter to a birthday party. Kid birthday parties can be fun, but this one was at Dave and Buster’s – only one small step better than the worst place to have a party, Chuck E. Cheese. Lights, noise – Las Vegas for kids. Still, I survived. Then, it was home and a quick clean-up of the house (two little girls = large increase in entropy). Some guests came over for dinner – mussels in white wine, plus a few glasses of La Fin du Monde beer. It was excellent. It’s nice being married to a great cook.

That’s pretty much how I spent my last day of the 5,125 year Mayan Long Count calendar, just before the global apocalypse.

Dave Brubeck

At age 14, I thought Dave Brubeck was the coolest musician ever. Like so many people, I discovered the Dave Brubeck Quartet through their 1959 album Time Out, the first jazz record to sell over a million copies. The album is a magnificent exploration of meter, and I still find it amazing that they could create a 5/4 song (Take Five, written by their sax player Paul Desmond) so catchy that it gets stuck in your head.

One day I was listening to Brubeck once again in my bedroom when my mom walked by, poked her head in and asked, “Is that Dave Brubeck?” I was shocked that she even knew who Dave Brubeck was, let alone recognized his music. My dad loved Johnny Cash, that I knew, but as far as I could recall my mom had never expressed a musical preference in my presence. Not that I paid much attention – she was my mom, after all. “You know Dave Brubeck?” I replied with some trepidation. “Oh yes,” she said. “I went to see him in concert when I was in college.”

There are only a few times in one’s life when one receives information so out of line with your worldview that to grasp it requires every ounce of intellectual and emotional fortitude that can be mustered. At such moments the carefully constructed edifice of your mental interior can come crashing down around you. If this, this thing I believed so strongly and without question, is wrong, what else about my life has deceived me? What else have I viewed through this distorted lens? Everything becomes open to question. Your foundational beliefs. Your conception of yourself. It is a mental state so venerable and fraught with danger that many people simply don’t allow themselves to experience it.

I experienced my first worldview collapse at that moment. David Brubeck was cool. People who listened to Dave Brubeck were cool. People who went to see Dave Brubeck in concert were super cool. But cool, that was just a word I never thought to use with my mom. Now, my mom was a great mom and even during my teenage years I had no problems with her. But to a 14-year-old boy, “mom” was on the opposite side of the spectrum from “cool”. As I listened to Brubeck on his piano, as I imagined myself blowing a Paul Desmond riff on the saxophone, as I hoped one day to see the Dave Brubeck Quartet perform “Blue Rondo a La Turk” live, was I trying to be like my mother?

Since that moment, I’ve had to make major realignments of my relationship with reality only a couple of times more. While every time was hard, I was always extremely happy with the result – a life a little more grounded, a little more authentic, a little easier to be proud of.

Dave Brubeck died a few days ago, and while he continued to give concerts into his 90s, I never saw him perform live. I guess my mom will always be a little more cool than me.

ASML to Buy Cymer

“We have experienced some delay in EUV, basically caused by delays in developing the light source”, said Peter Wennink, ASML’s financial chief.

With that understatement, ASML succinctly explained its rationale for offering $2.6B in cash (25%) and stock (75%) to buy San Diego-based Cymer, the leading developer of EUV sources. Over the last year, ASML has sent about 500 of their engineers to work at Cymer’s EUV source development labs. But as EUV source development falls further behind schedule, it has become obvious that this infusion of manpower was not enough.

There is a nice symmetry at work here. Earlier this year ASML got Intel, TSMC and Samsung to buy 23% of ASML and invest in ASML R&D to boot. Just as the chip makers invested in their key supplier ASML to provide maximum financial stability during a turbulent time, ASML is investing in one of its most critical suppliers to make sure they keep the faith during a very difficult time. Will this help speed up EUV source development? I doubt it. But it will probably help prevent a worsening of the schedule and keep Cymer’s focus where it needs to be.

While everyone concentrates on Cymer’s EUV source development, it is important to remember that ASML’s and Cymer’s cash cow is 193-nm immersion lithography. As ASML dumps cash into EUV development, it has remained profitable due to its growing market share of 193-nm tools (now about 80%). But Cymer only supplies about half of the 193-nm lasers that ASML needs. The other half comes from Gigaphoton (formed in 2000 as a joint venture of Komatsu and Ushio). What will happen to Gigaphoton in the long term? You can bet they are trying to figure that out themselves about now. And what does this deal say about ASML’s faith in Gigaphoton’s EUV source development efforts? It seems ASML is willing to put all of its source eggs in one basket.

