SEMICONDUCTOR

UPDATE

November 2006

McIlvaine Company

Hua Hong Shelves 300-mm Wafer Plans

A Hua Hong NEC affiliate is mothballing plans for a 300-mm wafer fab in Shanghai, opting instead to build up a 200-mm wafer line.  Few details were given regarding the change. A spokeswoman would only acknowledge that the 200-mm line will add to the foundry capacity of Hua Hong NEC and that the parent company, Hua Hong Group, will not immediately pursue a goal of becoming an IDM.

China currently has one operational 300-mm wafer fab, run by Semiconductor Manufacturing International Corp in Beijing. SMIC is building another 300-mm line in Shanghai. In Wuxi, a joint venture between Hynix Semiconductor and STMicroelectronics is building a 300-mm wafer fab that will be operational next year.

The change in plan is a minor setback for China's plans to rapidly expand its 300-mm wafer manufacturing. Aside from the SMIC and Hynix-ST venture, there aren't any other companies currently building 300-mm wafer facilities. A recent report by Semiconductor Equipment and Materials International (SEMI) forecast as many as five 300-mm production lines in China by the end of 2008, with up to 70 percent of new equipment sales being for 300-mm wafer gear.

Hynix to Add the New Factories
Hynix wants to add the new fabs at its main complex in Ichon, just south of Seoul, by 2010. Unshackled from the four-year debt regimen that included asset sales, spending limits and the day- to-day involvement of creditors in management, the company charted an aggressive investment strategy to increase its profile as the world's most cost-effective supplier of memory chips, which are used in everything from PCs and game machines to cell phones to digital music players.

But that plan has a glitch. The Ichon complex sits in a zone subject to severe environmental regulations designed to protect the Han River, which supplies drinking water. Hynix's new plants, which will make next-generation chips etched with ever thinner circuits, must use copper, a material forbidden in such a zone.

Hynix is asking the authorities to bend the rules and has promised not to cause copper contamination.

But the government remains undecided. It welcomes Hynix's investments at a time when major South Korean companies like Hyundai Motor are creating more jobs overseas than at home. But it is balking at setting a precedent by compromising on its policy of encouraging manufacturing industries to build plants farther from the congested metropolitan area.

With a presidential election coming next year, the government is also facing lobbying from Kyonggi Province, where Ichon is located, and Cheongju, a city farther south, which is home to Hynix's second chip complex and wants to attract the new factories, which could create as many as 6,000 jobs.

NanoOpto Corporation Nanotech Developments

NanoOpto Corporation, which is applying novel design methods and proprietary nano-fabrication technology to produce a broad range of unique optical components that enable higher quality, low-cost optical components and systems, and MOXTEK, Inc., which pioneered and now manufactures exclusively, using its own proprietary nano-fabrication technology, wire-grid polarizers for leading rear-projection TV manufacturers and other OEM manufacturers working in the range of the Ultra-Violet through the Infra-red to a world-wide market, announced they will jointly develop a suite of nanotechnology-based optical products for various consumer electronics markets. MOXTEK’s high-volume manufacturing is capable of delivering over 25,000 8–inch wafers of nano-photonics materials and devices per month. MOXTEK also has a division which manufacturers X-ray components and sub-systems for industrial and analytical applications. NanoOpto serves customers across a particularly broad application set including digital imaging, displays, telecom, and the government/military sector.

Powerchip Eyes Overseas Share Sale for Expansion Plans

Powerchip Semiconductor Corp, Taiwan's largest maker of computer memory chips, is seeking to raise as much as NT$11.7 billion (US$359 million) selling shares overseas to fund expansion plans.

Powerchip is selling 60 million new global depository receipts (GDRs), to be listed on the Luxembourg Stock Exchange, to international investors, according to a document sent to fund managers by Nomura Holdings Inc, which is arranging the sale with Goldman Sachs Group Inc.

Powerchip plans to spend NT$85 billion on new equipment and facilities this year, with investment of a similar size expected next year. Powerchip is in talks to set up a joint venture with Elpida Memory Inc, Japan's biggest maker of memory chips for personal computers and consumer electronics.

Powerchip's net income more than tripled to NT$7.79 billion in the three months to Sept. 30, from NT$2.27 billion a year earlier.

Conergy AG Acquires Shuttered Communicant Fab for Solar Production

Conergy AG, a leading solar wafer energy manufacturer with headquarters in Germany, has purchased the 200mm designed fab of the defunct Communicant Semiconductor Technologies AG pure-play SiGe foundry that became insolvent during the construction of its first fab, located in Frankfurt (Oder), 50 miles east of Berlin in the state of Brandenburg, Germany, in 2003.

