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Japanese group proposes logic LSI foundry for semi industry

Posted: 26 Apr 2005 ?? ?Print Version ?Bookmark and Share

Keywords:system-on-chip? LSIs? consumer electronics? dvd?

Concerned with the declining presence of Japan in the system-on-chip LSI market, the Economic Research Institute in Japan has proposed to form an independent logic LSI foundry that would combine industry-wide human, financial and intellectual resources in Japan.

Also known as ERI, the Economic Research Institute is functioning as a think tank for the Ministry of Economy, Trade and Industry (METI) in Japan. It is urging the formation of the foundry by 2006 to catch the next upturn in the semiconductor market. The group will shortly publish a report proposing new strategies for the semiconductor and production equipment industries.

The group believes the need to establish the foundry gains urgency as consumer electronics, which use system-on-chip LSIs, gains in usage globally.

"The digital consumer electronics market grows worldwide, and more players are coming into the market from other areas outside of Japan. Japan had a large share but its share is dropping by being pushed out by these new players," said Koki Inoue, senior economist of Industry-Government Organization Policies at ERI.

Taiwanese Media Tek is a good example, added Inoue. iSuppli reported in January that Media Tek had became the top DVD device supplier, replacing Matsushita.

ERI's report said Matsushita and Sony's semiconductor businesses can probably survive as captive suppliers for their internal use. But merchant suppliers such as NEC Electronics and Renesas will face difficulty being cost competitive. Smaller scale manufacturers like Oki, Ricoh, Rohm, and manufacturers such as Sharp, Epson and Sanyo, which derive most of their revenue outside semiconductors, cannot afford to build their own 300mm fabs.

According to Inoue, the proposed foundry should receive funding from both venture capital and the supporting companies. It should be established as an independent enterprise so that it can deal with overseas fabless companies, as well as Japanese fabless companies and small-scale manufacturers.

If the foundry starts with a 65nm process in late 2006, it can go one generation ahead of Taiwanese foundries, said Inoue.

Separately, the Japan Electronics and Information Technology Industries Association (JEITA) is also studying the competitiveness of Japanese semiconductor industry.

Its think tank, the Semiconductor Industry Research Institute Japan (SIRIJ), has drawn the framework for a five-year joint R&D project that begins in 2006, integrating the MIRAI national project and private projects. SIRIJ is now hammering out the action plan based on the framework, slated to be announced in a few months.

- Yoshiko Hara

EE Times

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