Financial comparison of 200 mm vs. 300 mm IC manufacturing facilities

This paper compares the cost structure, optimal deployment policies, expected values and financial risk of 200 mm and 300 mm IC manufacturing facilities. 300 mm facilities are shown to have significantly lower capital costs than 200 mm facilities of comparable size (measured by die output), but comparable fixed recurring costs, and measurably higher variable costs. Due to the dominant role of capital costs in IC manufacturing, 300 mm fabs are significantly more valuable than comparably sized 200 mm fabs. The manufacturer's optimal policy is to outsource production until demand reaches a level at which additional in-house capacity can be fully utilized with high probability, and then to add a large, sequentially deployable 300 mm facility.