FEI Company: Under the surface
Chip doctor takes 3D inspection from lab to fab
By Drew Wilson -- Movers & Shakers, 8/15/2002
Chip structures have grown so richly complex that yield-killing defects are now buried under the chip’s surface. Down there, a foreign particle such as a piece of metal may be the culprit, or perhaps a transistor or conducting wire is the wrong size.
 “We are enabling chipmakers to get across barriers they couldn’t get across before.” Vahe Sarkissian, CEO, FEI Company |
Conventional inspection is like taking the pulse of a patient who really needs an x-ray of his blood vessels, says Vahe Sarkissian, CEO of metrology company FEI.
FEI has an answer with its DualBeam tool, which provides a three-dimensional view of the wafer defect area. “Like when you’re in the ocean, if submerged you can see a lot better what’s going on below the surface,” Sarkissian explains.
DualBeam combines several core technologies into a system that resembles a surgical and analysis tool all in one box. Bob Johnson, analyst at Gartner Dataquest’s semiconductor research group, adds that FEI’s DualBeam actually cuts out a hole around the defect area, looks down that hole, and gives a view of just the defect area—without affecting the rest of wafer.
Previously, the suspect wafer would often have to be taken offline and brought to the lab while fab engineers waited for the diagnosis. In the process, the whole wafer had to be broken apart and destroyed in order to analyze one defect—throwing away anywhere from $5000 to $20,000 worth of revenue, depending on where that wafer was in the production process.
“We are enabling chipmakers to get across barriers they couldn’t get across before,” Sarkissian says.
Three-dimensional analysis tools like FEI’s are considered necessary technology for a leading-edge semiconductor company, says Dataquest’s Johnson. “It does give semiconductor manufacturers a certain capability to analyze buried defects that you can’t analyze any other way.”
Significantly, the company’s tools have been moving from the research lab in a chip plant up to the manufacturing line. The move saves the chip company time-to-data so that problems can be resolved quicker than before.
Sarkissian says FEI has already shipped two 300mm DualBeam systems directly into customer’s fabs in Asia, and he expects more direct shipments in the second half of the year. Getting from the lab to the fab has been the company’s goal.
“Because [FEI’s tools] are being incorporated as part of the manufacturing process rather than just an analytical tool in an analysis lab, they’re expanding their market opportunity from maybe a potential one or two tools per factory to maybe four to six,” says Mark Miller, analyst at Hoefer & Arnett.
FEI calls itself a structural process management company and promises its systems will provide faster time-to-data, shorter R&D cycles, and enhanced yields.
Customers include the big guns such as Intel, IBM, Samsung Electronics, TSMC, UMC, and Chartered Semiconductor.
Newer fabs coming online are starting to be more aggressive with their metrology and analysis capabilities. “Their feature size is going down to a point where they need this capability to find out what’s going on,” says Dataquest’s Johnson.
| “We’re in the heart of nanotechnology.” Vahe Sarkissian, CEO, FEI Company |
FEI also believes it’s well-positioned for the chip industry’s move to the nanotech level. Last year it introduced a new generation of its Tecnai-brand transmission electron microscope, which analyzes materials down to the atomic level. “We’re in the heart of nanotechnology,” Sarkissian says.
FEI was founded in 1971 as a provider of single-crystal materials for field emission research. The company assembled its technology through a 1997 merger with Philips Electron Optics, a Philips Electronics NV unit. Philips owned about half of FEI until last year when it reduced that to 25 percent ownership.
FEI’s business is driven more by technology shifts than by chip-company capacity increases. Moreover, the company has some diversity because it also sells to other sectors including data storage, life sciences, institutes, and industry.
That’s probably why in 2001, during a dismal chip market and capital spending restraints, FEI racked up a record year, with revenues rising 17 percent to $376 million. Sarkissian calls his company “semi-acyclical.”
“We have significant upside growth potential with downside buoyancy,” he says.
H&A’s Miller says about half of FEI’s business comes from semiconductors. “But the fact they’ve been able to maintain profitability and have a decent backlog of about $120 million is a tribute to them when a lot of people are reporting losses or very constrained results,” Miller says.
FEI’s competition primarily comes from Japan’s JEOL. Cristina Osmena, analyst at Needham & Company, believes FEI is several steps ahead of its competitors. “In terms of combining focused ion beams of electron microscopes, they’ve established themselves as the best supplier and have the most advanced product,” Osmena says. “Other companies supplying electron microscopes attempting to enter this market have missed the market window and are well behind in terms of sophistication of product.”
Osmena says the process-control and metrology market is characterized by small niches. Therefore FEI needs to work on diversifying its product line. “They have great positioning in terms of R&D labs, and now need to get deployed into more volume-production markets,” she says.
To that end, FEI has been forging alliances with the top chip-equipment companies. Last year it initiated a program with KLA Tencor to deliver a defect-inspection, review, analysis, and characterization line for chipmakers. Other alliances involve Novellus Systems and ASML.
FEI is also in a development agreement with Sematech to develop next-generation mask-repair solutions, which H&A’s Miller cites as an area of strong opportunity for the company.
This year, Needham & Co forecasts that FEI’s revenues will drop about 10 percent to $337 million due to a clampdown on capital spending in the chip industry.
FEI started the year with an $85 million quarter, down about 10 percent from the previous quarter. Sarkissian, however, expects a stronger second half. R&D expenses increased 11.4 percent to $11 million last year. The company expects those investments to pay off with the launch of new products later this year and to support the drive toward in-fab applications.
Moreover, as 300mm fabs with their more costly wafers come onstream, analysts expect FEI’s tool sales to gather momentum. In 2003, Needham’s Osmena has a revenue target of $412 million for FEI.
