SEMICONDUCTOR
UPDATE
July 2010
McIlvaine Company
TABLE OF CONTENTS
SRC Initiates Smart Energy Research
TSMC Begins Construction on Gigafab
MEMC Completes Acquisition of Solaicx
Warwick University Opens High Tech Cleanroom
Japan’s Elpida Makes More Chips
GES Begins Contract Manufacturing Services in Viet Nam
Wacker Buys Major Source of Silicon Metal
Taiwanese Semiconductor Manufacturer to Run Factory on Solar Power
GLOBALFOUNDRIES to Use GE's Water Purification System
ST, Tsinghua University Expand R&D
Chinese Government Drives Investment in IC Industry
Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) and ARM Holdings have signed a long-term strategic agreement to achieve optimized Systems-On-Chip (SoCs). ARM will provide TSMC with access to a broad range of ARM processors as part of a long-term strategic agreement that enables the development of ARM physical IP through the 20-nm technology node.
John Heinlein, VP of marketing for ARM's physical IP division, said the two companies have collaborated frequently in the past, but on a node-by-node basis. This is a much broader agreement, Heinlein said.
"Really what this agreement does is continue that relationship," Heinlein said. "In the past we used to engage on a node-by-node basis. This is a longer term, broader collaboration that can give us a lot more momentum."
The agreement will enable TSMC to optimize the implementation of ARM processors on TSMC process technologies, including ARM's Cortex processor family and CoreLink interconnect fabric for AMBA protocols, according to the companies. It also establishes a long-term relationship with ARM (Cambridge, U.K.)for the development of physical IP, including memory products and standard cell libraries targeting the most advanced TSMC 28- and 20-nm processes, the companies said.
The companies said they will collaborate on creating TSMC technology optimized processor core implementations for benchmarking of optimal power, performance and area. Typical implementations will target consumer-centric market segments including wireless, portable computing, tablet PCs and high performance computing, they said.
"We see this as a renewed commitment for a long-term relationship extending our relationship to the 20-nm node, which is really several years out," said Ching-Cheng Chai, a product marketing manager at TSMC
Semiconductor Research Corporation (SRC) has announced it has established a $5 million industry-university partnership devoted to bringing clean, reliable and efficient energy systems and technologies to the marketplace. Founding industry members include ABB, Applied Materials, Bosch, First Solar, IBM, Nexans and Tokyo Electron. The Energy Research Initiative (ERI) will team companies from semiconductors and other energy-related sectors with university research centers to address the world's need for smart alternative energy sources and prepare students with the technical skills required for the burgeoning industry.
Initial research will address the need for new modeling and simulation tools to support the development of improved photovoltaic devices and the development of systems and technologies to enable an efficient, reliable and secure smart grid electricity infrastructure with integrated renewable energy resources.
"The pervasive use of simulation in semiconductor process development, device design and system analysis has been a critical factor in the success of the electronics industry," said SRC Executive Vice President Steven Hillenius. "Similar capabilities do not exist for technologies in support of solar-powered systems. Likewise, today's smart grid simulation capabilities are also limited, and new transformational approaches are required to enable significant integration of renewable energy resources into the grid."
"The development of these capabilities is beyond the scale of a single company or even industry, making the cooperation between industry and academia critical to delivering the benefits of alternative energy on a global scale," Hillenius continued.
The ERI will initially address two critical areas for efficient distribution of renewable energy resources: photovoltaics and systems and technologies to enable and optimize smart grids. A Photovoltaic Research Center will be established at Purdue University to address the performance, cost, reliability and manufacturing challenges of photovoltaics technologies. The centre will leverage Purdue's extensive modeling/simulation expertise and national Network for Computational Nanotechnology framework to provide enabling analytical models and simulation tools for photovoltaic manufacturers, much as Purdue has done for the semiconductor industry.
