The Value of Used Equipment from OEMs

November 10, 2014
Category:
Corporate, Technology

The secondary equipment market is becoming more prevalent in today’s semiconductor manufacturing supply chain. Strong demand for older-model (“legacy”) tools continues to increase as chipmakers become even more mindful about seeking ways to extend the use of their existing infrastructure and maximize return on their capital investment.

According to a recent article from Semiconductor Engineering, the used equipment market could approach approximately $3 billion in 2014, which represents about 10 percent of overall wafer fabrication equipment spending. Customers have multiple options in buying this equipment – from OEMs and used equipment companies to brokers and even eBay – but they should be cautious about the “sight unseen” factors that can arise from third-party resellers. For instance, a chipmaker could buy a used tool only to discover that it is missing parts and/or doesn’t function.

Major OEM suppliers such as Lam offer access to the largest selection of certified, legacy products that provide lowest-risk manufacturing solution options for customers. “The value proposition of buying used equipment from an OEM is all about risk management,” says Abdi Hariri, vice president of Lam’s Customer Support Business Group. “For example, we provide a whole suite of services, including, but not limited to, auditing, decontamination, configuration matching, and necessary upgrades on a tool. The upgrades can extend the useful life of a system and/or enhance its productivity, lowering the cost of ownership. We guarantee the availability of the tool and production readiness. We also provide a software license necessary to operate the system.”

The advantages of lower cost and increased production capacity for chipmakers continue to be primary drivers for the secondary market, despite the long-standing cautionary tales of used equipment. OEMs like Lam provide value to IC manufacturers by managing these risks through a strong product lifecycle strategy. As more fabs rely on mature equipment to meet their production needs, the value of used equipment will remain strong in the semiconductor industry.

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