Future progress in the semiconductor industry relies strongly on the ability to fabricate increasingly complex structures. As individual device dimensions become smaller and smaller, a new level of fundamental understanding of materials and processes at surfaces and interfaces is necessary. Using the unique structural and electrical properties of STM a number of different problems can be addressed. The key areas of semiconductor materials and processes will be reviewed to point out important and outstanding issues. Specific examples will be discussed to illustrate the potential impact of STM. © 1987.