SEMICONDUCTOR
UPDATE
February 2008
McIlvaine Company
TABLE OF CONTENTS
AMD's New York Fab to Begin Construction in Summer of 2008?
Intel's China Fab Receives Permission to Use 65-nm Process
Sony Sells Chip Facility to Toshiba for $835 Million; Forms Joint Venture
West Bengal Sells Kolkata to Semiconductor Industry
Chartered buys Hitachi 200mm Fab, gains Renesas' Biz
LTX Offers Demo and Testing Lab in China
India to Get Its First Wafer Chip Plant
AMD's New York Fab to Begin Construction in Summer of 2008?
Even though AMD has been going through an increasingly difficult period, plans for the future are not getting sidetracked. On Feb 25th, AMD reps filed zoning amendments and an environment impact study for a new fab with the Malta NY Town Board.
Plans for AMD's future Fab in New York State have now expanded to potential 1465 employees, up from 1200 that were envisioned with the original plan.
This spells good news for the region if AMD decides to build a factory in Luther Forest Technology Campus. State of New York is ready to shell out 1.2 billion dollars in incentive package if troubled chipmaker decides to build a $3.2 billion facility. Even though AMD hasn't officially announced that the company will build the Fab, AMD wants permission to start clearing land and prepare for construction during this coming summer, and a building permit to be ready by January 1st, 2009.
It seems that design of the Dresden complex was so successful (AMD has room to build up to five Fabs in Dresden) that AMD plans to do the same thing in NY state. First phase would include building one cleanroom (wafer manufacturing facility), with the room to expand the factory complex to three cleanrooms, and bring the head count of the company to 20,000 mark and beyond. Currently, AMD employs around 16,000 people worldwide, so the New York plan could employ more than 4,000 people.
Intel's China Fab Receives Permission to Use 65-nm Process
Intel Corp. has sought and received permission from the U.S. government to begin manufacturing on a 65-nanometer process at its wafer fab in Dalian.
The wafer fab is currently under construction and the timing of operations at the $2.5-billion wafer fab in Dalian has also been refined. The start of operations is now scheduled for the first half of 2010, along with possibility of the more advanced process technology. At the time of the announcement of the wafer fab in March 2007, Intel said the plant would begin operations sometime in 2010 on a by-then trailing-edge 90-nm process technology. Intel would choose whether to begin manufacturing on 90-nm or 65-nm in about one year.
Intel broke ground on the shell of Fab 68 in September 2007 and it is expected to cover 163,000-square-meters of factory space and host a 15,000-square-meter (161,400 sq. ft.) cleanroom.
Sony Sells Chip Facility to Toshiba for $835 Million; Forms Joint Venture
Mumbai: Sony Corporation has entered into a joint venture with Toshiba Corporation for setting up an advanced computer chips facility.
The move comes close on the heels of Toshiba's decision to abandon its HD DVD high-definition DVD format, ending a prolonged battle with the Sony-led Blu-ray technology for high-definition video formats.
Under the agreement, first announced in October last year, Sony will sell its microchip production facilities in western Japan to Toshiba Corporation for 90 billion yen ($835 million).
Toshiba will own 60 per cent in the semiconductor joint venture while Sony will have a 40 per cent equally stake - split between Sony Corporation and its game unit Sony Computer Entertainment Inc.
The joint venture will make high-performance cell chips and RSX graphic chips, both used in Sony's PlayStation 3 game console, as well as other microchips that go into Toshiba products.
The joint venture is expected to go on stream on April 1, 2008.
Sony said it is focusing more on its core businesses. Sony said in October it will focus on image sensor chips for digital cameras and pull away from heavy investments for cutting-edge chip production equipment.
Toshiba plans to invest $16 billion in new NAND-type flash memory plants with its US partner SanDisk Corp.
West Bengal Sells Kolkata to Semiconductor Industry
West Bengal is now wooing the semiconductor industry by offering a basket of incentives and concessions.
"We are building a 20-floor dedicated facility at Salt Lake in Kolkata for locating incubation centres, start-ups, software and hardware development centres and electronics manufacturing units,” says Debesh Das, the State’s IT minister.
