SEMICONDUCTOR INDUSTRY

UPDATE

 

February 2017

 

McIlvaine Company

 

TABLE OF CONTENTS

 

Sequans Opens R&D Facility in Sophia Antipolis, France

Toshiba Builds Memory Fab, R&D Center in Japan

GlobalFoundries 12-inch Wafer Production in Chengdu Begins

Intel Announces $7 Billion Investment in Semiconductor Fab in Arizona

Fab Deals announced for China

Phoenix Semicon starts Phase 2 Expansion at Clark Plant

 

 

 

Sequans Opens R&D Facility in Sophia Antipolis, France

LTE for IoT chip maker Sequans Communications S.A. announced the opening of a new development site in Sophia Antipolis, on the Côte d’Azur, in the south of France. The new team currently includes ten engineers who will support Sequans’ core development of LTE semiconductor solutions for the Internet of Things (IoT).

 

“By establishing this facility in Sophia Antipolis, where there is a vibrant community of software and embedded systems engineering talent, we were able to efficiently strengthen our development capabilities to meet the requirements of our growing list of customers in the worldwide market phenomenon known as the Internet of Things,” said Georges Karam, Sequans CEO. “Establishing ourselves in Sophia Antipolis quickly with a proven team is an important step in implementing our long-term global R&D strategy. This choice has been made thanks to the personalized support of Team Côte d’Azur, the official investment promotion agency of the Côte d’Azur, which streamlined the process.”

 

“Our territory is already a welcoming land for companies who appreciate the quality of tech talent Côte d’Azur has to offer,” said Jean-François Chapperon, head of International Networks, Team Côte d’Azur.

 

Sequans recently released its newest LTE for IoT chip, an LTE-M / NB-IoT chip called Monarch, based on the latest LTE standard and highly optimized for IoT. In less than one year, Monarch has gone from introduction, to operator certification, to deployment, and has already been designed into numerous LTE for IoT devices.

 

The new facility in the south of France is Sequans’ eleventh site among its worldwide locations. The new team will work closely with Sequans main R&D engineering team at the company’s Paris headquarters.

 

Sequans Communications S.A. is a provider of single-mode 4G LTE semiconductor solutions for the Internet of Things (IoT) and a wide range of broadband data device

 

Toshiba Builds Memory Fab, R&D Center in Japan

Fab 6 will be dedicated to production of BiCS FLASH, Toshiba's 3D Flash memory, according to the company.

 

Toshiba has started the construction of a new semiconductor fabrication facility, Fab 6, and a new R&D center for its memory business at its main memory production base, the Yokkaichi Operations in Mie prefecture.

 

Fab 6 will be dedicated to production of BiCS FLASH, Toshiba's 3D Flash memory. Like Fab 5, construction will take place in two phases, allowing the pace of investment to be optimized against market trends, with completion of Phase 1 scheduled for summer 2018. Toshiba will determine installed capacity and output targets and schedules by closely monitoring the market.

 

Toshiba's memory R&D center will be built adjacent to the new fab, with completion targeting December 2017. The facility will advance development of BiCS FLASH and new memories, according to the company.

 

GlobalFoundries 12-inch Wafer Production in Chengdu Begins

Worldwide semiconductor wafer foundry leader GLOBALFOUNDRIES has published its global manufacturing business expansion plan. The company will continue investing in its wafer plants in the United States and Germany, expand its capacity in Singapore, and construct a facility to produce 12–inch wafers in Chengdu, China in order to satisfy Chinese and global demands for the company’s 22FDX technology.

 

According to the cooperation plan of the two parties, the Chengdu plant will start production in Q4 of 2018, with fabrication of the advanced 22FDX to begin in Q4 of 2019.

 

CEO of GLOBALFOUNDRIES, Sanjay Jha, indicated that, “From the world-class RF-SOI platform used for wireless Internet devices, to the technical roadmaps of the state-of-the-art FD-SOI and FinFET, they all serve as evidence of the market’s tremendous demands for our main staple and progressive technologies. The construction of the 12–inch wafer plant in the High and New Technology Development Area of Chengdu will be conducive to accelerating our expansion in the Chinese market.”

 

The High and New Technology Development Area of Chengdu is home to one of China’s most prominent IT industry clusters, hosting a plethora of global IT giants including Intel, Texas Instrument, AMD, MediaTek, Dell, Lenovo and Foxconn, as well as 115 of the Fortune Global 500 companies. In 2016, the High and New Technology Development Area posted total trade amounting to USD 24.9 billion.

