Demand for legacy tools remains strong, but the supply of used platforms is drying up, prompting some suppliers to build new.

The law of supply and demand is holding true in the market for equipment capable of processing 200mm and smaller wafers. Over the past few years, the brisk production of sensors, MEMS, power ICs and other devices which do not require leading-edge processes, has resulted in rising demand for 200mm tools.

For nearly a decade, that market has been synonymous with "used" or "refurbished" equipment, and indeed the vast majority of 200mm platforms sold are refurbished, usually with some development or re-engineering to modernize them. While many equipment OEMs have sold or transferred all or part of their legacy equipment operations to third-party manufacturers, some continue to build and sell many of their own 200mm products.

Increasingly, however, Applied Materials is making more brand-new 200mm equipment to keep customers supplied with the tools they need, according to Cody Harlow, a director at the company’s Applied Global Services manufacturing operation in Austin, Texas.

One of Harlow’s responsibilities is scouring the world for the 200mm equipment no longer needed by chip manufacturers. These "cores" are taken apart and rebuilt at the Austin manufacturing facility, and increasingly, are being fitted with new chambers capable of the more contemporary deposition, etch, and other processes required by customers. Often, refurbished cores are also updated with software and other upgrades, resulting from Applied’s continued 200mm development initiatives to enable more sophisticated processing capabilities.

During the past decade, the largest chip makers in both the microprocessor and memory arenas have closed the majority of their 200mm wafer fabs. A virtuous cycle ensued, with large chipmakers putting "a steady stream of tools" on the market, making it possible to give these tools "a new lease on life," Harlow said.

A few years ago, as Applied experienced a growing demand for 200mm tools—fuelled by growth in emerging technology applications—the company began stocking its warehouses with platforms that were on the market at the time. That stockpile has helped ease the supply crunch, Harlow said.

Market Pull from Smartphones

Demand for 200mm equipment continues to be particularly strong from both IDMs and foundries producing components used in smart phones, including wireless communications ICs and filters. Market research firm IC Insights (Scottsdale, Arizona) sees a continuing shift away from a PC-centric chip industry to one focused on supplying mobile systems. Cellphone IC revenues are projected to grow by a CAGR of 8.7% between 2013 and 2018. Many companies serving this market continue to expand capacity at their 200mm fabs. Other companies which use 150mm and smaller-diameter gallium arsenide substrates to produce amplifiers and other communications ICs are expanding fab capacity as well.

And soon to come on strong are the myriad sources of demand from the Internet of Things (IoT), where IC Insights sees a CAGR of 22.3% during the 2013 - 2018 period.

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