Intel Reveals Plan to Build 3D NAND in China

Intel Corp. has announced its plan to shell out up to $5.5 billion to manufacture 3D NAND flash for its solid state drives (SSDs). The company said the first production of 3D NAND at the fab, located in the Northeast China city of Dalian, is forecast to start in 2H16.

In March, Intel and partner Micron Technology Inc. announced the availability of jointly developed 3D NAND, billed as the world's highest density flash memory. 3D NAND stacks layers of data storage cells vertically to create storage devices with higher capacity than competing NAND technologies. The devices were presumably going to be built in Micron fabs.

China is widely believed to be pushing hard to establish memory chip manufacturing within the country. In July, a Chinese-government backed investment firm bid $23 billion to acquire Micron. The proposal has reportedly since been scrapped because it was considered unlikely to win the approval of U.S. regulators.

It is not known whether Intel is receiving government financial support to help fund the transition to 3D NAND production at the Dalian fab. A spokesman for Intel declined to comment. "Unfortunately, we do not disclose the details of our investment agreements with governmental authorities," the spokesman said.

Rob Crooke, GM of Intel's non-volatile memory group, said in a memo that Intel's collaboration with the Dalian government "has been and continues to be an excellent partnership."

Joseph Unsworth, research VP for semiconductors at market research firm Gartner Inc., said Intel's decision to convert the Dalian fab from logic to 3D NAND flash manufacturing would allow Intel to ramp the jointly developed technology at its own pace. "Ultimately, Intel remaining in non-volatile memory manufacturing serves its goal to fuel its enterprise SSD business and continue to reduce the storage bottleneck within data centers," Unsworth noted.

Intel's Dalian fab has been in production since 2010. It has to date been used to build 65nm logic chips.

In the memo, Crooke said Intel's SSD sales posted double digit YoY increases in every quarter this year. Crooke said Intel has a long-term plan for 3D NAND manufacturing at the Dalian fab and "may invest up to $5.5 billion over the coming years to transition this site to support leading-edge non-volatile memory production."

Crooke added that the expansion is part Intel's global multi-source supply strategy.

Infineon Sets Up Second Factory in China

Infineon Technologies plans to get closer to its Asian customers as it invests $300 million in its second factory in China, seemingly unconcerned about the country's slowing growth.

Some of the German chipmaker's Asian customers include LG Electronics and Samsung Electronics, according to Bloomberg.

Engaging an area of 387,360 sq. ft. (36,000m2), the new facility will rise in Wuxi, near Shanghai, at the end of 2016. It is expected to generate 2,500 jobs upon ramp-up of all the production lines. One-fifth of Infineon's sales last year came from China.

"Infineon's new factory will foster further expansion in China, building on the experience of two decades in the country," said Dr. Reinhard Ploss, CEO of Infineon. "It highlights Infineon's confidence in the continuous opportunities of the Chinese market as well as our commitment to substantial investment in China and our determination to support the 'In China, For China' strategy."

Infineon entered the Chinese market in 1995 and currently employs more than 1,800 employees in the country, manufacturing chips in applications such as industrial, automotive, power management and security card.

The new factory will further give play to Infineon's unique expertise in smart factory to provide demonstration and consulting services for local partners such as manufacturers and integrators of production systems, thus supporting the transformation of the local manufacturing industry towards smart production, Infineon said in a statement.

Infineon also focuses on the Internet of Things (IoT), which is identified as a catalyst for economic growth in China and around the world. Known as the "IoT pilot city of China," Wuxi has unique advantages in IoT-related research and applications.

Infineon has established and is maintaining a long-term partnership with the Wuxi-based Internet of Things Research and Development Centre of the Chinese Academy of Sciences, and provides one of the 10 IoT reference cases in the city with its IoT-enabled facility.

The new factory will leverage the company's proven expertise in sensing, security, power and micro-control, thus enhancing the connection between IoT and manufacturing.

According to research firm Sanford C. Bernstein, China consumes more than half of semiconductors produced each year. In 2013, it spent more money on chip imports than on oil.

Apart from Wuxi, Infineon also has a manufacturing site located in Beijing.

AMD and Nantong Fujitsu Microelectronics have JV

AMD and Nantong Fujitsu Microelectronics Co., Ltd announced the signing of a definitive agreement to create a joint venture combining AMD's high-volume assembly, test, mark, and pack (ATMP) facilities and experienced workforce in Penang, Malaysia and Suzhou, China with NFME's established outsourced semiconductor assembly and test (OSAT) expertise. Upon close, the new business will leverage the capabilities of 5 facilities and approximately 5,800 employees to offer differentiated ATMP capabilities and scale to service a broad range of customers. The transaction is expected to close in the first half of 2016, pending successful completion of regulatory approvals.

