KLA-Tencor Corporation (“KLA-Tencor”) is the world’s leading supplier of process
control and yield management solutions for the semiconductor and related microelectronics
industries. Our comprehensive portfolio of products, software, analysis, services
and expertise is designed to help integrated circuit (“IC”) manufacturers manage
yield throughout the entire fabrication process—from research and development
to final mass-production yield analysis.
We offer a broad spectrum of products and services that are used by virtually
every major wafer, IC and photomask manufacturer in the world. These customers
turn to us for inline wafer defect monitoring; reticle and photomask defect
inspection; critical dimension (“CD”) metrology; wafer overlay; film and surface
measurement; and overall yield and fab-wide data analysis. Our advanced products,
coupled with our unique yield technology services, allow us to deliver the complete
yield management solutions our customers need to accelerate their yield learning
rates, reduce their yield excursion risks and adopt industry-leading yield management
practices.
The semiconductor fabrication process begins with a bare silicon wafer—a round
disk that is six, eight or twelve inches in diameter, about as thick as a credit
card and gray in color. The process of manufacturing wafers is in itself highly
sophisticated, involving the creation of large ingots of silicon by pulling
them out of a vat of molten silicon. The ingots are then sliced into wafers
and polished to a mirror finish on the side where the circuits are made.
The manufacturing cycle of integrated circuits is grouped into three phases:
design, fabrication and testing. IC design involves the architectural layout
of the circuit, as well as design verification and photomask or reticle generation.
The fabrication of an IC, or “chip,” is accomplished by depositing a series
of film layers that act as conductors, semiconductors or insulators. The deposition
of these film layers is interspersed with numerous other process steps that
create circuit patterns, remove portions of the film layers, and perform other
functions such as heat treatment, measurement and inspection. Most advanced
chip designs require over 300 individual steps, many of which are performed
multiple times. Most chips consist of two main structures: the lower structure,
typically consisting of transistors or capacitors, which perform the “smart”
functions of the chip; and the upper structure, typically consisting of “interconnect”
circuitry, which connects the components in the lower structure.
When all of the layers on the wafer have been completed, each die on the wafer
is then tested for functionality. The wafer is placed on a prober that is used
to attach the input/output pins of the device to a tester. When chips are tested
on the wafer, it is called sort test. Sort test determines which chips are good.
The wafer is then cut up and the good die are bonded to lead frames that contain
pins used to attach the chip to the outside printed circuit board. Wires are
bonded from the input/output pads of the IC to the pins of the lead-frame. Then
the lead frame is encapsulated in packages typically made of plastic or ceramic
materials. The packaged part are put through a final test and then shipped to
customers. This entire packaging and testing process is called the “back end.”
Engineering analysis: This method of analysis is performed offline from the
manufacturing process to identify, analyze and locate the source of defects
or other manufacturing process issues. Engineering analysis equipment operates
with very high sensitivity to enable comprehensive analysis of wafers. Because
this method operates off the manufacturing line, high operational speeds are
not required.
Inline monitoring: This method of analysis is used to review the status of
ICs during production. Information generated is used to determine whether the
fabrication process steps are within required tolerances. It is also used to
make any necessary real-time process adjustments before wafer lots move to subsequent
process stations. Because information related to defects is needed quickly,
inline monitoring requires both high throughput and high sensitivity.
Pass/fail tests: This method of analysis may be used at several different points
in the manufacturing process to evaluate whether products meet performance specifications.
The most significant opportunities for yield and device performance improvement
generally occur either when production is started at new factories or technology
shifts in existing factories. Equipment that helps a manufacturer quickly increase
new product yields and optimize device performance enables the manufacturer
to offer these new products in high volumes early in the product lifecycle—the
time when they are likely to generate the greatest profits.
Customers
Intel is our largest customer.
Our business depends upon the capital expenditures of semiconductor manufacturers,
which in turn depend on the current and anticipated market demand for ICs and
products utilizing ICs. We do not consider our business to be seasonal in nature,
but it is cyclical with respect to the capital equipment procurement practices
of semiconductor manufacturers and is impacted by the investment patterns of
such manufacturers in different global markets. Downturns in the semiconductor
industry or slowdowns in the worldwide economy could have a material adverse
effect on our future business and financial results.
Competition
The worldwide market for process control and yield management systems is highly
competitive. In each of our product markets, we face competition from established
and potential competitors, some of which may have greater financial, research,
engineering, manufacturing and marketing resources than us, such as Applied
Materials, Inc. and Hitachi Electronics Engineering Co., Ltd. We may also face
future competition from new market entrants from other overseas and domestic
sources. We expect our competitors to continue to improve the design and performance
of their current products and processes and to introduce new products and processes
with improved price and performance characteristics. We believe that to remain
competitive, we will require significant financial resources to offer a broad
range of products, to maintain customer service and support centers worldwide,
and to invest in product and process research and development.
