april 06 update

SEMICONDUCTOR

UPDATE

McIlvaine Company

April 2006

Matsushita to Expand Singapore IC Design Center

Panasonic Semiconductor Asia Pte., Ltd. plans to spend about $6.2 million to triple the size of its regional IC design center in Singapore. The announcement by Panasonic Semiconductor Asia, a subsidiary of Matsushita Electric Industrial Co. Ltd. of Japan, comes after it announced it would invest about $93 million to upgrade its semiconductor assembly and test facility in Singapore.

Matsushita plans to increase manpower at the design center from 80 to over 300 within the next five years. The Singaporean design center is scheduled to develop mixed-signal and power management ICs that serve digital audiovisual consumer electronics, such as mobile phones, digital televisions, digital still cameras and digital video cameras.

AMD Starts Shipping Chips from Plant

Advanced Micro Devices has started to ship processors out of its new plant, but the advanced chips for which the building was erected won't start coming out for another few months.

The company has begun to produce processors built on the 90-nanometer process at its Fab 36 facility, AMD announced recently, at a press conference in Dresden, Germany.

Test chips based on the more advanced 65-nanometer process are also coming out of Fab 36, but the company reiterated that it won't start shipping these types of chips in production volumes until the second half of the year.

By 2008, AMD hopes to have the factory capacity in place that will allow it to produce 30 percent of the processors for the PC market.

The 65-nanometer question is one of the big issues facing the chip world in 2006.

Intel began shipping 65-nanometer chips to PC makers last year and will have four factories producing these chips by the end of the year.

Paul Otellini, Intel's CEO, asserted last month that the manufacturing lead, combined with new chip designs, will help the company regain market share.

For its part, AMD disputes this and notes that its manufacturing prowess is far better than it was in years past. Still, AMD trails Intel by several months. AMD won't be substantially converted to 65-nanometer production until the middle of 2007.

AMD is putting equipment into 13,400 square meters of space in Fab 36. To get to 30 percent, AMD will have to fill up all 20,000 square meters of the building. It will also have to continue to exploit the facilities at Chartered.

Flextronics to Invest in Indian Fab Project

Contract manufacturer Flextronics will invest in a large semiconductor manufacturing facility being set up in India by SemIndia, giving a significant boost to the fledgling project, Flextronics announced recently.

Flextronics of Singapore will also use chips produced by SemIndia to make products such as mobile phones at a factory that the company is setting up in Chennai in south India, the company said. Flextronics’ new factory is scheduled to start operations by the end of July.

SemIndia, which is a consortium of investors, announced plans in November to set up a wafer fabrication and assembly and test operation in India with process technology from Advanced Micro Devices of Sunnyvale, CA.

The US$3 billion fab will operate under a partnership between the private sector and the Indian government. Of the total cost of the facility, about $1 billion is likely to be in equity, of which the Indian government is expected to contribute about 26 percent, said Vinod Agarwal, chairman, president and chief executive officer of SemIndia of Delaware.

The Indian government announced in February that it will assist new ventures in high-tech manufacturing, including semiconductors, with both equity participation and "viability gap funding." The government’s viability gap funding tries to compensate for the higher costs incurred by new ventures in India because of extraneous factors such as poor infrastructure.

The SemIndia facility will be India’s first large semiconductor-manufacturing facility. A number of semiconductor companies, such as Texas Instruments of Dallas, have chip-design facilities in India, but have been reluctant to set up fabs because of its poor infrastructure.

Besides Flextronics, which will make a minority investment in the fab, SemIndia expects other investors to announce shortly that they will pick up equity stakes in the project, Agarwal said. Broadcom President and Chief Executive Officer Scott McGregor told reporters in Bangalore in December that his company would consider contracting production to the SemIndia project.

Elpida Memory Entering Indian Semiconductor Market

Elpida Memory, Inc., Tokyo-based dynamic random access memory (DRAM) silicon chip-maker, is entering the nascent Indian semiconductor market by setting up a DRAM design and development centre here in partnership with Singapore-headquartered Future Techno Designs (FTD) Technology.

The new venture, Edison Semiconductor Pvt. Ltd., a wholly-owned subsidiary of FTD, will focus on various DRAM architectures and products for the digital consumer electronic systems, servers and personal computers applications, a senior company official said.

"DRAMs have been driving the growth of semiconductor industry pushing every limit on silicon.

