Chip Equipment Firms Meet on Positive Note

Manufacturers of the multimillion-dollar equipment used to make computer chips are gathering for their annual trade show in San Francisco beginning today, amid optimism that their three-year industry slump is over.

“It’s going to be a big love-in,” said Mike O’Brien, an analyst at SoundView Technology Group. “It’s going to be 180 degrees different from last year.” The industry’s trade group, Semiconductor Equipment and Materials International, plans to release a survey of member companies reflecting growing optimism and a forecast for industry revenues to grow 9% in 1999 to $23.8 billion, compared with a drop of 20.9% in 1998. The one remaining cloud hanging over the equipment industry’s head is the volatile memory chip business, where pricing is on the downswing again, which could affect equipment purchasing patterns.

Still, the industry is especially jolly after major chip makers such as Intel, Motorola and Taiwan Semiconductor Manufacturing announced plans to begin using larger silicon wafers, which will require new 300-millimeter chip-making equipment. The industry’s much-anticipated move to this so-called 300mm technology--where silicon wafers will be 300mm, or 12 inches, across, up from the current 200mm, or 8 inches--had been delayed because of the Asian financial crisis, which erupted in July 1997. Bigger silicon wafers will enable chip makers to have more chips per wafer. Another focus at the show will be new technology to use copper instead of aluminum to conduct electricity in computer chips, making them faster.