SEMICONDUCTOR INDUSTRY
UPDATE
July 2020
McIlvaine Company
Foxconn Breaks Ground for New Chip Plant in China
Winbond Slows Fab Construction
ON Semiconductor to Explore Sale of Niigata
Manufacturing Facility
TSMC Boosts CapEx on Strong 5G, HPC Demand
GLOBALFOUNDRIES to Acquire Land in NY for Advanced Manufacturing Facility
Foxconn Breaks Ground for New Chip Plant in China
Foxconn Electronics (Hon Hai Precision Industry) recently broke ground for an
advanced semiconductor assembly and test plant in Qingdao, northeast China.
Foxconn plans to invest a total of CNY60 billion (US$8.6 billion) in the new
plant project, according to sources familiar with the matter. China’s
state-backed Rongkong Group will be co-financing the project.
Foxconn’s new Qingdao plant will be dedicated to providing advanced packaging
technologies, such as fan-out, and wafer-level bonding and stacking, for chip
solutions for use in 5G and AI related device applications, sources indicated.
The plant will be ready for production in 2021 and scale up its output to
commercial levels by 2025.
Foxconn’s new advanced backend plant in Qingdao is designed for monthly capacity
of 30,000 12-inch wafers, the sources said.
Foxconn in 2017 set up a semiconductor subgroup to consolidate resources to grow
its semiconductor business. The new Qingdao plant is believed to be part of
Foxconn’s efforts to strengthen its deployments in the semiconductor field.
Over the past two years, Foxconn struck deals with China’s local governments in
Zhuhai, Jinan and Nanjing regarding its participation in the local chipmaking
sectors.
Winbond Slows Fab Construction
Although the memory market looks to be heading towards a recovery in 2020,
suppliers are cautious about expanding supply. Winbond is building a new plant
in Kaohsiung, southern Taiwan, with completion originally slated for year-end
2020 and commercial production for 2021. But now the company has now rescheduled
equipment move-in to January 2022. Meanwhile, ASE reportedly is the one
providing semiconductor backend services for packaging Qualcomm's freshly
launched Arm-based processors for notebooks.
Winbond slowing down new fab construction: Specialty DRAM and flash memory
chipmaker Winbond Electronics is slowing down constructing and equipping its new
12-inch wafer plant in Kaohsiung, southern Taiwan, according to company chairman
Arthur Chiao.
ASE reportedly grabs SiP orders for new Qualcomm PC processor: Qualcomm has
launched new Arm-based processors for notebooks. Among the chips, the new
Snapdragon 7c series designed for entry-level devices reportedly adopts ASE
Technology's system-in-package (SiP) services to integrate multiple chips into
one single package to help OEMs lower their R&D costs.
ON Semiconductor to Explore Sale of Niigata
Manufacturing Facility
ON Semiconductor Corporation (Nasdaq: ON), driving energy efficient innovations,
announced it is exploring a sale of its manufacturing facility in Niigata,
Japan. The intended sale of Niigata facility is part of the company’s plan to
optimize its manufacturing footprint and sharpen its focus on highly
differentiated power, analog and sensor products. The company will begin
searching for strategic buyers to enter into a mutually beneficial arrangement
that is expected to facilitate an orderly transition of products from its
facility in Niigata to other facilities in its network.
The Niigata facility is an automotive qualified facility, which meets the IATF
16949 global industry standard for quality management. The company believes that
the facility is an attractive semiconductor manufacturing asset. The site is run
by a highly skilled and productive workforce capable of managing a large mix of
technologies.
The Niigata facility consists of two co-located wafer fabs with 215,000 square
feet of cleanroom space, located on a 40 acre campus with 1.1 million square
feet of building space. The large campus, existing infrastructure and capability
of eight inch wafer manufacturing provide potential buyers a compelling growth
opportunity. Currently, the facility supports the company’s BCD, BiCMOS, CMOS,
Discrete and Smart Discrete technologies.
ON Semiconductor remains committed to growing its presence in Japan, and the
company recently added a large eight-inch wafer fab in Aizu to its manufacturing
footprint. ON Semiconductor plans to continue to invest in its various
functional groups, such as field service, research and development, solution
engineering centers, and manufacturing plants to better serve its customers in
Japan.
About ON Semiconductor:
ON Semiconductor (Nasdaq: ON) is driving energy efficient innovations,
empowering customers to reduce global energy use. The company is a leading
supplier of semiconductor-based solutions, offering a comprehensive portfolio of
energy efficient power management, analog, sensors, logic, timing, connectivity,
discrete, SoC and custom devices. The company’s products help engineers solve
their unique design challenges in automotive, communications, computing,
consumer, industrial, medical, aerospace and defense applications. ON
Semiconductor operates a responsive, reliable, world-class supply chain and
quality program, a robust compliance and ethics program, and a network of
manufacturing facilities, sales offices and design centers in key markets
throughout North America, Europe and the Asia Pacific regions.
TSMC Boosts CapEx on Strong 5G, HPC Demand
Taiwan Semiconductor Manufacturing Co. (TSMC) has increased its capital
expenditure plan for this year by about $1 billion to an amount ranging from $16
billion to $17 billion on the improved expectation that demand for 5G phones and
high-performance computing (HPC) products will boost sales in 2020 and for the
next few years.
In the third quarter of 2020, the world’s largest chipmaker by market valuation
expects strong orders from customers such as Apple and MediaTek for its 5nm and
7nm products, driven by applications in 5G smartphones, HPC and IoT.