"This is the first company in India to develop advanced DRAM products for a global industry leader bringing opportunity for Indian engineers to contribute to the growth of this industry,'' he stated.

Elpida's state-of-the-art semiconductor wafer manufacturing facilities located at Hiroshima in Japan offer a broad range of DRAM products for high-end servers, mobile phones, digital television sets, digital cameras and personal computers.

Global insourcing firm FTD Technology is positioning its insourcing business model as a distinct alternative to outsourcing of R&D and helping build technology competence centers for semiconductor and system customers.

1ST Silicon Merges with X-Fab Semiconductor

1st Silicon (Malaysia) has merged with X-Fab Semiconductor Foundries, creating a new entity named XFAB Silicon Foundries. 1st Silicon is a leading pure play foundry in Malaysia offering logic, mixed signal, nonvolatile memories and several emerging innovative niche technologies. Germany-based X-Fab is one of the world's leading analogue mixed-signal foundries.

The combined manufacturing capacity of the merged company will be approximately 700,000 200mm-equivalent wafers per year, and the sales of the new company are expected to exceed US $300 million in 2006.

There is a strong strategic rationale for these two established foundries to merge as the manufacturing, technological and marketing synergies are significant.

Moreover, there is minimal overlap in terms of personnel and geographic coverage.

Post-merger, 1st Silicon and X-Fab will have key manufacturing facilities in Sarawak (Malaysia), Erfurt (Germany), Lubbock (Texas, USA) and Plymouth (UK).

Its marketing network and client base will span across the Americas, Europe and Asia.

In the late 1990s, the State of Sarawak invested in 1st Silicon to strategically transform and foster the economic development of the state.

The investment into the wafer fabrication business was a tactical choice to spearhead the state's entry into high-tech and knowledge-intensive industry.

As a result of this, spill-over effects in terms of creation of various clusters and supporting industries have provided a nucleus for growth in domestic human talent pool and high-technology process capabilities.

Over the years, this has enhanced Sarawak's manufacturing expertise and global connectivity.

'The State of Sarawak views this strategic merger and long-term partnership with X-Fab as a powerful union and will further the state's long-term goal to develop its world-class high-tech and knowledge-based sector', said YAB Pehin Sri Haji Abdul Taib Mahmud, Chief Minister of Sarawak.

'X-Fab's decision to expand their Asian operations from Sarawak is a testimony that Sarawak has successfully transformed and diversified its economic base beyond natural resource and agricultural base industries', added the Chief Minister.

'This strategic partnership signifies X-Fab's long-term commitment and confidence in the State of Sarawak as we believe they have the technological expertise and sustainable pool of well trained local workforce as well as a stable political, social and pro-business environment', commented Roland Duchatelet, Chairman of the Supervisory Board of X-Fab.

Hans-Juergen Straub, CEO of X-Fab stated that he was impressed with the cutting-edge advanced manufacturing facilities and quality of the workforce that 1st Silicon possesses.

'We look forward to working together and to developing an efficient technologically advanced and profitable business model in the mid-term', he noted.

Dr John Nelson, CEO of 1st Silicon added: 'The merger will benefit both parties through long-term financial viability as well as expanding our mutual customer bases because of X-Fab's strong presence in Europe and North America and 1st Silicon's strong customer base centred primarily in Japan, Korea and Taiwan'.

'This globalization of sales will present new opportunities for growth for both companies'.

The merger is subject to regulatory and other approvals and is expected to be completed by the 3rd quarter of this year.

Infineon Spins Off DRAM Operations, Plans IPO

German semiconductor maker, Infineon Technologies, will spin off its memory-chip business two months earlier than planned, with a public offering to be "the preferred next step", the company said last week.

The new company, to be called Qimonda, will start operations on May 1, 2006. The designated CEO is Infineon board member, Kin Wah Loh.

Rumours had been circulating for some time that Infineon intended to spin off its volatile dynamic RAM (DRAM) operations to focus on more lucrative areas such as chips used in mobile phones, automotive electronics and security systems.

DRAM chips are used in numerous products but, in particular, as the main memory in personal computers, a highly competitive business that has been subject to intense price pressure in recent years.

Qimonda will be the world's fourth largest DRAM manufacturer, with revenue of $US3.8 billion in 2005.