The Rs.1 billion (approx $25 million), 275,000 sq ft facility promoted by Kolkata-based Infinity Intech Parks Ltd will be ready for occupation over the next 18-24 months in phases.
"Besides state-of-the-art infrastructure with all utilities, the state government will offer seed capital and training subsidy of Rs.20,000 for every employee retained for a stipulated time."
"As a special economic zone (SEZ), the facility will have 20 per cent tax holiday for over 10 years. We will also arrange attractive venture capital funding," said Das, who holds a masters in electronics and telecom engineering.
Inspired by the rapid growth of the knowledge sector in Bangalore, Hyderabad and Chennai, the West Bengal government has decided to replicate the same in Kolkata, with similar facilities and resources in and around Salt Lake.
"Though we may take years to catch up with these southern cities in terms of growth and investments, we are creating an enabling environment to position Kolkata as an equally attractive destination for IT, BT (biotechnology) and nanotechnology industries in the east."
Apart from building massive infrastructure and connectivity, the state government is working with academia and industry to develop human resources for meeting the growing requirements of the knowledge sector.
"A high-level state committee is working with IIT-Kharagpur and Kolkata, Jadavpur and Durgapur universities and engineering colleges and technical institutes across the state to chalk out a five-year program for churning out thousands of graduates and skilled manpower for software and hardware sectors of the new economy."
In addition to hundreds of training centres across the state, the state IT department is setting up finishing schools in secondary cities and major towns to impart soft skills, including fluency in English, clear communication and personality development for ready absorption by industry.
Toshiba Corp. (Tokyo) announced that it will build two fabs in parallel, one at its existing memory complex in Yokkaichi and another in Iwate prefecture in northeastern Japan. Separately, SanDisk Corp. (Milpitas, Calif.) and Toshiba said they have signed a non-binding memorandum of understanding (MoU) to form a new production joint venture and construct a new 300 mm wafer fab in Japan. The MoU provides SanDisk with reduced capital expenditure commitments. The Toshiba announcement said SanDisk will participate in one of the fabs, with Toshiba planning to discuss with SanDisk its participation in the other fab. One of the new fabs will initially fabricate advanced generations of NAND flash memory, and it is also expected to produce future memory. The other fab will provide capacity to meet Toshiba's future semiconductor requirements.
The companies said they expect to sign a definitive agreement later in 2008 based on the MoU. Construction of the new facility is expected to start in the spring of 2009. Typically, Toshiba pays for the site and fab construction, while sharing equipment costs with SanDisk. Toshiba has built four NAND fabs at Yokkaichi in Mie prefecture in central Japan.
The joint announcement said that the two companies will “now select the plant site, targeting a production start-up date in 2010.”
Toshiba had decided to build its fifth NAND flash fab in Iwate prefecture in northeastern Japan. The total investment would exceed ¥700B (US$6.6 billion), with SanDisk participating in the Iwate fab.
The announcement from Toshiba said one of the NAND fabs would be built in Iwate prefecture, while the other will be in Yokkaichi. The announcement said it would build a new fab that would build future "advanced generations" of NAND memory, as well as "future memory."
Chartered buys Hitachi 200mm Fab, gains Renesas' Biz
Singapore's Chartered Semiconductor Manufacturing has bought 100% ownership of Hitachi's Singapore unit, Hitachi Semiconductor Singapore Pte Ltd (HNS), including a local 200mm fab near its existing campus, for ~$233M in cash.
The deal also includes a manufacturing agreement with HNS customer Renesas Technology to provide ~$250-$300M worth of future wafer fab services. Hitachi noted in a statement that HNS will continue to make semiconductor products for Renesas.
Stats about the newly purchased facility: it's a 90,000 sq. m campus, with 28,000 sq. m of building space, ~12,000 of that (129,120 sq. ft.) in cleanroom space. Bulk CMOS logic production capacity (0.25&mum-0.15&mum) is currently ~24,000 wafers/month. Chartered calculated the deal translates into ~$7M/1k WPM. Along with the facility, Chartered also will bring on about 800 workers.
