Transparent IC cost calculation for cost engineers - A look into the depths of semiconductor manufacturing

IC cost calculation is a key challenge for cost engineers, as the price structure of integrated circuits (ICs) is rarely disclosed and at the same time has a significant impact on the total cost of an electronic product. With increasing demands on functionality, performance and miniaturization, a deep understanding of IC manufacturing costs is essential to make informed decisions in product cost optimization.

The production of an IC essentially comprises three major process areas: wafer production, the front-end process and the back-end process. Each of these steps entails specific investment and operating costs, which must be precisely recorded as part of a complete cost calculation. Wafer production begins with the Czochralski process, in which single crystals are grown from high-purity silicon and then sawn into thin wafers. The first significant costs are already incurred here, particularly in the areas of material procurement, energy consumption and process control.

In the front-end process, the circuit structure is transferred to the wafer surface. Lithography is particularly cost-intensive here, as it determines the finest structures and therefore has a significant influence on the technology node. DUV and increasingly EUV lithography systems represent considerable investments - an EUV system alone can cost up to 300 million US dollars. Due to its complexity, lithography is not only a technological but also an economic bottleneck within IC production.

Once structuring is complete, the back-end process begins, which involves separating, joining and packaging the dies. Despite a lower degree of automation than the front-end, this step accounts for around 20% of the total production costs, with material and labor costs dominating.

One methodical approach to IC cost calculation is bottom-up costing. This takes into account all direct and indirect costs along the production chain. In addition to the obvious material and process costs, machine depreciation, production throughput times and investment costs are also included in the calculation. It should be particularly emphasized that overhead costs alone - consisting of overhead costs for development, quality assurance and administration - account for around 35% of total IC manufacturing costs. This component, which is highly dependent on location and technology, makes it clear how important regional benchmarking is for the accuracy of the calculation.

Another cost driver is the complexity of the IC design itself. Higher clock rates, larger memory areas and additional processor cores increase the die size and require smaller structure widths, which in turn necessitates more expensive manufacturing processes. The materials used, such as photoresists, special gases and ultrapure water, must also be included in the cost calculation in detail, as they cause considerable variable operating costs.

The bottom-up method offers cost engineers an extremely precise tool for evaluating IC costs. It not only allows cost drivers to be identified, but also supports well-founded price negotiations and strategic procurement decisions. It should be noted that an accurate IC cost calculation takes into account a large number of technical parameters, regional factors and market data - carefully analyzing these is the key to a realistic and reliable cost structure.

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