 

On the same day, GLOBALFOUNDRIES also unveiled its brand new trade name for the Chinese market: “Ge Xin“, and announced the establishment of a new joint venture — Gexin (Chengdu) Integrated Circuit Manufacturing Co., Ltd. In Chinese, the name “Ge Xin” shares the same pronunciation as the Chinese word for “innovation” and signifies rebirth, reinvigoration and reform.

 

Intel Announces $7 Billion Investment in Semiconductor Fab in Arizona

Intel Corporation announced plans to invest more than $7 billion to complete Fab 42, a project Intel had previously started and then left vacant. The high-volume factory is in Chandler, Ariz., and is targeted to use the 7 nanometer (nm) manufacturing process. The announcement was made by U.S. President Donald Trump and Intel CEO Brian Krzanich at the White House.

 

Intel Corporation on Tuesday, Feb. 8, 2017, announced plans to invest more than $7 billion to complete Fab 42. On completion, Fab 42 in Chandler, Ariz., is expected to be the most advanced semiconductor factory in the world.

 

According to Intel’s official press release, the completion of Fab 42 in 3 to 4 years will directly create approximately 3,000 high-tech, high-wage Intel jobs for process engineers, equipment technicians, and facilities-support engineers and technicians who will work at the site. Combined with the indirect impact on businesses that will help support the factory’s operations, Fab 42 is expected to create more than 10,000 total long-term jobs in Arizona.

 

Mr. Trump said of the announcement: “The people of Arizona will be very happy. It’s a lot of jobs.”

 

There will be no incentives from the federal government for the Intel project, the White House said.

 

Context for the investment was outlined in an e-mail from Intel’s CEO to employees.

“Intel’s business continues to grow and investment in manufacturing capacity and R&D ensures that the pace of Moore’s law continues to march on, fueling technology innovations the world loves and depends on,” said Krzanich. “This factory will help the U.S. maintain its position as the global leader in the semiconductor industry.”

 

“Intel is a global manufacturing and technology company, yet we think of ourselves as a leading American innovation enterprise,” Krzanich added. “America has a unique combination of talent, a vibrant business environment and access to global markets, which has enabled U.S. companies like Intel to foster economic growth and innovation. Our factories support jobs — high-wage, high-tech manufacturing jobs that are the economic engines of the states where they are located.”

 

Intel is America’s largest high-technology capital expenditure investor ($5.1 billion in the U.S. 2015) and its third largest investor in global R&D ($12.1 billion in 20151). The majority of Intel’s manufacturing and R&D is in the United States. As a result, Intel employs more than 50,000 people in the United States, while directly supporting almost half a million other U.S. jobs across a range of industries, including semiconductor tooling, software, logistics, channels, OEMs and other manufacturers that incorporate our products into theirs.

 

The 7nm semiconductor manufacturing process targeted for Fab 42 will be the most advanced semiconductor process technology used in the world and represents the future of Moore’s Law. In 1968, Intel co-founder Gordon Moore predicted that computing power will become significantly more capable and yet cost less year after year.

 

The chips made on the 7nm process will power the most sophisticated computers, data centers, sensors and other high-tech devices, and enable things like artificial intelligence, more advanced cars and transportation services, breakthroughs in medical research and treatment, and more. These are areas that depend upon having the highest amount of computing power, access to the fastest networks, the most data storage, the smallest chip sizes, and other benefits that come from advancing Moore’s Law.

 

After the announcement, President Trump tweeted his thanks to Krzanich, calling the factory a great investment in jobs and innovation. In his email to employees, Krzanich said that he had chosen to announce the expansion at the White House to “level the global playing field and make U.S. manufacturing competitive worldwide through new regulatory standards and investment policies.”

 

“When we disagree, we don’t walk away,” he wrote. “We believe that we must be part of the conversation to voice our views on key issues such as immigration, H1B visas and other policies that are essential to innovation.”

 

During Mr. Trump’s presidential campaign, Krzanich had reportedly planned a Trump fundraiser event and then cancelled following numerous controversial statements from Trump regarding his proposed immigration policies. Intel has continued to be critical of the Trump administration’s immigration policies, joining over 100 other companies to file a legal brief challenging President Trump’s January 27 executive order which blocked entry of all refugees and immigrants from seven predominantly Muslim countries. Recently, Krzanich took to Twitter to criticize the order, voicing the company’s support of lawful immigration.

 

In 2012, Paul Otellini, then Intel’s CEO, made a similar promise about Fab 42 in the company of Obama, during a visit to Hillsboro, Oregon.

