1

Trends in development of breakthrough technologies in 2001-2010,

investment volumes for their implementation and market capacity forecast
INVESTMENTS, TARGET ACCORDING TO THE GOVERNMENT
Investments, PROGRAM (197,8 KK USD) Market capacity,
KK USD INVESTMENTS, REAL AND EXPECTED (197,8 KK USD) billion USD
100 MARKET CAPACITY, billion USD 500

90 450

80 400

70 350

60 300

50 95 250
405

40 85 78 200
315
30 53 150
210
20 100
23 122 26
20
10 15 50

0 0
1,2-0,8 μм 0,8-0,5 μм 0,5-0,35 μм 0,35-0,25μм
2001-2003 2004-2005 2006-2007 2008-2010

2004
 2
Design rules for semiconductor products and sales share in
the world market Market capacity , $
Power and и
Силовая automobile electronics
автомобильная 80%
электроника 80% 10 432 000 000
Industrial and military
Промышленная equipment 80%
и оборонная техника 80% 11 736 000 000
Consumer
Бытовая electronics
электроника70%70% 19 397 000 000
>1мкм Telecommunications
Телекоммуникации60%60% 11 247 000 000
Computer engineering
Вычислительная 30% 30%
техника 5 868 000 000
Mobile 10% связь 10%
Мобильная
1 956 000 000
Personal computers
Персональные 10%
компьютеры 10%
4 890 000 000
1мкм

Power and иautomobile

Силовая electronics
автомобильная 20%
электроника 20% 2 608 000 000
Industrial and military
Промышленная equipment 20%
и оборонная техника 20% 2 934 000 000
Consumer электроника
Бытовая electronics 30%
30% 8 313 000 000
<1мкм Telecommunications
Телекоммуникации 40%
40% 7 498 000 000
Computer engineering
Вычислительная 70% 70%
техника 13 692 000 000
Mobile 90% связь 90%
Мобильная 17 604 000 000
Personal computersкомпьютеры
Персональные 90% 90% 44 010 000 000
0 20 40 60 80 100

2004
 3
Production volumes
in years, $x109
World tendency in the
market development
depending on minimal
design rules

Minimal size of
element

PRODUCTION
Life cycle of
Sales volumes

Profitability
microelectronic 25-40% 15-25% below 10%

products
research, Introduction
design/developme
nt
Introduction growth maturity drop Life cycle
1-2 years 1 year 3-5 years 2-3 years
Fundamental stages
Equipment
investigation, design
Technologies
Costs

and research
Products

2004
 4
What do we know about our
competitors
China
Assembly
Started in 1990 IC production – 10 companies
(Motorola, AMP, Fairchild, Hitachi, IRM, Lute, NEC,
200 mm – 9 factories Samsung, Sony, ST, Toshiba)
in 6 cities (Suzhou, Shanghai, Tiaujin, Beijing, Wuxi,
150 mm – 10 factories Shenzhen)
125 mm – 4 factories 1.2 kk USD in 2003, and 15.35 kk USD by 2010, that made
100 mm – 5 factories 44% of the world output
Total: 28 factories SMIC 1300 K w/year 11 K w/year
Grace 1000 K w/year 83 K w/year
Production Hua Hay NEC 700 K w/year 58 K w/year
volumes Otres 400 K w/year 92 K w/year

Total 4100 K w/year 340 K w/year

2004
 5
What do we know about our
competitors
RUSSIA
Joint-stock company “Angstrem”
Manufacturing capacities :
- CMOS, BiCMOS and MOS ICs with 1.5-2.0 μm design rules on Joint-stock company “Micron”
100 mm wafers,
- LSI and VLSI on CMOS and BiCMOS technologies with 0.8 - 1.2 Manufacturing capacities :
- IC on CMOS, BiCMOS and MOS technologies with 1.5-
μm design rules on 150 mm wafers.
2.0 μm design rules on 100 mm wafers
Perspective - project FAB-2: production of ICs with 0.25-0.35μm
design rules on 200 mm wafers. Perspective - project “Set up of modern fabs for
production of competitive microelectronic products
based on advanced technologies" : wafer fabs with 0.5-
Estimated market capacity - 0.35 μm design rules on 200 mm wafers
500-800 kk USD
Import ICs
Russian ICs Research Institution of System
Analysis of the Russian Academy of
Science
Research Institution of System Analysis of the Russian
Domestic ICs Academy of Science has the capacities for production of
10-15%
6-9% Integral’s ICs
ICs with 0.35 μm design rules on 150 mm wafers with
up to 500 w/month output)

