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Intel downplays delays in chipmaking gear

The company faces changes in its chip manufacturing schedule because a new batch of lithography equipment, due in 2005, now is set to arrive sometime in 2007.

Intel has been forced to alter its chip manufacturing plans to work around delays in the availability of certain kinds of new chipmaking equipment.

The Santa Clara, Calif., company disclosed this week that it will adjust its chip manufacturing schedule in order to continue working with its current crop of lithography tools because a new batch of equipment, which had been expected in 2005, now is set to arrive sometime in 2007.

Chip lithography equipment operates like a slide projector. The tools direct light through a lens and a device called a photomask, which has an image printed on it, to cast an image on a silicon wafer. The image becomes a template for creating features inside a processor during manufacturing.

The introduction of the next generation of lithography tools, designed to produce light at 157-nanometer wavelengths as opposed to the current generation's 193-nanometer wavelength, has been pushed back by chip equipment manufacturers because of glitches in development and the drag of the economic slowdown, an Intel representative said.

Intel--which hedges its bets by developing new manufacturing processes using both current and expected lithography tools--doesn't expect that keeping the current machinery on hand longer will affect its ability to move to new manufacturing process technology or to produce its Pentium or other chip lines, said spokesman Manny Vara.

Instead, Vara said, "we are adjusting the manufacturing road map to when we think the (new) tools are going to be available."

Chipmakers move to new manufacturing processes to produce chips containing smaller features and packing more transistors in order to boost performance. When moving through several manufacturing processes, they eventually need to switch to new lithography tools that produce shorter wavelengths of light, thus allowing them to more easily lay out the smaller features inside the newer chips.

Intel had already planned to use 193-nanometer lithography equipment in its next-generation 90-nanometer manufacturing process. The company's 90-nanometer transition will begin later this year. (Eds. note: The 90-nanometer measurement, like the references below to 65, 45 and 32 nanometers, refers to the size of the features inside the chip, not the wavelength of light that the lithography tools use.)

But where it originally planned to switch to 157-nanometer wavelength lithography tools during 2005, Intel now plans to continue using 193-nanometer tools at least through 2007, as it awaits the new tools.

Intel had expected 157-nanometer tools to hit production during 2005 and a brand-new kind of tool based on extreme ultraviolet lithography, or EUV, to hit the market in 2007. Now it believes 157-nanometer tools will be ready for production in 2007 and EUV tools in 2009, a company representative said.

The chipmaker had been planning to make the switch to 157-nanometer lithography tools for its 65-nanometer chip manufacturing process, set to start in 2005. But it can extend 193-nanometer lithography to cover that manufacturing process as well.

Using 193-nanometer lithography equipment for longer than expected doesn't present a big problem for the company, said Risto Puhakka, analyst for VLSI Research, which tracks the chip equipment market.

"I don't think it's going to be an issue for Intel. There's several technologies for it to use to get around these issues using 193 nanometers," he said. "The consumer or end user would not see the difference."

But the development might make for more expensive masks, he said, boosting Intel's costs.

During 2005, Intel plans to make the call on whether to go to 157-nanometer or some other process, such as an extension of 193-nanometer lithography, for its 45-nanometer manufacturing technology. Intel will decide during 2007 what it will do for its planned 2009 transition to 32-nanometer chip manufacturing. There it is likely to use EUV lithography tools, Vara said, but that decision is still several years away.

While it may create some challenges for chipmakers, the delays affecting 157-nanometer lithography tools don't present a big surprise, Puhakka said.

"Equipment companies are going through the worst recession in the history of this industry," he said. "There's not much excitement in putting money into something that won't pay off for a few years. One thing that is good, however, is that it will help in terms of recovering the research and development costs for 193-nanometer (tools)."