Tag: fabs

China threatens US, European fabs

ChinaThe Chinese government is committed to developing its own semiconductor business and it’s pretty clear that nothing is going to stop its advances.

Now market research company Trendforce has revealed the trends in the Chinese semiconductor market which is describes as a “growing challenge” to US and European IC manufacturers.

Trendforce said Powerchip started building a 12-inch fab in Hefei in China. The 12-inch factory is a joint venture between Taiwanese Powerchip and Hefei City Government and will start operation in 2017 and produce 40,000 wafers a month.

Trendforce pointed out that Chinese IC designers have had generous government subsidies and companies including HiSilicon and Spreadtrum are in the vanguard of the shannel.

While fabless IC firms onlyhave 18.5 percent market share worldwide, that figure is sure to rise in the next five years.

China’s own homegrown foundry company SMIC has three eight inch fabs in three locations and also two 12-inch wafer fabs in Shanghai and Beijing.

Both Taiwanese foundries TSMC and UMC also have fabs in mainland China.

Semiconductor capital spend rises – but not by much

Silicon wafer - Wikimedia Commons -Spending on capital investment in the semiconductor industry is set to rise by 2.5 percent this year, well down on the numbers predicted.

Gartner said it had projected a growth of 4.1 percent for the year, but weakness in both the euro and the yen have skewed the picture. Total capital spending will amount to $66.1 billion for 2015.

Bob Johnson, a research vice president at the semiconductor firm, said: “With over half of all equipment being produced by either Japanese or European suppliers, the weakness in their currencies has been the primary factor in our reducing our overall outlook for 2015.”

He said that there will be pause in the equipment market growth next year, because DRAM will go through its normal cyclical downturn.

Foundries will outspend the logic integrated device manufacturers (IDMs) this year, with spending set to increase by 17.2 percent. But saturation of the smartphone market will subdue the necessity to create fresh capacity.

Capital spending in memory will only be 3.2 percent for the year – Gartner had predicted that that it would rise by 10.2 percent. But major manufacturers have revised their spending plans.

Silicon wafer spend will only increase by 0.1 percent during the year – that’s due to a slowdown on fab construction.

GlobalFoundries becomes an IBM supplier

IBM logoAs we reported yesterday, the US government cleared the acquisition of IBM’s semiconductor business by GlobalFoundries (GloFo).

And today IBM announced that that would mean to its future business.

GloFo will become IBM’s exclusive semiconductor supplier for the next 10 years – so it will make its POWER chips that go into Big Blue servers.

It’s not the end of the story for IBM semiconductor engineers, however. IBM Research will carry on doing semiconductor and material science and that will help the company to continue selling mainframes, storage and POWER systems to aid it in its push into cloud, big data and analytics systems.

IBM said that its semiconductor and material research has delivered important technology including copper chips, silicon germanium and quantum computing.

It’s good news for GloFo. The Abu Dhabi based company, which acts as a foundry to produce semiconductors for its customers, also gains access to leading IBM technology, including its state-of-the-art fabrication plant (fab) in New York State.

IBM, STMicro to open fabs in India

The Indian government has approved plans for the construction of two wafer fabrication plants in the country.

The first chips are due to roll out in two to three years, according to EE India

IBM proposed the first fab with the backing of Jaiprakash Associates and cooperation from TowerJazz. It will have a capacity of 40,000 CMOS 300mm wafers per month and feature 90nm, 65nm and 45nm nodes in phase one, but later it will get to 28nm and 22nm in phase two and three respectively.

STMicroelectronics is behind the second plant, which will have the exact same capacity, 40,000 wafers per months, 300mm size, and CMOS technology. The first phase will feature 90nm, 65nm and 45nm nodes, but phase two will bring 28nm and 22nm capacity as well.

The government has required technology providers to take 10 percent equity in the new projects, while the state will also grab 11 percent equity.

They’re expected to directly employ about 22,000 people and up to 100,000 indirectly. 

