SEMICONDUCTOR UPDATE
May 2010
McIlvaine Company
TABLE OF CONTENTS
Semiconductor Manufacturer Donates Land and Facility to UCF
Samsung Boosts Manufacturing, R&D Investment
Asia’s First LED Chip Production Plant
Agilent Technologies and UC San Diego Collaborate
Intel Invests in Guadalajara Design Center
Epistar Invests NT$839 million in Nan Ya Photonics
Intersil Corporation a designer and manufacturer of high-performance analog and mixed-signal semiconductors announced that it will donate a high-technology semiconductor wafer fabrication facility and the land it occupies to the University of Central Florida.
The gift consists of 100,494 square feet (9,336 square meters) of office space, manufacturing, and cleanroom facilities, plus a 5 acre property. In addition, Intersil will provide utilities and assist with operating expenses during the first three years of UCF's ownership, enabling a turnkey solution for the university.
Rising demand for semiconductors and memory products calls for new and improved production facilities and intense R&D efforts.
This year Samsung will invest almost $23 billion on manufacturing facilities and R&D, its largest annual investment outlay ever, the company announced
In South Korea, Samsung broke ground on a memory semiconductor fabrication plant that will receive about one-third of this year’s investment, or $7.9 billion. The new facility will produce DRAM, NAND and next-generation memory products. The accelerated investment in the new facility represents a 64 percent increase from the original plan for 2010, and total multi-year investment in the new facility is slated to reach $10.6 billion.
The next-largest portion of Samsung’s 2010 investment is a $7 billion outlay on research and development. The company did not specify how that would be allocated across its semiconductor, LCD, telecommunication and digital media businesses.
Also, in response to demand for energy-efficient, high-density memory, Samsung will spend $4.4 billion on increasing the capacity of its 30nm DRAM production at an existing facility. Samsung’s semiconductor production is based at the Nano City Complex in Hwaseong, Gyeonggi Province, 30 miles south and a two-hour trip from the South Korean capital, Seoul.
Further investments include $2.2 billion for improved LCD facilities and $1.8 billion to improve operations and meet demand for System-on-Chip (SoC) mobile and set-top devices.
Samsung reported $30.5 billion in sales in the first quarter of 2010, according to the company’s April 2010 earnings report. The digital media division, including video devices and appliances, generated $11 billion of the quarterly total. During the same period, telecom sales were $8 billion and semiconductors $7.2 billion. In digital media, the company is expanding its focus on premium models, including 3-D televisions. The company forecasts higher demand based on 3-D, higher adoption of LED TVs, and interest in the World Cup.
In telecom, Samsung has outperformed market growth by shipping over 64 million handsets in the first quarter, for a year-over-year increase of 40 percent. The company expects increased demand in the second quarter due to economic recovery and higher adoption of mid-to-high-end products.
In semiconductors, Samsung expects to "strengthen market dominance based on technology leadership and cost competitiveness," according to a presentation accompanying the April earnings report. The company expects continued supply constraints of DRAM based on high PC shipments, and strong demand for mobile products based on new product launches in smart phones, tablet PCs and book readers.
Samsung expects to hire 10,000 new employees in 2010, including 3,000 for its semiconductor business and 4,000 for its LCD business.
(U.S. dollar figures have been converted at the rate of 0.00088 Korean won to the dollar.)
Toshiba said that it will start building a new flash memory factory in Yokkaichi, central Japan this summer. It had hoped to expand capacity earlier but put those plans on hold when recession hit. The company expects to complete the new facility next spring.
OSRAM Opto Semiconductors has held an opening ceremony for its 35,000 square meter (376,600 sq. ft.) new LED wafer fabrication plant in Penang, Malaysia. It is the company’s first ever LED chip plant in Asia and currently the most modern facility in the world. The plant will produce chips for light emitting diodes, the light source of the future. OSRAM has doubled its chip production capacities investing in the new chip fab in Penang and the chip fab in Regensburg, Germany.
The new plant is the second LED chip manufacturing facility of OSRAM Opto Semiconductors. It will produce LED chips in indium-gallium-nitride technology on 4-inch wafers, serving as the basis for blue, green and white LEDs. Together with its Regensburg (Germany) LED chip plant, OSRAM is poised to respond quickly to the fast growing LED market with superior quality, sufficient quantities and at cost advantages.
The production facility in Penang makes OSRAM Opto Semiconductors the first LED manufacturer with high-volume chip production facilities both in Europe and Asia and puts the company in a good position to continue its leadership in the LED industry. It will also enable the company to take on this fast growing market.
