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Photomask in shortage from China and AI chip development

Daniel Nenni

Admin
Staff member
Photomask.jpg


The shortage in photomasks is continuing despite the global economic downturn due to high demand for the commodity from Chinese chip fabless and foundry companies.

Photomask makers, Toppan, Photronics, and Dai Nippon Printing, are all maintaining factory operation rates of 100%, sources said.

Some Chinese chip companies are even paying extra to shorten the delivery time, they also said.

Photomasks are made out of quartz blank masks that have circuit patterns drawn on them. They are similar to film for film cameras.

The patterns on the photomask are imprinted on wafers through lithography. This ultraviolet process uses dozens of photomasks that are called sets.

Thinner circuit patterns for advanced chips require more photomasks. For example, a legacy process may require 30 units but the most advanced process will require 70 to 80 units.

Last year, China recorded 3,243 fabless chip companies, a rise caused by US sanctions. The launch of the DUV 7nm process by Chinese foundry SMIC also exasperated the shortage in photomasks. The DUV process requires more masks compared to EUV for multi-patterning.

The rise in the number of AI chip companies is also another cause, which was spurred by the popularity of ChatGPT.

Toppan said in its latest fiscal quarter earnings report (July to September) that strong demand for photomasks is expected to continue within the year. Dai Nippon Printing also concurred on its April to September period earnings report.

Toppan said it plans to expand its photomask production capacity through its global production facilities.

However, sources said photomask makers’ increased capacity won’t be sufficient to meet demand, making a price rise in the commodity inevitable next year.

 
US export regulation people seized on steppers, while they can ask Taiwan to shut down mask shipments, paralyzing mainland semi completely for any new developments, well not only mainland semi, but anybody's else semi industry as well.

I see it as a sign that US policy is much more receptive to hot words, and buzz around EUV, while missing much more obvious.

Similarly, US completely failed, and continuing so to stymie Western tech flow to Russia despite people shouting at Biden from every corner "company A, company B continue to legally ship war materiel to Russia".

This is another example what results from complete extinction of technical experts within state bureaucracy.
 
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Are there any independent photomask companies in the US? I assume the easiest way to steal IP is when sending the GDS2 for mask making. Dan stated last week that Samsung has been known to steal IP (he mentioned SRAM). Does the chips act cover US based photomasking?

Edit: I suppose you can have the lower layers generated in Asia, and metal 5 and above done in the US. Does anybody do that?
 
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US export regulation people seized on steppers, while they can ask Taiwan to shut down mask shipments, paralyzing mainland semi completely for any new developments, well not only mainland semi, but anybody's else semi industry as well.

As I understand it,SMIC make their own masks just like TSMC and Intel. Those small fabs buy masks from independent photomask producers
 
Are there any independent photomask companies in the US? I assume the easiest way to steal IP is when sending the GDS2 for mask making. Dan stated last week that Samsung has been known to steal IP (he mentioned SRAM). Does the chips act cover US based photomasking?

Edit: I suppose you can have the lower layers generated in Asia, and metal 5 and above done in the US. Does anybody do that?

Toppan , Photronics manufacture photomask in US.

Higher End masks use OASIS as opposed to GDSII
 
Thanks. I will call them.

I will put somebody onto OASIS as a parallel format. That will save us upload time. I don't know if all 3rd party EMag solvers handle OASIS, so we will handle both.
 
https://sg.finance.yahoo.com/news/photronics-reports-full-fourth-quarter-113000408.html

BROOKFIELD, Conn., Dec. 13, 2023 (GLOBE NEWSWIRE) -- Photronics, Inc. (NASDAQ:pLAB), a worldwide leader in photomask technologies and solutions, today reported financial results for its full year and fourth quarter of fiscal year 2023 ended October 31, 2023.

“We delivered our sixth consecutive year of record revenue with growth in fourth quarter amidst a prolonged industry downturn,” said Frank Lee, chief executive officer. “Fourth quarter and full year revenue increased 8% year-over-year, and fourth quarter increased 1% sequentially. Both IC and FPD increased, as demand for our design-driven products remained strong. Operating expenses were lower sequentially, partially offsetting lower gross profit, resulting in operating margins of 28.5% for the fourth quarter and 28.4% for the year. Strong cash generation and our disciplined strategy of investing in growth strengthened the balance sheet while positioning us for sustained solid performance. I am proud of our team’s performance and look forward to even greater achievements as we execute our strategy in the year to come.”

Full Year Fiscal 2023 Results

  • Revenue was $892.1 million, up 8% over the previous year – the sixth consecutive year of record revenue
  • GAAP net income attributable to Photronics, Inc. shareholders was $125.5 million, or $2.03 per diluted share, compared with $118.8 million, or $1.94 per diluted share in 2022
  • Non-GAAP net income attributable to Photronics, Inc. shareholders was $126.0 million, or $2.04 per diluted share, compared with $101.7 million, or $1.66 per diluted share in 2022
  • IC revenue was $651.3 million, up 10%
  • FPD revenue was $240.8 million, up 4%
  • Cash generated from operating activities was $302.2 million, and cash invested in organic growth through capital expenditures was $131.3 million
Fourth Quarter Fiscal 2023 Results

  • Revenue was $227.5 million, up 8% year-over-year and 1% sequentially
  • GAAP net income attributable to Photronics, Inc. shareholders was $44.6 million, or $0.72 per diluted share, compared with $37.1 million, or $0.60 per diluted share in the fourth quarter 2022 and $27.0 million, or $0.44 per diluted share in the third quarter of 2023
  • Non-GAAP net income attributable to Photronics, Inc. shareholders was $37.2 million, or $0.60 per diluted share, compared with $31.2 million, or $0.51 per diluted share in the fourth quarter 2022 and $31.6 million, or $0.51 per diluted share in the third quarter of 2023
  • IC revenue was $164.5 million, up 5% year-over-year and 1% sequentially
  • FPD revenue was a record at $63.0 million, up 17% from the same quarter last year and 3% sequentially
  • Cash generated from operating activities was $106.6 million, and cash invested in organic growth through capital expenditures was $52.5 million
  • Cash balance at the end of the quarter was $499.3 million, with $12.9 million in short-term investments and $24.6 million in debt
 
As I understand it,SMIC make their own masks just like TSMC and Intel. Those small fabs buy masks from independent photomask producers

SMIC claims to have an own mask shop, and it's being run by a former TSMC veteran.

How much they actually own of their mask service, I don't know, but I believe they cannot have the entirety of mask making ecosystem, as even Taiwan didn't manage to internalize mask making completely.
 
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