Cash strapped DRAM makers can't afford 20nm

Christmas has been a time of wringing of hands for Taiwan-based DRAM makers who are finding themselves cast as Tiny Tim to the costs of installing extreme ultraviolet (EUV) lithography systems.

According to Digitimes the makers need to upgrade their production to 20nm and below processes, but they are being hamstrung by the huge costs of extreme ultraviolet (EUV) lithography systems.

Apparently a set of EUV tools will set you back $100 million per set, and the installation of such equipment also requires a considerable amount of dosh. Immersion scanners cost $33.6-50.4 million per set. Not the sort of thing that many DRAM makers can expect Father Christmas to deliver even if they have been very good this year.

Samsung Electronics and Hynix Semiconductor have already placed orders for the equipment which does not help. The pair cleaned up during the transition to sub-50nm production, with their enormous resources and strong cash position.

DRAM prices have been dropping which makes it hard for the Taiwan-based chip suppliers to make enough cash to buy the new gear. This is sticking Taiwan two generations behind Korea. At this rate it looks like the only thing that will save Taiwan is a second Korean War.

Most of Taiwan’s DRAM makers have just started taking delivery of immersion scanner equipment, a key tool for ramping production on sub-50nm processes. Nanya Technology and Inotera Memories were ahead of their domestic peers, having installed their first sets of immersion tools in late 2009, Digitimes said.