The prospects of the LED market remain bright. Market researchers forecast a threefold increase up to almost €13 billion by 2012 for light emitting diodes (LEDs) and organic LEDs (OLEDs). These technologies offer a particularly small size, a long lifetime and top levels of energy-efficiency, thus opening up new applications and new markets. As OSRAM CEO Martin Goetzeler proclaimed, "We are shaping the lighting market of the future and we are a leading manufacturer in all stages of the LED value chain. We already achieve 17 percent of our sales with Solid State Lighting. In connection with classic technologies, our LED portfolio of products, systems and solutions will raise energy saving potential for lighting up to 60 percent. This represents a major contribution to climate protection."The list of LED applications keeps on expanding: architectural lighting, backlight displays, mobile terminal devices, solid state lighting, automotive lighting and many more to come. We already see projectors being lit up by LEDs, advertising boards being replaced by LED display video walls and cars illuminating the streets with LED headlights.
“Cost, and more so the talented and experienced workforces are all in favor of Penang when it comes to choosing the site for our new facility,” said Dr Ruediger Mueller, CEO of OSRAM Opto Semiconductors. “But it was also the long-term partnership with the Malaysian authorities that made it the top choice, after all we have operated in Penang for over 30 years.”
The opening ceremony was held on site in Bayan Lepas Free Industrial Zone of Penang.
Agilent Technologies Inc. and the University of California, San Diego (UCSD), announced they have established a new chip-scale micro- and nanophotonic- systems testing facility on the UCSD campus. The new facility is part of the National Science Foundation (NSF) Major Research Instrumentation (MRI) project and is being set up in conjunction with the multi-university Center for Integrated Access Networks (CIAN), led by The University of Arizona.
The new Chip-Scale Photonic Testing Facility is housed in the California Institute for Telecommunications and Information Technology (Calit2) which is located on the UCSD campus. The facility will support testing and characterization of micro- and nano-scale ultra-high-speed optical components and subsystems for numerous applications, including technology for future data centers and cloud computing.
"Accurate, high-speed measurements are essential to the investigation of novel designs and fabrication techniques for nanophotonic devices," said CIAN Deputy Director Yeshaiahu Fainman, a Cymer Professor of Advanced Optical Technologies in the Electrical and Computer Engineering department of UCSD's Jacobs School of Engineering. "This testing facility will hopefully lead to closer collaborations with our industry partners. Agilent Technologies has made it possible for us to build a facility with state-of-the-art test and measurement equipment that complement the technologies deployed in other UCSD and CIAN laboratories."
A complete suite of 40 Gigabits-per-second (Gbps) test equipment will permit component-level compliance testing and troubleshooting of devices intended for NSF's MRI Data Center Testbed, further enhancing the work of Calit2 and CIAN in these areas. In the next few years, CIAN participants at UCSD expect to upgrade the basic data rates of the Chip-Scale Photonic Testing Facility from 40 Gbps to 100 Gbps (and greater). The facility also will add system- and network-level analysis capabilities, including modulation and bit-error rate measurement.
"In addition to testbeds, another major thrust of CIAN is the development of industrial collaborations and technology transfer to the private sector," said CIAN Director Nasser Peyghambarian, a professor of optics at UA. "We are delighted with the supportive role that Agilent Technologies is taking with respect to research in testbeds, industrial collaborations, technology transfer, education outreach and diversity."
"We are delighted to be associated with the CIAN research effort and to help establish the testbed facility at UCSD for CIAN," said Bill Wallace, America’s region director of university development, Agilent. "The research conducted by distinguished CIAN and UCSD faculty will enable new, affordable and flexible networks, with data service rates of 10 Gigabits-per-second. The research being conducted by CIAN is both interesting and transformational in nature."
Calit2 currently hosts a second photonics testbed at UCSD, which is one of the NSF's Engineering Research Centers. The photonics testbed is used by researchers from the nine universities participating in CIAN.
Based at the University of Arizona (UA), CIAN is designed to create transformative technology for optical access networks. Virtually any application requiring any resource can be seamlessly and efficiently aggregated and interfaced with existing and future core networks in a cost-effective manner.
UA recently began construction on a new testbed for optical aggregation networking, another NSF facility, with matching support from Agilent as well as Fujitsu Network Communications and Yokogawa Corp. of America. CIAN researchers also can access existing facilities at Columbia University for cross-layer optimization, and the University of Southern California for optical data introspection, which round out the principal sites for CIAN researchers who need specialized testing capabilities.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is the world's premier measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 16,000 employees serve customers in more than 110 countries. Agilent had net revenues of $4.5 billion in fiscal 2009.
