jan 08 update

Despite persistent losses at SMIC and a slowdown in the chip industry at large, the Shanghai-based foundry provider continues to announce new fabs at an alarming pace.

The announcement that SMIC plans to add separate 200- and 300-mm fabs in Shenzhen had some observers puzzling over the maverick foundry's motives.

Revelations that several Chinese municipal governments, including Shenzhen, have largely or fully funded a number of SMIC facilities as part of a "virtual fab" strategy has further raised eyebrows. Under the approach, a municipality owns the facility and SMIC manages it, garnering fees and a share of the profit for its troubles. Though it may receive some government funding for the fabs, SMIC apparently will own them.

Whether SMIC's virtual fabs give it an unfair advantage over rivals that must foot most of the bill for their facilities remains a matter of debate. Indeed, some sources said the strategy has already proved a disappointment and may be in flux. They pointed to the foundry's severing of ties with Japanese DRAM specialist Elpida Memory Inc., which reportedly was to occupy a 300-mm virtual fab in Wuhan, China, that now stands empty.

ON Semiconductor Opens Facility in Slovak Republic

Phoenix-based ON Semiconductor announced 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 employs 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.

Intel’s Fab 28 Expected to Expand

Intel is discussing the advancement of the building of Intel's Fab 28 in Kiryat Gat in southern Israel. The newly-built wafer fab is expected to receive an investment of around $4 billion from Intel, with addition support worth about $525 million coming from the government of Israel. Fab 28 is set to manufacture at the 45-nanometer manufacturing node on 300-mm diameter wafers. The plant is expected to ramp up to reach volume production in mid-2009.

Set to cover an area of 130,000 square meters (1,398,800 sq. ft.) in four buildings, including 20,000 square meters (215,200 sq. ft.) of Class 10 cleanrooms, Fab 28 is Israel's largest construction project. The fab is expected to generate exports worth $3 billion annually. Numonyx, the flash memory venture being created by the sale of memory operations by Intel and STMicroelectronics, is set to become the owner of Intel's first fab in Kiryat Gat, Fab 18. Fab 18 opened in 1999 and it now employs more than 2,000 people. The plant currently manufactures processors using 0.18-micron technology. Built with a total investment of $1.6 billion — $1 billion invested by Intel and the rest by the government of Israel — the manufacturing plant includes a 9,000-square-meter (96,840 sq. ft.) clean room.

Intel has been operating in Israel since 1974. It has five development centers (Haifa, Yakum, Jerusalem, Petach Tikva and Yokneam) and it employs over 7,000 people directly, as well as stimulating the employment of several thousand external workers. Intel Israel was the company's first development center outside the United States. Intel's development center in Haifa led the invention and development of the Intel Pentium processor with MMX technology, launched in early 1997, the Intel Centrino Mobile Technology, launched in early 2003, and continues to develop Intel's microprocessors for mobile applications. The Haifa center played a pivotal role in the development of Intel's Penryn processor. Intel's design and development center in Petach Tikva employs approximately 500 people developing products for the future cellular market (2.5G, 3G). The center develops wireless handheld communication devices that combine multimedia, voice communications and Internet access capabilities onto one chip using 0.13 and 0.09 micron technology.

Panasonic to Build New Semiconductor Plant in China

Panasonic will build a new factory (second building) to facilitate the business expansion of Panasonic Semiconductor (Suzhou) (PSCSZ), established in December 2001 in Gaoxin District, Jiangsu Province in China.

PSCSZ started operation as a production site for discrete semiconductor devices in response to the increase in demand in China for digital consumer electronics such as mobile phones, DVDs, TVs, etc. and has continued its operations since then.

The new factory construction at PSCSZ is reportedly based on the company’s future growth strategy that mandates expanding its assembly production structure on a global scale in response to the rising demand from its customers for key devices.

