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| Semiconductor Manufacturing Today: The Issues |
Cost: The total process for creating flat, rectangular integrated circuits today accounts for more than $1.5 billion in manufacturing assets. Because of the strict requirements for ultra-pure air and water in the fabrication process, and the precision equipment required to construct millions of circuits in a fingernail-sized space, wafer fabrication facilities cost about $1 billion to design, construct and equip. Silicon manufacturing and assembly-and-test facilities cost approximately $250 million each.
Cycle Time: The cycle time consumed from the start of silicon processing to the end of the assembly-and-test process is between 120 and 180 days. This cycle time imposes severe cash flow problems because of large work-in-process costs. In addition, long cycle times mean that production planning must be based on demand forecast, not actual orders. This means additional cash flow problems as assets are tied up in finished goods, some of which are inevitably scrapped |
 Quality: Wafers produced by this process typically have many defects. These defects can be attributed to the difficulty inherent in having a single,highly pure crystal survive the cutting, grinding and cleaning processes, as well as actual impurities associated with the containers used in forming the crystals. For example, oxygen is a pronounced impurity associated with the quartz crucible. At larger wafer diameters, the task of producing wafers of acceptable quality becomes proportionately more difficult. Only 10-20 percent of the original silicon material ends up in usable chips, assuming 100% yield in both the wafer-fabrication and assembly-and-test processes. This represents tremendous waste of material, energy, water, and other resources, in addition to the effort required for safe disposal of the chemicals used in processing silicon |
| Barrier to Innovation: The large capital outlays and short product life cycles characteristic of today's industry act as a huge barrier to innovation. Inventors with innovative algorithms, or new functions, but not endowed with several hundred million dollars to invest in capital, must rely on silicon foundries to bring their ideas to the marketplace. |
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