SEMICONDUCTOR INDUSTRY
UPDATE
April 2010
McIlvaine Company
TABLE OF CONTENTS
Bosch GmbH Has Opened a 200mm Wafer Fab
GlobalFoundries Seeks Money from State to Expand Operations
Toshiba Sets Up NAND Flash Fab in Japan
Epistar to Increase Blue LED Chip Capacity
Robert Bosch GmbH has formally opened a 200mm wafer fab in Reutlingen to make a variety of ICs including MEMS at a cost of about Rs.3,900 crore (about €600 million)
Once the fab is fully equipped, which is scheduled to take up to 2016, the plant will be capable of producing a million chips per day and employ 800 people, the company said.
The 200mm wafer fab has been built along-side a 6-inch wafer fab that has been in operation since 1995. ICs produced on the sire are used in electronic control units in automobile engines, electronic stabilizers and ride control, airbag, night-vision and driver assistance systems. However, Bosch said that its MEMS devices are being used, increasingly, in consumer electronics such as notebook computers and cell phones.
Bosch has also set up a test centre at its Reutlingen location. There the semiconductor circuits and MEMS sensors are finally tested and programmed according to their eventual applications.
"Despite the economic crisis, we had the will, the strength, and the resources to see this project through," said Franz Fehrenbach, the chairman of the Bosch board of management, at the opening of the wafer fab.
"Making engines even more economical and making driving even safer, will only be feasible with an increasing level of technology, particularly electronics," Fehrenbach said.
Officials with GlobalFoundries are asking New York lawmakers to add more state money to their existing $1.2 billion incentive package as they consider whether to expand their facility being built in Saratoga County.
The idea has been under discussion at the state Capitol for weeks, but lawmakers and officials with the computer-chip maker were hesitant to reveal many of the details being considered as part of the potential agreement.
Travis Bullard, a spokesman for GlobalFoundries, would not say precisely how much money the company is seeking from the state, how large the expansion could be or how many jobs may be created if the expansion occurs in an interview.
Officials with the Empire State Development Corp., the state's economic development arm, also refused to release details of the discussions, citing ongoing negotiations.
"Once a resolution has been arrived at, we will inform you and your public," agency spokesman Warner Johnston said.
State lawmakers with knowledge of the deal, though, said they have been told GlobalFoundries is seeking at least $100 million, to be paid over the course of several years, to help add as much as 90,000 square feet of clean room space to the factory now being built at the Luther Forest Technology Campus in Malta.
Under its current design, the $4.6 billion facility - expected to be finished in late 2012 - will include 210,000 square feet of clean room space, a tightly controlled area in which the computer chips are made.
With that amount of space, the company can produce up to 40,000 computer chips a month.
But the company's customer base has grown through acquisitions over the last year, and officials are now looking to add production capacity to meet the demands.
Expansions are also being contemplated in Dresden, Germany and in Singapore, where GlobalFoundries also has computer-chip manufacturing facilities.
Whether New York state provides an incentive package or not may or may not be the ultimate deciding factor in whether officials chose to build here or elsewhere, Bullard said.
"There are a number of other options that we're evaluating now," he said. "We'll weigh all of the variables and determine what makes sense." State leaders who have been briefed about the plans have been receptive despite the state's troubled finances, Bullard said. "Obviously, this is a very challenging time for New York state, but our conversations have been going very well," Bullard said.
A decision about whether the state can provide more incentives to the company should be made in the coming weeks, so that contractors who are already on site and working can be used effectively, he said.
It was unclear whether the money is being sought as an outright expense in the state budget, or if the funds would be raised through selling bonds, as money for the existing incentive package is.
State Sen. Roy McDonald, R-Saratoga, said he did not believe the money would be included in the state budget now under consideration and due by Wednesday, however.
McDonald has been briefed on the negotiations, but said the conversation has largely occurred within the executive chamber and he has not been given all of the details.