Intel breaks ground on 450mm Fab

Intel has started building its first dedicated facility for 450mm wafer production.

The new foundry, which will have the catchy title D1X Module 2, will come online in 2015 and cost $2 billion.

The 450mm facility will set records because of the cost of the new manufacturing equipment, something that Intel is banking on. After all – if it is one of the few chip makers that can afford the new generation of gear, it will will gain a significant competitive advantage.

Intel’s enthusiasm may be masking some nerves. The industry attempted a transition from 200mm to 300mm transition which went disastrously wrong.

The cost and fears of another disaster mean that rivals like IBM, Samsung, and GlobalFoundries have begun to talk about a 450mm transition, while Intel is full steam ahead.

The logic is that while 450mm wafers are expensive in terms of equipment costs, in the long term you can make a lot of money.

GlobalFoundries has said that a 450mm wafer can yield 3,400 dies while a 300mm wafer yields just 1,450.

So, a 450mm fab with a 40 to 45,000 wafer starts a month will produce as much as a 300mm fab with 100,000 wafer starts a month. It is believed that 450mm wafers will save 20 percent to 25 percent in capital expenditures.

Cutting costs is all very well, but the whole project will bank on Intel’s ability to sell the chips it makes. This could be a little tricky given the downturn in the IT industry. Chipzilla is already facing failing margins to sell its chips, and some of the savings it makes from 450mm wafers might just go to keeping its head above water.

According to ExtremeTech, Intel hopes to address this by moving to 14nm at the same time.

If a 450mm wafer packs 2.5 times the processors of a 300mm wafer, the cost-per-processor is far lower if and only if Intel can ship every single chip.

To achieve this, Intel really could do with widespread uptake of its Atom processors to justify the enormous build-outs the company has done at Fab 42 and now at Fab D1X. 

Qualcomm tipped to invest in UMC

UMC, the foundry which nibbles at the knees of TSMC, is looking for a private equity placement for as much as 10 percent of the company, and the rumour is pointing towards Qualcomm.

It would be an interesting play for Qualcomm, which outsources its manufacturing. Earlier this year it warned that, because of capacity problems, TSMC would be unable to provide enough chips to meet demand. Qualcomm then signed up with UMC for 28nm 3G/4G baseband chips and Snapdragon S4 processors.

UMC’s Shih-Wei Sun would not comment on the rumour, but he did tell EE Times that “the structure is changing” and that the “radical supply chain partnership is getting more and more important”. 

UMC suggested it would remain open minded about potential investors, but insisted that they must be technologically or business beneficial to the company in the long run.

European Commission report looks into 450-mm fab initiative

A study commissioned by the European Commission has looked into the potential role of European authorities in encouraging the construction of a 450-mm wafer fab on the old continent.

The report, prepared by Future Horizons and Decision SA, tried to identify activities required to support research and innovation in semiconductor production in Europe. It found that semiconductor output in Europe could decline unless something is done to support development.

The report concluded that the EU and member states could launch a five-year program to create a 450-mm pilot line in Europe, allowing companies to transition to 450-mm production and coordinate with the US G450C initiative in Albany. The construction of a jointly-owned 450-mm fab for more-than-Moore semiconductors is another possibility. 

The transition to 450-mm production is necessary to keep up with 10 percent annual growth in wafer capacity, the report found.

Future Horizons CEO Malcolm Penn points out that 450-mm fabs have 2.25 times the output of 300-mm fabs, with a 30 percent cost reduction.

Interestingly, a recent SEMI report found that companies will make record investments in fab equipment next year. However, Europe will not see much investment, as most fab spending is expected in Korea, the Americas and Taiwan.

Fab equipment spending in Europe is also behind China and Japan.

Indian government gets interest from chipmakers

The Indian government is having some success in attracting the big chipmakers to set up shop in the country.

According to the Hindu Business Times, the Indian government has been wining and dining five global semiconductor makers.

The Government wants to have at least two semiconductor wafer fabs in the India, for which it has been scouting for companies that can offer technology and investment.