The company will have around 12,000 employees, of whom 4700 will be in Germany. It will employee 1700 people in research and development with more than 900 engineers in product development working at five main R&D facilities: two in Germany, one in Asia and one in the US.

The new venture will have access to five 300-millimetre chip manufacturing sites on three continents.

Infineon CEO, Wolfgang Ziebart, said a date for an initial public offering (IPO) is not set and will depend on numerous factors, including stock market conditions. The IPO would most likely be in a country where other chipmakers are active, he said, without providing any names.

Micron and Infineon Expanding Virginia Facilities

As for semiconductor chips, Micron and Infineon Technologies Richmond are Virginia's two manufacturing plants and are spending a combined $2.7 billion to expand and refit the facilities.

.Micron bought its Northern Virginia plant from Toshiba Corp. in 2002 but didn't start making chips until two years later. Manufacturing really took off there last year, Otte said.

And while Infineon is waiting until it can competitively produce what is known as NAND flash memory, Micron is actively pursuing the market.

The Boise, Idaho-based company announced in July 2004 that it would begin making flash, increasingly popular for use in consumer electronics such as memory cards, digital cameras and iPods or other portable music players.

Flash production, Otte said, "essentially takes our output at this facility up two and a half times."

Infineon's Das said the volume of Infineon's business is growing by double digits. Otte estimates that memory-chip demand will grow 50 percent each year. "Most industries would kill for something like that."

The growth trend in chip exports could be tempered by market demand, which can cause extreme price fluctuations in memory products.

SEH to Double Wafer Production in Vancouver

SEH America Inc. has won state permission to use an additional 2,000 gallons of water every minute at its northeast Vancouver plant, which produces silicon wafers for the computer semiconductor industry.

The new permit allows SEH to double its water use and paves the way for the company to spend more than $350 million on new production.

"That doesn't mean they will use the water or make the wafers," Sandy Howard, a spokeswoman for the state Department of Ecology, said Thursday.

That depends on a decision by SEH's Japanese parent company, Shin-Etsu Handotai Ltd., which is expected soon.

At its Orchards campus, where 685 people work, SEH makes 8-inch silicon wafers, thin disks that are cut and etched to make computer chips.

Last year, the company hired 30 people as part of a pilot program here to make 12-inch wafers, a more advanced technology that can command higher prices.

Shin-Etsu plans to spend $1 billion worldwide to expand its 12-inch silicon wafer production. If one of its new manufacturing lines is in Clark County, the company will spend at least $350 million on equipment. It's not clear how many jobs that would create.

If Shin-Etsu chooses to expand here, SEH will have many big permits in place already, said Steve Stenberg, the company's director of facilities. Getting the water right is a major step, he said.

The company applied for the additional water right a decade ago, when SEH had no expansion plans but knew extra water would be needed if it ever did decide to grow, Stenberg said.

Intel Fab 32 to be Operational by 2007

Metro offers high-tech companies all the factors they need to expand operations.

Intel first came to Arizona in 1979. In the ensuing 27 years, the company has invested billions of dollars and created more than 10,000 jobs at its Chandler, Ariz., facilities in the Phoenix metro.

And while technology and the economy have changed dramatically during the past quarter-century, the things that attracted Intel to Arizona in 1979 still hold true today. In August, Intel broke ground on Fab 32, a $3 billion investment. The semiconductor manufacturing facility is scheduled to open by the end of 2007.

“The first factor for the company selecting Arizona in 1979 was that Phoenix had an international airport, great education system and superior infrastructure in terms of transportation, water and sewer,” said Dave Olney, site development manager in Intel’s Public Affairs Group. “When you combine that with the favorable business climate in Arizona, this has been a great place to be.”

The Fab 32 facility will sit adjacent to Fab 22. When completed, about 1,000 Intel employees will work at the new building.

As Intel has grown exponentially in the decades since opening its first facility in Chandler, its need to find, hire and retain highly educated and skilled workers has increased as well. The company works closely with Phoenix-area community colleges and Arizona’s four-year universities to provide a steady stream of qualified workers.

Intel also partnered with Chandler to come up with a creative solution to the company’s water usage needs. The high-tech manufacturing processes used by Intel require lots of water. Using an on-site reverse osmosis water treatment facility, Intel uses just 1 million gallons of water a day thanks to recycling it several times internally. Without the process, the net usage per day would go up to 5 million gallons.

“Arizona is an arid state, and we wanted to recycle as much water as possible,” Olney said. “We were able to minimize the usage of city water with this unique approach.”