Panasonic informed that the new facility will utilize more advanced production methods that suit the Chinese environment and adopt a new management method that fully integrates an IT system that will make the factory a strong competitor on the global stage. The factory will produce advanced semiconductor products including integrated circuits in addition to general-purpose discrete devices and camera modules for mobile phones.

Matsushita Begins Construction on New Factory Building in China Facility

Matsushita Electric Industrial Co. of Japan reportedly began construction on a semiconductor chip manufacturing building in at an existing facility in Suzhou, China, according to an article in Nikkeinet. The new 15,530 sq meter (167,102 sq. ft.) building is expected to be utilized as Matsushita begins production of transistors, LEDs, digital camera parts. The building will be an addition to Panasonic Semiconductor’s (Matsushita’s) second plant in Suzhou.

Spire Semiconductor to Offer Design and Manufacturing Service for Solar Cells

Spire Semiconductor, a wholly owned subsidiary of Spire Corporation of Bedford Massachusetts USA, announced that it will offer design and manufacturing capabilities for custom gallium arsenide (GaAs) solar cells. The company said it will use a portion of its 50,000 square foot facility in Hudson, New Hampshire for the design and large scale manufacturing of the solar cells. Spire Semiconductor specializes in high-end wafer epitaxy, foundry services, thin film products, and device fabrication for the defense, biomedical, telecommunications and consumer products markets.

Spire Semiconductor has a complete custom compound semiconductor device fabrication line. The company is also able to offer a range of services that help companies bring new products to market. Among these, the company offers development, prototyping, pilot production, and volume manufacturing. Spire Semiconductor also offers photolithographic processing of III-V cell structures and deposition of broadband, dual-layer AR coatings. The company says it maintains more than 50MW of expandable capacity on multiple Veeco E450 LDM, Metal Organic Chemical Vapor Deposition (MOCVD) reactors in state-of-the-art clean-room space.

Fujitsu Breaks-Out Semiconductor Division into New Subsidiary

After much rumor and speculation and a long-term study internally, Fujitsu Limited has decided to reorganize its ‘LSI’ semiconductor division with leading-edge development and production consolidated into its 300mm facilities in Mie Prefecture and a separate subsidiary established to run the operations.

Key to the reorganization is the move to a new business model for the division, which will now be able to collaborate as a strategic business partner with internal (Fujitsu Group) as well as external partners, yet to be revealed.

The reorganization is scheduled to be implemented in March 2008, which will also see the fab equipment from its 200mm Akiruno TC facility moved to the Mie 200mm fab as well as process development for the 45nm node and below.

National Semiconductor Downsizes

National Semiconductor Corporation announced that it is disposing of certain manufacturing equipment and reducing staff at its wafer fabrication facilities as the company continues to take steps to modernize facilities and rationalize its capacity. The company is also leveraging the efficiency improvements made possible by new tools and work processes it has implemented in recent years.

In connection with the action, National will eliminate approximately 200 positions and incur a charge of approximately $20 million, of which roughly $12 million is related to severance costs for the eliminated positions, approximately $7 million is related to the impairment and disposal of manufacturing equipment, and about $1 million is related to contractual and other obligations.

National's three wafer fabrication facilities are located in Arlington, Texas; Greenock, Scotland; and South Portland, Maine. Most of the 200 eliminated positions are in Arlington and Greenock. The Arlington facility, which primarily runs 150mm wafers, recently ramped up production on a new 200mm production line. The Greenock facility runs 150mm wafers. A small number of positions are affected in South Portland, a 200mm wafer facility. The eliminated positions include both direct and indirect labor, manufacturing jobs as well as managerial, staff and support positions. Affected employees will receive severance packages commensurate with their length of employment.

The company currently employs approximately 7,600 people worldwide, with more than 400 employees each in Arlington and Greenock and more than 500 employees in South Portland.

Freescale Opens New 200mm MEMS Facility

Freescale Semiconductor has built an advanced MEMS 200mm production line to address growing sensors market demand at its Oak Hill Fab in Austin, Texas. The newly facility complements the company's existing 150mm MEMS capacity in Sendai, Japan.

