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.