A Smart Grid Research Centre will be established at Carnegie Mellon University to support the incorporation of renewable energy resources and provide modeling, simulation and control tools needed to manage, optimize and secure the power grid. The centre will develop the dynamic monitoring and decision systems (DYMONDS) required to create a new paradigm for the electricity infrastructure. In addition, personal energy systems will be enabled providing individuals and organizations choices and flexibility in the use of energy.
The ERI will also train and educate students, providing them with the expertise and skills needed to transition these new methods into the marketplace. Research will be undertaken by a global network of universities comprised of several university centers, starting with the Purdue and
Carnegie Mellon centers. Each center will have its own research focus and area of expertise, with close coordination to complement the respective programs. Industry members of the ERI will dedicate engineering and other resources and participate in the selection of appropriate research projects.
The ERI will be managed by a SRC subsidiary called The Energy Research Corporation (TERC), which was formed in 2009 to create opportunities between the semiconductor industry and energy sector.
TI will expand analogue production capacity with the acquisition of wafer manufacturing plant in Japan.
Texas Instruments Incorporated has said it will purchase two wafer fabs and manufacturing equipment located in Aizu-Wakamatsu, Japan. The assets currently are operated by Spansion Japan Limited (SJL) and are being acquired under a court-approved plan of reorganization.
This purchase cost-effectively increases the production capacity that TI can offer its customers of analogue semiconductors. It includes a 200mm wafer fab currently in operation that is capable of expanding TI's analogue revenue by more than $1 billion annually, as well as a second non-operating wafer fab of equal size for either 200mm or 300mm production. TI will continue running the first fab and will preserve the second fab for future capacity expansion. TI plans to offer employment to almost all of SJL employees in Aizu.
The purchase also includes 300mm production tools, many of which will be moved to Richardson, Texas, to help complete Phase II of RFAB, the industry's first 300mm analogue wafer fab. With the completion of Phase II, RFAB will be capable of supporting $2 billion of revenue per year. A portion of the 300mm tools that come with the acquisition in Japan are not needed for TI's advanced analogue technology processes and will be re-sold.
"Analogue technology is increasingly important as the vital link between the real world and digital domain in all electronic applications," said Gregg Lowe, senior vice president in charge of the company's Analogue business. "This latest addition of analogue capacity will further increase TI's ability to support our customers' growth, now and in the future."
The new capacity in Japan joins TI's global network of manufacturing sites producing a comprehensive range of analogue products, such as amplifiers, data converters, clocks, interface and power management chips. Manufacturers are using TI's analogue chips in a vast array of applications, including industrial controls, set-top boxes, eBooks, hard disk drives, smartphones, robotics and LED streetlights.
This acquisition is the most recent in a series of analogue manufacturing expansions announced by TI over the past 24 months which collectively will add capacity for more than $3.5 billion of additional Analogue revenue per year when fully operational.
TSMC has held a groundbreaking ceremony in Taichung's Central Taiwan Science Park for Fab 15, TSMC's third 12 inch (300mm) Gigafab(tm) and an important milestone in the company's pledge to expand investment in Taiwan. The groundbreaking ceremony was conducted by TSMC Chairman and CEO Dr. Morris Chang. "Science parks have played a critical role in the development of Taiwan's high-tech industry. They have also provided important support to TSMC as we grew to become a leading global semiconductor company with its roots in Taiwan," Dr. Chang said. "Over the past two decades, TSMC has flourished in the Hsinchu and Tainan science parks, and our groundbreaking for Fab 15 today sets the foundation for TSMC to reach new heights."
"TSMC has worked unceasingly to improve its technology leadership, manufacturing excellence, and customer partnership to join together with our fabless and IDM customers to forge a powerful competitive force in the semiconductor industry. This groundbreaking for Fab 15 in the central Taiwan science park shows our commitment to providing our customers with advanced technology and satisfying their capacity needs. And as capacity in Fab 15 grows, it will create 8,000 high quality job opportunities, demonstrating TSMC's dedication to corporate social responsibility," Dr. Chang added.