High-volume MEMS manufacturing expertise remains critical as the MEMS sensor market continues to grow. The 200mm capacity will allow Freescale to explore and integrate new MEMS capabilities and address major competitive challenges, such as power consumption, cost effectiveness and form factors.

MEMS technology is revolutionizing the semiconductor industry by exploiting both the unique electrical and outstanding mechanical properties of silicon. First proliferating in airbags, engine management and blood pressure monitoring, MEMS-based sensors now have spread to cellular, gaming, medical, appliance, computation, stability control, tire pressure monitoring systems and numerous other applications. The enormous variety of applications demonstrates that MEMS-based sensors are a versatile interface to the physical world, and are helping to make electronics products safer and more energy efficient and enabling innovative new services.

The global MEMS industry reached almost $6 billion in 2006 and is growing at a compound annual growth rate of 14 percent. By 2010, we're predicting the MEMS market will be $ 9.7 billion.

Fujitsu to Spin Off Semiconductor Business, Asahi Reports

Fujitsu Ltd., Japan's largest computer-services provider, will spin off its semiconductor business by the end of March 2009, the Asahi newspaper reported.

Fujitsu will set up a chip-making subsidiary to enhance the efficiency of the business and to cooperate with other companies in technology development, the newspaper said.

The Tokyo-based company is expected to make an official announcement, and will decide the name and capitalization of the new subsidiary later.

Fujitsu will transfer part of its chip development operation in Akiruno city in Tokyo to its semiconductor manufacturing facility in Kuwana city in central Japan to speed up development and production, the newspaper reported.

Fujitsu posted 473.5 billion yen ($4.4 billion) in sales from its semiconductor business in the year ended March 31, 2007. Slumping chip prices and declining orders have forced the company to restructure the business.

Panasonic Plans to Expand Semiconductor Facility

Panasonic announced plans today for the expansion of its semiconductor production facility at its Tonami plant in Japan. The company plans to invest 94 billion yen for this expansion.

The new plant will focus on producing image sensors for various digital appliances. Production work will start in September 2008 and will be launched in August 2009.

This expansion will strengthen Panasonic's image sensor business in areas of digital cameras, in-vehicle devices, camcorders, broadcasting and medical equipment. Slowly, the company also aims at increasing the production capacity to nearly 30,000 wafers per month.

Panasonic has been positioning as the most committed company focused in developing high-quality semiconductor components and core solutions for digital networking focusing on five digital consumer electronics areas including optical disc devices, digital TV sets, mobile communications, image sensing and automotive electronics.

The company’s semiconductor business is backed by the combined system technology capabilities of the Panasonic Group and its low-power consumption, high-speed signal processing and fine patterning technologies, which are critical requirements for consumer electronics.

The new plant is believed to cope with the progress of fine processing technology and to respond to the rapid expansion of the digital camera and other image-related markets. It will match up with the demand for more sophisticated features including higher resolutions.

The semiconductor production facility will employ environmental measures including local cleaning technology to reduce CO₂ emissions from the air conditioning systems in clean rooms by 30 percent compared with the existing plant.

Renesas Expanding Semiconductor Operations

PENANG: Renesas Technology Corp plans to expand its back-end processing plant in Malaysia to further strengthen its analog and discrete semiconductor business.

Chief executive officer Satoru Ito said the expansion plans included the construction of a new building at Renesas Semiconductor (Kedah) Sdn Bhd (RSK).

“This will increase the size of the facilities in Malaysia from 37,000 to 43,000 sq m for diode production,” he told a press conference.

He said that when operations at the new facility began in August, the total production of analog and discrete semiconductors in Malaysia would double to 1.2 billion a month from 600 million units currently.

