SEMICONDUCTOR UPDATE
January 2009
McIlvaine Company
TABLE OF CONTENTS
ON Semiconductor Plans Lay Offs and Temporary Shut Downs
Intel to Consolidate Manufacturing Operations
Matheson Tri-Gas Planning to Expand Semiconductor Facilities and R&D Operations
Rogue Valley Microdevices Completes Foundry for MOS and MEMS
MCC Signs Deal with Baogang for $1.2 Billion Polysilicon Project in Inner Mongolia
HSC and Dow Corning Plan New Facility in Michigan and Tennessee
Hynix Cuts Spending Plans on S. Korean Plant and Delays Chinese Joint Venture
ON Semiconductor Corp. based in Phoenix, AZ, plans to lay off 1,500 workers, eliminate second-half 2008 and full-year 20009 bonuses, freeze hiring and implement three weeks of unpaid time off for senior executives in both the first and second quarter. Other employees will receive two weeks of unpaid time off or a four-day work week. The company will also temporarily shut down plants for four to six weeks in the first half of the year, move up planned factory closings to the middle of the year and will look to close an additional location by the end of 2009.
Intel Corporation disclosed plans to restructure some of its manufacturing operations and align its manufacturing capacity to current market conditions. The company will consolidate and streamline some older capacity without impacting the deployment of new, leading-edge 45-nanometer and 32-nanometer manufacturing capacity.
The company plans to close two existing assembly test facilities in Penang, Malaysia and one in Cavite, Philippines, and will halt production at Fab 20, an older 200mm wafer fabrication facility in Hillsboro, Ore. Additionally, wafer production operations will end at the D2 facility in Santa Clara, Calif.
The actions at the four sites, when combined with associated support functions, are expected to affect between 5,000 and 6,000 employees worldwide. However, not all employees will leave Intel; some may be offered positions at other facilities. The actions will take place between now and the end of 2009.
Matheson Tri-Gas is planning to expand both of its semiconductor manufacturing facilities and R&D operations in light of the demand it has seen from advanced semiconductor manufacturers. A new 25,000 square foot expansion of its current manufacturing cleanroom facility is planned for completion in mid-2009, according to the company. The expanded Advanced Technology Center in Longmont, CO, will handle molecule development, purification and molecule delivery systems.
As part of the transition, Matheson Tri-Gas has shifted its SEMI-GAS gas cabinet product line for the North American market to Applied Energy Systems of Malvern, PA. Matheson will manufacture its advanced UHP products at its Longmont, CO facility.
“Our overall growth strategy calls for investing in developing cutting-edge molecule technology and delivery systems,” commented Scott Pufahl, General Manager, Equipment Business Group, Matheson Tri-Gas. “We are fortunate to have found such a capable company as AES to continue to serve the North American market with the existing world-class SEMI-GAS products.”
Rogue Valley Microdevices announced the completion of their new Metal Foundry.
Rogue Valley Microdevices is now adding physical vapor depositions (PVD) to their product lineup. PVD Metal and Dielectric film deposition capabilities will allow Rogue Valley Microdevices to satisfy MOS and MEMS process requirements.
To accommodate the addition of an E-Beam Evaporator and a DC Magnetron Sputtering System an additional 1000 square feet of cleanroom space was added to their existing facility. Rogue Valley Microdevices also added a suite of metrology equipment essential for measuring the physical and electrical properties of the PVD films.
“I am very proud of the new processes we have introduced,” said CEO Jessica Gomez. “These new PVD films will help us to provide a more comprehensive thin films product portfolio for our customers.”
Rogue Valley Microdevices will now be able to offer a variety of sputtered films including Chromium, Aluminum, Copper, Titanium, Tantalum Nitride, Silicon Dioxide, and Silicon Nitride. The addition of an E-beam Evaporator is also exciting because it provides customers with much greater flexibility. Evaporated films now being added to the company’s growing list of services include Platinum, Gold, Chrome, Titanium and many others that can be deposited in a multitude of combinations. With these new capabilities, Rogue Valley Microdevices will continue to offer world class products and services to their customers.
Founded in 2003, Rogue Valley Microdevices (www.roguevalleymicro.com) is the first company to establish a microelectronics manufacturing facility in Southern Oregon. Headquartered in Medford Oregon, Rogue Valley Microdevices is dedicated to providing high quality manufacturing and engineering services for their customers at an affordable price.
Rogue Valley Microdevices has become a leader in delivering high quality thin film products and services to the Semiconductor, MEMS, and Solar community. Rogue Valley Microdevices maintains a facility that is capable of handling high volume manufacturing but flexible enough to process wafers from 25mm to 300mm in diameter.
Rogue Valley Microdevices specializes in high quality microelectronics manufacturing and thin film deposition. Their silicon wafer processing equipment is capable of volume manufacturing and can accommodate wafer sizes from 50mm to 200mm
MCC Signs Deal with
Baogang for $1.2 Billion Polysilicon Project in Inner Mongolia
China Metallurgical Group Corporation (MCC), a leading mining and
smelting company, has signed a deal with the Baotou Iron and Steel Group Company
(Baogang), one of China's largest steel bases and the world's largest rare earth
products producer, to build a polysilicon project in Baotou City in northwestern
China's Inner Mongolia Autonomous Region. MCC and Baogang are planning to invest
up to $1.2 billion in the project, which has a designed production capacity of
5,000 tons per year. The project could come on stream this year.