Hamburg-based Conergy AG is planning to invest €250 million in what it claims is the world's first fully integrated mass volume solar wafer facility. Upon production ramp, which is expected in the third quarter of 2007 and is said to be capable of 250MW module production, over 1,000 new jobs will be created. By 2008, a production capacity of 300MW for wafers, 275MW for cells and 250MW for solar modules is planned, according to the company.

The 200mm designed fab was originally built by MW-Zander for Communicant, who was an investor in the failed foundry. The cleanroom construction company will become the general contractor for Conergy's conversion of the facility. The purchase price was not disclosed, nor was the degree to which Conergy would receive State incentives for the project that is in a high unemployment region of the country

Intel Triples Size of Vietnam Plant

Intel Corp., the world's largest computer chip maker, announced Friday it will more than triple its initial investment in Ho Chi Minh City,Vietnam to $1 billion, dramatically expanding the size of a chip assembly and testing plant it plans to build in the country's southern business hub. The company plans to expand the facility from 150,000 square feet to 500,000 square feet. Construction is expected to begin in March. It will be Vietnam's first semiconductor facility and Intel's sixth testing facility in Asia.

ON Semiconductor Opens Facility in Slovak Republic

Phoenix-based ON Semiconductor announced yesterday that it has officially opened up a new product development center in Bratislava, Slovakia. The new center will focus on designing integrated circuits for power management and automotive applications. ON said that the center employees 15 engineers with plans to expand staffing to 30 in the near future. The new center expands the firm's current business in Central Europe, where it already operates two wafer fab facilities, customer service and logistics, and another product development center in the Czech Republic. ON Semiconductor provides power semiconductor devices for the computing, automotive, industrial, and other markets.
 

TSMC Continues with 300mm Fab Program

TSMC, according to Taiwan- and China-based news stories, has confirmed that it is planning to build 2 new 300mm fabs simultaneously in Taiwan with groundbreaking expected in April 2007. The new investment came after the company's board approved allotting US$1.133 billion for the expansion of 65 and 90 nanometer process capacity in 300mm.

The leading pure-play foundry has in recent years adopted a fab construction strategy that builds fabs in advance of actual customer demand or capacity limitations from existing facilities. Within the last month, the company announced that it had started production at Fab14 Phase II, which is an identical fab to Fab14 Phase I, four years after both fabs were built at the same location in Tainan, Taiwan.

TSMC is also building a ‘mega' 300mm fab, dubbed Fab 15, which is estimated to have a capacity of 100,000 wafer start per month, more than twice that of its existing 300mm facilities.

News reports have also suggested that the location for the new facilities is in a new area of the Hsinchu Science Park, which is the original location for many of Taiwan's chip manufacturers, but has long been fully occupied resulting in several more parks being established within the country.

Though completion of the new fabs could typically occur only 12 months later, depending on the size of the facilities, it would be common now for TSMC to only carry out cleanroom fit-out and move to partially tool install when demand was justified.

In addition to TSMC, both Powerchip Semiconductor Corp and Vanguard International Semiconductor Corp may also soon start constructing fabs at the Hsinchu science park, according to the park's administration.

Powerchip, the nation's largest memory-chip maker, is expected to begin construction of two new plants for making 12-inch wafers next year at the earliest, while Vanguard has yet to make up its mind whether its new fab will make 8-inch or 12-inch wafers, the park's administration said.

TSMC controls more than half of the world's market for making chips to a client's specifications, according to researcher IC Insights. It has the capacity to produce 271,000 silicon wafers a month at its two existing 12-inch facilities, double that of rival United Microelectronics Corp.

IMEC Expands Collaboration with Indian Semiconductor Companies

IMEC, Europe's leading independent nanoelectronics and nanotechnology research institute, engages to expand its R&D collaborations with Indian semiconductor companies and institutes. As a first step, a memorandum of understanding (MOU) was signed on November 5 with SemIndia. The company is planning to build a semiconductor fab in Hyderabad (India) and wants to take up research with IMEC on the next generations of semiconductor process technologies. Today, IMEC has also signed an MOU with the Indian Institute of Science (IISc) in Bangalore to perform joint research on various nanoelectronics process steps.