Infineon Technologies, ST Microelectronics, Sitronics, GlobalFoundries and a consortium comprising Jaypee Associates, IBM and Israeli firm Tower Jazz have all said they are interested.

The government’s Department of Electronics and IT (DEITy) said that feelers had been sent to TSMC, Intel and Freescale.

Freescale and TSMC said no but Chipzilla has offered advisory support on infrastructure and financial matters related to semiconductor manufacturing.

GlobalFoundries is offering know-how for 200 nm technology and also consultancy on process intellectual property.

A committee, set up by the DEITy to monitor the progress of the project, has asked Accenture to draw up a business proposal to enable the semiconductor firms take a final decision on investing in the project. 

AMD goes back to fabs

AMD has expanded its chip assembly and test plant in Suzhou, and it claims that it says will contribute to half of its global production capacity by the end of this year.

According to the Shanghai Daily, AMD will assemble, test and package chips for CPU, GPU and APU  in the Suzhou plant.

David Tang, AMD China’s president was quoted as saying that AMD has sold over 30 million APU chips since the chip’s debut last year.

Commenting that the investment represents AMD’s commitment to the China market, he said that the plant  will help improve market response and meet the surging chip demand in the global market

According to the Shanghai Daily, AMD has spent $300 million in the expansion, following an initial injection of US$100 million to build the factory in the Suzhou Industrial Park in Jiangsu Province in 2004.

AMD spun off its chip making facilities to GlobalFoundries. However the relationship with the outfit soured when GloFo could not get chips out fast enough.

Although AMD has been seen trying to make deals with TSMC, it is starting to look like the capacity for that plant is maxed out too. This is probably why AMD is having to create its own plants to get the sort of production levels it needs. Still if you said that AMD would get back any fab capacity a couple of years ago, they would put you away. 

AMD's move out of fabs was a terrible idea

Last week AMD finally got shot of GlobalFoundaries and no longer had any connection with any fabrication plant. Instead, it has the option to shop where ever it liked.

But it is starting to seem that thefFabless chipmakers might not be getting the sorts of deals they expected and AMD might be joining a crowd of designers who can’t get foundries to do what they  are told.

Problems with yields at 28nm might have pushed AMD to lose patience with GloFlo but there are indications that other fabs are having the same problems.

While most have their fingers crossed that foundries which may deliver processes in time to meet their deadlines they have little control over the timing of their process transitions.

Electronics Weekly points out Intel started showing off 32nm in early 2010 and 28nm is supposed to use the same process. Yet the foundries seem unable to get 28nm, which is based on the same process, running properly.

Some of the problems have been caused by the fabless chipmakers listening to the cocaine nose jobsworths of Wall Street who have been saying for ages that real men don’t need fabs and advanced digital CMOS didn’t add value.

The fact that Intel did not fall for this advice means that it has a huge process lead. 32nm was a doddle too because they moved to hi-k a node earlier than the rest.

The next generation of development, 20nm planar at the foundries/22nm finfet at Intel, looks set to push Chipzilla even further into the lead. Intel deep throats have suggested that this will happen in July.

So this means that AMD sold its fab at the time that it needed process engineering to compete. It also means that Qualcomm will not bring terror to Chipzilla, as expected, until it starts making its own chips.

Electronics Weekly thinks that there could be a new player in the market. Apple has $100 billion in the bank, a few years of R&D and is finding that its access to 28nm is slowed. It might be better for Jobs’ Mob to start fabbing its own chips.

It is also clear that if the fabless chip makers out there don’t do something they will quickly become also rans to the likes of Intel and Samsung who have them. It is possible that the likes of Qualcomm would have to enter a consortium of companies made up of Xilinx, Altera, Nvidia and AMD to buy their own fabs.

It might be that last week’s announcement that AMD paid Global Foundries (GloFo) $420 million to get out of their contractual relationships was the beginning of a shift towards such a consortium. With GloFo off its back AMD is free to play with whatever friends it wants.