Fab 15 will be TSMC's third Gigafab(tm), or fab with capacity of more than 100,000 12 inch wafers per month, and will also be TSMC's second Gigafab(tm) equipped for 28nm technology. Construction will be divided into four phases, and total investment over the next several years is expected to exceed NT$300 billion. TSMC is scheduled to begin equipment move in for the phase 1 facility in June 2011, with volume production of 40nm and 28nm technology products for customers in the first quarter of 2012. More advanced process nodes will be introduced as TSMC's technology development continues to advance.
In addition, to meet strong customer demand as we build Fab 15, TSMC will continue to expand capacity at Fab 12 in Hsinchu and Fab 14 in Tainan. Combined capacity of Fab 12 and Fab 14 currently exceeds 200,000 12 inch wafers per month, and is scheduled to exceed 240,000 12 inch wafers per month by the end of this year, underscoring our commitment to providing steadfast support to our customers.
Fab 15 will be TSMC's next "green fab" following Fab 12 and Fab 14, incorporating green concepts in energy conservation and pollution control in its design, including a process water conservation rate of 85%, reclamation of rainwater, recirculation and reuse of general exhaust heat, and development of solar power generation and LED lighting applications. TSMC's goal is to reach zero emissions of greenhouse gases
Lextar Electronics, a maker of LED epitaxy wafers and chips, is expected to hire 1,300 employees in the second half of 2010 for its operations in Taiwan and China, according to the company.
The reason for the hiring spree is to accommodate the company's rapid capacity build-up in the upcoming quarters. Its new plant in Chunan, Taiwan will go online in the fourth quarter of 2010 and another facility in Suzhou of China's Jiangsu Province will begin test production in the first quarter of 2011. Lextar plans to increase its number of MOCVD machines from 30 sets currently to 130 sets by the end of 2011.
Lextar will add 300 positions for various functions in marketing, research and development, human resources and finance, and 1,000 workers on its production lines.
Lextar exceeded NT$1 billion in monthly revenues for the first time in June 2010 at NT$1.03 billion (US$32 million) up 35% for the month and 540% from a year ago. Second half revenues rose 969% to NT$3.69 billion.
MEMC Electronic Materials, Inc., a global leader in the manufacture and sale of wafers to the semiconductor and solar industries, announced that it has completed the acquisition of privately held Solaicx. At closing, MEMC paid the initial merger consideration of $66 million in cash, plus an additional amount in cash of approximately $10 million that is equal to amounts that have recently been invested in Solaicx by its existing security holders. The acquisition is expected to be accretive to earnings per share in 2011.
"We are delighted to complete this acquisition and to welcome the employees of Solaicx," said Ken Hannah, President of MEMC Solar Materials. "The acquisition brings to MEMC talented people and cost-effective, proprietary process and equipment that expand our served market in the solar industry."
Solaicx, headquartered in Santa Clara, California, has approximately 80 employees and a large-scale production facility in Portland, Oregon. As a result of the acquisition, MEMC now has proprietary continuous crystal growth manufacturing technology that yields low-cost, high-efficiency monocrystalline silicon wafers for the photovoltaic solar industry. MEMC also has low-cost polysilicon and crystal operations in North America, with support offices around the world that provide customers with industry-leading customer service. The acquisition advances MEMC's ability to drive solar industry toward grid parity.
The cutting edge equipment used for semiconductor energy efficient applications will be accessible to users from both local industry and academia
The University of Warwick formally opened its new “Science City Cleanroom for Energy Efficient Semiconductors” on the Second of July.
The facility is part of a £10.6 million project funded by Advantage West Midlands (AWM) and the European Regional Development Fund (ERDF) as part of the Birmingham Science City Energy Efficiency & Demand project.
The University of Warwick is leading the project in collaboration with the University of Birmingham as part of the Science City Research Alliance program. Some £9.5m has been invested in leading-edge equipment which will be accessible to any interested users from both local industry and academia.
