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Euro fabs take niche path to avoid TSMC

Posted: 02 Jul 2007 ?? ?Print Version ?Bookmark and Share

Keywords:foundry services? European foundries? CMOS technology? TSMC?

Even as Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) prepares to roll out a series of 45nm manufacturing process variants, the world's leading foundry is pursuing a two-pronged strategy that is putting increasing pressure on its European competitors.

Foundries in Europe are finding plenty of business at the 0.35?m through 0.18?m manufacturing nodes, picking up customers that find advanced processing too expensive and more than they need. But TSMC also serves customers at the trailing edge, pursuing a "winner-take-all" game plan.

Indeed, TSMC is investing in increasing 0.18?m manufacturing even as it seeks to bring out its 45nm process in more varieties and in a shorter time than previous nodes. As a result, foundries such as austriamicrosystems AG, Tower Semiconductor Ltd and X-Fab Semiconductor Foundries AG are looking to turn a profit in niche markets where specialized technologies may give them an edge.

Executives from all the foundries attended last May's IET & FSA International Semiconductor Forum in France.

Node nudge
"We see a breadth of applications that require more advanced technologies," said Charles Byers, TSMC's director of worldwide brand management and corporate marketing. At TSMC, "45nm is in development today, and production will start in September 2007. The next step will be 32nm in 2009. We are also in the research mode for 22nm and below."

Byers said that TSMC's 45nm process includes 193nm immersion photolithography, strained silicon and ultralow-k intermetal dielectric material with a dielectric constant pushed down to 2.5.

"The transition to 45nm will not be technically difficult," continued Byers. "The multiplicity of advanced technological processes goes with the concurrent development of the design ecosystem."

Most notably, TSMC will introduce embedded memory and mixed-signal/RF variants of 45nm soon after the release of the initial low-power process and before general-purpose and high-performance processes.

In TSMC's 45nm process rollout, mixed-signal leads low-power and embedded memory applications.

"There is basically a two-speed market," said Rafi Nave, chief technology officer of Tower. "Companies such as Xilinx and Qualcomm need very large capacity that can only be available from big foundries. Besides, if their products are primarily digital, they require advanced process technologies to remain competitive."

In contrast, Nave said that he sees little interest among analog product makers in moving to 90nm and below, since the customer would pay extra money without having the benefit of smaller chip area.

But TSMC also offers analog, mixed-signal and RF manufacturing at 0.35?m through 180nm and down to 65nm. In fact, TSMC is pursuing many of the same applications as austriamicrosystems, Tower and X-Fab.

"A lot of applications are in 0.18?m. We plan to expand the capacity in our Shanghai fab this year," said Kees Den Otter, VP of TSMC Europe.

Temporary relief
To keep up, European foundries are seeking to diversify their businesses into niche applications such as MEMS or plastic electronics, where TSMC and other major foundries may not wish to competefor now.

X-Fab, which was the No. 10 foundry in 2006, according to Gartner Inc., concentrates on supporting technologies such as analog, mixed-signal, high-voltage, optoelectronics, MEMS and sensors.

Commenting on the need for diversification, Roy Starr, X-Fab's European sales manager, said, "Our R&D investments are not directed toward advanced technologies, but aim to identify and penetrate niche markets."

Following a similar track, Tower has emphasized specialized technologies in targeted vertical markets, including CMOS image sensors, mixed-signal and RF CMOS, embedded non-volatile memory and power management ICs.

Specialized techs
Nave said the product mix in Tower's Fab 1 has shifted toward specialized technologies. Fab 2, which is due to ramp up from 15,000 to 24,000 wafer starts a month next quarter, is being driven to follow the same pattern.

The areas of interest for austriamicrosystems include sensors and sensor interfaces, high voltage and power management. According to senior VP Peter Gasteiner, power management has become a key area for austriamicrosystems.

To remain competitive, austriamicrosystems is also teaming with big partners. It will work with IBM Corp. on a 0.35?m high-voltage CMOS technology already in use by austriamicrosystems and use it to enhance IBM's 180nm RF CMOS process technology.

- Anne-Francoise Pele
EE Times

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