I think the LOCOS technique is quite beneficial because it prevents silicon from being consumed inside the oxide openings. With traditional thermal oxidation, I believe some silicon gets lost, but with LOCOS, this issue is avoided. We can have more precise control over the oxidation process, which is great for manufacturing.
2 Answers
In my opinion, the biggest advantage of using LOCOS is the reduced oxide step height. When you use the LOCOS method, the oxide step is only about half as high as the step produced with thermal oxidation that's structured by etching. We can see from the diagrams that this also makes the oxide step less steep. It helps to cover the edges better when other layers like metal or polysilicon are applied over it.
You might find it interesting that LOCOS also offers an extension to make the surface almost flat. When we use LOCOS with its extensions, the height of the oxide can be reduced, resulting in a smoother surface. This could be really useful in situations where a flat surface is needed for better layer deposition.
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