SEMICONDUCTOR INDUSTRY
UPDATE
November 2020
McIlvaine Company
TSMC's 3nm Factory Structure Construction Complete
Taiwan Semiconductor Manufacturing Co. has completed the construction of its
latest semiconductor fabrication plant in central Taiwan. The firm held a
traditional topping-out ceremony at the factory location, in Tainan's Southern
Taiwan Science Park. The plant sits on 35 hectares of land and boasts over
1,721,600 sq. ft. (160,000 square meters) of cleanroom area – approximately
equivalent to 22 football pitches.
Now the factory buildings are complete, TSMC has to prepare the factory and it
will be completing this next stage and moving in the necessary production
equipment over the next 12 to 18 months. This is not a trivial stage, with the
cleanrooms needed to maintain "extremely low levels of particulates, such as
dust, airborne organisms, or vaporized particles," notes Taiwan News.
At the topping off ceremony TSMC chairman, Mark Liu, said that the facility will
be world's most advanced logic process plant, and help maintain TSMC's
leadership. Once up to speed the Tainan plant will have a production capacity of
around 55,000 WPM – hopefully, that will be plenty to sate demand of its N3
output. This capacity will come online in H2 2022.
There are already 15,000 people working on the new 3nm plant. Once the facility
is fully operational it is expected that it will provide 20,000 steady jobs.
Such a large plant does not necessarily have a terrible impact on the
environment. TSMC is committed to green manufacturing and promotes energy
conservation, water conservation, waste and carbon reduction, and ecological
protection. It has pledged to use 100 per cent renewable energy by 2050.
In other recent TSMC news, it was reported that the contract chip maker was
working closely with both AMD and Google on 3D stacking technology. Again, the
first TSMC fabricated products using this technology are expected to emerge from
2022.
Asian Companies Expected to Lead 2020 Semi Capex
Most Chinese companies might be forced to cut capex spending, but TSMC is moving
ahead on its plans for an Arizona fab...
Samsung and other Asian companies are expected to lead semiconductor industry
spending on capex (capital expenditures) this year, which in total will grow by
about 8% to $87.2 billion, according to IC Insights.
Chipmakers generally brushed off the global coronavirus pandemic as a relatively
short-term disruption and continued with spending plans that will ultimately
affect their capacity and technology roadmaps for many years to come.
As in past years, Asian semiconductor companies are leading growth in capital
expenditures, but Samsung stands out among them for its growth in spending
sustained over a number of years. Samsung’s expected 24% capex increase in 2020
may help widen the gap between itself and Chinese competitors such as Yangtze
Memory Technologies Co. (YMTC), according to IC Insights President Bill McClean
in an email he provided to EE Times.
“Samsung’s level of spending over the past four years has been nothing short of
incredible. I believe that they are attempting to put so much distance between
themselves and the Chinese memory startups that it will be basically impossible
for them to catch up,” McClean said.
The increased spending by companies in Asia coupled with slowing spending by US
chipmakers has prompted an initiative by the American government to revive
investment in the U.S. on concerns that the nation is losing a competitive
advantage in an industry that’s critical for the economy and national security.
For 2021, IC Insights expects similar mid-single-digit growth. One thing that
will hold back growth in capex next year is the U.S. restrictions on sales of
chipmaking equipment to China. For example, in its third-quarter 2020 conference
call, Shanghai-based Semiconductor Manufacturing International Corp. (SMIC)
announced an $800 million reduction in its capex spending plans for this year
primarily due to the restrictions.
“It can be assumed that other Chinese companies will face similar challenges
next year,” McClean said. “We believe that in at least the short term (i.e.,
2021), the restrictions on equipment exports to China will continue under the
Biden Administration. Over the longer term, it is expected that U.S./China
relations will be less confrontational than they are now but not to a great
extent.”