“Renesas has also established a new analog and discrete semiconductor design company, Renesas Semiconductor Design (M) Sdn Bhd (RDM), a spin-off from the Renesas Semiconductor (M) Sdn Bhd (RSM) design department, on Jan 1.

The company had invested about US$9mil in the construction of the RDM building at the Kulim Industrial Estate, Kedah, which would be ready in July.

Renesas plans to increase the workforce to 200 in two years by hiring 100 design personnel.

Currently, the two back-end processing plants for analog and discrete semiconductors in Malaysia are the RSM in Penang and RSK. The plants’ main products are linear and digital integrated circuits (ICs), power transistors, small signal transistors and diodes.

The Japanese company invested US$20mil to US$30mil in its Malaysian plants yearly, he said. Its investment in Malaysia had reached about US$800mil since it was founded in April 2003, he added.

Massive Expansion of Hemlock Semiconductor

A $1.5 billion expansion of Saginaw County's Hemlock Semiconductor Corp. is hitting high gear, as a giant crew of 1,200 construction workers races to complete the enormous job.

Greg Skufca, site manager for the company, said the work includes everything from building storage facilities for materials to constructing the high-tech control rooms that will run the manufacturing process.

Hemlock Semiconductor makes polycrystalline silicon for use in solar panels and computer electronics. The company's majority owner is Williams Township-based Dow Corning Corp., and two Japanese firms share a minority stake.

High demand for silicon is driving the huge plant expansion at the Thomas Township facility, near Hemlock, in Saginaw County.

The work includes two distinct projects.

The first is a $500 million expansion of Hemlock's existing factory, a project announced in November 2005. According to Skufca, the expansion is progressing well and should be completed by the end of March.

The second project is construction of a new facility adjacent to the existing plant. The cost of that project is about $1 billion and is in its early phases, according to Skufca. The anticipated construction completion date is 2012.

About 1,200 construction workers a day are working on the two building projects. The workers are coming from around the state, as well as from Bay City, Midland and Saginaw.

When finished, the company's expansion is expected to create about 250 direct jobs and 250 contract positions. The company has a current work force of about 1,000, split equally between direct employees and contract employees.

Hemlock Semiconductor was set up in 1979 as a Dow Corning subsidiary. By 1994, the company became the world's largest producer of polycrystalline silicon.

Today, Hemlock Semiconductor executives project demand for its product to increase by 35 percent a year for the foreseeable future, as more countries seek to develop renewable energy sources.

Matsushita Becomes Panasonic, Invests $862 Million in Image-Sensor Fab

Matsushita Electric Industrial Co Ltd will soon solely be known by its Panasonic brand as it makes an effort to unify its business under the well-known consumer electronics name.

Further backing consumer electronics, Matsushita has announced plans to expand its semiconductor production facility at its Tonami plant in Toyama Prefecture, Japan, investing approximately $862 million (94 billion yen) to construct a new image-sensor fab. Construction of the fab, slated to house 10,000-square-meters (107,600 sq. ft.) of cleanroom space, will start in September.

Meanwhile, Matsushita will officially change its name to Panasonic Corp undertaking a brand name change from the National brand, used for home appliances and housing equipment in Japan, to the Panasonic brand by the end of fiscal 2010, ending March 31, 2010. Subsequently, the National brand will be abandoned and the corporate brands in Japan will be unified to the Panasonic brand, the company said.

Semiconductor Firm Nitronex Closes on $7.5 Million in Financing

Semiconductor manufacturer Nitronex, which recently moved its headquarters and manufacturing to a 69,000 sq. ft. facility in Durham, has closed on $7.5 million in new financing.

Investors in Nitronex include Intersouth partners, which is located in Durham.

Nitronex recently decided to move from Raleigh to a Durham facility it had built several years ago. The company received a $100,000 grant from Durham County to use for employee training.

In negotiating the grant, Nitronex said it would invest $24 million in the Durham facility and create 200 jobs over five years. Since moving to Durham, the company has increased its headcount to more than 60, company spokesperson Ray Crampton told WRAL Local Tech Wire recently. It employed 55 people before moving.

