Cost Modeling
Cost Modeling
Cost Modeling
Co$t
Information
Exchange
For Your
Application
&
Use of Cost
MODELING
Modeling
Inside
Their Relationship and Hierarchy
Introduction
Equipment Performance The semiconductor manufacturing equipment industry has
Metrics ................................1 developed a variety of equipment performance metrics to
satisfy equipment suppliers’ and users’ requirements (see
Calendar of Events.............2 Reference 1). Most of these performance metrics are simple
to understand. However, their relationship with each other
WWK Names Yarbrough and their hierarchy are not clear. The purpose of this paper
Southwest Sales Agent .......5 is to describe the make-up of the following six most widely
used equipment performance metrics, to define their
Cost of Ownership: A Tool relationship with each other, and to show their hierarchy.
for ESH Improvements......8
1. Reliability
Wright Williams & Kelly 2. Maintainability
Re-Opens Texas Offices...13 3. Availability
4. Overall Equipment Efficiency (OEE)
New Fellow Category 5. Life Cycle Cost (LCC)
Targets IEEE Members...14 6. Cost of Ownership (COO)
S.Y. Technology Definition of the Performance Metrics
Engineering and
Construction Co. Licenses A. Reliability
WWK Software Suite ......14 Reliability is one of the basic equipment performance
characteristics that has been in use since the 1940's. It is a
life longevity measure of the failure-free operation period
of any equipment. Formally, it is the probability of
Winter 2004 equipment performing its intended functions for a specified
time under the stated operational conditions. One of the
[Continued on Page 3]
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December 17, 2003 (Pleasanton, CA) –Wright Williams & Kelly (WWK), a cost & productivity
management software and consulting services company, announced today the naming of
Yarbrough Southwest as its sales agent covering the Southwestern US. This appointment
represents the next step in WWK’s strategic vision to provide increased sales and service support
in close proximity to all of its customers, world-wide.
“Yarbrough was selected to support our critical installed base in the Southwest based on their
unparalleled credentials,” states David W. Jimenez, WWK's President. “They combine a unique
understanding of the region’s high-tech industries and the application of our software products
and services to drive manufacturing optimization. Their dedication to both sales and service sets
them apart from other organizations.”
“We are pleased to begin representing WWK and its product line,” says Mike Dailey, President
of Yarbrough Southwest. “We see a large demand for software tools and consulting services
designed to help optimize manufacturing costs and productivity. WWK will help keep our clients
at the forefront of cost competitive operations.”
Yarbrough Southwest was founded in 1973 to serve the emerging Semiconductor and electronic
defense manufacturing industries in the Southwest. Unlike other representatives, the company
has been focused on service and sales, employing a field service staff in addition to a growing
sales staff.
By balancing the needs of the customer and the supplier Yarbrough Southwest has maintained a
steady presence in the Southwest as the market has evolved into a center for semiconductor
device manufacturers, equipment manufacturers, BioMed/Pharmaceutical and Nanotechnology.
With more than 2,800 users worldwide, Wright Williams & Kelly, Inc. is the largest privately
held operational cost management company serving technology-dependent and technology-
driven companies. WWK maintains long-term relationships with prominent industry resources
including International SEMATECH, SELETE, Semiconductor Equipment and Materials
International (SEMI), and national labs and universities. Its client base includes most of the top
10 semiconductor manufacturers and equipment and materials suppliers as well as leaders in thin
film record heads, magnetic media, flat panel displays, and solar panels.
WWK’s product line includes TWO COOL® for detailed process step level cost of ownership
(COO) and overall equipment efficiency (OEE), PRO COOL® for process flow and test cell
costing, Factory Commander® for full factory capacity analysis and activity based costing, and
Factory Explorer® for cycle time reduction and WIP planning. Additionally, WWK offers a
highly flexible product management software package that helps sales forces eliminate errors in
product configuration and quotation processes.
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Since all elements of LCC do not occur in FC = Fixed costs (amortized for the period under
the same year, we need to consider one more consideration)
VC = Operating costs
factor named "time value of money" in the YC = Yield loss costs
LCC calculations. This factor converts all L= Life of equipment
costs incurred after the first year to an THP = Throughput rate
equivalent present value (worth) in the first Y= Composite yield
year. A variety of LCC models are available. U= Utilization
Reference 4 contains the most commonly
used LCC models. Hierarchy of Equipment Performance
Metrics
F. Cost of Ownership (COO)
LCC is one of the most widely used When discussing manufacturing equipment
equipment performance metrics, but it has performance, we have to deal with its
the following shortcomings. It does not metrics as described above. Since there are
include: many metrics, to most professionals working
with the equipment performance, the metrics
Effect of the production volume appear disjointed. However, nothing could be
Product scrap loss because of poor further from the truth. They all fit into a
quality output hierarchical tree structure shown in Figure 1.
