On a broad scale, the announcement means that a chip battle in the next millennium is beginning to take shape.
Intel said today it will use larger "wafers" to reduce manufacturing costs by 30 percent. Intel will also move to the next generation of production technology called "0.13." Motorola also said today that together with Infineon Technologies it has transitioned successfully to bigger wafers on a pilot line for making memory chips. Infineon Technologies was formerly Siemens Semiconductors.
The wafer is a thin slice of semiconductor material on which the chip's circuits are formed. Both Intel and Motorola are moving to 300 millimeter wafer sizes from 200 millimeter which will increase production yields since more chips are produced per wafer.
Generally, the smaller 0.13 production technology combined with copper will allow for smaller and faster-running chips, while the larger wafers provide for more efficient production.
Intel said it will begin using these larger wafers on a next-generation, 0.13-micron production process with copper in 2002--about one year after it starts production on this new process.
IBM was the first chip manufacturer to move to copper and is already making PowerPC chips using this technology which replace aluminum interconnects with copper.
"IBM is certainly leading in the move to copper. Intel is being more conservative, as it can't afford to have any problems. For IBM, [production] yield problems are an annoyance. For Intel, yield problems are a financial disaster. As a result, IBM could have a small technology edge over Intel," said Linley Gwennap, editorial director of the Microprocessor Report.
"The road to the Internet is paved with silicon," said Craig Barrett, Intel chief executive officer, in a statement. "The 300 mm wafers will help us get there more cost-effectively, and Intel believes it is the time for the industry to move to a new, larger wafer generation," he added.
Indeed, the battle lines are drawn as chipmakers move into the age of the Internet. Smaller, faster chips will be needed in Internet-centric devices such as handhelds, TV set-top boxes, and low-cost PCs. Because the Internet is not tied to any particular operating system or chip architecture, this makes for a potential free-for-all for semiconductor manufacturers.
"[Because of ] the nature of most internet appliances...vendors can fight it out on the basis of performance, features," said Nathan Brookwood, an analyst at Insight64.
IBM is already making more advanced copper-based PowerPC chips. This is the processor architecture which powers IBM's brawny RS/6000 Unix and AS/400 computers, core hardware products in its e-commerce strategy. Motorola, with IBM, also makes PowerPC chips for Apple Computer's colorful iMac Internet box and is eyeing more of its future chips for the massive market for Internet networking equipment.
Also, Nintendo has announced in May that it would use copper IBM PowerPC processors to power its next-generation game machine. Nintendo's "Dolphin," which arrives in time for the holidays in 2000, will come with a copper 400-MHz PowerPC chip that is similar to the highest-speed processor used currently in Apple computer systems.
Intel, meanwhile, faces a more competitive future as the old concept of a PC is de-emphasized in favor of simple devices that make the Internet run. Advanced Micro Devices has indicated it will transition to more advanced production techniques with its K7 processor, including copper, as its chips continue to find their way into more low-cost PCs designed as Internet computers.
Intel, for its part, is planning to supply chips for a host of Internet devices ranging from the standard PC to low-cost Internet appliances all the way to large servers which power Web sites. The larger wafers make it more economical for Intel to meet the needs of these markets.
Of equal importance, this move by the world's largest chipmaker will send a clear signal to chip production equipment manufacturers that it's time to begin making equipment for this new generation of chips, an Intel spokesperson said.
The larger wafer size represents more than a doubling of the silicon wafer's surface versus today's standard 200 mm wafer resulting in cost reductions of 30 percent, the company said in a statement.
Meanwhile, the 0.13 copper technology will be introduced as a successor to today's 0.18 production technology. Generally, the smaller the size, the faster the chip and the more circuits can be packed together. So, 0.13 technology can realize faster chips with more features than 0.18 chips.
"With our 0.18 micron process technology now in production, it is time to aggressively step up our pursuit of our next generation process technology development," explained Sunlin Chou, Intel vice president and general manager of the Technology and Manufacturing Group, in a statement. "We plan to be the first to ramp production on 0.13 micron technology with copper metallization, initially on 200 mm wafers, and then on 300 mm wafers."
Intel said the new production process will produce advanced microprocessors and other semiconductor products that will be the future versions of the Pentium III, Pentium III Xeon, and Celeron processors. In addition, Intel's new IA-64 microprocessors will take advantage of this future manufacturing technology.