ON Semiconductor Purchasing LSI Logic Corp.'s Gresham, OR Wafer Fabrication Facility

ON Semiconductor Corp. announced that its primary operating subsidiary, Semiconductor Components Industries, LLC, has executed a definitive agreement with LSI Logic Corp. to purchase LSI Logic Corp.'s Gresham, OR, wafer fabrication facility and certain other semiconductor manufacturing equipment for a total of approximately $105 million in cash. The assets to be purchased include an approximately 83 acre campus with an estimated 500,000 square feet of building space of which approximately 98,000 square feet is clean room. The 200 mm capable tool-set and equipment included in the transaction is currently capable of producing 18,000 8-inch wafers per month.

Pursuant to the agreement, ON Semiconductor will offer employment to substantially all of the LSI Logic manufacturing employees currently working at the Gresham facility. The skilled process development and operational expertise of Gresham's employee base are a critical aspect of the transaction and will help enable ON Semiconductor to produce its own high-volume, low-cost, high-performance analog and digital power products down to 0.18 micron levels -- with toolset capabilities down to the 0.13 micron level in the future.

Taiwan and China are Growth Leaders

Contract chip manufacturers in Taiwan and China are leading growth in the foundry industry and will continue to do so through almost the end of this decade, industry researcher In-Stat said last month.

Investments in leading-edge chip plants have given Taiwan the largest concentration of 12-inch (300-millimeter) chip factories anywhere in the world, said In-Stat, a unit of Reed Business Information.

The researcher credits strong spending for growth in Asia, where chip plant and production line purchases among contract chip makers rose more than 150 percent in 2004, before declining 23 percent last year. The gush of new spending arose from pent-up demand created by a global technology industry downturn in 2001 and 2002, according to the industry researcher.

Taiwan is already home to the world’s two largest contract chip makers, or foundries, Taiwan Semiconductor Manufacturing (TSMC) and United Microelectronics (UMC). Both companies operate 12-inch factories in Taiwan and have pledged billions of dollars in new spending this year. TSMC plans to spend US$2.66 billion and $2.8 billion on new production lines this year, while UMC has set plans for $1 billion.

The two companies account for more than 50 percent of all foundry capacity in Asia, a title they’re expected to keep through 2009, according to In-Stat.

China has been seeding its fledgling foundry industry with incentives in the hopes it will someday rival Taiwan’s.

"Capacity in China will also grow rapidly over the next several years," said In-Stat analyst Prakash Vaswani. "Price advantages and emerging domestic fabless companies will allow China’s local foundries to survive."

The world’s most populous nation already boasts the third-largest foundry chip maker in the world, Semiconductor Manufacturing International (SMIC), which overtook Singapore’s Chartered Semiconductor Manufacturing in 2004.

STMicro Invests $500 Million in China Chip Packaging Plant

STMicroelectronics said Wednesday it plans to spend $500 million on a chip packaging plant in China as part of its plan to expand its presence in the world’s largest chip market.

The Geneva chip maker will put the money into its second assembly and test plant, to be located in Longgang, in the Guangdong province.

STMicro is currently building a memory chip-making plant with its joint venture partner Hynix. The $2-billion memory chip plant, located in Wuxi, Jiangsu province, is scheduled to be finished by the end of this year.

“Today, we are the No. 3 semiconductor supplier in China,” said Bob Krysiak, who recently became the corporate vice president and general manager of STMicro’s operation in China. “We plan to become No. 1.”

The chip maker, whose semiconductors are found in cell phones, cars, televisions, and telecom equipment, among others, also is building a new, $10-million China headquarters in Shanghai.

It’s no secret that China is an important market for chip companies worldwide. The country not only boasts a large consumer base, it also hums with factories that roll out a variety of electronic equipment and gadgets, from MP3 players to computers.

China became the largest chip market globally in 2005, according to market research firm IC Insights. The region’s appetite for semiconductors grew 32 percent to $40.8 billion last year.

But the majority of those semiconductors are made outside of the country. China has few home-grown, chip-making facilities. Chip companies that have their own plants, such as Intel, Samsung, and Texas Instruments, have opted to build new facilities elsewhere in the world.

The world’s largest foundry, which manufactures for chip design firms, is Taiwan Semiconductor Manufacturing (TSMC). TSMC builds most of its plants in Taiwan and must abide by the Taiwanese government’s rules on using advanced manufacturing technology in its operation in China.

