Officials of SVG Lithography, Wilton, Conn., this week confirmed that the firm is delaying shipments up to four months on its Micrascan V 193-nm wavelength lithography system, which sources said is being used by Intel Corp. to make the 0.13-micron critical layers on its next-generation processors.

News of the delay in the SVG equipment was first reported on Semiconductor Business News, a sister website to EBN.

Intel has touted its 0.13-micron process, which is being installed in new fabs and retrofitted to older fabs, as critical for die shrinks to cut costs and to get smaller feature sizes to increase frequency and performance.

SVGL last year announced a $100 million order by "a major microprocessor manufacturer" for Micrascan V, which sources said is Intel. The MPU giant already has large quantities of earlier SVGL lithography tools installed in its fabs.

An Intel spokesman declined to comment on any of the firm's lithography suppliers or status of equipment installations. He said Intel is still on schedule to begin 0.13-micron chip processing "sometime at midyear" in both Fab 20 in Hillsboro, Ore. and Fab 22 in Chandler, Ariz.

He also said Pentium 4 Northwood version is still expected to be introduced in Q4 '01 based on the 0.13-micron process.

Analysts such as Nathan Brookwood, principal of InSight 64 Research, Saratoga, Calif., and Eric Ross, semiconductor analyst with Thomas Weisel Partners, San Francisco, have said Intel urgently needs the 0.13-micron process to cut the size of the current 217-mm square Pentium 4 in half to reduce high manufacturing costs and build its next Pentium 4 Northwood processor at mainstream PC price points.

Intel was depending on production orders of the SVGL Micrascan V to make the 0.13-micron critical layers initially for Northwood Pentium 4 and Tualatin Penitum III, but later for a wide variety of new chips.

The firm also reportedly was evaluating 193-nm wavelength lithography tools from Nikon Precision and from ASM Lithography.

A source close to the Intel lithography situation said while the firm is waiting for the delayed SVGL tools, it can use a technique called hard phase shift masks with its current lithography systems to reach 0.13-micron feature sizes on chips.

However, unless Intel had been developing phase shift mask processing earlier, it would take additional time for the firm to qualify this alternate approach, equipment sources said.

Phase shift masks are also more expensive to use and will only run up Intel's already high Pentium 4 production costs, until it could bring on its originally planned 193-nm lithography systems.

Archrival AMD is adapting its existing ASML lithography tools with improved optical lenses that can produce 0.13-micron feature sizes on chips without use of hard phase shift masks, AMD President Hector Ruiz previously told EBN.

AMD is planning to ramp up its own 0.13-micron processing in Fab 30 in Dresden, Germany, by the end of the year. Analyst Ross said even if Intel is able to launch its 0.13-micron chip production at about the same time as AMD, the rival's next generation processor chip at 80-mm square would still be 40% smaller than Intel's 0.13-micron Northwood Pentium 4 at 140-mm square.