SEMICONDUCTOR INDUSTRY
UPDATE
September 2009
McIlvaine Company
TABLE OF CONTENTS
GLOBALFOUNDRIES Welcomes President Obama
Intel Preps 32nm Chip Launch by Year's End
GEO Semiconductor Announces New Locations for Headquarters in Silicon Valley
TriAccess Acquired by Oregon Semiconductor
GEO Semiconductor Inc. and Other Semiconductor Mergers
Chip Maker Enters a Different Class
GLOBALFOUNDRIES welcomed President Barack Obama to upstate New York to address students, faculty, staff and representatives from the region’s growing technology industry at Hudson Valley Community College.
“Today’s visit by the White House highlights the success of the Capital Region’s private-public, education, and high-tech economic development initiatives,” said Hector Ruiz, chairman of GLOBALFOUNDRIES. “We are working with many of the region’s top educational institutions, including Hudson Valley Community College, the University at Albany's College of Nanoscale Science and Engineering, and Rensselaer Polytechnic Institute, to build on this success. Working together, we can implement a new partnership model for government, education and business institutions to create a modern economic engine to increase opportunities for our business and the entire community.”
In his address at Hudson Valley Community College today, President Obama said, “What we have here in this community are talented people, entrepreneurs, world-class learning institutions. The ingredients are right here for growth and success and a better future. These young people are testimony to it. You are proving that right here in the Hudson Valley. Students here are training full time while working part time at GE Energy in Schenectady, becoming a new generation of American leaders in a new generation of American manufacturing. IBM is partnered with the University at Albany; their partnership in nanotechnology is helping students train in the industries in which America has the potential to lead. Rensselaer is partnering not only with this institution but with businesses throughout the Tech Valley. And early next year, Hudson Valley Community College’s state-of-the-art TEC-SMART training facility is set to open side-by-side with GLOBALFOUNDRIES coming state-of-the-art semiconductor plant.”
In July, GLOBALFOUNDRIES broke ground on the construction of Fab 2, the company’s new 300mm semiconductor manufacturing facility at the Luther Forest Technology Campus in Saratoga County, NY. When fully operational, the fab is expected to create approximately 1,400 new technology jobs.
The majority of these new jobs will be wafer fab and maintenance technicians, a specialized and highly skilled career field. Many of the qualified candidates for these new positions are expected to come from the area’s innovative education programs, such as Hudson Valley Community College’s TEC-SMART campus currently under construction in Malta, New York.
“As President Obama stated today, the building blocks of innovation are education, infrastructure, and research and the ability of new industries to thrive depends on workers with the knowledge and the know-how to contribute in those fields,” said Andrew J. Matonak, president, Hudson Valley Community College. “Through innovative programs like, TEC-SMART, we are helping to bring together education, infrastructure and research to prepare people for new technology jobs like those being created by GLOBALFOUNDRIES.”
“Hudson Valley's TEC-SMART facility, being built next to our new Fab 2, will be a premier resource for clean energy and semiconductor manufacturing education,” said Norm Armour, vice president and general manager of Fab 2, GLOBALFOUNDRIES. “We’re looking forward to TEC-SMART holding their first classes in January and we are working closely with HVCC as they develop their education program and facilities, including the campus’ new clean room and semiconductor manufacturing training center to train hundreds of workers for new technology jobs in this region.”
When completed, Fab 2 is expected to be the most advanced semiconductor manufacturing facility in the world and capable of producing a range of critical semiconductor products that serve as the foundation of devices powering today’s digital economy. The new jobs at Fab 2 represent an estimated annual payroll of more than $88 million. In addition, the project is expected to create approximately 5,000 new indirect jobs in the region with a sustained estimated total annual payroll of $290 million per year for all jobs.