A developer of radio-frequency power transistors, Nitronex landed $21.8 million in funding in June 2006. That investment set the stage for the firm’s expansion plans and decision to move to Durham.

Matsushita to Expand Sensor Production

Amid a name change, Matsushita Electric Industrial Co. Ltd. plans to expand its image sensor and charge coupled device (CCD) production in Japan. The company plans to invest 94 billion yen ($858.8 million) for the expansion.

Matsushita (Osaka), which is changing its name to Panasonic Corp. in 2008, seeks to become a major player in the sensor arena. Canon, Sony and others are major players in CCDs, while Micron, OmniVision, Samsung and Toshiba dominate the rival CMOS image sensor market.

Panasonic plans to expand its semiconductor production facility at its Tonami plant in Toyama Prefecture. Construction of the new facility, which will produce image sensors for various digital appliances, will start in September. Production is slated for August 2009.

Panasonic has been making semiconductors in the plant. The consumer-electronics giant has also been a player in the image sensor and CCD markets.

The new plant will strengthen Panasonic's image sensor business in areas of digital cameras, in-vehicle devices, camcorders, broadcasting and medical equipment. After commencing production in August 2009, the company plans to gradually increase its production capacity up to 30,000 200-mm wafers per month.

The new plant will employ environmental measures including local cleaning technology to reduce CO2 emissions from the air conditioning systems in cleanrooms by 30 percent compared with the existing plant.

In a related event, the company plans to boost its efforts in flat-panel displays. By increasing its stake in IPS Alpha Technology Ltd., the company will ensure a stable supply of IPS-type LCD panels and promote a shift to a vertically-integrated business structure.

In recent times, Matsushita said it plans to take a majority stake in IPS Alpha Technology, which is a joint-venture making large LCD panels owned 30 percent by itself, 50 percent by Hitachi and 15 percent by Toshiba.

The company also said it will construct a new manufacturing plant aiming to start production in fiscal 2010. The new plant will also serve as a possible base for future development of large-sized organic light emitting diodes (OLED) TVs.

Linde Receives Contract to Supply Wafer Fabrication in Dalian, China

The technology group the Linde Group is expanding its business with semiconductor manufacturers in China, signing multiple, multi-year contracts to supply high purity gases to the country's wafer fabrication plants.

In China, Linde has made a series of major investments to support the semiconductor manufacturing industry, which has grown by some 30 percent a year for the past five years. Linde has contracted to supply wafer fabs located in Chengdu, Shanghai, Suzhou and will now add Dalian, where Linde will enter into a new, multi-year agreement to supply high purity bulk gases to the new 300mm wafer fabrication being built by a major IC manufacturer.

The Dalian project, which will begin operating in early 2009, is expected to be the first of several semiconductor plants on the site. Using its unique Spectra technology, Linde will build an ultra-high purity nitrogen and oxygen plant as well as a hydrogen generator and supply systems for argon and helium. Linde will also install additional infrastructure for purification, filtration and quality assurance functions.

In Suzhou, Linde has expanded its nitrogen gas production capacity feeding a high purity pipeline network in the Suzhou Industrial Park to meet increased demand from a major 200mm wafer fab site, as well as from numerous assembly and test facilities.

In Shanghai, Linde is providing complete bulk gas supply systems to advanced 200mm fabs in SongJiang and ZhangJiang. And in Chengdu, Linde is completing a production site that will supply bulk gases to the wafer fabrication and packaging plants of China's leading domestic semiconductor manufacturer. Linde also operates China's only ultra high purity liquid nitrogen plant, which provides critical backup product for our growing customer base.

Linde has also expanded its electronic special gases capacity with a new production plant in Suzhou's High Tech Park. This facility, which can handle the full range of today's advanced specialty process gases, is providing gases and chemicals to manufacturers of semiconductors, liquid crystal displays, light emitting diodes and solar cells throughout China and East Asia.

