Axcelis Technologies announced in January that the vendor has signed a long-term contract with a major North American semiconductor manufacturer to provide top-to-bottom on-site management for all of Axcelis's systems. Valued at more than $30 million, the agreement with Axcelis's Global Services Solutions business covers service and support for all ion implantation, dry strip, and RTP process tools at the customer's 300-mm fab.

Jim Neroda, director of marketing for global customer solutions at Axcelis, wasn't at liberty to divulge the name of the client. He disclosed that the chipmaker—"as big as you can get"—manufactures both logic and memory devices, "but less memory."

Both suppliers say acute cost-of-ownership concerns are driving their customers to look favorably on outsourcing solutions in order to squeeze every bit of profit out of their operations, especially when new fabs cost upwards of $2 billion. Kirby Hicks, managing director of operations for Applied's customer productivity solutions field operation, says, "We feel we've identified the market and the market opportunity early as we've been working the trade shows. We're beginning to see an overall outsourcing trend for customers, and we think we're leading the development of a market [for it]."

Ted Miller, vice president and general manager of Axcelis's Global Service Solutions, sees a change in attitude in the near future among chipmakers. "If we fast-forward four or five years from now, the way companies traditionally do service is going to seem pretty antiquated. The ability to utilize your own [production] resources more efficiently and effectively is where it's going to go." One big advantage, asserts Miller: chipmakers will be able to predict when tools "will go down."

At newer fabs, Miller sees great interest in outsourcing, although the level of interest varies. "There's such a drive for cost-of-ownership improvements, and the technology is changing faster and faster. It starts with us, as consumers," he reasons. Chipmakers take note when, for example, consumers want the latest cell phone models. Device manufacturers find cycle time shrinking just as they need to place "more and more on the chips. Therefore, they are putting more and more of their energies on technology." A chipmaker has to determine whether to focus on its core competencies or whether it needs to build up "a bunch of costly assets" to keep its equipment in top shape.

As befits the world's largest supplier of process equipment, Applied's brand new program is broad in scope. The vendor conducted extensive research before launching the RPM service. Tom Lipscomb, RPM senior director of operations, says the company met with large architectural and engineering firms to understand what's driving customer needs. "There is a need for information that would come from equipment suppliers from a temporal perspective that is totally different from ours. Our ends are driven by the customer's [delivery] time for the tool."

Applied initially places a small team of experts in the fab for a month to two months to work with customers in specific areas of need, Lipscomb explains. "What we do from there is to build up the team, and try to integrate the capability with the customers' team." This initial "two-in-a-box" approach permits the supplier to tackle short-term problems such as an etch tool that is not coming on-line quickly enough, Lipscomb says. "At that point what we'll do is put in a larger and somewhat atypical team with clearly more-defined roles and responsibilities to address specific risks."

Applied adds members to the support teams "as appropriate," Lipscomb says. "We try to use as much of the customer infrastructure as possible. Our goal is that you should have professionals doing this."

TIME IS MONEY: In this accelerated ramp-up scenario, Applied Materials claims a logic fab can increase revenue by up to $675,000 per week. Potential gain during a 70-week ramp is approximately $37 million, based on assumptions including 300 die and $2,250 revenue per wafer.

Hicks says the RPM program is designed to work directly with the customers to provide them the "professional capability" to determine the construction fab's immediate status before beginning hookups, installation, and eventual tool start-ups. Hicks notes that other equipment suppliers "are interested in working with us, because we assist them in reducing some of their costs and helping them respond to customer needs on-site."

One of the streamlining breakthroughs is the ability to work with all the different construction trades within the original plan, Hicks asserts. "That's a benefit to the other tool supplier. [The program] could be perceived as a threat to Applied's competitors, but we've actively placed priorities on competitors' tools. We align all activities in the fab to the customer's goal. This is not about making Applied look better."

