Triumph and despair met at the Future Horizons IEF 2004
conference which took place in Prague last week. Triumph that the
industry is back in classical recovery mode; despair that the
industry's basic technology is running out of steam.
"We are fully saturated, but the orders keep coming very
strongly and some products are on allocation," said Pasquale
Pistorio, CEO of STMicroelectronics, who recently upped ST's capex
for 2004 from $1.6bn to $2.2bn. "There isn't enough equipment, in
the last quarter of last year, everyone was rushing to buy
equipment."
Agreeing with Pistorio was Stuart McIntosh, president of ASML,
the leading supplier of semiconductor lithography tools. "We've put
prices up, and lead-times up, and customers complain, but they're
chasing us for the equipment," he said.
"The industry's investment plans are limited by the ability of
the equipment industry to deliver," said Malcolm Penn, CEO of
Future Horizons. "The equipment companies were still laying off
people in Q4. It will be difficult for them to produce enough to
meet demand."
That means the recovery is unlikely to be killed off by
over-investment this year. "Not this year; but next year - maybe,"
said Pistorio. "This year the equipment people can't deliver enough
for the industry to over-invest, but next year could be
different."
The conjunction of saturated capacity and equipment shortage can
mean only one thing: rising prices. "We predicted 32 per cent
industry growth for this year," said Penn, "and we will probably be
revising that later in the year - upwards. The growth can't be less
than 32 per cent."
So much for triumph. Despair came from a number of distinguished
US technologists who believe the industry's process technology is
running out of steam.
"Scaling is already dead, and no one has noticed it's not
breathing and the lips have turned blue," said Dr Bernie Meyerson,
chief technologist at IBM Systems and technology group, adding,
"somewhere between 130nm and 90nm everything stopped working."
"Yields were so bad at 0.13µm that many companies delayed
their product introductions by a year," said Aart de Geus, CEO of
Synopsys.
"Yield curves are now being pushed down below what were
considered acceptable," agreed Wally Rhines, CEO of Mentor
Graphics.
"What is really putting us through the loop is leakage current,"
said de Geus, "the transistor, which was a switch, is turning into
a non-linear resistor."
It was because scaling wasn't producing the traditional benefits
of lower power with better performance - because of current leakage
- that designers pumped more power into the circuits. This resulted
in soaring power density.
That cannot go on forever. "We're getting to the end, guys,"
said Meyerson. Whereas 90 per cent of the performance gain used to
come from scaling, now 60-70 per cent of the advantage has to come
from innovative techniques to get around the power density
ceiling.
This has big implications for the fabless/foundry business model
which can no longer just rely on buying the latest tools to get the
benefits of a shrink.
"Now that the fabless people can only get 40 per cent of the
performance benefit, they need to innovate to get the other 60 per
cent," said Meyerson. "The consequences for the industry are pretty
dire."
Renesas Technology's senior v-p Hideo Inayoshi, pointed the
finger: "I think the ITRS (International Technology Roadmap for
Semiconductors) roadmap is the bad guy - metal pitch doesn't mean
anything from now on."
Meyerson agreed. "When they drew those roadmaps you wonder where
the physicists were," he said.
For ST's Pistorio, Meyerson's prognosis was: "Exciting,
stimulating and scary." However he didn't subscribe to the doom and
gloom. From what our technologists tell me, I think the industry
knows how to master 90nm," said Pistorio. "Many companies have been
producing samples for 90nm, and I don't think 90nm will be a
dramatic change from the traditional tough generational evolution."
ST plans volume production on 90nm in Q4 2004 or Q1 2005.
Pistorio is similarly confident about 65nm. "Nothing has come to
my ears that there is a stumbling block," he said. "Speaking with
my colleagues, all I hear is that there are the normal difficulties
of any node."
For the triumphalists at IEF2004, the good times will roll for a
year or two. "It will be at least 2006 before we see the market
adjust itself again," said Future Horizons' Penn. "Excess capacity
will cause the next cyclic adjustment." He expects a tough year in
2006. "We've never had a soft landing in the history of the
industry," he said.
For the despairing, there are a few possibilities, pointed out
Ericsson's Jan Johansson: carbon nanotubes, nanowires,
nanotweezers, quantum dots, photonic crystals, nanomagnetics, nano
photoluminescence and nano peashooters.
Christoph Kutter, senior v-p of Infineon Technologies, also
talked of the promise of carbon nanotubes, but it's not going to
save the industry in the short-term. When asked by Synopsys' de
Geus when the first product containing nanotubes would be on the
market, Kutter replied: "Nanotubes could be used in chips - perhaps
for interconnect - in five years to ten years time."
So the semiconductor industry does not seem to have much of an
idea about where it's going. But it's always been like that.