LTX Offers Demo and Testing Lab in China
LTX Corp., a semiconductor test equipment maker, reports that Korean company Hana Micron has purchased its first X-Series MX test system for an undisclosed amount.
Hana Micron, a subcontract assembly and test provider, plans to use the X-Series at its facility in Chungcheongnam Province, Korea to test its customers' radio frequency and mixed signal devices.
In November 2007, Norwood-based LTX (Nasdaq: LTXX) opened a new office in Shanghai, China, responsible for sales and applications support for its testing equipment in the region.
The Shanghai office itself, however, is equipped with a demonstration and applications lab with a test system configured for radio frequency, power and other mixed signal applications, according to the semiconductor test equipment maker.
LTX reported revenue of $148 million for its last fiscal year, ended in July 31, 2007, with a $10.6 million loss.
India to Get Its First Wafer Chip Plant
New Delhi, India is poised to announce a breakthrough in its attempt to woo wafer chip manufacturers, with a multibillion-dollar facility likely to be built in the western part of the country.
The plant is expected to give a boost to India's efforts to position itself as a manufacturing destination, and help Indian officials convince the world that it is closing the gap with China in industry competitiveness.
According to those familiar with the plans, the first of the mega-projects, which complement India's fast-expanding services economy, has already drawn interest.
One of the country's biggest industrial groups is set to announce a US$6 billion ($8S.5 billion) assembly, test and manufacturing plant. Two more investment proposals for plants, running into billions of dollars, are also being prepared.
The latest breakthrough is the result of efforts by India to woo wafer fabrication plants to the country.
Taking a leaf from Singapore's book, India started last year on this concerted attempt, seeing it as a strategic necessity to serve a domestic electronics market that is projected to hit sales of US$363 billion by 2015.
Semiconductors, which are an integral part of most electronic products, account for 10 per cent of those sales.
However, while India had drawn investment proposals for everything from flat-panel displays to solar cells, it had difficulty attracting leaders of the wafer chip industry, such as Taiwan Semiconductor Manufacturing, Intel and Texas Instruments.
Even though many of these companies designed chips in Indian laboratories, Texas Instruments, for instance, filed some 225 patents from India over the past decade - manufacturing seemed a no-go.
The new electronics policy, details of which were unveiled last September, offered investors incentives such as tax breaks, interest-free loans and subsidies that could amount to as much as a quarter of the project cost of a semiconductor plant.
This has succeeded in drawing investor interest, said the official, adding: 'The Taiwanese also are beginning to show interest in an Indian plant after initial reluctance.'
The progress is a boon to India, which is increasingly looking to build its own strengths in fields increasingly dominated by China.
Officials claim, for instance, that the cost of manufacturing cell phones in India is 8 per cent to 10 per cent cheaper than elsewhere.
'The government's electronics ecosystem policy seems to be one policy that looks set to be a tremendous success,' said Ms Poornima Shenoy, president of the Indian Semiconductor Association.
'The semiconductor industry is not one that takes quick decisions, but the interest has nevertheless been tremendous. We are aware because the new groups poised to enter the market have been hiring aggressively from established companies and these experts don't come cheap,' she added.
Maxim to Shut Down Dallas Fab
Seeking to cut costs, Maxim Integrated Products Inc. has announced the ramp down and eventual closure of its U.S. wafer fab in Dallas, Texas.
Maxim also announced the restructuring of certain businesses, including a decision to stop funding R&D for its handset RF transceiver product line. Maxim — which did not announce any layoffs—expects to take a one-time charge of Rs.39.48 crore ($10 million) before asset impairment costs, which are as yet undetermined.
By shutting the Dallas fab, the company appears to be moving towards an outsourcing strategy in some cases. Last year, Maxim concluded an IC-manufacturing agreement with Japan's Seiko Epson Corp. Seiko will manufacture Maxim's leading-edge, mixed-signal semiconductor products designed for power-management and battery-management applications.
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