The Linde Group is a world-leading gases and engineering company with around 50,000 employees working in more than 70 countries worldwide. Following the acquisition of The BOC Group the company has annual gases and engineering sales of approximately 12 billion euros. The strategy of The Linde Group is geared towards forward-looking products and services. Linde Electronics offers electronics customers around the world an extensive selection of high purity gases, related products, services and technical solutions for research and development through to large-scale production.

Cypress Semiconductor Exit Fab 2 Semiconductor Manufacturing

Cypress Semiconductor Corp. will exit its Fab 2 Semiconductor Manufacturing facility in Round Rock by late 2008 and transfer production to its more cost-competitive Minnesota fab and outside foundries. Cypress opened Fab 2 in 1987 with 68 employees and 18,000 square feet of cleanroom space. The plant was expanded to 32,000 square feet in 1999 and currently employs 245 people.

A trio of Indian chip makers, SPEL Semiconductor, SemIndia and Tessolve, are looking to pump in $600m (Rs 2,358 Crore) in building such facilities. Livemint's report says that two chip assembly plant announced by SemIndia and Tessolve will start operations this year.

Today, India has a fledgling chip manufacturing sector that accounts for less than one percent of the global market.

India is competing with other Asian countries like Taiwan, whose chip makers already churn out $3-4bn worth of chips sales per year. In its bid to become a global chip player, SPEL is aiming to triple its capacity from 435m units per year to 1 billion by 2010. Interestingly it has also received $7.7m funding including funds from US firms like California Micro Devices. Right now SPEL has around 30 customers including FairChild Semiconductor, Alliance Semiconductor and Taiwan's 02 Micro.

Tessolve is also breaking ground on a new chip assembly and testing facility in the city of Sriperumbudur. The work has started nine months late but Tessolve hopes the $200 million facility will lift capacity to 3 million packaged units per day.

Like SPEL Tessolve has also recently secured funding, to the tune of $30 million, and expects to close a second round worth $50 million in the first half of 2008.

Tessolve also runs an engineering and testing facility in Bangalore.

Meanwhile SemIndia is also planning to build another $100 million facility in Hyderabad, though it is reported that project has been delayed as well

Expansion of Advanced Micro Devices in Hyderabad

Semiconductor maker Advanced Micro Devices announced the expansion of its R&D centre in Hyderabad and aims to focus on intellectual property creation in the areas of next generation consumer electronics, graphics capabilities and microprocessors.

AMD added Hyderabad centre to its research portfolio after the acquisition of graphics design company ATI which has a R&D centre in Hyderabad. With this addition, the company expects to address issues of convergence of personal computers with other mobility devices.

This follows the company’s announcement late last year to expand the Bangalore development centre. Together the company has four R&D centres in India.

SUMCO Consolidating Next-Gen Silicon Wafer R&D

Japan's SUMCO (nee Sumitomo Mitsubishi Silicon Corp.), the world's No.2 silicon wafer provider, is planning to consolidate its domestic engineering staff of ~1000 workers at seven manufacturing facilities to a new R&D center at its facility in Imari, Saga Prefecture.

The move of operations from the sites, including plants in Imari and Yonezawa, Yamagata Prefecture, is in an effort to improve efficiencies among staff that perform a range of functions from crystallizing silicon to wafer processing. Roughly 200 engineers will focus solely on developing next-generation technology, particularly 450mm wafers and products for 32nm system chips, working to lower production costs and improve crystallization precision, the paper notes; another 50 personnel will come over from affiliate Sumco Techxiv Corp.'s Hiratsuka facility in Kanagawa Prefecture, the paper notes.

The company plans to invest ¥15B (US ~$135M) for the new building and cleanroom facility, plus research equipment. Construction is expected to be completed by year's end 2008, with all engineers transferred in by spring 2009.

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