2004
 6
Our advantages
over competitors

• orientation to development of several basic technological processes (CMOS, bipolar,

BiCMOS) and not to one or two processes as usually
• clean technological module for production of ICs with 0.8 μm design rules
• design center («Belmicrosystems» Design Center) equipped with modern design and
development equipment and able to develop ICs and technological processes with submicron
design rules
• reserve and experience in basic technological operations based on fundamental researches
• cheap skilled labor and specialists
• certification of Quality System for compliance with the requirements of International
Standards ISO 9000
• cheap land and energy
• favorable tax policy

2004
 7
Problem description
Morally and physically obsolete equipment
Low efficiency

Results

Limited technological potentials

Reduction of occupied market segment

Solutions

Necessity of engineering infrastructure and clean rooms for

0.35 μm design rules.
Setting up the production of ICs with 0.35 μm design rules.

2004
 8

Project realization
Project constituents:
Production line modernization (engineering structures,
clean rooms, etc.);
Technology transfer (route, list of technological
operations, list of equipment, technical requirements for
VLSI design/development);
Delivery of set of special process and check and
measurement equipment;
Personnel training
Production set up

2004
 9
Problems to be solved for the objective achievement
1. Selection of silicon VLSI BiCMOS type with 0,5 μm design rules.
2. Determination of the minimal required and sufficient list of technological operations.
3. Determination of the minimal required and sufficient list of special process equipment and
check and measurement equipment.
4. The same items like items1,2,3, but for VLSI CMOS with 0,35 μm design rules.
5. Purchasing special process equipment and check and measurement equipment.
6. Delivery, installation and start-up of special process equipment and check and measurement
equipment.
7. Preparation of Module 7 clean rooms.
8. Appraisal of Module 7:
 constructions: walls, ceilings, floors,
vibrocharacterization,
air preparation: conditioners, filters, recycle system, inspection, control and monitoring
system,
water preparation: DI water, recycled water, drinking water, etc.
drains, cleaning system,
gas,
power,
vacuum,
Totally 20 power supply units of “REM” factory.
9. Development and implementation of basic technology.
10. Design/development and manufacture of products.
11. Selection and training of personnel.
12. Promotion of products in the market.
13. Switching the production line to the required design rules.

2004
 10

Project realization options

Option Month Cost, Mio $

A License technology purchasing 24 29,6

B Development of technology by 57 20,6
own means
C Obtaining of technology and kit of
technical documentation from a 36 21,3
shut-down factory
D Purchasing of unlicensed
technology from a group of 26 22,0
foreign specialists under a special
contract

2004
 11

DEVELOPMENT OF NEW TECHNOLOGIES

– development of technologies by own means
100% cost (20,6 kk USD) 100% development duration (57 months)
– purchasing the unlicensed technology from a group of foreign specialists under a special contract
107% cost (22 kk USD) 46% development duration (26 months)

Options 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60
Actions
1. Financial and technical agreement
2. Technology transfer 1 2 3 4
2а. Development of a preliminary route, list of operations,
set of equipment 1 – purchasing the technological process: description,
4. IC design and foundry-orders for pilot lots route, design rules, spice-parameters
2 – technological process
3. Purchase and delivery of the equipment set 3preparation
– introduction and testing
4. Installation, start-up, acceptance according to OEM’s 4 –technological support
specification
5. Personnel training during technological operations
6. Development of test matrix design and technology
7. Test matrix production production line technological
start-up
8. Research, analysis, extraction of spice parameters of test
matrix element base
9. Development of structure and technology of the 1st IC
10. Manufacture of engineering lot of the 1st IC
11. Research, analysis, extraction of spice parameters of
commercial IC element base, structure and technology
correction (iteration 1)
12. Manufacture of commercial IC engineering lot
13. Commercial IC testing (3000 h)
14. Testing at customer’s site (2х3000 h)
15. Start-up of premass (mass) production Loan repayment start Loan repayment start