Taiwan Semiconductor Manufacturing Company said it would build an additional 300mm production facility in order to boost capacity for advanced process technologies. This will be third TSMC’s “gigafab” that would process 300mm wafers.
TSMC is the world's largest dedicated semiconductor foundry which operates a 150mm wafer fab (fab 2), five 200mm wafer fabs (fab 3, 5, 6, 8 and WaferTech) and two 300mm wafer “gigafabs” (fab 12 and 14). The latter two factories produce chips using so-called advanced process technologies, which are 130nm and below. About 71% of TSMC’s revenue comes from advanced fabrication processes and the demand is increasing quickly.
Morris Chang, chairman and chief executive of TSMC, recently pointed out that the company`s supply of advanced process technologies was already 30-40% short of demand. The shortage is projected to grow as many integrated device manufacturers (IDMs), such as Fujitsu, have begun to increase outsourcing to pure manufacturers due to rising development cost of leading-edge fabrication processes and tremendous costs of building new semiconductor facilities, reports China Economic News Service.
The future 300mm fab will process chips using 28nm process technology (and probably below) and will cost the company around $3.1 billion, the lion’s share of TSMC’s annual capital expenditure in 2010 of $4.8 billion. Construction is set to start in the middle of this year. Planned capacities are currently unknown, but given the recent trends, it can be expected that the fab will be expandable.
In addition to building the new factory, TSMC will also expand capacities of the current 300mm facilities. Mr. Chang, is reported to have said that once the expansions are completed, the two fabs will be able to turn out a total of 100 thousand wafers a month, which seems to increase output of advanced products by 35%.
Intel Corp. president and CEO Paul Otellini announced it will invest 2,300 million pesos ($177 million) over three years to expand Intel's Guadalajara Design Center (GDC).
The investment will focus on increasing technology development activities, staffing and technology and education initiatives that support Calderon's National Digital Plan.
The Intel GDC focuses on the design, testing and validation of IC and other hardware, and education software technologies used in Intel products sold globally. The expansion will include the construction of a new building for technical labs, office space, a technology museum for children and an IT lab to support small- and medium-sized businesses. In addition, approximately 150 additional technical jobs will be created over the next three years, bringing the total number of GDC engineers to 550.
"As a global computing leader, we believe that investing in the future of discovery is an essential business decision," Otellini said. "Our team in Mexico will continue to help us do this. This new investment extends our long-term commitment to Mexico. The highly technical work being done at our research center here has been extraordinary, and today we are taking it to a new level."
The new campus will adhere to world-class design and construction standards and to minimize its impact on the environment. For example, it will seek Leadership in Energy and Environmental Design certification, which provides independent, third-party verification that a building meets the highest green building and performance measures.
The GDC is Intel's largest site in Mexico and where all its technology development activities in Mexico are based. Since it was established 10 years ago, it has grown from 33 employees to over 400 value-added jobs. In addition to technology development activities, the GDC also has several initiatives in place at local universities aimed at fostering the region's technical talent pool. Nearly 100 undergraduate students have participated in these programs in the past 18 months.
Additionally, to make possible the GDC's mission—to "help to transform prototypes into products" and continue tackling current and future technologies—the new site will increase its product validation activities. Validation is a critical part of Intel's product development cycle. Since its foundation, the GDC has contributed to the development of more than 40 leading processor and chipset products distributed around the world. The center aims to increase its technical contributions in the upcoming years.
With this investment, Intel also seeks to increase its contribution to the development of the national and local technological ecosystem. For example, more than 20 research and talent development projects have been completed or are underway with the university system. In addition, a multi-core technology lab has been set at the Information Technology Institute of Jalisco to help local small- and medium-sized businesses learn multicore technologies that will be key for their competitiveness. Also, more than 50 interns spend 6 to 12 months in the GDC's labs learning about state-of-the-art technologies and engineering processes.
"Innovation results in the making of things, the solving of problems and improvements in society," said Jesus Palomino, general manager of Intel GDC. "And, forward-looking government policies like the National Digital Plan, paired with investment in innovation, are at the center of economic growth. Today Intel is reinforcing its commitment to technology development in Mexico and to supporting the government's plans to use technology to advance the country."
The company also announced it will also erect a new building for laboratories and a technology museum for children.
Mexican President Felipe Calderon called the announcement a "good business decision."
Taiwan-based LED chipmaker Epistar has announced an investment of NT$839.45 million (US$26.79 million) in Nan Ya Photonics, a specialist in high-brightness (HB) LED wafers and chips. Epistar now has a 40.75% stake in Nan Ya Photonics.
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