Of the top-three capex spenders — Samsung, Taiwan Semiconductor Manufacturing
Co. (TSMC) and Intel — the American giant is the only company expected to cut
capex. It has been widely speculated that Intel may soon start outsourcing some
of its production to foundries such as TSMC or Samsung.
Earlier this month, TSMC’s board approved an initial $3.5 billion for its
planned chip fabrication plant in the U.S. state of Arizona. That is about a
quarter of the $12 billion total earmarked for the project, slated to open in
2024.
The Arizona plant is expected to have a capacity of 240K 300mm silicon wafers
per year when it opens, or about 1.4% of TSMC’s total capacity at about 17.7
million 300mm wafers per year, according to IC Insights.
That capacity suggests that the scale of the Arizona project is more about
appeasing the U.S. government than it is about creating a significant offshore
production base, IC Insights said.
It may be some time before the Creating Helpful Incentives to Produce
Semiconductors for America (CHIPS) Act helps boost capex for U.S. chip
companies.
At least initially, the CHIPS act would support U.S. IC manufacturing though
investment tax credits. Yet, with trillions of dollars going to help support the
U.S. economy during the COVID-19 pandemic, funds may be more difficult to come
by over the next few years to funnel into the CHIPS act.
“This is a program that is probably about 10 years late from having a huge
impact, but any additional funding will help the U.S. players that currently
have production fabs (e.g., ON Semiconductor, Analog Devices, TI,
GlobalFoundries, etc.),” McClean said.
Kioxia Corporation to Build New Fab7 Facility
in Japan
The new BiCS 3D NAND Fab facility will have an earthquake absorbing structure
and an environmentally friendly design
Kioxia Corporation has announced it will begin construction of a
state-of-the-art fabrication facility (Fab7) at Yokkaichi Plant in Mie
Prefecture, Japan to expand production of its proprietary 3D Flash memory BiCS
FLASH.
The construction of Kioxia Corporation's Fab7 facility is expected to commence
in the spring of 2021.
Due to technological innovation, the amount of data being generated, stored and
used around the world has increased exponentially. Furthermore, the flash memory
market expects further growth driven by cloud services, 5G, IoT, AI and
automated driving. As a result, the production of cutting-edge products in
Kioxia Corporation's Fab7 facility will continue to meet the increasing demand
for memory around the world.
The Fab7 facility will be built on the north side of Yokkaichi Plant, where land
development is underway.
In order to secure optimal production of advanced flash memory products, the
construction of Fab7 will be divided into two phases, with the first phase of
construction scheduled to be completed by the spring of 2022. Kioxia plans to
fund the capital investments for the construction of Fab7 from its operating
cash flow.
Consistent with Kioxia's successful 20-year partnership with Western Digital,
the two companies regularly collaborate on facility operation.
Accordingly, Kioxia and Western Digital expect to continue their joint venture
investments for the Fab7 facility.
The Fab7 facility will have an earthquake absorbing structure and an
environmentally friendly design that includes the latest energy saving
manufacturing equipment.
Located in Yokkaichi Plant, which offers the world's largest flash memory
production capacity, the Fab7 facility will further boost Kioxia's production
capacity by introducing an advanced manufacturing system that utilizes AI.
Qualcomm to Establish Research and Development Facility in Cork
Qualcomm Technologies, Inc. a wholly-owned subsidiary of Qualcomm Incorporated,
will establish a Research and Development facility in Cork City.
Qualcomm, headquartered in San Diego, California, and incorporated in Delaware,
is the world's leading wireless technology innovator and the driving force
behind the development, launch and expansion of 5G.
The 78 million-euro ($92.5 million) four-year investment is expected to create
hundreds of highly skilled engineering roles, adding to Qualcomm's global
workforce of around 20,000. The project, which is supported by the Irish
Government through IDA Ireland will add to the reputation of the Irish
semiconductor industry, and the country's strong reputation in microelectronics
R&D.
