Intel Ceding Leadership in EUV

The few chipmakers that lead technology development are betting that by next year extreme ultraviolet lithography (EUV) will take transistor densities on semiconductors another step closer to their physical limits.

Intel, once the world’s biggest chipmaker, appears to have given up efforts to lead the pack in EUV. The company was among the first to start EUV development in the late 1990s.

Intel will not be inserting EUV anytime soon, according to Mark Li, an electronics engineer and analyst with Bernstein. The company is having difficulties ramping 10nm, and EUV in Intel’s 7nm, expected several years from now, remains an open question, he adds.

In the meantime, Samsung and TSMC are pressing ahead with EUV, albeit cautiously. While Samsung and TSMC are developing EUV for introduction in 2019, the rest of the world’s major chipmakers appear to be falling behind.

Intel, for now, appears to be a distant third in the race.

“Intel has effectively lost its manufacturing leadership,” according to Mehdi Hosseini, an analyst with Susquehanna.

Globalfoundries last year said it expects to use EUV tools in 2019 production flows to make contacts and cut masks.

Samsung will introduce 7nm, the newest node, later than TSMC but with EUV, according to Li. While TSMC's enhanced version of 7nm, called 7nm+, will be slightly later with fewer EUV layers, the flexibility of having both EUV and non-EUV versions will be an advantage, he says.

Samsung has consistently planned for EUV insertion with a minimum of 8-10 layers at 7nm compared with a few layers that TSMC has planned at 7nm+, according to Hosseini.

Intel may be biding its time until the technology is more mature.

The company told EE Times last year that it is committed to bringing EUV into production as soon as the technology is ready at an effective cost. Intel may not insert EUV into its process technology until late 2021, according to a forecast from Bernstein.

“It now appears that Samsung's aggressive plans have backfired, and prospective customers are not so pleased with Samsung's 7nm process recipe” Hosseini said.

Hosseini added that Susquehanna doesn't believe that Globalfoundries had gained much traction at 7nm. Globalfoundries subsequently announced that it suspended work on 7nm node, and will lay off nearly 5% of its workforce and make its ASIC group a wholly-owned subsidiary so it can partner with one of the remaining 7nm foundries.

The chip industry’s cautious adoption of EUV lithography will probably not have an impact on TSMC’s business with Apple, according to Bernstein’s Li.

“Though Apple may not be using EUV next year, we believe TSMC will retain Apple's exclusive processor business,” he said. “We also don't think this will negatively impact TSMC's EUV plan.”

TSMC will be able to bring EUV to mass production in the second half of 2019 as many customers, including mobile, GPU and cryptocurrency miners, are interested in 7nm+, Li said.

For now, TSMC leads its competitors with the rollout of 7nm technology, and that’s one of the key reasons the company has been able to increase business with Apple and other key customers, according to Susquehanna's Hosseini.

“TSMC appears to be winning most of the leading-edge design wins due to better 7nm process technology performance, lower power consumption and better area density,” he told EE Times. “TSMC’s 7nm is expected to account for more than 20 percent of the company’s revenue in the December quarter as the customer mix includes more than 50 different product tapeouts for diverse applications including APs, GPUs, server CPUs, network processors and FPGAs.”

Technology leadership should help TSMC diversify its customer base in the future.

“TSMC will increasingly benefit from non-smartphone markets over time as new growth drivers start to inflect: 5G basestations, cloud computing, autonomous vehicles and AI are all nascent but important long-term opportunities in high-performance compute that require leading-edge technology,” according to Arete analyst Brett Simpson.