IMEC's initiative to strengthen its position on the Indian semiconductor market comes in the wake of India’s plans to give a major boost to the semiconductor industry by expanding nanotechnology R&D at the international science and technology centers and by setting up modern semiconductor fabrication facilities.

SemIndia intends to set up a semiconductor foundry in 2007 with production ramp up beginning of 2009 and with IMEC as a strategic fab technology research partner. Initial collaboration would focus on developing foundry-compatible 130nm and 90nm CMOS processes for logic and mixed-signal products for e.g. the cellular market. To this end, SemIndia will build on IMEC's long-term expertise in developing and transferring advanced CMOS processes. In a second phase, SemIndia intends to collaborate with IMEC on the 65nm and 45nm semiconductor processes.

The Indian Institute of Science in Bangalore has International Nano-Science Centre

The Indian Institute of Science in Bangalore has recently set up an international nano-science centre for R&D projects in nanotechnology applications. IMEC and the IISc intend to perform joint research on new materials for (sub-)45 nm CMOS technologies as well as nanotechnology for the post-CMOS era. In addition, RF-CMOS and MEMS have been identified as potential joint research topics. PhD students and researchers will be exchanged and the use of facilities will be shared between the two institutes.

Sofradir Building New Fab to Double Third-generation IR Detector Production

Sofradir of Veurey-Voroize, near Grenoble, France has received permission to construct a new €9m ($11.5m) factory that will allow it to almost double its production area (from 5500m2 to 9000m2, one third cleanroom) and to mass produce third-generation infrared detectors made from mercury cadmium telluride (HgCdTe, or MCT), starting in late 2007.

Sofradir will upgrade from 2-inch to 4-inch MCT wafers, at the same time becoming the first European manufacturer to produce IR detectors using molecular beam epitaxy and the only company, worldwide, to do so on an industrial scale, it claims. Part of the new facility will be devoted to enhancing customer support by providing demonstration rooms and additional testing facilities. “The new factory will give us more cost-efficient production that runs a secure, environmentally friendly process,” says Yves-Henri Bourgeois, VP Facilities and Quality.

The decision to invest in the new plant follows five years of consecutive growth, increased customer demand, and the successful industrialization of a new technological process, says Sofradir. The company, which was founded in 1986, claims it is ranked number two for deliveries of second- and third-generation MCT IR detectors worldwide (with 20-25% of the MCT second-generation detector market). Sofradir’s scanning and staring array products cover the infrared spectrum from 1µm to 16µm using MCT, quantum well infrared photodetector (QWIP) or microbolometer technology platforms.

Intel Gets Approval on Vietnam Investment

Intel Corp., the world's largest chipmaker, has received permission to increase its initial investment in Vietnam from $300 million to up to $1 billion.

Intel is constructing a $300 million chip assembly and testing plant in Ho Chi Minh City. Its original license, granted in February, allowed the company to invest up to $605 million.

The government has since approved an amended license allowing Intel to invest up to $1 billion and increase its production capacity, said Nguyen Anh Tuan, director of the Information Technology Industry at the Ministry of Telematics.

Intel, Micron Slect Singapore for NAND Flash Fab

Intel Corp. and Micron Technology Inc. have agreed to site their fourth wafer fab for the production of NAND flash memories in Singapore.

Since the formation of the Intel-Micron joint venture IM Flash Technologies LLC in January 2006, the companies have brought online a 300-mm NAND fabrication facility in Manassas, Virginia, and a Lehi, Utah, 300-mm wafer fab is on track to be in production early in 2007. The venture also currently produces NAND through existing capacity at Micron’s Boise, Idaho, fabrication facilities.

Intel and Micron intend to form a joint venture in Singapore to build and manage a NAND flash wafer fab that will come online in the second half of 2008. The fab would initially use a 50-nm process technology on 300-mm wafers. The Singapore JVs facility is expected to break ground in the first half of 2007.

Micron already has a joint venture in Singapore — with Hewlett Packard, Canon and the Singapore Economic Development Board — for the production of DRAMs.

Elpida May Choose China for DRAM Fab Site
After Powerchip Semiconductor Corporation (PSC) recently announced a global depositary receipt (GDR) issue, market speculation has risen concerning potential ties with Elpida Memory on the construction of a new DRAM fab, with China surfacing as the possible location of the fab.

Elpida chief executive Yukio Sakamoto was cited in a Reuters report as saying that the tax breaks and subsidies that China offers make it the ideal site for Elpida's new DRAM fab. The report noted that Elpida will invest US$8.5 billion on fab construction with production slated to start by March 2009. Sakamoto said producing DRAM in China can help reduce initial costs by 30-50%.