"We are excited about the new workplace in Penrose Dock. Not only are the
offices state of the art, but they also have specially purposed and designed
labs to enable continued ground-breaking security and validation work," Ajay
Bawale, VP, Engineering, Qualcomm Technologies, Inc. said.
Paul Kelleher, Sr. Director, Engineering for QT Technologies Ireland Limited and
the site lead for the new facilities in Cork added: "This city center location
will help us to attract the world-class engineering talent needed to fuel our
continued success."
Qualcomm Technologies' local affiliate moved into the new 49,500 sq. ft. (4,600
m2) facility at Penrose Dock in Cork City Centre last month and is recruiting
for roles in the ASIC areas of Digital, Analog, Machine Learning, Automotive,
CAD, Automation, System Validation, Advanced Design for new Technologies and
Software Engineering using leading-edge technologies to work on the next
generation of ASIC Chips.
"This is really welcome news for Cork. Ireland is known for being one of the
leading Research, Development and Innovation locations in the world and today's
announcement is further evidence of our strength in this area. This announcement
from Qualcomm to invest €78m to
establish a new Research and Development center in Cork, is expected to create
hundreds of highly-skilled roles over the next four years. Our skilled and
talented workforce allows companies like Qualcomm to embed and grow their
operations here," Tnaiste and Minister for Enterprise Trade and Employment Leo
Varadkar said.
CEO of IDA Ireland, Martin Shanahan added: "Qualcomm's new Research &
Development Centre in Cork will operate on the cutting edge of technological
innovation in Ireland. It is a terrific project for Cork and the South West
region, and demonstrates IDA Ireland's proven record of winning investments for
regional locations. This investment also significantly enhances the reputation
of the Irish semiconductor industry, adding to Ireland's strong standing in
microelectronics R&D."
Demand for plant construction is likely to be sustained for years, and is
expected to benefit building material and construction companies, as well as
some financial firms, Yuanta Securities Investment Consulting Co (元大投顧)
said.
There has been stable growth in construction loans, as purchases of land and
commercial buildings have been robust since last year.
Based on data released by the central bank on Oct. 26, construction loans grew
for an 18th straight month in September to a record NT$2.323 trillion (US$80.4
billion), and rose 16.09 percent from NT$2.001 trillion a year earlier.
An aerial photograph taken on Nov. 1 shows land and buildings in Taipei’s
Nangang District. Several listed companies have new construction projects in
Nangang, making it one of the hottest areas for developers in Taipei.
The annual growth in construction loans in September was higher than the annual
increase of 7.65 percent in housing loans for the same month and an indication
of solid demand for plant construction, said Yuanta analyst Lisa Chen.
“The
phase one and phase two construction projects in the Southern Taiwan Science
Park (南部科學園區)
have taken up 95 percent of the park’s land, with Taiwan Semiconductor
Manufacturing Co (TSMC,
台積電)
accounting for more than 50 percent of that and more new construction projects
planned in the next five years,” Chen said.
To rapidly expand its capacity, TSMC this year has spent nearly NT$10.01 billion
purchasing manufacturing facilities in Tainan from E-Ton Solar Co (益通光能),
Optimax Technology Corp (力特光電),
Gudeng Precision Industrial Co (家登)
and HannStar Corp (瀚宇彩晶),
the company has said in regulatory filings.
DUTCH INTEREST
As semiconductor plants in the science park have reached a significant scale,
Dutch semiconductor equipment maker ASML Holding NV has set up an office there
with 2,800 employees, Chen said.
The park has obtained government approval to launch its phase three expansion
project, in which it plans to acquire 92 hectares of land by 2023 to cope with
the boom in plant construction and demand from returning Taiwanese businesses,
she added.
BENEFICIARIES
“As
these projects are for Taiwanese companies, they are driving demand for
construction materials, as well as benefiting employment and housing demand in
southern Taiwan. Relocation of plants back to Taiwan from China will continue to
boost construction material demand even after 2021,” she said.