ACL Fest 2012

I haven’t been to the Austin City Limits Festival since its second year (2003), thanks to having kids. But now that they are a little older, it was time to go again. While some things are the same, many things have changed in nine years. Here are some of the things I learned by attending ACL Fest last weekend.

Best Rule: ACL Fest is a non-smoking event (except for pot).
Best band I’d never heard of: Ben Howard.
Band that was good but didn’t quite do it for me: Florence and the Machine.
Band that exceeded my (already high) expectations: Rufus Wainwright.
Biggest Surprise: It wasn’t the fact that putting my daughter Sarah on my shoulders during the Rufus Wainwright show resulted in a camera focusing on her and projecting her onto the jumbo screens to either side of the stage. After all, she is really cute, and she was the only person up on shoulders. It’s that seeing herself on the big screen prompted her to flash a peace sign, which caused the entire crowd to applaud. That was really cool.
Lesson in obviousness: When you take an event that works for 50,000 people/day and let 75,00 people in, it is too crowded.
Next lesson in obviousness: When an event is sponsored by Bud Light, don’t expect the beer to be good.
Obvious truths that are not always true: Even though there were 20 massive beer stands spread throughout the park selling nothing but AB InBev pizzel, there was one small “craft brew” stand tucked away in a corner that sold one or two decent brews (Red Hook IPA, Kona Porter). Thank goodness for small favors.
Best way to meet up at the festival: Forget it. You can’t do it – there are too many people. Unless, of course, you carry a 20 foot pole with a bizarre flag on top. There were hundreds of poles with flags.
Band that is as good as everyone says: The Avett Brothers.
Highest energy performance: The Avett Brothers.
Show where mere attendance will get you high: Red Hot Chili Peppers (see “Best Rule” above).

In all, a great time (it helps that the festival is two miles from my house, so I don’t have to worry about driving or parking). I can’t wait for next year.

The Economics of my New EV

I have now owned my new Nissan Leaf electric vehicle (EV) for exactly one month. Assuming one month’s data is enough to make a reasonable estimate of the costs (and savings) that I am incurring, I am pleasantly surprised at how cheap it is to own an EV.

To begin, I sold my seven-year-old (completely paid-for) Volvo station wagon before getting the Leaf, so my basic economic analysis will compare getting the Leaf to keeping the Volvo. Also, I chose to lease the Leaf for 39 months, so I’m only going to make the calculations for that case.

Cash Up Front: I sold the Volvo for $7,000, so that was my working capital. The down payment, tax, tags, and license for the Leaf was $5,350. I am also in the processes of installing a 220V charger (the Leaf comes with a 110V charger, which has been working just fine, but I want the faster charging) at an estimated cost of $2,000. Thus my estimated out-of-pocket cost is about $350.

Cost of Driving the Volvo: I had been averaging about 16 – 18 mpg for my normal (mostly city) driving with the Volvo. At the current pump price of $3.60/gallon (I buy low-octane gas), this gives $0.20 – $0.22/mile operating cost. Maintenance costs are hard to estimate, but assuming nothing major were to happen with the Volvo over the coming three years, I’d probably spend $250/year on just the standard maintenance (oil changes and filters and the like). This adds another $0.025/mile, so I’ll just say $0.235/mile as my working figure. Obviously, I’m purposely ignoring the reliability difference between a new car and a 7-year-old car here, since I really only want to compare a gas car to an EV, not an old car to a new one. Another way to look at it: I doubt the residual value of the Volvo after driving it for another 39 months would equal the major maintenance costs I would likely incur during that time.

Cost of Driving the Leaf: In my first month, I drove 790 miles, and averaged 3.5 miles/kWh. In Austin, the cost of electricity is currently $0.129/kWh. This makes the electricity cost per mile = $0.036/mi. There are no maintenance costs on the Leaf until the 36 month scheduled maintenance, and in particular there are no oil changes.

Cost Savings: Comparing the per mile costs, I am saving about 20¢/mile driving the Leaf over the Volvo. For my 790 mile month, that translates into $158 (money that I am not spending at the gas pump and for oil changes).

Net Cost of the Leaf: My 39 month lease has a monthly payment of $291. Subtracting the net $158 savings, my actual cost of switching to a brand new EV is $133/month. Thus, my total net costs are:

$350 down, $133/month for 39 months

Frankly, I’m shocked at how cheap that is. I can’t think of many new cars I could buy/lease for that price. Now add this to the fact that driving the Leaf is really, really cool and really, really fun. It has been a very good choice for me.