Elpida will join forces with Taiwan partners Promos, Rexchip, and Powerchip to focus on producing "ultrasmall" DRAMs, by improving design and production processes, not shrinking linewidths, according to the Nikkei daily. Only slight modifications for 65nm production (no new tooling) will be required, to reduce costs and boost chip volume/wafer by 25%. A little more than half of Elpida's monthly output from its Hiroshima factory (~180,000 wafers/month) will be allocated to the new chips.
First shipments of advanced electronic control systems for FPD systems will lead to additional manufacturing and engineering programs supporting semiconductor, FPD and solar markets.
Global Equipment Services, Inc. (GES) announces that first customer shipments have been completed from their Manufacturing, Service and Training Center located in Saigon High Tech Park in Ho Chi Minh City, Viet Nam. Opened in May 2009, the new 100,000 sq. ft. center contains modern manufacturing operations, a customer training center, design engineering and field service offices.
"This represents a major milestone for GES and for our customers who want to explore outsourcing options in Asia besides China. We have a proven product transfer process from pilot production in the U.S. and a well trained staff in Viet Nam. In the next few months, we will be transferring several additional programs to Viet Nam for volume production," said John Villadsen, GES Vice President of Operations.
About GES:
GES allows OEMs and end users in the Semiconductor, Solar, FPD and related industries to expand their capabilities, increase profitability and improve customer satisfaction through a unique outsourcing model. GES provides high-quality, low-cost design engineering, contract manufacturing and field engineering services to customers worldwide. Founded in 2006 in San Jose, CA, GES has operations in Viet Nam, Japan, Taiwan, China, and India. www.geservs.com
Munich, Germany-based Wacker Chemie AG has successfully concluded its acquisition of the silicon-metal production site in Holla, Norway, from FESIL Group (Norway). The transaction has now been cleared by the relevant antitrust authorities and approved by WACKER’s and FESIL’s supervisory bodies.
Under the terms of the transaction, WACKER takes over for a purchase price of around €65 million all of FESIL’s production facilities in Holla, Norway, including the related real estate. The strategic acquisition is a key step in securing WACKER’s long-term supply of silicon metal.
Acquiring Holla makes the Munich-based chemical company more independent of raw-material price fluctuations and increases its supply security during peak-demand periods.
Silicon metal is one of WACKER’s most important raw materials and is needed for the production of silicones and hyperpure polysilicon. Holla Metall’s production capacity is around 50,000 metric tons of silicon metal per year, which corresponds to about one third of WACKER’s current annual needs.
WACKER is a globally active chemical company with some 15,600 employees and annual sales of around €3.7 billion (2009). WACKER has 26 production sites and over 100 sales offices worldwide. For more information, visit www.wacker.com
One of the world´s largest manufacturers of semiconductors has announced plans to run its plants on solar power.
Taiwan Semiconductor Manufacturing Company (TSMC) has said it will power its sites at the Southern Taiwan Science Park in Tainan on energy from the sun.
Ricky Tsai, new business division president at TSMC, said that while the panels would not provide enough energy to power the sites entirely, they did represent a useful starting point to reducing carbon emissions.
Mr. Tsai also said that energy consumption on TSMCs core sites had been reduced by 30 per cent since 2001.
The company is now planning to target the green energy sector in China as it sees significant potential for growth in the marketplace in the country.
India’s semiconductor market is set to grow by over 20 per cent during the next two years.
Rapid Electronics is a leading UK supplier of energy saving products, electronic components and electrical equipment.
GE announced that it has signed a contract to supply an ultrapure water system to GLOBALFOUNDRIES' new semiconductor manufacturing facility currently under construction at the Luther Forest Technology Campus in Saratoga County, N.Y. GE will design, supply and install an advanced ultrapure water system for the new $4.6 billion computer chip factory called "Fab 8." The new facility is the largest economic development project now underway in the United States and is expected to be the largest and most advanced semiconductor "fab" in the world upon completion in late 2012.
