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“What I worry about is capital
efficiency. How much it takes to
increase the number of bits by one
percent is going through the roof.
For every generation, the extra
spending is so much more,” he said.
Besides what he claimed was
slowing productivity of capital
equipment, materials are becoming
more expensive. Materials, both
direct and indirect, now claim more
than 26 percent of the total wafer
cost. He mentioned the rising cost of
gases such as xenon and krypton.
The ability to store many more
bits per wafer has been the engine
of a “virtuous cycle:” lower bit costs
open up new markets, which lead to
growth in demand, which attracts
new investments. “Reducing the
costs of our technology opens up
new markets. We know how well
this has been working. However, this
virtual cycle can quickly turn into a
vicious cycle. That is what has happened the last couple of years,” said
Sivaram, who heads up strategy and
technology at Western Digital.
Over the last seven years the
number of bits on a 300mm wafer
has increase by 4.5 times, and the
day is not far off when a single wafer
will hold a petabyte. “That is what
I want to happen, so we can (after
packaging in a storage system) put a
petabyte in your pocket.”
Equipment and Materials
Productivity
Flash is expected to become a
100-billion-dollar industry in
2025, and now accounts for about
22 percent of the semiconductor
industry’s capital expenditures,
even though revenues account for
roughly 11 percent of chip industry
revenues. That forward-looking
investment strategy, which he said
rivals that of a Las Vegas gambler
betting on a future card, requires
that all members of the value chain
do their part to keep costs under
control.
“If you spend 30 percent of revenue
in capital spending, and another
26 percent of every wafer goes to
materials, this is where that nice,
beautiful, virtual cycle can get ugly,”
Sivaram said, calling on “everyone
in the this room” to work to “share
value appropriately.”
“I need to get to better capital
productivity for this great story to
continue and for us all to be gainfully
employed,” Sivaram concluded.
16 | Thursday, July 14www.semiconductordigest.com
