Perspective Semiconductor Contract Manufacturing Services Worldwide Market Analysis Semiconductor Contract IVIanufacturing Wafer Pricing Trends: October 1998 Abstract: in the third of three surveys of semiconductor contract manufacturing wafer prices conducted in 1998, Dataquest observes continuing price declines. Prices are reported for 150mm and 200mm wafers, categorized by minimum feature size and number of metal interconnect levels, as well as special process options. Results are compared with those of previous surveys dating back almost three years. Finally, a consensus view of short-term price projections is presented and discussed in relation to current supply and demand dynamics within the semiconductor foundry market. By James F. Hines Foundry Wafer Prices: More Deciines, but Some Firming at the Lagging Edge Fovindry-processed wafer prices declined in leading-edge technology categories and increased in some of the more mature technologies in the J period from June to October 1998. The current results of Dataquest's survey Lii of semiconductor contract manufachiring (SCM) wafer prices mark two years D of pricing pressure as the industry struggles under a stubborn oversupply N condition. Survey results include the following: Z UJ • Average prices for ISOmtn wafers ranged from $498 to $623, compared > _J with $449 to $650 in June 1998. CL < > • Prices for 200mm wafers, which generally represent the leading-edge technologies, averaged $870 to $2,241, compared with $917 to $2,611 in O < June 1998. oLU ^ < • Average prices for 0.25-micron wafers dropped by about 9 to 15 percent U- over the four-month period. Dataquest Program: Semiconductor Contract Manufacturing Services Worldwide ProductCode: SCMS-WW-DP-9812 PublicationDate: February 1,1999 Filing: Perspective (For Cross-Technology, file in the Semiconductor Regional Markets and Manufacturing binder) Semiconductor Contract Manufacturing Services Worldwide • The 0.35-micron technology category, now beginning to see higher production volumes, continues to undergo substantial price reductions, with average wafer prices falling 10 to 12 percent since June 1998. • The lagging-edge categories experienced some price firming during the four-month period, with average wafer prices in some technologies increasing by as much as 18 percent. The Foundry Wafer Pricing Survey Dataquest conducts periodic surveys of the SCM market for the purpose of tracking foundry wafer pricing trends. At this time, the survey concentrates on mainstream CMOS process technologies segmented by minimtim linewidth. For purposes of reporting prices, linewidth is defined as the "as- drawn" feature size, which is a more conservative measurement than the sometimes quoted "effective channel length," symbolized as L^„. The SCM wafer pricing survey completed in October is the third of three surveys plarmed for 1998. The previous survey was conducted in June, and the results were published in the Perspective titled "Semiconductor Contract Manufacturing Wafer Pricing Trends: Jxme 1998" (SCMS-WW-DP-9809), dated August 31,1998. In October, a total of 19 companies were surveyed and reported prices paid and charged for 150mm and 200mm foundry-processed CMOS wafers. For this study, the group comprised 10 SCM users (buyers) and nine SCM suppliers (sellers), representing fabless semiconductor companies, integrated device manufacturers (IDMs), and dedicated foundries. The survey encompassed a variety of process technologies, categorized by minimum feature size and number of metal interconnect levels. Also, participants were asked to report prices for a number of special processing options, such as tungsten, chemical mechanical planarization (CMP), salicide, and epitaxial silicon. Finally, foundry users and suppliers were polled to obtain a consensus view on the expected change in wafer prices over the next four months (the interim period between surveys). '-^ October 1998 Foundry Wafer Pricing Update Table 1 summarizes the results of the most recent foimdry wafer pricing siirvey, conducted in October 1998. Participants were asked to report prices paid for foundry-processed wafers delivered during October 1998, assuming CMOS, unprobed wafers with 13-to-15 mask levels, single-level poly, and no epitaxial silicon. The minimum volume requirement was set at 1,000 wafers per month. The estimated average price is the average of all prices reported or, in cases of small sample size, Dataquest's estimate of the average price. The price range shows the minimum and maximum prices reported. SCIVIS-WW-DP-9812 ©1999 Dataquest February 1,1999 Semiconductor Contract Manufacturing Services