"Reliable, long-term production of ultrapure water will play a vital role in the successful operations of our new Fab 8 facility. We chose GE based on its extensive experience and ability to provide ongoing reliable technical and field support," said Norm Armour, vice president and general manager of Fab 8, GLOBALFOUNDRIES.
GE's ultrapure water system will filter millions of gallons of water per day to be used in the semiconductor manufacturing process. It will significantly reduce operating costs and increase efficiency.
Ultrapure water systems are often considered the lifeblood of a semiconductor wafer fabrication facility, or "fab." During the production cycle, a wafer comes into contact with ultrapure water more than 35 times and any disruption of service or "out-of-spec" water can compromise the wafers and even result in loss of product. In order to consistently manufacture superior semiconductor wafers, GLOBALFOUNDRIES requires the reliable production of ultrapure water 24 hours per day, 365 days per year.
"We are excited to support GLOBALFOUNDRIES' goals to make its Fab 8 chip fabrication plant as energy and water efficient as possible to help reduce the plant's operational costs, which will be crucial for the company to successfully compete in the global semiconductor industry," said Jeff Connelly, vice president, engineered systems--water and process technologies for GE Power & Water. "The project illustrates the demand for ultrapure water systems in the semiconductor industry, which has some of the manufacturing sector's most stringent quality requirements when it comes to industrial water usage."
Connelly also noted that GE's work with GLOBALFOUNDRIES on the Fab 8 project builds on GE's legacy of supporting energy technology innovation in the Capital Region of upstate New York, which also is home to GE's flagship Global Research Center; GE Energy's renewable energy headquarters and steam turbine-generator factory; GE Power & Water's global headquarters; and GE's planned advanced battery factory.
GE's ultrapure water system consists of a series of water treatment technologies, pumps, storage tanks, ultraviolet sterilizers, ozone generators, ion exchange, an ultrafiltration system and a gas transfer membrane system, as well as commissioning and operations and maintenance.
STMicroelectronics and Tsinghua University, Shenzhen Graduate School, have entered a long-term strategic research partnership agreement. This is the second phase of a collaboration that began in 2002 with the setup of a joint ASIC (Application Specific Integrated Circuit) research centre.
ST will provide the university with digital multimedia and advanced analogue chips, expert support and advanced design tools, and jointly cooperate on applications engineering projects assigned by ST. Under the terms of the strategic partnership, ST will also donate RMB 1 million (Rs.67.27 lakh) to the Graduate School each year for five years, with an overall assessment of research efforts conducted each year.
The Graduate School and the Electronic Engineering department of Tsinghua University will staff the long-term partnership with talent, including graduates and technical staff that have important know-how for the market in China, such as local standards and technical specifications in various application fields.
"This partnership provides a great opportunity for Tsinghua University to develop IP blocks and ICs that meet market demand, raising our design and innovation skills to a new level," said Prof. Kang Feiyu, Vice-president of Tsinghua University Graduate School, Shenzhen, "Leveraging our expertise, talents and management to extend the cooperation between us, the partnership is intended for applications that will be commercialized within five years, which is ideal for Chinese designers to sharpen their skills very quickly."
"ST has had a strong technical presence in China for many years. This presence has included manufacturing, IC design and applications teams. The collaboration with Tsinghua will enhance ST's capabilities to tailor our IC solutions to the local market needs," said Francois Guibert, executive VP and president, Greater China and South Asia region, ST. "This partnership with Tsinghua University will contribute to maintaining and further strengthening our relationship with industry leaders in the most dynamic and fastest growing market in the world."
The collaboration with Tsinghua is part of an R&D network established by ST with many world leading universities, research institutes, customers and suppliers in Europe, Asia and America. It aims to bring a dramatic increase in the availability of advanced IP blocks and chips designed in China.
It's a great time to be a fabless company with leading-edge designs with the top foundry players moving to ratchet up capacity at 40- and 28nm, setting the stage for a market share battle and a corresponding drop in wafer pricing.