A Hypothetical Case: Suppose instead one were driving an SUV that got 13 mpg, and you drove a little more – 33 miles per day (1000 miles/month). Assuming all other numbers presented above were valid, you would actually SAVE $10/month by leasing the Leaf. Of course, if the price of gas goes up, the economics become even more compelling.

So there you have it. The Leaf makes a lot of sense. Of course, it assumes that you are a two-car family with a lot of short-hop city driving (where an EV excels). But that is probably a majority of car owners.

Bacus 2012 – I Want My Mask for Free

Alas, I was not able to attend the Bacus maskmaking conference last week in Monterey, California. Although smaller now than in its heyday, it is still a fun conference to go to. But thanks to some talented and enterprising Baccanalians, a little of the flavor of the conference is available on YouTube:

http://www.youtube.com/watch?v=2HgJc9UMvd0&feature=share

I don’t know who all the folks are who made this, though I do recognize Mark Mason (the Aggie) and it must certainly be Tony Vacca on the drums.

For a little history on Bacus entertainment, look here.

Deriving the Tesla Roadster

The Tesla Roadster is just about the coolest car on the planet. Starting with the body of a Lotus Elise, Tesla adds an electric engine and a bunch of laptop batteries to create fabulous style, amazing speed, and a perfectly green image. What more could a car buff want?

OK, one could hope for a slightly lower price. But I have a separate problem. I already own a Lotus Elise (since 2005, the first year it was available in the US), and I am attached to it. I still need a family car, since the kids aren’t old enough to ride in the Elise, and I am still a believer in electric vehicles as the future of personal transportation (with that future starting now).

As such, circumstances have created a workable compromise. Last week I bought a Nissan Leaf – an all-electric vehicle. I love it. And with the purchase I was able to derive the following equation:

1 Lotus Elise + 1 Nissan Leaf + $20K = 1 Tesla Roadster

The numbers don’t lie.

Postscript to 450-mm wafers

After posting on Why 450-mm Wafers and Why the Big Players Like 450-mm Wafers, I received a few comments from friends in the equipment supplier community talking about the effect of wafer-size transitions on the suppliers of process and metrology tools for semiconductor manufacturing. So, based on their inputs and further reflection, here are a few more thoughts on 450-mm wafers.

It is expensive to develop equipment to process larger wafers. If an equipment supplier spends a boatload of money developing new equipment, they want to sell that new equipment for a lot of money in order to recoup their investment. But their customers, the chip makers, don’t want the equipment prices to rise too much, or else the cost advantage of the larger wafer size will disappear. The goal should be a win-win sharing of the benefits of a lager wafer: the chip makers get a lower manufacturing cost per chip and the equipment makers get a higher margin on their equipment, thus paying off their R&D and making more money after that.

There is a general feeling in the industry that the transition to 300-mm wafers didn’t work out equitably: the equipment suppliers made all the investments, and the chip makers got all the benefits. And while I’m sure this version of the story is somewhat slanted, still we have seen most equipment suppliers dragging their feet on 450-mm tool development. They want the chip companies to pay up-front for development. Chip companies in turn want to get governments to foot the bill (why should a highly profitable company like Intel pay the costs needed to ensure future profits if they can get the state of New York to pay instead?). And so it has begun: the Global 450 Consortium funding tool R&D, and Intel, TSMC, and Samsung paying litho supplier ASML billions of dollars directly for 450-mm tool development.

How will a transition to 450-mm wafers affect the equipment suppliers? One effect is similar to that experienced by the chip makers: the small guys won’t survive. Only the bigger players can afford the development costs for 450-mm wafer size tools. But there has traditionally been a second effect: even the big players can’t afford the development costs of new process equipment on multiple wafer sizes.

When the industry moved to 300-mm wafers, new process tools were developed for 300-mm wafers only. Chip companies that stuck to 200-mm wafers couldn’t get the latest and greatest tools for the smaller wafer size. They were stuck in the past. Not only did they have a cost disadvantage compared to 300-mm fabs, they had a technology disadvantage as well. Staying up to speed on Moore’s Law required moving to 300-mm wafers.

Will the same thing happen at 450 mm? Maybe, but I’m not convinced that it is inevitable. As I said before, the move to 450-mm wafers will not likely be the slam-dunk cost savings that many people hope. If the cost advantage is only 10%, I suspect many companies will choose to stick with 300-mm wafers. But will the next generation of process tools be available at the smaller wafer size? If new 300-mm wafer fabs are being built, you can bet that equipment suppliers will scramble to provide them with tools.

All in all, I think the move to 450-mm wafers will be a mess. The timing is problematic, the economics are problematic, and the resemblance of the future to the past is not likely to be strong. Somehow, though, we’ll figure something out. We always do.

