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This paper presents a new improved tool monitoring methodology using product wafers for high effectiveness and significant cost savings that is being implemented at Powerchip Semiconductor 300 mm production line. CompassPro inspection tool's on-the-fly function inspects the wafer, identifies and classifies defects at production speed with no impact on throughput. Using CompassPro a new model is developed for performing tool monitoring using product wafers. This part of tool monitoring is embedded into the production process. By implementing the new method in thin film, furnace and dry etch modules in the Powerchip 300 mm fab, the fab was able to save over USD$13 million in bare wafer cost.