This is according to according to Dean Freeman, who added that the semiconductor industry has never before had more than one foundry that could offer process technology near the leading edge. But today, there are three—Taiwan Semiconductor Manufacturing Co. Ltd., GlobalFoundries Inc. and Samsung Electronics Co. Ltd—Freeman said.
By Q4 11, TSMC, GlobalFoundries and Samsung combined will have the capacity for nearly 280,000 300mm wafer starts per month at 45nm and below, up from about 70,000 in Q4 09, according to estimates. TSMC and GlobalFoundries plan to spend a combined $7.9 billion on capital expenditures this year.
"Foundries are spending now to add capacity at 40nm and spending to meet the 28nm ramp," Freeman said. "You have a significant number of companies all introducing technology at the same time, which is going to lead to a significant market share battle."
Despite losing a small amount of market share last year, TSMC still held nearly 45 percent of the foundry market in 2009. Both GlobalFoundries and Samsung are pushing hard to cut into that lead.
China's LED chip industry has received a huge investment from 2009 to 2010. Although the output value is not yet large, there is no doubt about its great development speed and potential. According to LEDinsider the gross output of LED chip industry in China reached more than two billion yuan (US$294 million).
LED wafer sales of the top-7 manufacturers all exceeded 100 million yuan each in 2009 and the top-5 amounted to more than 150 million yuan each. Shandong Inspur Huaguang Optoelctronics would have been ranked higher if its LD sales had been taken into account.
Each of the top-10 companies is expanding production capacity with a total increase plan of several hundred MOCVD machines. As a result of the massive investment in 2009 and 2010, great changes have taken place in China's LED chip industry in terms of both size and industrial pattern, LEDinsiderr said.
LEDinsider: Top 10 LED chip manufacturers in China, 2009 are:
RANK COMPANY 1 Xiamen Sanan Optoelectronics 2 Hangzhou Silan Azure 3 Shandong Inspur Huaguang Optoelectronics 4 Dalien Lumei Optoelectronics 5 Xiamen Changelight 6 Epilight Technology 7 Wuhan HC Semitek 8 Aqualite 9 APT Electronics 10 Neo-Neon Holding
Notes: Sales of non-LED products and sales of LED package application products or other LED components are excluded; makers without MOCVD system or unable to produce LED wafers are not in the ranking; and makers who only provide total sales figure without sales of LED expitaxy wafers are not included.
Source: LEDinsider, compiled by Digitimes, June 2010
A new report from The Information Network claims that massive investments in China's semiconductor industry are paying off as internal production is making inroads on demand.
China's IC industry is expanding rapidly. In 2009, the country produced 4,000 crore ICs, which accounted for 25.1 per cent of domestic demand as a result of massive building programs and the weak economy. In comparison, China produced only 20.9 per cent five years ago, according to the report, "Mainland China's Semiconductor and Equipment Markets: A Complete Analysis of the Technical, Economic, and Political Issues."
"China's chip industry, once the wunderkind of the semiconductor industry is broken, a combination of the recession and too little money being spent by the government," says Robert Castellano, president of The Information Network. "Only Rs.32,133.74 crore ($7 billion) was spent on fabs in the past five years, enough to build only two 300mm fabs."
That's soon to change as the China government is spending as much as Rs.1.14 lakh crore ($25 billion) is earmarked over the next five years to prop up the industry, including Rs.22,952.67 crore ($5 billion) for the joint venture between Elpida and Suzhou Venture Group and Rs.22,952.67 crore for Sino-chip.
Outside investment will continue to generate new fabs, thereby increasing production levels. Numerous foreign companies have set up fabs in China through investment or acquisition. The latest was Taiwan-based United Microelectronics Corp. acquisition of mainland China chipmaker Hejian Technology Suzhou Co. Ltd.
"Areas propelling the Chinese IC industry are part of the government stimulus program such as projects to supply subsidized electronic goods to rural areas of China. The construction of 3G networks, the expansion of mobile TV operations are big areas of opportunity," added Castellano. "By 2013, a third of China's IC needs will be met internally."
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