Construction material suppliers and construction companies, including Goldsun
Building Materials Co (國產建材實業),
Tung Ho Steel Enterprise Corp (東和鋼鐵),
Universal Cement Corp (環球水泥)
and Da Cin Construction Co (達欣工程),
would likely benefit from the demand for plant construction, Yuanta said.
Goldsun leads Taiwan’s ready-mixed concrete market with a market share of 17
percent; Tung Ho is the nation’s leading rebar and section steel supplier;
Universal Cement is a major ready-mixed concrete manufacturer in southern Taiwan
and a national leader in gypsum board manufacturing; and Da Cin’s business
mainly focuses on plant construction, with TSMC’s orders accounting for 40
percent of its revenue from this year to 2022, the investment consultancy said.
Meanwhile, rising housing and construction loans should be positive for
financial firms such as Taiwan Cooperative Financial Holding Co (合庫金控)
and First Financial Holding Co (第一金控),
as these two state-run companies have more exposure to this area of business
than their peers, Yuanta said.
Taiwan Semiconductor Manufacturing Company Approves US Subsidiary
Taiwan Semiconductor Manufacturing Company’s (TSMC) board approved the creation
of a US subsidiary with $3.5 billion in capital, as the company continues its
push to increase its presence in the country.
The subsidiary, which will be wholly owned by TSMC, will be set-up in Arizona –
a state where the company plans to begin the build of a $12 billion
semiconductor factory next year.
Aside from its forthcoming industrial plant, it has production facilities in
Washington and design centers in Texas and California.
Cree Ramps Hiring In Utica, Albany as Production Start Is Year Out
Cree Inc., the North Carolina semiconductor manufacturer building a new $1
billion factory near Utica, has started to hire for more positions in both Utica
and Albany.
The company has more than 20 jobs posted, including for a facilities operation
manager, senior process engineers, equipment technicians, as well as interns.
About 80% of staffing in Utica will be engineering and technical jobs.
The hiring comes as Cree will be able to start moving tools into the cleanroom
space by summer 2021. And the factory is on track to start production of its
first silicon carbide wafers in January 2022. Silicon carbide chips are an
emerging alternative to silicon in power semiconductors that can reduce the
charging time for, and increase the range of, electric vehicles, and can also be
used in solar inverters and 5G infrastructure.
The company has already started hiring. As of September, Cree had about 40
employees between Albany and Utica. Some work has been underway at SUNY
Polytechnic Institute in Albany on a pilot production line.
Cree has said it plans to have 270 jobs in Marcy by 2023 and over 400 jobs at
the factory by 2026. By 2029, Cree is expected to employ at least 614 people at
the facility.
Construction has moved along at the Utica factory despite the pandemic.
Structural work for the administrative building continues, and in some parts of
the main fab, interior work has begun. Exyte U.S. (formerly M+W Group) is the
general contractor on the project.
The factory is a $1 billion bet that the electric vehicle market will take off
over the next decade, and CEO Gregg Lowe has said that many of Cree's customers
will be ramping up their production right as the Utica factory goes online in
2022.
The company has been doubling down on this strategy. Last month, Cree announced
it is selling off equipment, inventory, intellectual property rights and other
assets related to its LED business to focus on its semiconductor operation,
known as Wolfspeed.
The Utica project will be a huge part of Wolfspeed's growth. Cree's total
project costs are estimated to be more than $1 billion, including $183 million
for design and construction, $300 million for facility fit out, and $522 million
for machinery and equipment, including some Cree already owns, according to
Empire State Development board documents.
The state plans to reimburse Cree with a $500 million grant, covering about half
the project's cost, as Cree meets certain goals. It is the largest project on
the Business Review's State Incentives List this year.
As part of the deal, Cree will own the factory. It is expected to sublease the
land for 49 years from Mohawk Valley EDGE, an economic development organization,
which in turn leases the land from SUNY.
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