Second Hand Equipment

A winning strategy for ST

Christian CLERC

WW Engineering Director

Agenda

• Introduction to STMicroelectronics

• The importance of ‘Moore’s Law’ technologies

• Opportunities in ‘More than Moore’

• Re-using existing 200mm assets

• Requirements for second hand tools sourcing

• Conclusion

2

Introduction to STMicroelectronics

• A global semiconductor leader

• The largest European semiconductor company

• 2013 revenues of $8.08B

• Approx. 45,000 employees worldwide

• Approx. 9,000 people working in R&D

• 12 manufacturing sites

• Listed on New York Stock Exchange, Euronext Paris and Borsa Italiana in Milano

Who we are 4

Where you find us 5

Our MEMS & Sensors

are augmenting

the consumer experience

Our automotive products

are making driving safer,

greener and more

entertaining

Our smart power products

are allowing our mobile products to operate longer

and making more of our energy resources

Our Microcontrollers

are everywhere

making everything smarter

and more secure

Our digital consumer products

are powering the augmented

digital lifestyle

ST ‘s Solid Foundation 6

World-class Technology • 28nm FD-SOI agreement with top-tier foundry

• Embedded flash for MCU in 300mm

• BCD9S for power applications

Unique Set of R&D and Design Competences • 9,000 people working in R&D and product design

• Strengthening capabilities in application processors, RF, analog and

power technologies, software and complex system integration

Intellectual Property • 16,000 owned patents corresponding to 9,000 patent families

• 598 new patent applications filed in 2013

Independent Manufacturing • Supply flexibility and asset-lighter model provided by foundries

Worldwide Sales & Marketing Network • 79 sales offices in 35 countries

• Global coverage with 54 associated distributors in over 150 countries

Digital

Convergence

Group

(DCG)

Imaging,

BiCMOS, ASIC

& Silicon

Photonics

(IBP)

Automotive

Product Group

(APG)

Analog, MEMS

& Sensors

(AMS)

Microcontroller,

Memory &

Secure MCU

(MMS)

Embedded Processing Solutions

(EPS)

Industrial &

Power Discrete

Group

(IPD)

Product Segments 7

Sense & Power and Automotive

Products (SP&A)

Global Presence

& Sales by Market Channel 8

~15%

~25%

~42%

~19%

Americas

EMEA

Greater China & South Asia

Japan & Korea

~74%

~26%

OEM Distribution

% by location of order shipment % by market channel

FY2013

Flexible and Independent Manufacturing 9

Front-End

Back-End

Morocco

France

(Crolles, Rousset, Tours)

Italy

(Agrate, Catania)

Malaysia

Singapore

Philippines

China

(Shenzhen

/ Longgang)

Malta

Technology competitive advantage 10

« More than Moore »: Diversification

Analog/RF Passives HV Power Sensors &

actuators Biochips

130nm

90nm

65nm

45nm

32nm

22nm

SoC System-On-Chip

SiP System-In-Package

VLSI PLATFORM

« M

oo

re’s

Law

»: M

inia

turiz

atio

n

CMOS

Digital

Embedded

non

volatile

memory

Imaging

RF • Information, storage,

processing,

transmission

• Digital content

• Interacting with people

and environment

• Non-digital content

Beyond CMOS Quantum Computing Molecular Electronics

Spintronics

Second Hand Equipment

200mm Equipment Market Trends

Power device growth driven by renewable energy and electric car expansion

Majority of chips for consumer electronic market remains in 200mm

Automotive silicon increasing to improve fuel efficiency and safety

MEMS usage expanding to new application and industries

12

Semiconductor demand growing in multiple segments

Semiconductor demand in multiple manufacturing segments addressed by 200mm fabs

13

Needs additional 200mm Equipment

to complement the install base

Fundamentals continue to support demand : • Technology transitions

• Fab expansion and conversions to increase capacity

• Expansion in new markets

200 mm installed capacity will remain high 14

Semiconductor Manufacturing in Europe 15

25 (200mm) fabs running in Europe

25 to be

confirmed

Why do we still need to buy 200mm Equipment ?

• Equipment internal transfer

BUT

not always possible

(global capacity or Equipment model not available)

• Equipment upgrade or retrofit

BUT

cost can be too high

(tool retrofit at standard configuration)

16

Preferred solution is to use internal assets

Why Second Hand Equipment ?

• Many Opportunities on Second Hand Equipment Market

• Cost competitiveness

• Difficult to get new equipment from supplier:

• Line stopped

• Lead time

17

Opportunities on Second Hand Equipment Market

• Many fab closures World Wide

• Mix evolution in most of the fabs

A lot of equipments available BUT

• Equipment configuration specific to the fab

• Equipment operating conditions difficult to evaluate • Equipment only visible in warehouse

• No test possible

• No/poor data available before equipment was stopped

• Risk of equipment cannibalisation for spares

18

Start-up Lead time can be compromised

Cost competitiveness 19

BUT

What is the real equipment value?

Need to include

• All retrofits, upgrades, missing parts

• Obsolete components and module replacement

• Software fees

• CE mark compliance

Start-up Lead time can be compromised

Cost appears cheap…. and cheaper than new Equipment (OEM)

New equipment from supplier

• Not always possible to get the Equipment OEM manufacturing line stopped

• Higher Cost than other solutions (by definition)

• Higher lead time Priority given to 300mm Equipment

200mm not entering in a standard parts ordering

• Equipment manufacturing and installation quality can be an issue Less skilled people …

20

BUT

The Safest and less risky solution

Start-up Lead time can be compromised

Lead time

• Priority must be given to :

• Fast delivery

• Fast installation

• Equipment full production capability demonstrated

• No surprise: everything must be anticipated

21

New Business opportunities require to be fast and reactive

Second Hand Equipment Solutions 22

C

O

S

T

R

I

S

K

Source Challenges

Not low cost

Lead times

Equipment 'too good'

Turn Key solution Availability of donor tool

Refurbisher/Broker Cost close to OEM?

As is Where is Donor tool quality

Broker with 3rd party can refurbisher source

Upgrade/modify/install parts?

Internal skill set

Tool compatibility

Number of failed parts

unknown

Refurbished 'As New'

OEM supplied

As is Where is

Install by fab engineer

Europe challenges

• CE Mark constraint including custom issues

• ROHS2 new European regulation Impact?

• 2nd hand challenges acceptability (European culture?)

• Legacy / Obsolete Equipment: less skill / Spares parts availability

• Software update / Licences fees

• 2nd hand tool configuration too much customized

• Most of the Equipment in Asia (Fab closure / more Fabs)

• 2nd hand capability more flexible in Asia (more competition)

• Some OEM not playing the game and not supporting Europe enough

23

ST approach 24

Need to be adapted according to the projects and Equipment types

There is no unique miracle solution !

Best compromise

between

Speed – Quality – Cost

Questions / Answers