 

Fab Deals announced for China

GlobalFoundaries announced a $10B project to build an advanced semiconductor manufacturing plant in the central Chinese city of Chengdu. The timing of the deal’s announcement – two days after Intel and President Trump jointly announced Intel’s plans to spend $7B on a U.S. based fab – is interesting. The battle for preeminence in chip technology has been heating up in recent years with China striving to become more technology independent and a leader in computer technology.

 

An article in the New York Times (Plan for $10 Billion Chip Plant Shows China’s Growing Pull) suggests the announcement is more evidence of the shift of semiconductor technology’s center of gravity towards China. The U.S., under President Obama, enacted trade restrictions on some high-end Intel processors. At least partly in response, China built the Sunway Taihulight, currently on top of the Top500 list, using home-grown components.

 

President Trump further riffled the waters with provocative statements discounting China’s long-held One China policy in which Taiwan is seen as a part of China. Trump reversed himself on that issue.

 

GlobalFoundaries is based in California. Noteworthy, process details for new fab were not spelled out although it is not expected to be cutting edge.

 

According to the article, China will spend about $100 billion to bring chip factories and research facilities to China. “Almost all of the large semiconductor enterprises in the United States have received investment offers from Chinese state actors,” according to a report from the Mercator Institute for China Studies, a think tank based in Germany. The report added that China’s newest industrial policy, Made in China 2025, had named semiconductors as a crucial area to improve.

 

The Times also reported:  “Jason Gorss, a GlobalFoundries spokesman, declined to provide financial details but said in an email that “industry analysts estimate that the total cost of an advanced semiconductor fab is on the order of $10B and this fab will be in that range.” It is not clear how much investment is being provided by the company and how much by the Chengdu government.” The article, written by Paul Mozur, looks at the shifting landscape.

 

Phoenix Semicon starts Phase 2 Expansion at Clark Plant

Semiconductor maker Phoenix Semiconductor Philippines Corp. (PSPC) said it has started construction of the second phase of its expansion project for its manufacturing facility at Clark Freeport, Pampanga in order to cater to more clients.

 

In a disclosure to the Philippine Stock Exchange, PSPC said the Phase 2 expansion project is to expand manufacturing capacity in 2017 for clients other than its major client South Korean tech giant Samsung Electronics Co. Ltd.

 

The second phase of the expansion involves the construction of a 193,680 sq. ft. (18,000-square-meter) manufacturing facility and a new 1,000-sqm warehouse as well as the expansion of its power utility building — all set for completion in August this year.

“The commencement of the Phase 2 project is a clear testament to the commitment of PSPC and its major shareholder, SFA Semicon Co. Ltd. of Korea, to continue with its investments and to expand its presence in the Philippines,” PSPC President Byeongchun Lee said.

Lee said PSCP is in advanced stages of negotiations with new customers that will take up the initial production capacity of the manufacturing facility under the Phase 2 project. He said the new facility will also house production capacity for SFA Semicon’s semiconductor assembly and packaging contracts.

 

He said this is in line with the group’s global manufacturing realignment strategy which plans to see PSPC diversifying to mobile semiconductor products while keeping its strong relationship with main client Samsung.

“PSPC is foreseen to be a manufacturing hub of the SFA group in Asia, providing state of the art semiconductor assembly services to Samsung and other electronics companies around the world,” Lee said.

 

Construction and foundation works have already started despite the pending finalization of the building’s architectural and engineering plans and the signing of a main construction contract.

After the August completion of Phase 2, the company will ramp up construction of production equipment, ancillary and support facilities.

 

The Phase 2 expansion will be financed by funds raised from PSPC’s December 2014 initial public offering (IPO) as well as from retained earnings in 2015 and 2016.

 

The project had been planned to start alongside the IPO but was delayed due to a slowdown in the global semiconductor industry. PSPC now anticipates a recovering global industry in 2017.

Established in February 2011, PSPC is the local subsidiary of South Korean semiconductor giant STS Semiconductor, which supplies memory chips for Samsung. The parent STS Semiconductor also has a presence in China through unit PSTS.

PSPC’s semiconductor products are used in various applications such as memory chips and devices for computers, laptops and servers, and micro SD cards for mobile phones.

 

McIlvaine Company

Northfield, IL 60093-2743

Tel:  847-784-0012; Fax:  847-784-0061

E-mail:  editor@mcilvainecompany.com

Web site:  www.mcilvainecompany.com