Market Segments

Semiconductor industry revenues reached $220B in 2004 with projected growth to $256B expected by 2007 (Dataquest, 2005). The market can be divided roughly into four segments:

• Micrologic devices (microprocessors, microcontrollers, etc.). A commonly recognized example is the microprocessor chip that controls a computer.

• Memory chips (DRAM, Flash, etc.), used to store data for many common electronic devices from computers to cell phones and PDAs.

• Analog chips that receive real—world signals — such as sound, temperature, motion, and light — and convert them to digital signals, for example, a CAT scanner or digital camera.

• Application—specific integrated circuits (ASICs), specific—purpose chips used in data processing, communications, consumer, industrial, automotive, and military/aerospace applications, for example, in electronic toys.

Micrologic and ASIC Markets
Classified as both micrologic and ASIC chips, microprocessors are among the most difficult semiconductor devices to design and manufacture. As such, they serve as a suitable example of these classes since other micrologic and certain ASIC chips present similar fabrication challenges.

For a microprocessor, manufacturing must be precise, or device performance can be compromised. Lam equipment processes several steps, some of which are repeated multiple times throughout the manufacture of a microprocessor chip. The Company's equipment also provides critical capability, including:

Gate etch. This step forms the gate length (critical dimension or CD) that determines device speed. Controlling CD uniformity for advanced chips requires sophisticated process tuning capability. For example, Lam's 2300 Versys® Star™ precisely controls temperature and gas flow at each step across the wafer surface.

Copper dual damascene etch. This step forms the critical layers of wiring (interconnect) that connect individual devices to form an integrated circuit. Dielectric etch shapes the structures, which requires processes that can adapt to form vertical sides, flat bottoms, and corners with a range of aspect ratios. The ability to combine steps in one process module (in situ) is also highly desirable to improve productivity and lower costs. Demonstrating these capabilities in production, Lam's Exelan® Series of dielectric etch systems continues to lead the market for dual damascene applications.

Memory Market
The memory market has long been plagued by the oversupply and pricing pressures typified by a commodity market. Consequently, successful suppliers to this market must provide exceptionally high—productivity equipment that operates at low manufacturing costs while still providing the necessary technical capability.

Lam pioneered high—productivity and low cost—of—ownership strategies such as in situ processing with its Exelan systems, which reduce the number of systems needed and improve throughput. These systems also provide solutions for challenging applications such as high aspect ratio contact etch, delivering industry—leading etch rates and superior process results that support high yields.