STMicro built its first assembly and test plant in Shenzhen. The second such plant in Longgang is scheduled to start production in the third quarter of 2008.

STMicro’s shares rose 0.28 to $17.94 per share in recent trading on the New York Stock Exchange.

Powerchip Breaks Ground on Major Fab Complex

Powerchip Semiconductor (PSC) has broken ground on the company's largest fab complex to date. The Taiwanese based memory producer has started ground work on two 300mm facilities simultaneously, which will each be capable of between 30,000 and 40,000wspm when fully utilised.

The new fabs are part of a cluster PSC is claiming it will build at the Central Taiwan Science Park, Taichung that includes another two fabs within the plan. The company is estimating the total investment for the four fabs will cost in the region of $9.0 billion US dollars. The fabs have been named as Fab 12C, 12D, 12E and 12F.

PSC operates two 300mm fabs currently with the expectation that only one of the new fabs will have tools installed when the cleanroom is finished. The company has had a good record in ramping its fabs and building facilities in advance of capacity requirements.

With the recent purchase of a shuttered 300mm fab from Macronix, PSC is expecting to reach 100,000wspm capacity by the end of 2006. The company will ramp both DRAM and NAND Flash devices, taking the company away from dependence on DRAM.

GSK Begins RFID Program

GlaxoSmithKline has begun distributing a medicine tagged with radio frequency identification (RFID) technology as part of a pilot project to help protect patient safety. The tags will be placed on all bottles of Trizivir, an HIV medicine, distributed in the U.S. When scanned at close range, the tags will help verify that the medicine bottle contains authentic Trizivir. This drug was selected for the project because it has been listed by the National Association of Boards of Pharmacy as one of 32 drugs most susceptible to counterfeiting and diversion.

"This is one more step toward safeguarding Americans' supply of medicine," said Mark Shaefer, vice president of the HIV and Infectious Disease Medicine Development Center at GSK. "The hope is that RFID tags can tighten the supply chain even further to help assure patients that the medicine they buy is indeed the medicine their doctor has prescribed."

The FDA has asked the pharmaceutical industry to develop standards and pilot processes for RFID that may lead in the next few years to broad adoption and use of the technology.

RFID uses a tiny silicon chip and antenna about the size of a postage stamp that is attached to each bottle of medicine. The chip stores a unique product code that reflects information about the drug's manufacturing and shipping history. The product code can be read by pharmaceutical wholesalers and pharmacists using a hand-held or stationary electronic device that is placed within 2-18 inches of the tag. The tag can be read by wholesalers when it is received from the manufacturer and when it is shipped to pharmacies, who would then record when they have received the medicine. This allows manufacturers to more precisely account for medicine as it moves through the distribution chain and to authenticate medicine at the point of dispensing.

The company noted that the technology does not collect any patient information. The RFID tag contains information about the product only, not the patient. GSK will not collect any personally identifiable information about patients through this technology.

RFID-tagged bottles of Trizivir will begin appearing on pharmacists' shelves in mid April.

Anadys Pharmaceuticals Names Vice President

Carol G. Gallagher, Pharm. D., has been named vice president, commercial affairs, at Anadys Pharmaceuticals. Dr. Gallagher will be responsible for commercial affairs, including business development, market planning and strategic planning. "We are very pleased that Carol is joining Anadys," said Kleanthis G. Xanthopoulos, Ph.D., Anadys' president and chief executive officer. "Her leadership and experience in managing many therapeutic agents with multiple partners on a worldwide basis will be critical to Anadys as we build the foundation of our commercialization strategy."

Prior to joining Anadys, Dr. Gallagher was the vice president, sales, marketing and product planning at CancerVax Corp. Previously, she was senior director of oncology marketing at Biogen Idec. During that time, her role included leadership of the Rituxan collaboration with Genentech. She also worked as director, global marketing planning for oncology and ophthalmology at Pfizer, and held other marketing positions, including product and new product management roles, at Agouron Pharmaceuticals, Lilly and Amgen.