GLOBALFOUNDRIES is the world’s first truly global leading-edge semiconductor manufacturing company. Launched in March 2009 through a partnership between AMD [NYSE: AMD] and the Advanced Technology Investment Company (ATIC), GLOBALFOUNDRIES provides a unique combination of leading-edge technology, manufacturing excellence and global operations. GLOBALFOUNDRIES is headquartered in Silicon Valley with facilities in Austin, Dresden and New York.
The latest Intel Corp. briefing had Senior Fellow Mark Bohr present highlights of the company's latest process technology.
Besides Bohr, an Intel engineer who has been there through the transition from metal to poly gates and back again, the briefing also included Sanjay Natarajan the chip giant's 32nm program manager charged with keeping the node rolling ahead of schedule.
The briefing provided some news in advance of the 2009 Intel Developer Forum (IDF) beginning Sept. 22. The company may launch or at least disclose the launch date for the first chips from the Westmere 32nm family of processors at the IDF.
Intel's PR team had two more reasons for holding analyst calls last week. One was to announce two papers that will be presented at IEDM in December. The second, but more significant, is that 32nm production wafers are now moving through Intel's D1D fab in Oregon.
The wafers are said to be "in support of planned Q4 revenue production." If you take that at face value, then Intel should be shipping 32nm processors to customers before the end of the year. However, none of Intel representatives were willing to commit to that deadline despite widespread assumptions that they will.
One IEDM paper describes the 32nm process, which is Intel's second generation of high-k metal gate (HKMG) technology. Paul Packan will present "32nm Technology for High Performance CPUs." Natarajan said Intel's presentation will provide more process details than past conference papers.
For now, Intel has improved NMOS drive current by 19 percent and PMOS by a whopping 28 percent compared to the 45nm node. As Bohr pointed out, designers have desired balanced NMOS and PMOS performance ever since Intel rolled out its first CMOS process in 1981. Perhaps, as he said, we are getting closer to that dream.
Intel process engineers also boosted 32nm PMOS transistors saturation currents closer to NMOS by virtue of the fact that, as Sanjay put it, "There are more knobs to turn in the PMOS process flow." Since embedded SiGe source/drains strain the PMOS channels to enhance hole mobility, in addition to using stress liners deposited after the gates, the PMOS devices employ additional strain enhancement techniques compared to NMOS transistors. Bohr reminded that the replacement gate flow used by Intel also benefits PMOS transistor performance.
Jumps in drive current—especially the PMOS—are a big achievement, but Intel also wants to get the word out about the leakage performance of their 32nm transistors. Record-breaking saturation current is nothing new for Intel, but they can now add the best reported leakage to their list of achievements. The design flexibility of trading off leakage for drive current has been part of Intel presentations for some time.
The range of transistor performance matching application has been growing as technology nodes shrink. Intel also said its yield ramps are getting faster at each node.
Perhaps the biggest news surrounding Intel's 32nm process is the introduction of immersion lithography. The new tools are used on critical layers up to metal three to provide Intel with another best: the smallest contacted gate pitch of 112.5nm.
Even 28nm processes in the literature cannot top that dimension.
The second IEDM paper describes the 32nm SoC process. The transistor performance range offered in the new process provides several advantages for non-CPU applications, which could well be the real story of the Intel 32nm process.
GEO Semiconductor Inc. ("GEO") announced the move of its headquarters to an expanded office in Santa Clara, CA at 2350 Mission College Blvd. Located in the heart of Silicon Valley and in close proximity to the San Jose International Airport, the new GEO headquarters will offer its customers and partners more convenient access to its products and services. The Company also relocated its Operations and Development Center to an expanded facility at 155 Gordon Baker
Road in Toronto, Canada.
These new locations provide expanded R&D and laboratory space for collaborating
with customers, as well as enhanced support and innovation.