The RPM program has been operating at customer fabs in the United States, Singapore, and Europe. In one instance, Applied "pulled in" the target date for first silicon "by over a month," Hicks says.

Neroda of Axcelis says outsourcing programs can make chipmakers more cost-effective. "Look, unit volumes aren't decreasing. There aren't fewer chips. They're just not selling at the average prices that they were a few years ago. The focus is on operating efficiency and expertise. It's a trade-off between being great designers of chips and greater fabricators of chips."

One of the big challenges, Neroda says, is "how do we optimize the performance of the chip so that the customer's...production ends are met, not only this year, but year to year?" By taking full accountability for keeping the installed tools running in shape, "we can project out years into the future what operating expenses will be."

The burden rests with Axcelis to reduce annual operating costs of its customers and that, says Miller, "forces us to drive down our own costs. We will reach the throughput numbers and at the same time drive costs down. It doesn't matter if we have to go double the number of people or double the number of parts."

Remote access to the equipment makes this job easier, Neroda believes. The Internet, he says, "has opened everyone's eyes. If equipment suppliers can collect the data, then we can make suggestions and production improvements in the fab for the yield in ways that we never could do before." For example, with electronic access to systems installed around the world, the expert in low-k dielectric materials stationed in Singapore "can now problem-solve in 15 different fab sites." Ironically, the ion implanters Axcelis installed as far back as the 1980s had dial-up capabilities, Neroda notes, adding, "we were never really able to tap into that because of security issues.

"The real bang-for-the-buck is knowledge transfer—that speed in solving problems," he continues. "MTTR time is going to keep decreasing. We'll shift away from the fix-and-repair kind of services [and move] more toward...maximizing throughput."

Applied's Lipscomb points out that fab ramp-ups often go awry. Tools ship months late, weeks late, weeks early, months early. Reasons vary. Equipment suppliers, market deadlines, poor communications—all these factors contribute.

"You're constantly going to run into situations where you don't execute to plan," Lipscomb says, recalling a recent experience. "A tool ships, in one particular instance, 21 days late. How do you deal with that? What you do is look at how much flow and access time is needed to bring the tool up.

"The first question is, 'Are we 21 days late?' The answer is, 'No, we're not. We've got a bit of flow. We're a good nine days late.' " In this instance the system "was a crucial tool with a lot of toxic gases" and related components.

The option of calling in the trade technicians to work double overtime on Sunday presented itself, but there was no need to set a world record in setup time for this particular system, Hicks notes. "People do it all the time. They get on this adrenaline rush...and keep plowing ahead blindly, and in the meantime there's a microscope that's not hooked up. So, when they...start running process wafers, they've got a problem."

Applied has hired specialists "to round out our capabilities," Hicks says. The RPM plan is designed to act as a bridge between construction management and production management. Typically, there's "a big handoff" between the facility side and the technology side. "We're trying to put the two sides together and manage that critical path to 'wafer out' to reach whatever level the customers need." In the case mentioned above, the fab ramped to 10,000 wafer starts per week at 95% yield, Hicks claims.

"We really have to put our arms around the entire thing," he emphasizes. "It's a capability that the customers can't achieve by fiat to the supplier."

The nearly two-year long exploration of the RPM program raised some questions, Lipscomb points out. "Is this a departure for Applied? How can we add the most value for our customers and be a world-class supplier? We looked at the internal efforts and the benefits of it."

Some customers had approached Applied and asked for help in their fabs, Hicks says. "They said, 'You seem to have better capability than we do.' It became very clear to us after a period of time that we really could improve the revenue stream."

"I almost think of it as a pit crew," says Neroda of the outsourcing concept.

If the outsource team is a pit crew, they're working on a track that's terribly slick from the downpour of gloomy economic news, however. Says Miller, "There are 15 to 20 big clients out there. We definitely want to keep them satisfied during a downturn. They've got long-term memories. They very much remember you when equipment orders start pouring in again."