Charles River Laboratories Inks Pact with Wash University

Charles River Laboratories International, Inc. has signed a licensing agreement with Washington University, in which Charles River will utilize WU's novel murine norovirus and culture system. Murine norovirus (MNV) was discovered to be a non-enveloped RNA virus which has the potential to infect laboratory mice. To protect the integrity of research animals, a reliable testing method is desired to rule out the possibility of murine infection by this pathogen. Utilizing Washington University's culture system technology, Charles River's Research Animal Diagnostic Services division has expanded its comprehensive portfolio of assays for screening of mouse samples by creating assays to detect MNV.

William Barbo, CRL's corporate vice president, Research Model Services, said, "Charles River is pleased to join Washington University in this licensing agreement. Utilizing the innovative MNV technology developed in the laboratories of Dr. Skip Virgin at the university, Charles River will continue to be in the forefront of laboratory animal diagnostic testing."

HollisterStier To Double Capacity, Lab Space in $30 Million Expansion

HollisterStier Laboratories has announced plans for a $30 million facility expansion. The company will add a second high speed filling line that can handle 2-100mL vials and fill approximately 400 vials per minute, doubling its current laboratory space, while adding an office complex. The clean room complex includes aseptic compounding areas, a new component preparation area, and an aseptic storage area. HollisterStier also projects increasing personnel by approximately 40 percent during the next three years.

"The new filling line and expanded lab space enhances our ability to meet the unique needs of our customers. With the expansion, we will also increase our various customer support teams," stated Anthony Bonanzino, Ph.D., president & chief executive officer.

HollisterStier is doubling its laboratory space for the Quality Assurance and Quality Control departments. "QA is one of the most vital components to our organization. The new construction allows for critically needed lab bench space and new instrumentation," he said.

The project increases the Spokane, Washington facility to a total of 185,000 sq. ft. Construction on the laboratories and office building begins in the fall of 2006 with completion expected in May of 2007. The construction for the filling line begins in Q42006, with commercial production commencing in Q42008

TI Taps Texas as Site for Next Semiconductor Manufacturing Facility

Texas Instruments Incorporated has selected Richardson, Texas, as the site for its next major semiconductor manufacturing plant. Groundbreaking is expected by the end of 2005.

The facility will build the world's most advanced semiconductors on 300-millimeter (12-inch diameter) silicon wafers, the second TI plant with such capability. The facility will represent an approximate investment of $3 billion by TI over a multi-year period subsequent to groundbreaking. When fully operational, the facility is expected to employ up to 1,000 people.

The selection of Texas as the location for the plant is the result of collaboration between TI, the State of Texas, the University of Texas System and several local governmental and economic development entities. This joint effort will promote the North Texas region's technological future and boost funding for engineering and research programs at the University of Texas at Dallas (UTD).

"TI spends almost $1 billion a year on capital and a significant portion will continue to stay in Texas with this planned expansion. This state has been a great home for TI for many years. The opportunity to contribute to the development of the Texas economy through cooperative agreements with the government and higher education institutions takes us into a new era," said Tom Engibous, chairman, president and CEO of TI. "This new facility and the enhanced research and engineering programs at UTD are great news not only for TI and its customers, but for the state and nation as a whole."

Working Together with State and Academia

Underscoring the company's long-standing commitment to education, TI officials worked closely with policymakers who earmarked millions in new funding for the Erik Jonsson School of Engineering and Computer Science at UTD. Named for one of TI's founders, the Jonsson School is among the fastest growing engineering programs in the country. More than $300 million in new funding from a combination of private and public sources will be directed to the Jonsson School as a result of TI selecting Texas for its next manufacturing site. Included is $50 million from the newly created Texas Enterprise Fund as part of the State's economic development package for TI.

"The State's commitment to a large investment in the Jonsson School was important in our decision to locate a facility of this magnitude here in North Texas," said Mr. Engibous. "UTD is now poised to move into the ranks of the country's great engineering schools. We all stand to gain from the well-educated workforce and top-notch R&D programs this effort will produce."

Texas Governor Rick Perry also hailed the selection of the site.

"This is the largest modern day private-sector economic development project ever undertaken in the State of Texas. The thousands of jobs it eventually will create are exactly what we expect from the Texas Enterprise Fund and our other economic development efforts," said Governor Perry.

United States Senator Kay Bailey Hutchison said in support of this announcement, "Texas Instruments is making a lasting contribution to the future of UT Dallas and to Texas. I will work to add federal resources to the research capabilities of this partnership."