GEO was founded by Paul Russo, Chairman and CEO, who formerly served as founder and CEO of Silicon Optix, Inc. and of Genesis Microchip. GEO is focused on providing the next-generation of video processing for HD and beyond by transitioning its award winning and branded (HQV - Powered by Teranex) video algorithm execution to a software platform, allowing customers to selectively integrate their own IP for product differentiation. In
addition, GEO`s unique advanced geometry processing takes advantage of the emerging transition to semiconductor illumination sources and will enable a host of high volume applications from pico-projectors to next-generation laser TV`s, as well as digital immersive displays and surveillance systems. GEO`s products also enable improvements in brightness and color uniformity in large panel displays and medical imaging applications.
TriAccess Technologies, the small telecom startup launched at the bottom of the telecom slump, was acquired by TriQuint Semiconductor Inc. (Nasdaq: TQNT) it was announced.
TriAccess makes a video chip that uses radio frequency to amplify signals at the subscriber’s premise, with customers in both the cable and telecom industries. Hillsboro, Ore.-based TriQuint supplies high-performance radio frequency modules, components and foundry services to the top five mobile phone manufacturers; to the makers of wireless handsets, laptops and base stations; and to the military. The company has manufacturing facilities in Oregon, Texas and Florida and a production plant in Costa Rica.
TriAccess will become a TriQuint design center, said TriAccess Vice President of Marketing and Sales Brian Bauer.
“They liked our cable TV and fiber-to-the-premises product portfolio, and they liked our strong footprint in the cable TV industry,” he said.
Terms of the acquisition were not disclosed.
In a separate action, the TriQuint board of directors has approved issuance of 170,300 stock options to the ten former employees of TriAccess. TriQuint is currently trading at $7.50.
Twenty-three-hundred-employee TriQuint had been a supplier to TriAccess for the last four years.
“We … believe that together we can accelerate our success in multiple CATV and fiber optic video markets worldwide,” said TriAccess President, CTO and founder Chris Dey. “We are anxious to further utilize TriQuint’s process technology and assembly and test resources. TriQuint is well-known and highly respected by our customers, providing additional confidence that we are a dependable and stable source of supply.”
According to Ralph Quinsey, president and CEO of TriQuint, the new Santa Rosa design center is expected to grow, although he declined to go into details.
“They’ve built a terrific product. They’ll bring us new customers, and I anticipate greater sales of their line of products as a result of the acquisition,” he said.
The proposed purchase of Chartered Semiconductor, a Singapore-based semiconductor foundry, by a Middle Eastern investment group may sound far removed from the everyday buzz of the data center and the CIO's world, but reality may prove to be quite different.
Just to set the stage, Advanced Technology Investment Co. (ATIC) is wholly owned by the government of Abu Dhabi. It has a subsidiary known as ATIC International Investment Co., which is the group buying Chartered. If the name sounds unfamiliar, think of it as the same company that established a joint venture with Advanced Micro Devices for its foundry business, now called Globalfoundries. And if none of this seems to matter one iota, consider they're both advanced technology development partners of IBM.
So now the government of Abu Dhabi is working with IBM to develop chips, process technologies to create those chips, and some of the most advanced technology on the planet. This is the kind of stuff companies could only export to Western Europe and Japan a decade ago. It's also more than a bit ironic that this technology is now being manufactured in what was formerly East Germany--Globalfoundries has a fabrication facility in Dresden--by a Middle Eastern nation. (Globalfoundries also is in the process of building one near Albany, N.Y.)
What's changed is that governments, not companies, are now buying their way into what are arguably the most advanced technology markets. China has been investing heavily in chip technology; so has Singapore, which is where Chartered is located. And from there, the relationships begin twisting into a knot because of the huge expense of developing new technology--and the deep pockets of countries like China and the oil-producing nations of the Middle East. Even IBM can't afford to do it alone anymore.
AMD is a development partner with IBM for silicon-on-insulator chips, which IBM and AMD have both been churning out for their customers because they can offer better performance, lower power consumption or both. In fact, AMD was a pioneer in lowering power rather than focusing exclusively on performance. IBM and AMD also are working on advanced research on new materials that can extend Moore's Law well into the carbon nanotube generation. These are the building blocks for the next generation of processors. AMD's primary foundry, of course, is the joint venture with ATIC.