"We continue our strategic transformation by creating a joint venture combining AMD's high-volume assembly, test and packaging facilities and our experienced workforce with NFME's expertise in outsourced semiconductor assembly and testing," said AMD Senior Vice President, Chief Financial Officer and Treasurer Devinder Kumar. "NFME is an ideal partner with the vision and business plan to successfully lead the joint venture upon the close of the transaction. We continue to sharpen the focus of our ongoing investments on designing differentiated, high performance technologies and products that can drive long term profitable growth. The formation of this JV further strengthens our balance sheet with significant asset monetization."

Shi Lei, the general manager of NFME, said, "AMD has world-class advanced assembly and testing facilities and a rich history of high-volume production. AMD's technology and expertise is very complementary to our current capabilities. The newly-formed JV will improve NFME's R&D capability and enhance our corporate reputation worldwide. The JV will also strengthen our opportunities to further move into international markets and secure additional customers as a part of our plans to become one of the world's leading assembly and testing companies."

The joint venture marks another step in AMD's strategic plan to sharpen its focus on building great products while enhancing the company's supply chain operations in the long run by providing additional scale and strengthening its balance sheet through a cash infusion and reduced capital expenditures aligned with a fabless business model.

The joint venture is well positioned to take advantage of the increasing demand for semiconductor assembly and test services (SATS). According to Gartner Research, the SATS market revenue is expected to be $27.4 billion for 2015, with growth of 1.1 percent. The 2014 through 2019 CAGR for the market is forecast to be 4.6 percent, leading to approximately $34 billion in total estimated market revenue by 2019(1).

Key highlights of the definitive agreement include:

AMD will contribute to the joint venture:
- ATMP facilities in Penang, Malaysia and Suzhou, China
- Approximately 1,700 employees -- including the site leadership teams which will continue to provide management and oversight
NFME will purchase an 85 percent share of AMD's Penang and Suzhou operations, and serve as controlling partner for the new combined business.
As consideration for the transaction, at close AMD expects to receive approximately $371 million from NFME, record cash of $320 million, net of expenses, and retain 15 percent ownership of its Penang and Suzhou operations.
Post close, AMD expects the transaction to be cost neutral with significantly reduced AMD capital expenditures.
There are no planned workforce reductions at AMD's Penang or Suzhou facilities in conjunction with the creation of the joint venture.

China Investment Holding Firm Buys Swedish MEMS Foundry

GAE Ltd, an investment holding company based in Hong Kong, has acquired Silex Microsystems AB (Jarfalla, Sweden), a pure-play MEMS foundry. It has also begun the construction of a wafer fab in Beijing to expand the company's production capacity.

GAE has been created to invest in the semiconductor industry and it acquired 98 per cent of the shares in Silex on July 13, 2015 when former shareholders CapMan, Priveq, Northzone and Startupfactory, agreed to sell all of their holdings in the company.

The amount paid by GAE was not disclosed. Some time ago market research firm Yole Development estimated that Silex had $34 million of sales in 2012.

Silex founder and CEO, Edvard Kalvesten retains two per cent of the shares in the company and continues his role as CEO and board member of Silex. No changes have been made to the organizational structure or business operations of Silex and all members of Silex executive management team remain in their respective functions after the transaction.

Tomas Bauer, SVP of sales and business development at Silex, told the European MEMS Summit that the Beijing wafer fab shell is complete and that first wafers are expected out in mid-2017.

Bauer did not indicate how much is being spent in Beijing on Silex's next fab or what the manufacturing capacity will be on completion. He said that the company would use the same equipment set it has deployed in the recent investment in Jarfalla.

Silex has 6in and 200mm wafer fabs in Jarfalla and has just finished spending $12 million on upgrading in Sweden. He quoted the production capacity as 400k litho layers per year on 6in wafers and that one million litho layers could be characterized per year on 200mm wafers.

Among Silex's strengths are experience built up with its own forms of through-silicon via (TSV) that it calls Silvia and Metvia depending on whether the conductor is silicon or metal. Silex is also introducing the use of lead-zirconate titanate as piezoelectric material for novel applications such as energy harvesting.

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