2004
 12

Full Process Transfer Schedule

Implementation
Activity Preparation phase
phase
Ramp-up

1. Finalization of technical
annex
2.Transfer of documentation partner

3.Equipment procurement Integral

4.Personnel training partner

5.Design of transfer vehicle Integral

partner
6.Validation of process steps
Integral + partner
7.Validation of modules
Integral + partner
8.Full process integration
Process Acceptance Integral + partner
Integral
9.Transfer support +
aftercare Transfer support Aftercare

2004
 13

EXTERNAL APPRAISAL OF THE PROJECT

1. Appraisal of Module 7 and Module 8 clean rooms and utilities made by

Siemens Industrial Building Consultants GmbH:
• the possibility of setting up the production on CMOS technology with
0.35 μm design rule was confirmed;
• the complete list of works aimed at modernization of engineering
systems, including the clean rooms construction, equipment and utilities
was determined;
• the cost of works for Module 7 and Module 8 was evaluated.
2. The appraisal of financial and economical status of State-owned
enterprise «Semiconductor devices Factory» as for 01.10.2003 was made
by Joint-stock company «CONSULTAUDIT»:
• financial and economical status of the enterprise is considered to be
satisfactory;
• in general the enterprise is solvent and financially stable.

2004
 14
REQUIRED SPECIAL PROCESS EQUIPMENT

Number of
№
Operation Equipment type Company, country equipment Unit price, k $ Cost, k $
п/п
units
1 Photolithography
1.1 Coat/develop DNS80A Dainnippon screen, Japan 1 588 588
1.2 Step/align NSR 2205i14E2 Nikon, Japan 1 1450 1450
2 Plasma etch
2.1 Nitride, Poly etch TCP 9400 Lam Research, USA 1 400 400
2.2 Plasma asher MATRIX 1108 Matrix, USA 1 300 300
2.3 Oxide etch TCP 9500 Lam Research, USA 2 450 900
2.4 Metal etch TCP 9600 Lam Research, USA 2 500 1000
3 Implantation Precision 9500xR Applied Materials, USA 1 1000 1000
4 Oxidation, diffusion, anneal Alpha 8S TEL, Japan 7 250 1750
5 RTP AG 8800 Metron Technology, USA 1 180 180
6 Metal sputtering
6.1 Conductive and barrier layers sputtering AMT Endura 5500 Applied Materials, USA 1 700 700
6.2 W-CVD and etchback P-5000 Applied Materials, USA 1 800 800
7 Deposition
7.1 Nitride LPCVD Alpha 8S TEL, Japan 1 250 250
7.2 Poly LPCVD Alpha 8S TEL, Japan 1 250 250
7.3 BPSG deposition WJ TEOS 999 Watkins-Jonson Company, USA 1 200 200
8 Химобработка
8.1 RCA cleaning FSI Mercury MP FSI International, USA 1 400 400
8.2 Etching, nitride stripping DNS WS820 Dainnippon screen, Japan 1 300 300
8.3 Photoresist stripping FSI Mercury MP FSI International, USA 1 400 400
8.4 PERP stripping/organic SST Semitool, Great Britain 1 400 400
Amount 27 11268

Equipment type, producer and the equipment cost shall be clarified while signing the contract

