Understanding cost structures: Focus on Cost Engineering for Microelectronics

The increasing miniaturization and growing complexity of integrated circuits (ICs) poses new challenges for cost engineering for microelectronics. In the field of semiconductor manufacturing in particular, in-depth knowledge of the entire production process is required in order to develop reliable and transparent cost models. The manufacturing costs of an IC are made up of several highly specialized process steps - from wafer production and the front-end process to the back-end and packaging. Each of these steps has specific requirements and cost drivers that must be taken into account in a comprehensive cost calculation.

A central component of production is the front-end process, in which the circuit layout is transferred to the silicon wafer using lithography. Modern lithography processes, in particular EUV (Extreme Ultraviolet), enable structures in the nanometer range, but at the same time drive up investment costs massively. An EUV system alone can cost up to 300 million US dollars, making this sub-process the most cost-intensive stage of production. The decision in favor of a particular lithography technology therefore has a significant influence on the overall production costs and requires a deep understanding of the cost-benefit ratio.

Material costs also play a decisive role in cost engineering for microelectronics. Raw silicon, process chemicals, gases and, above all, photomask sets vary greatly in price - depending on purity, technology node and quantity. The complex structure of semiconductor production means that even small changes in design or technology can have a major impact on material consumption and therefore on overall costs. Particularly critical are the mask sets, whose manufacturing costs for advanced nodes can amount to several million US dollars.

Overhead costs are another major cost item. In addition to energy consumption, IT infrastructure and facility services, these also include the cost of qualified personnel. As process complexity increases - for example with sub-5 nm technologies - so does the need for highly specialized staff. This development is clearly reflected in the overheads, which in some cases account for up to 35% of the total manufacturing costs of an IC. Location factors such as energy prices or wage levels also influence these costs, which is why region-specific benchmark values are essential for a precise calculation.

To apply the bottom-up approach in Cost Engineering for Microelectronics, it is necessary to record all relevant machine costs in detail. This involves not only the purchase price, but also depreciation, maintenance costs and the utilization and throughput of the equipment. Lithography, etching and coating systems are particularly capital-intensive. As many of these machines are used several times along the process chain, their utilization must be allocated proportionately to the dies produced in order to depict a realistic cost structure.

Although the back-end processes, including dicing, bonding and encapsulation, only account for around 20% of the total production costs, they require special attention in terms of labor and material consumption. The packaging technology not only influences the mechanical robustness and heat dissipation of the chip, but also its later usability in various fields of application. The automotive and aerospace sectors in particular have more stringent requirements, which can result in additional costs.

Overall, it is clear that cost engineering for microelectronics requires not only a sound technical understanding, but also economic know-how. Only through a holistic and data-based approach can reliable and comprehensible cost models be created that take into account both technical and economic factors. Especially in times of global supply chains and technological disruptions, a precise understanding of costs is a strategic competitive advantage. The further development of parametric cost models that link market data with technical key figures will become increasingly important in the future and should be an integral part of any modern cost engineering practice.

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