Plasma equipment and process design have matured from a largely empirical practice to a science based discipline during the past decade based, in part, on the improvement of our fundamental understanding of the dominant processes through application of diagnostics and modeling. Sustaining this innovation in equipment and process design through the next decade will be challenged by increasingly stringent demands for reliability, speed of development and increased functionality of tools. As the market for microelectronics trifurcates into high performance, but commodity components manufactured largely by foundries, select extreme performance silicon components, and non-silicon advanced logic and optoelectronics, the demands for equipment and process design will likely also be segmented. The role of non-traditional components, such as MEMS, adds an additional dimension of uncertainty. In this talk, the challenges which will need to be met to sustain innovation will be discussed, with emphasis on the role of diagnostics and modeling. @FootnoteText@ @footnote 1@Work supported by SRC, NSF, AMAT, LAM and DARPA/AFOSR.