In the near future, the company that is a bellwether for the electronics
industry still faces headwinds. The coronavirus pandemic will continue to
disrupt consumer demand, and TSMC expects weakness in smartphone shipments
compared with a year ago. Moreover, a ruling from the U.S. Department of
Commerce to halt TSMC’s sales to China’s Huawei will probably crimp demand
during the rest of this year.
The overall semiconductor market will be flat to slightly up during the rest of
2020, according to TSMC. During 2020, growth for the foundry segment that TSMC
dominates will be in the mid to high-teens percentage range, while TSMC will
outperform its peers with revenue growth exceeding 20 percent, the company said.
CC Wei, “In the mid to long term, we believe the underlying megatrends of 5G and
HPC applications remain intact,” said TSMC Chief Executive Officer CC Wei in a
Taiwan event to announce the company’s 2020 second-quarter results. “The supply
chain can adjust and rebalance.”
The company is optimistic that the U.S. government will relax its restrictions
on chipmakers that use U.S. equipment and design tools to supply semiconductors
to Huawei subsidiary HiSilicon, which has been blacklisted by the administration
of U.S. President Donald Trump.
No new orders from Huawei
TSMC has been caught in the middle of the trade war between the U.S. and China,
TSMC Chairman Mark Liu said about a month ago. Those restrictions apply equally
to TSMC and competitors such as Samsung of South Korea and Semiconductor
Manufacturing International Corp. (SMIC) of China.
TSMC has not taken any new orders from Huawei since May 15 this year, and it
does not plan to ship any silicon wafers made for the Chinese telecom giant
after Sept. 15, TSMC Chairman Liu said.
The company’s guidance for this year is an indication that TSMC should be able
to fill the shortfall from Huawei with new orders from other customers, he said.
As of May, Huawei accounted for about 15 percent of TSMC’s overall sales.
Huawei may remain an indirect customer of TSMC.
Current Commerce Department regulations do not prohibit sales of general chip
products to Huawei, according to Liu. He said Huawei may choose to stay in the
smartphone business by using standard products supplied by third parties.
TSMC said that it cannot rule out the possibility of an inventory correction as
Huawei and other companies in its ecosystem cut orders after stockpiling chips
in expectation of the U.S. Department of Commerce crackdown.
In the meantime, TSMC has started 5nm production and continues to improve yields
from its extreme ultraviolet (EUV) tools. The company expects a strong ramp of
5nm during the second half of 2020 driven by demand for 5G and HPC applications.
TSMC forecast that 5nm will contribute to about 8 percent of its overall revenue
this year.
The company said it will introduce 4nm early in 2021 as an extension of its 5nm
node, with compatible design rules and highly competitive cost advantages
compared with 5nm. Volume production of 4nm will start in 2022.
TSMC plans to start volume production of its new 3nm node in the second half of
2022.
No updates on Arizona fab
The company had no updates on its plan to build a 5nm chip plant in Arizona with
support from that state and the U.S. federal government.
The facility is expected to have a 20,000 wafer-per-month capacity, create over
1,600 jobs directly and thousands more indirect jobs.
TSMC is working closely with the U.S. federal government and the state of
Arizona as well as its supply chain partners to build the new facility and
overcome the cost gap compared with its chip facilities in Taiwan, Wei said. The
plant will start production in 2024, he added.
Bills that were introduced in the U.S. Senate to revive the American
semiconductor industry after TSMC and the U.S. government announced the Arizona
fab plan are “well aligned” with TSMC’s plan, Chairman Liu said.
GLOBALFOUNDRIES to Acquire Land in NY for Advanced
Manufacturing Facility
Land purchase option increases Fab 8 footprint for future development to support
growing client and U.S. government technology development needs
GLOBALFOUNDRIES, the specialty foundry and the leading U.S. pure-play
manufacturer of semiconductors, has announced it has secured a purchase option
agreement for approximately 66 acres of undeveloped land adjacent to its most
advanced manufacturing facility, Fab 8, in Malta, N.Y., near the Luther Forest
Technology Campus (LFTC).
The land parcel is located at the southeast end of the New York State Energy
Research and Development Authority (NYSERDA) Saratoga Technology + Energy Park
(STEP) campus, adjacent to Stonebreak Road Extension, between GF's Fab 8
facility and Hermes Road. Exercising the option to purchase the land and
commencement of development to expand GF's Fab 8 facility will be subject to
zoning regulations and client demand. The parcel is being sold at Fair Market
Value, with a purchase price determined by an independent appraiser.
“Amid growing consensus in our nation's capital for investment in semiconductor
manufacturing, it's more important than ever that we are ready to fast track our
growth plans at GLOBALFOUNDRIES' most advanced manufacturing facility in the
U.S.," said Ron Sampson, senior vice president and general manager of U.S. Fab
Operations at GF. “With this agreement option, we now have additional
flexibility to expand our footprint and position Fab 8 for future growth in
Saratoga County and New York State, while strengthening U.S. leadership in
semiconductor manufacturing."
"GLOBALFOUNDRIES continues to demonstrate its commitment to economic growth in
Saratoga County and Upstate New York," said Darren O'Connor, Malta's Town
Supervisor. "I am pleased to hear that this latest step will enable future
growth opportunities for GLOBALFOUNDRIES for years to come.”
GF employs nearly 3,000 people and has invested over $13 billion in Fab 8, its
most advanced manufacturing facility in upstate New York. The company recently
announced it is bringing its most advanced Fab 8 facility in upstate New York
into compliance with both the U.S. International Traffic in Arms Regulations
(ITAR) standards and the highly restrictive Export Control Classification
Numbers (ECCNs) under the Export Administration Regulations (EAR).
McIlvaine Company
Northfield, IL 60093-2743
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