A long-established foundry partner with Elpida, PSC said it has not heard any news regarding potential fab construction in China for Elpida, said company chairman Frank Huang. However, Huang noted that it seems unlikely Elpida will choose China as the location. Huang explained that the China government is still undergoing "macro-economic" measures to avoid overheating in the economy and its decision not to approve a 12-inch fab from Hua Hong NEC (HHNEC) highlighted the limited possibility for an oversea company to construct a wafer fab in China. He also noted that the so-called subsidies that China government could offer would just be limited to land, and the large investment needed for fab construction, clean room, equipment installation means that the costs of constructing a new fab will be the same, no matter the location.

Through the second quarter of fiscal 2006 (ended September, 2006), Elpida had a DRAM outsource ratio of 34% and the company plans to raise the ratio to 35-40% in its fiscal fourth quarter. The company projects its annual memory bit growth will grow 135% this year, up five percentage points from its previous estimate.

Elpida aims to boost its E300 (Japan) 12-inch fab wafer starts from 62,000 wafers in September to 70,000 wafers in December 2006. Mass production on 70nm is slated for December as well. Total 12-inch monthly capacity at Elpida's fabs is about 60,000 wafers currently, said industry sources.

PSC is aggressively boosting its DRAM production capacity as well. The memory maker has guided a capacity target of 100,000 12-inch wafers per month in the fourth quarter of 2006. Annual DRAM supply bit growth is expected to reach 82% in 2006. Technology advancement is proceeding along with capacity expansion and PSC projects it will migrate all DRAM to 70nm in the second quarter of 2007.

At the end of the third quarter, PSC had recorded a combined monthly capacity at Fab 12A and 12B of 85,000 12-inch wafers and another 5,000 wafers at Fab 12M. Fab 12C and Fab 12D are slated to install cleanroom equipment in the fourth quarter.

Through the first quarter of 2006, Elpida had a 9.7% share of the global DRAM market in terms of revenues, while PSC had 5.2%. The leading player, Samsung Electronics, held a 26.6% share of the market,

Synchronised Manufacturing

IBM, Chartered Semiconductor and Samsung Electronics are synchronizing their 300mm fabrication facilities at the 90, 65 and 45nm nodes, to provide cross foundry manufacturing capability. The move is likely to cater to the needs of customers with very high volumes of complex products, such as Qualcomm, which has just used the service for its 90nm SoCs for mobile communications.

Known as the Common Platform, the approach means that customers aren’t tied to single vendor and can source an identical part from any one of several manufacturing facilities.
Ana Molnar Hunter, vice president of technology for Samsung Semiconductor, said: “Collaborative innovation means the sharing of intellectual capital as well as physical capital, of people as well as dollars. IBM, Chartered and Samsung all benefit from added capacity for manufacturing, and accelerated learning and yield ramps lead to cost benefits from both clients and partners. The Common Platform works because all parties benefit by getting products to market faster at reduced cost.”

Siemens Opens China Central Research Lab, to Invest $102.1 Billion
Siemens Corporate Technology (CT) officially opened its central research laboratory in Beijing, China, its largest in Asia Pacific. Siemens disclosed that around $102.1 billion will be invested in the Beijing location as well as in Shanghai by 2010.

The "Siemens Corporate Technology" research center will house scientists who will conduct research on new environmental, energy, healthcare and automation technologies. Currently, the research center has 200 scientists, which will be increased to over 300 by 2008.

Cree's Current Transition

Cree opened its new facility in Raleigh's Research Triangle Park. The 275,000 sq. ft. fab and its 150 employees are solely devoted to the design, manufacture and test of SiC and GaN-based electronics, while the site also houses Cree's SiC MMIC foundry line. Currently running 3 inch SiC substrates, it is already configured to make the anticipated jump to 4 inch material, a critical yield consideration when fabricating large MMIC die.

Despite the rather unique materials it processes, this fab looks like, and is run as, a fairly conventional GaAs or silicon facility, with bays of I-line steppers for photolithography, dielectric and metal deposition, dry etching and inspection equipment. The only portion of the process remaining in the older Cree facilities is that of SiC boule growth, and SiC and GaN epitaxy using equipment that serves double-duty for LED production.

The other important link between Cree's LED and electronic offerings is the increased energy-efficiency that both types of device deliver. SiC Schottky power diodes are a prime example of improvement in device performance reaching a critical threshold that has enabled commercial penetration.