Consumable cost
Waste disposal cost
As shown in the figure, when we add time 5. SEMATECH, Cost of Ownership Model,
dimension to quality and safety, it becomes Technology Transfer #91020473B-GEN
reliability. Reliability and maintainability jointly SEMATECH, Inc., Austin, TX, 1992
make up availability. When production speed 6. E35-0701, Cost of Ownership for
efficiency and production defect rate are Semiconductor Manufacturing Equipment
combined with availability, it becomes Metrics, SEMI International Standard,
productivity. A metric for productivity is Overall http://www.semi.org.
Equipment Efficiency (OEE). Acquisition and
operational cost comprise Life Cycle Cost
(LCC). And when scrap, waste, consumables,
tax, and insurance cost are added to LCC and the
total is normalized by the production volume,
the resulting metric is Cost of Ownership (COO).
Reference 1 describes this hierarchy in detail.
References:
Metrics
1. Dr. Vallabh H. Dhudshia, Hi- Supported by
Tech Equipment Reliability: A Reliability Maintainability SEMI E10
(MTBF) (MTTR)
Practical Guide for Engineers
and the Engineering Managers,
Lanchester Press, Sunnyvale, CA.
1995.
2. SEMI E10-0304, Specification Safety Quality Time
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Introduction
The semiconductor industry’s main use of cost of ownership (COO) is as a metric for purchasing
processing equipment. However, COO can also be used as a tool for evaluating environmental,
safety, and health (ESH) impacts of process equipment. Using COO to evaluate ESH issues has
significant benefits for the end user. It is neither complex nor hard to do. With a few significant
details about purchase conditions, operation, utilization, and technical performance, users can
determine the life-cycle cost of owning a semiconductor tool. COO was developed for wafer
fabrication tools but has been easily extended to other applications, including ESH. COO
applications now provide a metric for ESH improvement in the semiconductor industry.
With equipment costs increasing and concerned about cost per wafer, SEMATECH began
developing a COO model in 1990. Since then, COO standards have been published by
Semiconductor Equipment and Materials International (SEMI).[1] A commercial COO model,
based on these standards, has been introduced through a joint development project between
SEMATECH and Wright Williams & Kelly (WWK). SEMATECH has built on this foundation
with research into ESH cost modeling with WWK and Oregon State University.
A standardized COO model has several benefits for the manufacturer and supplier communities.
First, the model can provide a clear estimate of the COO of the process tool. The model can also
be used to evaluate the ESH impacts of different process and tool design alternatives. COO
provides an objective analysis method for evaluating decisions and provides a systematic focus
on issues that might otherwise be overlooked. Finally, the COO model provides communication
between equipment suppliers and users. Both suppliers and manufacturers can work from hard
data to support a purchase or product/process improvement plan. They can speak the same
language, comparing similar data and costs using standard software algorithms and equations.
CF + CV + CY
CW = ----------------------------
L x TPT x YC x U
where:
CW = Cost per wafer
CF = Fixed cost
CV = Variable cost
CY = Cost due to yield loss
L= Life time of process
TPT = Throughput
YC = Composite Yield
U= Utilization
Fixed costs include purchase, installation, and facility costs that are normally amortized over the life of
the equipment. Variable costs such as material, labor, repair, utility and overhead expenses are costs
incurred during equipment operation. Throughput is based on the time to meet a process requirement such
as depositing or etching a nominal film thickness. Composite yield is the operational yield of the tool and
may include breakage, misprocessing, and defects. Utilization is the ratio of production time compared to
total available time.
Yield loss cost is a measure of the value of wafers lost through operational losses and defects. Yield
models are used in COO models for estimating the relationship between particle and yield loss or scrap.
These models relate integrated circuit yield to circuit and process parameters such as device geometry and
particle density.
Equipment cost includes all fixed costs such as equipment purchase, installation, ESH permits, and
facility support costs that are normally amortized over the life of the equipment. ESH-related fixed costs
include safety and hazard monitoring systems, containment hardware, and emission abatement systems.
These costs also include waste consolidation, recycling, and treatment systems.
Annual operating cost includes all of the recurring costs such as material, labor, repair, waste disposal,
utility and overhead expenses due to equipment operation. The costs of maintaining and operating ESH
support systems are part of operating costs. Other ESH-related operating costs include calibration of
monitoring equipment, periodic safety inspection, and worker health monitoring programs.
Process scrap yield or equipment yield is the operational yield of the tool. Die scrap yield is the defect-
limited yield that is recognized at wafer test or probe. Yield loss increases ESH impact due to
unproductive use of chemicals, equipment, and materials.