Still, he said he is supportive of the idea, billing it as a win for a region long ignored by his peers in Albany and in need of investment.
"We're trying to build an economy in upstate New York," McDonald said from the Senate chambers.
"Nobody's given us a better course of action."
Neil Breslin, D-Bethlehem, also said he supports the idea of providing more incentives to the company, which has estimated it will directly employ at least 1,400 people.
"Even with a looming state deficit, the state is very sensitive to economic development and job creation," he said.
The original $1.2 billion state-financed incentive package being provided to GlobalFoundries includes up to $600 million in tax breaks, and up to $600 million in cash reimbursements.
After construction began last year, the Empire State Development Corp. sold $400 million in bonds to help make reimbursement payments for the facility's construction.
The first payment to GlobalFoundries was made on March 16 for $49.47 million, and a request for another $58 million in reimbursements is under consideration now, officials said.
If GlobalFoundries ultimately decides to move forward with a local expansion, the plans would have to go through the permitting process with the town of Malta before acted upon.
Toshiba Corp. it set to start construction of new a fabrication facility on a site next to Yokkaichi Operations, its memory production facility in Mie Prefecture, in July.
Yokkaichi Operations currently has four NAND flash memory fabs. Toshiba has given careful consideration to the timing of the start of construction of the new fab, most notably in light of the fall in demand that followed the global recession in the fall 2008. However, as demand begins to recover with the market penetration of smart phones and other new applications, and foreseeing further market expansion in the medium- and long-term, Toshiba now recognizes that the time is right to construct a new fab.
The scale of Fab 5 will be comparable with that of Fab 4, which is now in operation. The new fab will have a quake-absorbing structure, and be designed for minimal environmental impact. Energy-saving clean rooms and effective use of waste heat are expected to cut CO2 emissions to a level 12 percent lower than from Fab 4.
The NAND flash facility will be similar in size to Fab 4, which has an official capacity of 210,000 wafer starts per month (wspm) and is one of the largest 300mm facilities ever built.
Toshiba said that construction would be completed by the spring of 2011, highlighting the need for Toshiba to add capacity for NAND flash production later in 2011. First phase tool install should therefore take place during the second quarter of 2011 with low volume production in the fourth quarter. Toshiba did not say at what technology node Fab 5 would initially ramp.
The company noted that the new facility would have energy-saving features for cleanroom operations, which included waste heat recycling and carbon emissions 12% lower than Fab 4.
Toshiba was originally expected to start building Fab 5 in the first quarter of 2010, however the economic recession and massive over capacity in the memory market required the company to postpone construction.
Toshiba proactively promotes timely investment that anticipates market trends, and will continue to develop new technologies, including advanced process technology and memories, in order to enhance its competitiveness in the memory business.
Samsung Electronics has claimed that a brief power outage that occurred at its production base in Kiheung on the afternoon of March 24 will not have a significant impact on its production. However, the one-hour blackout has still raised some concerns about its production of 32Gb and other high-density NAND flash chips, and supply to the already-tight DRAM market.
Samsung's 12-inch Fab 13 and Fab 14 - the former mainly for DRAM production and the latter NAND flash - were mostly affected by the power failure, according to sources at the vendor's supply chain partners. Monthly capacities at Fab 13 and Fab 14 are estimated at 120,000 and 130,000 wafers, respectively.
Taiwan-based LED chipmaker Epistar will invest US$16 million to expand blue LED chip capacity at its subsidiary Episky Corporation (Xiamen) in southern China, according to the company.
The monthly capacity at Episky is expected to reach 20,000 wafers by the end of 2011, mainly to meet the increasing demand for backlighting and lighting applications, Epistar said.
Market observers expected Epistar to report a net profit of almost NT$1 billion (US$31.42 million) for 2009 due to a high gross margin of 33% in the fourth quarter of 2009. EPS for the year is expected to exceed NT$2.5.
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