Small Scale Products in Large Scale Production

Groundbreaking for TI's new fabrication facility, or "fab", a few miles north of the company's headquarters in Dallas, is expected to occur before the end of 2005 pending attainment of appropriate permits and incentives as well as market demand. When completed, the planned facility will be one of the most advanced semiconductor manufacturing facilities in the world, producing a wide range of digital signal processing (DSP) and analog-based system-on-chip (SoC) devices for wireless, broadband and digital consumer applications.

Much as it did with its first 300-mm facility, DMOS 6 in Dallas, TI plans to construct the building and infrastructure ahead of market demand, followed by stages of equipment installation as demand increases. This construction method spreads capital investment over a period of years and allows the company to increase production quickly as customers demand more products. This is particularly important due to TI's continued focus on DSP and analog semiconductors. DSP revenue growth is outpacing other semiconductor markets and analog is now the largest segment in the semiconductor industry. TI has been producing 300-mm wafers in DMOS 6 since 2001.

NEC Establishes New Semiconductor Design & Sales Joint Venture Company in China

NEC Corporation (NEC) today signed an agreement to form a semiconductor design and sales joint venture company in China. The agreement was signed in the presence of China’s Minister for Electronics Industry Mr. Hu Qi Li, between Yu Zhongyu, Chairman of Chinese partner Beijing Hua Hong Integrated Circuit Design Co. Ltd., and the head of NEC’s Semiconductor Group, Senior Executive Vice President Hajime Sasaki.

The new joint venture company to be called Beijing Hua Hong NEC IC Design Co. Ltd. (Beijing Hua Hong NEC) strengthens NEC's commitment to the Chinese Government's '909 Project', aimed at promoting development of a semiconductor industry as a key part of China's Ninth 5-year economic plan.

Beijing Hua Hong NEC will be located in Beijing when it is established in June 1998. Operations are due to begin in January 1999. Overall investment in the joint venture company will amount to US$30 million, while capitalization will amount to US$20 million. 41 percent of this is to be contributed by NEC, 10 percent from NEC (China) Co., Ltd. and 9 percent from Shougang NEC (a total of 60 percent from the NEC Group), and the remaining 40 percent from Chinese partner Beijing Hua Hong Integrated Circuit Design Co. Ltd.

Beijing Hua Hong NEC will design microcomputers, ASICs (application specific ICs) codec ICs, IC cards and other semiconductor products for use in applications such as digital video and still cameras, consumer electronics, mobile communications equipment. Seeking to further develop the market in China, the company will also aim to develop System On a Chip (SOC) devices that combine the functions of several semiconductors into one chip.

Beijing Hua Hong NEC will market and sell its IC designs to other NEC semiconductor facilities and sell products manufactured by other NEC semiconductor facilities worldwide.

With the addition of Beijing Hua Hong NEC to the NEC Group, NEC will offer a complete product in its efforts to better serve its customers: from design and manufacturing through to sales and service, it will have the ability to support significant developments in China’s industry.

Furthermore, NEC believes that it will double its semiconductor manufacturing capability within a few years. NEC is therefore looking to recruit talented Chinese engineers. Initially Beijing Hua Hong NEC will total approximately 120 people, this is expected to rise to approximately 320 people before the year 2003.

NEC established itself in China as long ago as 1972 and has seen annual sales grow to over 150 billion yen. Today, each of NEC’s main products sold in China (semiconductors, digital switching systems, optical communications systems, mobile communications equipment, computers and software) are now being produced domestically. As a result, NEC’s overall investment in China stands at approximately 200 billion yen and employs 5,000 people. This makes NEC the largest Japanese corporation operating in China.

Shougang NEC began semiconductor assembly operations in Beijing in 1993 and from 1997 construction began of a mainstream fabrication facility for Shanghai Hua Hong NEC, this is due to be operational in February 1999. The establishment of the new Beijing Hua Hong NEC company (NEC's third joint venture in the semiconductor industry, and its 19th affiliate in the country) reinforces NEC’s position in China and places NEC and its Chinese partners in a key position to develop new business in the country and support the development of China's high-technology industrial sector.

Sony to Establish a New Semiconductor Plant in Kumamoto Prefecture, Japan

Sony Corporation announced recently plans to establish a new semiconductor plant in Kumamoto Prefecture, Japan. The new plant will expand the manufacturing capacity of small-size LCD (high temperature Poly-Silicon) and CCD image sensors that are currently being produced at Sony Kokubu Corporation. Construction for the new plant will begin in November 2000, and production is due to start in October 2001.