Downtime is the non-production time lost due to scheduled maintenance, engineering usage, standby, and
repair. Repair time is estimated from mean time between failures (MTBF) and mean time to repair
(MTTR). The reliability of ESH support systems is also part of downtime and utilization. An unreliable
hazard monitoring system can cause significant production interruptions if the system fails or initiates a
false alarm.
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The ESH impacts on these cost factors are illustrated by an analysis of point-of-use chemical generation
(POUCG) for wet chemical processes. [2] The comparison of ESH impacts between POUCG and
conventional wet chemicals is summarized in Table I.
The ESH cost impact is different for each alternative. Cost analysis of these alternatives should include
estimates for each of the ESH cost impacts. The ESH costs are in addition to a standard COO analysis.
Table I
ESH Cost Impact Comparison
Factor POUCG Bottled Chemicals ESH Cost Impact
Equipment Costs
Chemical Generator Required Not Required Hazardous gas
monitor
Distribution System Required May be required Double containment
and leak detection
Bottled Chemical May be required Required Safety showers and
Handling spill control
Operating Costs
Chemicals and Gases Required Required Waste disposal
Bottle Handling May be Required Required Includes rinse and
disposal
Personal Protective May be Required Required Equipment and
Equipment training
Exhaust Air Required Required Air scrubbing costs
Down time
Hazardous Gas Required May be Required Failure may interrupt
Monitor production
Waste Disposal Required Required Failure may interrupt
System production
Air Scrubber Required Required Failure may interrupt
production
ESH equipment cost impacts include purchase and installation costs. Factory-wide systems may provide
economies of scale, but require more extensive installation costs. These larger systems are often installed
in utility or other low cost spaces. Smaller units may cost more for a given capacity and may occupy
clean-room space but may be phased in as production volumes ramp to full capacity.
ESH operations costs at the factory level depend more on level of automation than on equipment size.
Highly automated systems minimize labor cost but increase equipment cost. Automated waste disposal
systems minimize exposure of workers to hazardous materials. ESH supervision, training, and inspection
costs are other operation costs that need to be considered in evaluating various alternatives.
Reliability of ESH equipment must be considered at the factory level. Downtime for a factory is very
expensive. The reliability requirements of a factory-wide ESH system are much greater than for
individual processing tools. Multiple ESH systems provide for redundancy. Single tool point-of-use
scrubbers may require a central backup system to achieve suitable reliability. Methods must be provided
for scheduled system maintenance that do not impact production.
In the SEMATECH example, the average number of days between cleans was increased from 11.7 to 18.8
days. Over the course of a year, this change reduces the amount of cleaning chemicals released and the
amount of worker exposure to these chemicals by 60%. In addition, the number of particles per wafer
pass was reduced by about 73%. Since metal deposition occurs in the later part of semiconductor
processing, yield improvement at metal deposition is an effective yield improvement at each prior process
step. This is illustrated in Figure 1. Thus, the same number of good die can be shipped by processing
fewer wafers; using less chemicals and hazardous materials. These productivity improvements are also
ESH improvements.
Summary
The semiconductor industry, which leads the use of COO, can also use COO as a tool for evaluating
environmental, safety, and health (ESH) impacts of processing equipment. While COO was developed for
wafer fabrication tools, it can easily be extended to ESH applications. Different ESH operating practices
affect equipment cost, operating cost, yield costs, downtime and repair times. The impact of ESH on COO
can be estimated by comparing the impact of ESH alternatives for significant cost drivers for process
tools. At the factory level, ESH cost impacts may also be considered on equipment, operation, and
downtime costs. Yield improvement projects may have significant ESH benefits at both the tool and
factory levels. Yield losses increase ESH impact due to unproductive use of chemicals, equipment, and
materials on products that are never shipped.
References:
1. E35-0701, Cost of Ownership For Semiconductor Manufacturing Equipment Metrics, SEMI
International Standard, http://www.semi.org.
2. Laura Peters, “Point-of-use Generation: The Ultimate Solution for Chemical Purity, “ Semiconductor
International, Jan. 1994, pp 62-66.
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One purpose of POUCG is to improve process chemical purity, but another benefit may be improved
safety and environmental impacts. The ESH cost impacts of the two methods will be compared in the
following case. The required cost elements from Table I have been replaced with contrived costs in Table
II. These costs are realistic, but do not reflect any specific case. This case has been slightly modified to
work with TWO COOL® packaging and assembly software. Thus, we consider a packaged unit clean
rather than a wafer clean and describe the unit of activity as a packaged unit.