MCC has been producing polysilicon for several years, and the company's profit in the business has amounted to more than $150 million. Baogang is a newcomer in polysilicon business.
It is widely believed that China's polysilicon industry will see a reshuffle in the near future that is set to eliminate a number of small and medium-sized companies and shape a few powerful companies in the business. The industry has been rather active in the past several months. Jiangsu Zhongneng Silicon Company (Xuzhou, Jiangsu Province) is set to see its first 10,000-ton-per-year silicon production line come online soon. By March 2009, the company's 165,000-ton-per-year production line, one of the largest silicon production lines in Asia, is expected to begin production.
Also in Inner Mongolia, a 6,000-ton-per-year silicon project worth about $600 million began construction in December. In Jiangsu province's Yangzhou City, a 3,000-ton-per-year silicon project worth $350 million is set to come on stream this year.
Worldwide, the polysilicon industry has been in a downward trend ever since September when the price of polysilicon fell from between $400 and $500 per kilogram to between $250 and $300 per kilogram. Experts say that most polysilicon companies will face difficulties in the next two years.
Rick Doornbos, president and CEO of HSC, said the Michigan-based company primarily owned by Dow Corning will invest up to $3 billion, including $1.2 billion to build and open a new site in Clarksville-Montgomery County, Tennessee and up to $1 billion to expand existing facilities in Hemlock, Mich.
HSC will occupy the entire mega-site in Tennessee, enabling it to have plenty of room to expand operations in years to come. Its product, polcrystalline silicon, is used by the solar cell industry and in new-age electronics.
“The exact scale of this investment will be determined by market conditions,” Doornbos adds. “Making this investment in today’s volatile economic climate is a testament to both the long-term outlook of the solar industry, as well as Hemlock Semiconductor’s ability to add capacity to meet the needs of customers.”
"Through these combined investments, we will be able to add up to 34,000 metric tons of polcrystalline silicon production capacity," Doornbos said. The initial phase of Clarksville's HSC facility should generate more than 10,000 metric tons of that total, annually, with the ability to expand to a maximum of 21,000.
Site preparation for HSC at Commerce Park will begin this spring, with the first production of polysilicon on site tentatively scheduled for as early as 2012.
After the initial investment, the Clarksville site is expected to employ more than 500 people, and it will employ up to 800 when expanded. Its construction is expected to employ 1,000 construction workers during the next five to seven years.
HSC jobs here will "pay very well," Doornbos said, and range from chemical engineers to accountants, technicians and skilled tradesmen. Bredesen described HSC's decision as a "huge win" for Tennessee. "They're (HSC) talking about a range of investment of between $1.2 billion to $2.5 billion over time. If they get to the upper end of that range, it will be the largest investment in our state's history," Bredesen said.
HSC's polysilicon is a hot commodity for other businesses, and that could mean additional spinoff business operations for Clarksville.
For the past 2 1/2 years, HSC had been looking for the right location to expand, Doornbos said.
He said HSC looked at numerous sites worldwide, with primary criteria for selection being "good access to skilled labor, the incentives package to help enable us to manufacture our product at competitive rates, and the overall business climate of the communities was also very important."
To execute the Hemlock Semiconductor group investment, the company’s shareholders formed Hemlock Semiconductor LLC, a new joint venture that will manage the Tennessee site.
Hemlock Semiconductor LLC’s new production facility will be constructed at the Commerce Park site in Clarksville.
The group also plans to spend up to $1 billion expanding its current operations in Hemlock, Mich. Construction of both the Michigan expansion and the new Tennessee site will begin immediately.
The new Clarksville facility and the expanded Hemlock operations may add up to 34,000 metric tons of polysilicon capacity and ultimately as much as $3.0 billion in investments to support the fast-growing solar industry, the company says.
Hynix Semiconductor Inc will cut planned spending on a South Korean plant and delay a $260 million investment in its Chinese joint venture as it tries to deal with a cash shortage amid a downturn.
The world's second-biggest maker of computer memory chips said in a filing with the Korea Exchange that it had revised down a planned 646 billion won ($491 million) in spending to upgrade its domestic production facility to 491 billion won, citing the "business environment."
Hynix would also delay a planned $260 million investment in its Chinese plant, run jointly with Numonyx, to 2009 from 2008.
The announcement comes after Hynix secured $600 million in relief funding via fresh loans from shareholders and a new share issue.
Memory chip makers worldwide are struggling to raise cash and reduce production to survive the industry's worst downturn, as chip prices plunge and consumer demand for electronics dries up.
Hynix shares slid 12.7 percent to end at 6,720 won before the announcement, compared with the wider market's .KS11 1.4 percent loss. ($1=1314.8 Won)
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