Predicting the future is hard

I can’t say that I am good at predicting the future. Then again, I don’t try to make a living off of it. Ray Kurzweil is a futurist who regular talks about how great technology will be in the 2020s by extrapolating trends like Moore’s Law (and, in fact, accelerating them). Will his predictions come true? Actually, we can make a prediction about that based in his past performance.

Here he is, in a 2005 TED talk:

“By 2010 computers will disappear. They’ll be so small, they’ll be embedded in our clothing, in our environment. Images will be written directly to our retina, providing full-immersion virtual reality, augmented real reality. We’ll be interacting with virtual personalities.”

I don’t know about you, but my computer has yet to disappear. And thankfully, I still interact with non-virtual personalities.

He was way off making a prediction five years into the future. I suspect he will only be further off in his further out predictions. Still, I bet if you ask Ray Kurzweil he’ll tell you he was dead on with this prediction. He always does:

http://www.forbes.com/sites/alexknapp/2012/03/20/ray-kurzweils-predictions-for-2009-were-mostly-inaccurate/

http://www.forbes.com/sites/alexknapp/2012/03/21/ray-kurzweil-defends-his-2009-predictions/

Why the Big Players Like 450-mm Wafers

The reason semiconductor manufacturers like the idea of 450-mm wafers is easy to understand: bigger wafers should lower the per-chip cost of manufacturing. But as I mentioned in my last post, this per-chip cost advantage doesn’t apply to lithography. Each time a wafer size is increased, only the non-litho (per-chip) costs go down, and so lithography costs take up a bigger portion of the overall costs. A corollary to this economic reality is that as lithography costs go up as a fraction of the total costs, the benefits of a larger wafer size go down. Past wafer size transitions have netted a 30% manufacturing cost reduction. The transition to 450-mm wafers will give at best a 20% cost reduction, and possibly only a 10% reduction.

Of course, these numbers are projections, and all projections are based on assumptions. It is possible to make more optimistic assumptions than I have, and that is probably what Intel, TSMC and the other big players are doing when they heavily promote 450-mm wafers. But why are the big guys so optimistic about 450-mm wafers? And why now?

As I briefly mentioned in my last post, for the switch to larger wafer sizes to be economically feasible two things must happen. First, the switch must enable a lower manufacturing cost per chip. The big players are hoping for a 30% cost reduction, but I am predicting a 10 – 20% benefit. Second, there must be sufficient demand for the chips being produced to justify a higher volume factory. A 450-mm fab will have at least double the output (in terms of chips) as a 300-mm fab. Thus, the demand for those chips must at least double to justify the building of a 450-mm fab. That’s a huge volume of chips, since 300-mm fabs are already exceedingly high-volume.

So an important effect of each wafer transition is that low-volume manufacturers can no longer compete. A 30% cost disadvantage is hard to overcome, and without the volume demand a new fab at the larger wafer size isn’t justified. The result? A successful wafer size transition is accompanied by a host of consolidations and chip companies going fabless (or fab-lite). This has happened again and again over the years. Only the biggest players survive, and the survivors get bigger.

Today, we have Intel, Samsung, Toshiba and TSMC at the top of the chip-making pyramid. But UMC, GlobalFoundries, Hynix, and Micron remain competitive irritants. What to do? A successful transition to 450-mm wafers will likely solve the problem for the big players. If 450-mm wafers result in a 20 – 30% cost advantage over 300-mm wafers, then any standard-process chip in a cost competitive space will have to be made in a 450-mm fab. But only a few of these $10B fabs will have to be built to supply that demand. And those fabs will be built by the biggest players, leaving the second tier manufacturers out of luck, and possibly out of business.

So why shouldn’t Intel, Samsung, and TSMC be bullish on 450-mm? If it works, it will mean that their dominance in the semiconductor world will be complete (maybe even pushing Toshiba out of the picture). And if EUV succeeds in keeping litho costs down, this scenario is all the more likely.

But personally I don’t think EUV will be successful at putting a lid on litho cost. As a result, I think the cost advantage of 450-mm will be closer to 10% than the 20 – 30% hoped for by the big guys. And while 10% may still be worth it for the highest-volume players, it won’t be enough to put the 300-mm fab world out of business.

That leaves one more ugly point to consider. If a transition to 450-mm wafers gives a per-chip cost reduction that is not sufficiently large to counter the rising costs of litho, then the per-chip costs overall might be higher (and maybe a lot higher) for new technology nodes. What will happen to Moore’s Law if moving to the next node no longer decreases the cost of a transistor?

We live in interesting times, and getting more interesting each day.