Table II
ESH Cost Impact Comparison
Factor POUCG Bottled Chemicals Comments
Equipment Costs
Chemical Generator $100,000 $0
Distribution System $50,000 $0
Hazardous Gas Monitor $20,000 $40,000 Note 1
Bottled Chemical $10,000 $20,000 Note 2
Handling
Operating Costs Annual Cost
Chemicals & Gases $150,000 $250,000
Bottle Handling $0 $65,000 Includes bottle rinse and
disposal
Personal Protective $0 $3,000 Equipment and training
Equipment
Waste Disposal $150,000 $150,000 Assume equal to chemical
cost
Exhaust Air $2,000 $1,000 Air scrubbing costs
Down time
Hazardous Gas Monitor 0.1% 0.2% Two systems
Waste Disposal System 0.1% 0.1%
Air Scrubber 0.1% 0.1%
Total Down Time 0.3% 0.4%
Note 1: POUCG requires 1 monitor at the point-of-use. Bottle chemicals require 1 monitor at the point-of-
use and 1 in the chemical warehouse area.
Note 2: POUCG requires 1 safety shower at the point-of-use. Bottle chemicals require 1 safety shower at
the point-of-use and 1 in the chemical warehouse area.
Table III
ESH Cost Impact Comparison
Parameter Base Case Improvement Comments
Scheduled Maintenance 35 12 Hours/week
Throughput 18 16 UPH
Equipment Cost $1,000,000 $1,000,000
Equipment Yield 96.5% 98.3% Includes Defects
Specialty Chemicals $31,000 $20,000 Cleaning Chemicals
Scheduled Maintenance 2 2 Buddy System for Safety
Technicians
“New business opportunities, the efficiencies of the Internet, and a company reorganization have
allowed WWK to reopen offices closed by previous management,” said Daren Dance, WWK’s Vice
President of Technology. “We are excited about the signs of growth and the opportunities that we see
in Texas and the surrounding region. These offices will allow us to strengthen our long-term
relationships with International SEMATECH and electronics companies in the area.”
“I am very pleased to be able to offer our clients in the Southwest more direct access to our expert
resources,” stated David Jimenez, WWK co-founder and President. “This is just the first step in
meeting our customers’ needs for out-sourced services in manufacturing, assembly, and business cost
optimization. We will have another major announcement in that area in the next week.”
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The IEEE Board of Directors approved this and other changes last June, based on suggestions made by a
task force appointed by 2003 President Michael Adler. The task force recommended the category be
added as a way to increase Fellow nominations from industry. The new category recognizes the vast
number of members who are involved in engineering practice, as opposed to R&D.
"The Board has been concerned for several years about how few engineers from industry have been
elected to Fellow grade," says 1985 Past President Bud Eldon, who chaired the task force. "The
percentage of members working in industry is higher than those in academia, but the number of
nominations for Fellows from industry is significantly lower."
Nominees for the new category, like nominees for the other three, will be evaluated primarily on the basis
of achievements in "bringing the realization of significant value to society." This is one of three criteria
for elevation to Fellow grade, along with being an IEEE senior member and having paid-up dues.
S.Y. Technology Engineering and Construction Co. Licenses WWK Software Suite
Creates Technology Partnership in PRC
“This is a major step for both S.Y. Technology and WWK,” states David W. Jimenez, WWK's President.
“The licenses for TWO COOL®, Factory Commander®, and Factory Explorer® provide S.Y.
Technology with the most advanced operational modeling tools available anywhere in the world. They
will be in a position to assist their clients in designing the most innovative factories and then optimize
their operations for lowest cost and highest productivity. The benefit to WWK is having such an
important client in mainland China who has agreed to help us expand our marketing efforts in what is
clearly the fastest growing manufacturing region in the world.”
“After a careful comparison of the available solutions, we decided that the software tools from Wright
Williams & Kelly would be the best approach to support our clients and grow our engineering practice,”
says Dr. Sean Du, Vice President of S.Y. Technology and Construction Company. “The need to keep
costs low, quality high, and product flowing is essential to maintaining the impressive growth of Chinese
manufacturing. We look forward to introducing WWK’s products to our broad and diverse client base.”
S.Y. Technology and Construction Company has completed a large number of international projects for
prestigious companies such as Intel, Grace Semiconductor, AMD, Dupont, Hana Microelectronics, and
STMicroelectronics. Established in 1953, China Electronics Engineering Design Institute (CEEDI) is a
sizeable and comprehensive engineering construction enterprise registered with the State Administration
of Industry and Commerce and one of the 10 key companies of survey and design directly under the State
Council. CEEDI has more than 1100 employees located in 10 offices throughout China.
Being guided by the philosophy of scientific and technological innovation, based on a people-oriented
design concept in conformity with international practices and the flexible utilization of new techniques,
CEEDI has been well received among clients both domestic and overseas. Its services for a large number
of national key projects have well established the CEEDI brand name and won high recognition. CEEDI
is well on its way towards becoming a top ranked international engineering firm and noted in the world’s
engineering circle.
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