SAN FRANCISCO – The captive photomask shops were generally investing during the recent downturn, but it was a different story for the merchant players.
DNP, Photronics, Toppan and others were hit hard by the recession and slowed their spending. Now, like the IC industry, growth has resumed in the photomask business and the merchant players are beginning to open up their purse strings.
But some warn that the merchant vendors are falling behind the technology curve—an alarming trend in the chip supply chain. And some wonder if the merchant players will ultimately get squeezed out of the market by Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), which itself owns a huge captive mask shop.
The good news is that the merchant players are finally talking about capital spending. ''For the first time in three years, we’re seeing some investments’’ among the merchant players, said Michael Archuletta, a veteran of the industry and director of marketing for Rave LLC, a mask repair tool vendor.
''Both Toppan and DNP have announced major funding plans,’’ added David Lee, vice president of marketing for Rave.
On the other hand, there is a clear bifurcation taking place in the mask community, which could be a troubling trend. For years, IBM, Intel, Samsung, TSMC have owned their own mask shops, which traditionally made leading-edge photomasks.
Still, there were strong and viable merchant mask shops, which could make photomasks that were slightly behind—or sometimes on par—with the captive players in terms of technology. That gave the industry a level playing field. Chip makers that did not own mask shops could get access to leading-edge photomasks.
But the business dynamics have been gradually changing. More recently, the captive shops began to invest heavily in leading-edge technology. Generally, the merchant vendors were somewhat more conservative and focused on mainstream technologies for good reason: It is becoming more and more expensive to set up a mask line and vendors need to obtain a return-on-investment on their capital.
But as a result, there is an apparent gap between the captive and merchant shops. The captive shops are now ahead in terms of mask scaling. ''They are further ahead than ever before,’’ Archuletta said.
This is not to say the merchant players—DNP, Photronics and Toppan—are going away. Needless to say, the merchant vendors can serve the mainstream markets, but what about the leading edge?
For some, that is a cause for concern in the market. Many merchant mask shops are aligned with ventures to play catch-up on the technology curve. For example, U.S.-based Photronics and Micron Technology Inc. have a leading-edge mask venture. Japan's Toppan has separate leading-edge mask ventures with IBM and GlobalFoundries Inc.
Still, the merchant players are not only facing competition amongst themselves, but also the captive shops, namely TSMC. During various presentations, TSMC claims that its mask operation has advantages over the merchants. Given that TSMC’s mask shop is tied to its foundry services, the company claims it can provide a time-to-market and technology advantage over the merchant players.
Most believe there is room for both the captive and merchant mask shops in the market. In fact, the captive vendors remain critical, and, for good reason: Growth for trailing-edge masks will grow a healthy 17 percent a year for the next five years, according to Rave. By trailing-edge masks, the company is talking about 130-, 90- and 65-nm products.
Leading-edge designs-and masks-grab the headlines, but shipments remain tiny right now. To date, 65-nm masks are in full production, but 45- and 40-nm reticle manufacturing remains small and ''sporadic’’ in the overall market, according to Rave. There is little production for masks at the 32- and 28-nm nodes, according to the firm.
At Semicon, Rave announced the completion of its acquisition of Eco-Snow Systems, a former member of the Linde Group. Eco-Snow Systems is headquartered in Livermore, Calif. and provides cryogenic precision surface process equipment for a broad range of cleaning applications to the micro-electronics industry. Rave is a customer for Eco-Snow’s products.
Rave will continue to focus on mask repair. The acquisition will enable the company to expand into new markets, such as disk drives, MEMS and solid-state lighting. In a statement, Rave CEO Barry Hopkins stated: “We are pleased to bring Eco-Snow into our advanced equipment portfolio. The Eco-Snow product lines complement our existing core systems technology and bring new market growth opportunities for RAVE and its subsidiary companies.”