deposition

A semiconductor manufacturing process where thin films of materials are grown or deposited onto a wafer substrate.

Deposition is a fundamental manufacturing process in semiconductor fabrication where ultra-thin layers of conducting, insulating, or semiconducting materials are grown or deposited onto a silicon wafer substrate. As microchips are built layer by layer, deposition acts as the additive step that places the necessary materials down before they are patterned and etched. The primary methods used in modern fabs include Chemical Vapor Deposition (CVD), Physical Vapor Deposition (PVD), and Atomic Layer Deposition (ALD), the latter of which allows for atomic-scale precision. For technology and semiconductor investors, deposition is a key market segment within wafer fab equipment (WFE). The demand for deposition tools is highly sensitive to structural shifts in chip architecture. For instance, the transition from planar (2D) transistors to 3D structures like 3D NAND and Gate-All-Around (GAA) logic transistors exponentially increases the number of deposition steps required per wafer, directly expanding the addressable market for equipment manufacturers. When analyzing companies in this space, investors monitor deposition tool shipments, backlog, and research and development spending. High growth in deposition equipment sales typically signals that chipmakers are expanding capacity or transitioning to advanced nodes. Conversely, a slowdown can indicate industry overcapacity or a cyclical pause in semiconductor capital expenditure.

A semiconductor equipment manufacturer sells a high-throughput Atomic Layer Deposition (ALD) tool to a foundry for $12,000,000. If the foundry processes 100,000 wafers on this machine before it requires major servicing costing $500,000, the depreciation and maintenance cost of the deposition step per wafer is calculated as ($12,000,000 + $500,000) / 100,000 = $125 per wafer.