Worldwide Table 1 October 1998 Foundry Wafer Prices (U.S. Dollars per Wafer) 150mm Wafer 200mm Wafer Average Price Price Range Average Price Price Range l-Micron, 1P2M 505 370-700 NA NA 1-Micron, 1P3M 541 420-750 NA NA 0.8-Micron, 1P2M 498 300-700 NA NA 0.8-Micron, 1P3M 522 340-750 NA NA 0.6-Micron, 1P2M 538 370-650 870 775-935 0.6-Micron, 1P3M 559 420-670 1,035 889-1,150 0.5-Micron, 1P2M 580 470-710 1,019 900-1,280 0.5-Micron, 1P3M 623 510-780 1,090 950-1,400 0.35-Micron, 1P3M NA NA 1,354 1,100-1,900 0.35'Micron, 1P4M NA NA 1,488 1,200-2,050 0.25-Micron, 1P3M NA NA 2,055 1,660-2,500 0.25-Micron, 1P4M NA NA 2,241 1,910-2,750 0,25-Micron, 1P5M NA NA 2,209 1,600-3,000 Note: 1P2M = 1 polysilicon level, 2 metal levels; 1P3M = 1 polysilicon level, 3 metal levels; 1P4M = 1 polysilicon level, 4 metal levels; 1P5M = 1 polysilicon level, 5 metal levels. NA = Not available Source: Dataquest (December 1998) Table 2 compares the average prices reported in October 1998 to those reported in the previous survey of June 1998. Foundry wafer prices have continued to slide during the past six months, reflecting the general overcapacity in the market that has existed since mid-1996. How the Views of Buyers and Sellers Differ Responses of buyers and sellers may differ in a survey of this type, and we might expect buyers to report generally lower prices than sellers, reflecting their respective biases in the ongoing negotiations between the two. Interestingly, this generalization has not always held true in past surveys of foundry wafer prices, and the cvirrent results are a case in point, as shown in Figures 1 and 2. The average reported prices of sellers are consistently higher for 200mm wafers, but 150mm wafer prices show the opposite trend. The line charts in Figures 1 and 2 represent the estimated average price for each technology category. The column charts represent the average of prices reported by buyers and sellers as separate groups. In those cases where a column is missing, the number of responses from the particular group was not sufficient to provide a statistically meaningful result. SCMS-WW-DP-9812 ©1999 Dataquest February 1,1999 Semiconductor Contract Manufacturing Services Worldwide Table 2 Change in Average Foundry Wafer Prices—^June 1998 to October 1998 (U.S. Dollars per Wafer) ISOmin Wafer 200mm Wafer June 1998 October 1998 Change(%) June 1998 October 1998 Change(%) l-Micron, 1P2M 449 505 12.4 NA. NA NA 1-Micron, 1P3M 458 541 18.2 NA NA NA 0.8-Micron, 1P2M 483 498 3.2 NA NA NA D.8-Micron, 1P3M 500 522 4.4 NA NA NA 0.6-Micron, 1P2M 549 538 -2.0 917 870 -5.1 0.6-Micron, 1P3M 576 559 -2.9 960 1,035 7.8 0.5-Micron, 1P2M 600 580 -3.3 1,093 1,019 -6.7 0.5-Micron, 1P3M 650 623 -4.1 1,195 1,090 -8.8 0.35-Microa 1P3M NA NA NA 1,511 1,354 -10.4 0.35-Micron, 1P4M NA NA NA 1,686 1,488 -11.8 0.25-Micron, 1P3M NA NA NA 2,267 2,055 -9.4 0.2S-Micron, 1F4M NA NA NA 2,444 2,241 -8.3 0.25-Micron, 1P5M NA NA NA 2,611 2,209 -15.4 Note: 1P2M = 1 polysillcon level, 2 metal levels; 1P3M : 1 polysilicon level, 3 metal levels; 1P4M = 1 polysilicon level, 4 metal levels; 1P5M =: 1 polysilicon level, 5 metal levels. NA = Not available Source: Dataquest (December 1998) Figure 1 October 1998 Foundry Wafer Prices: 150mm Wafers U.S. Dollars 700 0 Buyers • Suppliers ^— Estimated Averages T I 1-Micron, 1-Micron, 0.8- 0.8- 0.6- 0.6- 0.5- 0.5- 1P2M 1P3M Micron, Micron, Micron, Micron, Micron, Micron, 1P2M 1P3M 1P2M 1P3M 1P2M 1P3M Note: 1P2M = 1 polysilicon level, 2 metal levels; 1P3M = 1 polysilicon level, 3 metal levels. Source: Dataquest (December 1998) SCMS-WW-DP-9812 ©1999 Dataquest February 1,1999 Semiconductor Contract Manufacturing Services Worldwide Figure 2 October 1998 Foundry Wafer Prices: 200mm Wafers U.S. Dollars ^,OUU "• A^HIT' M 0 Buyers 2,000- V'V^-^^iBn m^ H Suppliers '^L<'--;'"WJH ^^JijSBmL •^ Estimated Averages 1,500- Z'^^m m r^^o-^jwH •fc^p '•y^mk i •^ ^''^'^^-^^ffl 1,000 - J^o*;^v i^'^'^Sl i '^m ^^^^ffiB ifl 500- ^'^fl M "WS^ 'wm f/^Sm ^^/mBak VJ^IA • 1 Wmk '/iyvMiv^Sm 1 1 1 ! jyylsa' '^^M 1 1 u-j 1 imjm ^•^"..'Kwl 0.6- 0.6- 0.5- 0.5- ^M0.35 - 0.35- 0.25- 0.25- 0.25- Micron, [^yiicro n Micron Micron, 1 Micron, Micron, Micron, Micron, Micron, { 1P2M 1P3M 1P2M P3M 1P3M 1P4M 1P3M 1P4M 11P5 M 96864a Note: 1P2M = 1 polysilicon level, 2 metal levels; 1P3M = 1 polysilicon level, 3 metal levels; 1P4M 1: polysilicon level, 4 metal levels; 1P5M = 1 polysilicon level, 5 metal levels. Source: Dataquest (December 1998) Process Option Prices Prices for special processing options are shov^n in Table 3. These are processes outside of the standard process flow that normally involve an additional cost.