Managing semiconductor tool obsolescence

9th October 2017
Posted By : Joe Bush
Managing semiconductor tool obsolescence

When it comes to semiconductor manufacturing equipment obsolescence, there’s no good way to avoid the issue. With the significant expansion of the Internet of Things (IoT) and MicroElectroMechanical Systems (MEMS) markets as well as the continuation of More than Moore (MtM), the demand for devices on legacy equipment is increasing. Semiconductor fabs using this legacy equipment will inevitably lose part of their supply lines to obsolescence every year. Owen Tangney, Managing Director of Ichor Systems, explains.

Many Integrated Device Manufacturers (IDMs) put off dealing with the issues until it is too late, but there are significant drawbacks to this approach. In many cases, waiting until obsolescence becomes a problem can have serious consequences. These include extended system down-time, lost production and potential yield loss when replacement parts are not fully engineered and tested with urgency to get the systems back to production.

Semiconductor manufacturing equipment parts become obsolete when the Original Equipment Manufacturer (OEM) discontinues making the part or servicing the systems in which is it used. This commonly occurs when the demand for such devices drops to a level that makes it unsustainable for the OEM to continue manufacturing it. Often times they may also be getting pressure through the supply chain for the sub-assemblies that make up the part in question.

As the devices we use become smaller and we are ever more connected through IoT and MEMS devices, the entire supply chain that serves semiconductor manufacturers is affected, especially the systems used in 150mm and 200mm tech nodes.

The reactive approach to obsolescence management
Manufacturers typically have about 6-12 months to react to an end-of-life announcement on critical components. This leads to a last time buy process in which they try to bulk up on inventory to extend the life of their production lines, but this is a temporary solution at best. In many cases the amount of inventory needed to extend equipment lifetime is simply unavailable. According to research on obsolescence challenges faced by IDMs, ‘a typical end of life announcement generates product orders to the Original Component Manufacturer (OCM) that cover only 60% of future demand for that specific part.’

While the last time buy process quickly consumes the remaining inventory for an obsolete component, there are other ways to manage end of life announcements. Some manufacturers will simply upgrade their production lines with newer equipment, but this is not cost effective in the long term. It is only a short term fix at best, as this equipment will also have parts going obsolete early into its lifecycle. Supply chain managers know that investing in new equipment every time a tool part goes obsolete is not sustainable.

Building relationships and planning ahead
Alternatively, some IDMs will engage with a licensed OEM partner to develop a repair and refurbishment programme, or to develop new upgrades for their current systems. This works best when there is a wider relationship between the IDM community and the licensed OEM partner. When customers and suppliers work together on a holistic strategy to combat the obsolescence issue, everyone benefits.

When they are aware of systems and parts that need to be replaced, manufacturers can work with licensed OEM partners to re-engineer sustainable solutions without heavily investing in new equipment. These third-party partners have relationships with the OEMs and access to parts and designs that are used to tailor custom solutions and value added manufacturing. Semiconductor manufacturing systems can be updated to bypass obsolescence issues and keep working long after individual parts are discontinued.

By working proactively with suppliers, semiconductor fabs can successfully mitigate the effects of obsolescence. Attacking the issue head-on helps extend the lifetime of machines as well as reduce potential expense and capacity reduction.

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