2004
 15
REQUIRED CHECK AND MEASUREMENT EQUIPMENT

№ Function Equipment type Company, country Quantity Цена, Стоим

(technological operation) тыс.$ т
1. Wafer inspection (from 0.5 μm) INS 3000 Leica, Germany 1 420
2. Dimension control (SEM) from 0.35 μm S 7000 Hitachi, Japan 1 70
3. Контроль повторяющихся дефектов KLA 2135 KLA -Tencor, USA 1 70
Advanced photometric and ellipsometric control system (film
4. APECS 3000 Leica, Germany 1 270
thickness control)
5. Small dose control ThermaProbe 400 Thermawave, USA 1 20
6. Resistivity control RS-55 KLA -Tencor, USA 1 30
7. D, p control for epitaxial films ECO-8N Nicolet, USA 1 110
8. Structure profile control AlphaStep 500 KLA -Tencor, USA 1 40
9. Control of B and P composition in BPSG Rigaku 3620 Rigaku, Japan 1 160
10. Introduced defects control Surfscan 7600 KLA -Tencor, USA 1 200
11. Repeatable defects control (from 0.3μm) LMS IPRO Leica, Germany 1 480
12. Particle analysis in fluids Model 8014 Hiak Royko, USA 3 10
SSM-150, Solid State Measurement,
13. Resistivity and carrier density profiles measurement 1 70
SSM-2000 USA
Amount 15 1
Total amount 42 1

Equipment type, producer and the equipment cost shall be clarified while signing the contract

2004
 16

Our potentials
All factories of “Integral"

200 mm wafers
200 mm – 5000 wafers/month
150 mm – 7500 wafers/month Total:10500 wafers/month
100 mm – 50000 wafers/month

2004
 17

Economics
Market of State-owned Enterprise
«Semiconductor Devices Factory»
• telecommunications - 1.37 kk USD/year (India)
• watch/clock and melody IC (the year 2005) - 6-8 kk USD/year
• calculator IC - 2-3 kk USD/year
• analog, logic ICs, microcontrollers, memory ICs – sales activation and
market expansion
• computer IC – restoring the relations with the companies of Russian defense
establishments, obtaining the status of independent supplier of specific ICs
according to own technical specifications
• net income shall make 11 - 15 kk USD
• net profit makes 5 - 6 kk USD

2004
 18

Forecast of financial and economic activity

Project realization will allow to speed up the turnover of floating assets of the
company by 41 day. The total growth of net floating assets will make 14845 k USD
(including current activity of the company - 275 k USD in 2004 at the cost of the
project realization in the period from 2005 till 2011 - 14507 k USD).
Except the growth of net floating capital the own funding sources are as follows:
accumulated depreciation fund makes 4638 k USD and the current depreciation in
2004 makes 1158 k USD ( 204 k USD will be spent for the project realization in 2005) .
Reserve resource of own funds for the project realization means demand balance on
bank accounts of the company on 01.01.2004 to the sum of 42 k USD.
The sum of net income (net profit + depreciation) within the period involved will
increase from 2469 k USD in 2004 up to 13110 k USD in 2001.
The project can be realized, since the sum of accumulated money balance is positive
for every year of the project realization. The total sum of the accumulated balance
will make 17024 k USD with the growth in 2011.

2004
 19
КАЛЕНДАРНЫЙ ГРАФИК РЕАЛИЗАЦИИ ПРОЕКТА
Schedule of the project realization
Этапы of
Stages осуществления
the project Ед.
Mes. Всего
Totalпо
проекта
realisation измер.
unit проекту 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1.Making
1. Принятие decision.
решения.
Разработкаplan
Business бизнес-плана
development

2.Development
2. the
Определение перечня
необходимого оборудования
required equipment and и
поставщиков
suppliers
3. Подготовка
3. Preparationплощадей
of the area
для установки
for и монтажа
the equipment
оборудования
installation
4.Закупка,
4. Purchasing andоборуд,,
доставка delivery
of the equipment,
таможенные платежи, customs
уста-новка и тыс.$
K 13238
монтаж
payment, installation
5.5.Освоение
Developing of production
производствен-ных
capabilities,
мощностей, increase of
наращивание
производственных мощностей
production capacities
ИТОГО, Mil.$
Total, млн.$:

6. Получение
6. Obtainingкредита
the loan тыс.$
K 12000

7. Выплата
Loan interest repayment
процентов
по кредиту
тыс.$
K 7200 1440 1440 1412 1243 915 555 195 -

8. Loan repayment
8. Погашение кредита K $
тыс. 12000 500 2500 3000 3000 3000 -

2004
 20
График проекта
Project "Создание
schedule субмикронной
«Setting up a productionпилотной линииICпоonизготовлению
line of CMOS КМОП
200 mm wafers with 0.5СБИС на пластинах
µm design диаметром 200 мм с
rule (4000 wafers/month)
проектны ми нормами 0.5 мкм (1000 пл./мес) и с проектны ми нормами 0.35 мкм
and pilot line of CMOS IC with 0.35 µm design rule (1000 wafers/month)» (1000 пл./мес)"
1 год 2 год
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3
11.Трансфер технологии
Technology transfer
1.1
1.1 Передача маршрута
Process flow transfer
1.2
1.2 Передача
Equipment комплекта
set transfer СТО и КИО
1.3
1.3 Передача операционнойtransfer
Technical documentation тех. документации
1.4
1.4 Передача SPICE-параметров
SPICE parameters transfer
1.5
1.5 Передача правил
Design rules transferпроектирования
1.6 Обучение у поставщика технологии
1.6 Training provided by the supplier
1.7
1.7 Перевод комплекта
“Technology transfer”"трансфера технологии"
kit translation
1.8
1.8 Изучение
“Technologyкомплекта
transfer”ТДkit "трансфера
study технологии"
22.Закупка комплекта
Equipment purchaseСТО и КИО
2.1
2.1 Заключение контрактов
Contract signing
2.2
2.2 Транспортировка
Transportation
2.3
2.3 Монтаж
Installation
2.4 Запуск
2.4 Start up
2.5
2.5 Обучение персонала
Personnel training на операциях
on operations СТО и КИО
of equipment
33.Обучение
English language courses
на курсах английского языка
44.Стройка
Module 7иconstruction
модернизация
andмодуля
upgrading
4.1 Фундаменты
4.1 Foundation
4.2 Деионизованная
4.2 DI water вода
4.3 Газы
4.3 Gases
4.4 Микроклимат
4.4 Microclimate
55.Закупка
Purchase of wafers
пластин подforзапуск
equipment
СТО start up
66.Закупка
Purchaseрасходны
of spare parts
х материалов
7 Вы бор ИМС,IC,
7. Selection of выtechnical
дача ТЗspecs for design
на дизайн
88.Разработка
Developmentтехнологии,
of technologyконструкции
and construction
9. Technical start up of the
9 Технологический пуск операций process stages
10. Formation
10 Сбор блоков of the blocks
11.Сбор
11 Formation of the whole route
маршрута
12. Pilot lot start
12 Запуск пилотной up партии
13. Making the reticles
13 Изготовление комплекта МПО

2004
 21

Expenditures schedule, K$
Общие инвестиционные затраты по проекту, тыс. долл.

14000

12000

10000
тыс. долл.

8000
K$
6000

4000

2000

0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Годы
Years

1.1.СОБСТВЕННЫЕ СРЕДСТВА - всего

Own means - total
2. Foreign loans from
2.ИНОСТРАННЫЕ commercial
КРЕДИТЫ bancs
КОММЕРЧЕСКИХ БАНКОВ

2004
 22

Debts repayment at state -owned enterprise “semiconductor Devices Factory, K$

Расчет погашения долговых обязательств по УП «Завод полупроводниковых приборов»,
тыс. USD

16000

14000

12000

10000
K$
тыс. USD

8000

6000

4000

2000

0
2005 2006 2007 2008 2009 2010 2011 2012
Годы
Years

сумма основного
Primary debt sumдолга сумма основного
Interest долга
and primary и процентов
debt sum погашение основного долга
Primary debt repayments

Loan debt
задолженность по кредиту погашения основного
Interest and долга
primary debt и процентов
repayments

2004
 23

Questions

2004