Likewise, Chartered is one of IBM's two closest partners in developing the process technology--incredibly complicated stuff and in many cases proprietary--for manufacturing semiconductors. IBM established a three-way deal with Chartered and Samsung to create a common platform, which allows chips to be moved from one foundry to the next without worrying about changing over to a new process. That allows any of those companies to use their fabrication facilities as a second source.
And what does all of this have to do with the CIO? Unless your company is buying all Intel-based servers and hardware, you're now part of this international network. The chips running the computers in your data center may be made in any fabrication facility around the world.
Governments that don't necessarily see eye-to-eye are paying big bucks to gain entry into this business. A new state-of-the-art fabrication facility costs $4 billion to $5 billion, and the process technology being developed by a consortium of companies costs many times that amount. That accounts for why even the largest companies, including Texas Instruments, have been swapping their production to foundries outside the U.S., Europe and Japan.
The real key is quality--and what happens when something goes wrong. The longer the supply chain and the more players, the more room for bickering and finger-pointing. These are all top-notch companies involved in this effort, to be sure, but even they have subcontractors. What remains to be seen is just how effectively each of them can manage their supply chain from the widely dispersed foundries and development efforts through the assembly and testing and, finally, into your data center.
Globalfoundries, the Abu Dhabi computer chip venture, will expand its business to “a whole new class of customers”, when the acquisition of Singapore’s Chartered Semiconductor is completed later this year, its chief executive said.
The Advanced Technology Investment Company (ATIC), the Government-owned investment business that runs Globalfoundries in a joint venture with the California-based chip maker AMD, said last week that it had struck a deal to buy Chartered for Dh14.4 billion (US$3.92bn) in cash and debt.
“What this does for us is gives us an even bigger worldwide capacity footprint,” said Doug Grose, who was named as the interim chief of Chartered after the acquisition.
“They bring some established, older technologies that compliment nicely the future technologies that we are driving to. What they bring is something we were not going to invest or drive into and it brings along customers that we wouldn’t have been able to acquire.”
The factories owned by Globalfoundries are capable of making state-of-the-art computer central processing units (CPUs). This gives the company a niche ability in the industry but limits its products to high-end chips.
Chartered’s facilities can produce a different class of products, particularly the simpler or cheaper chips that many customers demand.
In acquiring the world’s third-largest contract chip maker, or foundry, and merging its operations with Globalfoundries, ATIC is creating the world’s second-largest foundry company, according to a report by the research group iSuppli.
The merged business would hold about 17 per cent of the world market, iSuppli estimated based on data from the first half of the year.
That is dwarfed by the 47 per cent held by the market leader Taiwan Semiconductor Manufacturing Company (TSMC).
But it pushes Globalfoundries ahead of Taiwan’s United Microelectronics Corporation (UMC), which previously held second place with a 15 per cent share.
Jim McGregor, the chief technology strategist at the research group In-Stat, said the Chartered acquisition completed what he considers the three immediate priorities in improving Globalfoundries’s long-term prospects.
The first two, acquiring a new customer base and breaking ground on new facilities, were achieved in recent months. The third, to join the Common Platform alliance that is a standard in the semiconductor industry, has been achieved through the Chartered acquisition.
“What is most impressive is that Globalfoundries accomplished all three of these tasks in less than a year, far quicker than In-Stat had predicted,” Mr McGregor said in a research note.
When the acquisition is completed and the integration process begins, the company will evaluate which of Chartered’s customers could eventually have demand for the more advanced products made by the Globalfoundries facilities in Germany and the new facility in New York state that is due to open in 2011.
But it will also increase efforts to attract new customers based in its expanded product portfolio.
“The part that we don’t know is which companies that are not Chartered or Globalfoundries customers now might want to come to the table,” Mr Grose said. “That is a very exciting part of the process for us.”
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