In light of the strong demand for small-size LCD and CCD image sensors, Sony has decided to further strengthen its competitiveness in this market by establishing a new mass production facility. Small-size LCDs are key devices for data projectors, rear projection televisions and Camcorders, whereas CCD image sensors are critical components for digital still cameras and Camcorders.

Kumamoto-prefecture is located in the center of Kyushu Island where 30 percent of Japanese semiconductors are produced. Not only does Kumamoto have abundant human/natural resources and semiconductor infrastructure, its proximity to Sony's other semiconductor facilities such as Sony Kokubu Corporation, Sony Nagasaki Corporation and Sony Oita Corporation facilitates the sharing of technology and raw materials.

The new plant will be the first Sony plant to comply with the production of 300mm wafers, and will also house the latest semiconductor manufacturing technologies such as localized cleanroom technology, mini production line and "zero-emission" recycling process of cleansing fluids. Initial capital expenditure is estimated at 10 billion yen within the fiscal year 2000, and cumulative investment is forecasted at 100 billion yen by the end of fiscal year 2005. The plant will employ approximately 300 people at start up, of which 140 will be new hires. Mass production of LCDs is planned to begin in 2002 at 3,000 wafers per month, and CCDs in 2003 at 2,000 wafers per month. Within 2005, production will be increased to 12,000 wafers per month, which will double the current monthly production of LCDs and CCDs (850,000 units and 2,600,000 units respectively).

Entegris Demonstrates Commitment to Japanese Semiconductor Market with New Manufacturing Facility

Entegris, Inc., a materials integrity management company, has announced the opening of its newly remodeled manufacturing facility in Japan to produce the company’s full pitch FOSB (front opening shipping box).

“The bulk of 300 mm prime silicon wafers are currently manufactured in Japan,” said Patrick McKinney, president, Entegris semiconductor market segment. “Opening a FOSB facility in this region improves and expands our resources to serve 300 mm raw wafer customers and others with products and services to protect and transport their critical materials. This facility adds to our global infrastructure enabling Entegris to support wafer manufacturers and end users around the world with unparalleled materials science capability, technology development and manufacturing support.”

The approximately 600-square-meter manufacturing facility is located at 4452-25 Hachimanpara; 3 Chome; Yonezawa, Yamagata; Japan (Tel: 81-238-28-1611). The facility includes a newly assembled injection molding room, a class 1000 cleanroom (where full and reduced pitch FOSB products will be assembled) and a raw materials and finished goods warehouse for staging.

Entegris announced the initial availability of its full pitch FOSB in July 2003. It is the company’s latest addition to a comprehensive line of 300 mm wafer handling products, which includes the 300 mm Crystalpak® wafer shipper and the FabFit™ reduced pitch FOSB. The full pitch FOSB is the only Factory Interface Mechanical Standard (FIMS) compatible shipping box allowing for complete integration of the FOSB with fab automation eliminating labor and reducing cleanroom requirements. Its primary function is to protect the integrity of 300 mm wafers from particles, molecular contamination and shock and vibration, which can occur during the wafer shipping process.

New Science and Technology Facility to Combine Energy Efficiency with Research

The future of solar cell, thin film, and nanostructure research will be built on a hill to the east of the National Renewable Energy Laboratory's Solar Energy Research Facility. There, among the native grasses, wildflowers and an occasional rattlesnake, will be a new type of research facility that will support a new way of doing research on several of the technologies highlighted by President George W. Bush in his National Energy Policy, including the development of next-generation energy technologies such as hydrogen and fuel cells.

Construction of the Laboratory's new Science and Technology Facility (S&TF) is expected to begin in the fall and be completed in approximately two years.

"This new facility will support research on thin-film photovoltaics and nanostructures in an environment designed to be a laboratory research facility, first and foremost," said Pete Sheldon, Measurements and Characterization Division manager and the technical project manager for the S&TF.

The S&TF will provide significant advantages for state-of-the-art energy research. Research groups sharing common interests will be co-located in the same building and will have the ability to pursue process integration research that will ultimately reduce the time it takes to move a technology from the lab to the marketplace. NREL is striving to achieve a "Gold" Leadership in Energy and Environmental Design (LEED) rating by incorporating a sustainable design and energy efficient features into the new building.

Foundries Join Together in Euro-Asian Merger