India's fab project fails to attract big chip players

Two consortia, led by Hindustan Semiconductor Manufacturing Corp. and Jaypee Associates, remain the top contenders to construct and equip proposed wafer fabrication facilities in India. No large semiconductors manufacturers have emerged as leaders for the project. HSMC is working with STMicroelectronics and Silterra, while Jaypee is collaborating with IBM Microelectronics and Tower Semiconductor.

Under the current proposals, Jaypee has tied up with IBM and Tower Jazz and has proposed a facility in Greater Noida with an investment of Rs 26,300 crore, while HSMC has partnered with ST Microelectronics and Silterra and has planned its unit at Prantij near Gandhinagar in Gujarat with an investment of Rs 25,250 crore.

India is trying to create an electronics manufacturing ecosystem to prevent the loss of billions of dollars of foreign exchange in such imports every year. This bill, expected to reach $55 billion (aboutRs 3.4 lakh crore) by 2020 from about $7 billion (Rs 43,600 crore) now, is projected to outstrip oil imports, according to a report commissioned by the industry lobby India Electronics and Semiconductor Association last year.

According to two government officials, the Department of Electronics and Information Technology (DeitY) has received only two new proposals - one by Interactivity Group (supported by a group of IIT alumni) and another by APSTL, an Arizona-headquartered technology firm. Even though an empowered committee set up to evaluate all the proposals is still studying them, an official said it is unlikely something concrete will come out of the two new applications.

With the government's support for setting up the fab firming up at about 40 per cent of the total cost, officials were keen on figuring out if other chipmakers could also be enticed to show interest.

Typically, setting up a chip foundry costs around $4-5 billion (Rs 24,800-31,000 crore). "The idea was, with the incentives firmed up, could we push the fence-sitters off the fence, but that didn't happen," the industry executive said. The deadline to submit initial plans in the fab under a separate call for expressions of interest ran out in November, and there have been no new viable plans submitted other than the two the government had already approved in-principle.

However, a lack of interest the second time around as well underlines the concerns about the feasibility of setting up fab units in the country. Experts argue the long-gestation period and the technology mandates of the government may diminish the usefulness of the projects when they finally come up. The facilities are expected to start production only sometime in 2017.

India Plans To Build 2 Wafer Fabs

The government of India on Thursday approved "in principle" a plan to construct and equip two wafer fabrication facilities in the country, in a move designed to reduce India's reliance on imported semiconductors. Two consortia will go ahead with the twin fab projects. One is led by STMicroelectronics, an integrated device manufacturer, and the other is spearheaded by Tower Semiconductor, a silicon foundry. These companies will add their names to list of VLSI companies in India and boost the manufacturing capability.

"The Cabinet has given in-principle approval for setting up of semiconductor wafer fabrication manufacturing facilities," Information and Broadcasting Minister Manish Tewari told reporters after a meeting of the Union Cabinet, chaired by Prime Minister Manmohan Singh.

After considering proposals from two consortia, the government took the decision. The government received proposals from two consortiums to set up chip fabrication units in the country. One was led by Israel's Tower Jazz and the other was led by Geneva–based chipmaker STMicroelectronics.

Israel-based foundry chipmaker Tower Semiconductor Ltd, which operates under the brand name TowerJazz, partnered with IBM and Indian infrastructure conglomerate Jaypee Associates to build and operate a 300mm chip facility in India. On the other hand, STMicroelectronics partnered with Hindustan Semiconductor Manufacturing Corp. (HSMC).

Welcoming the government's decision, India Electronics & Semiconductor Association (IESA) President PVG Menon said, "The IESA deems the fab a highly strategic game changer for India. Some of the world's leading economies including the USA, France, Germany, Ireland, Japan, Singapore, Taiwan and China besides a number of developing economies like Malaysia and Israel have their own fabs. These fabs continue to contribute significantly to the growth and development of the economy of their respective countries and we hope that this would be the case in India as well."

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How 450mm wafers will change the semiconductor industry

The semiconductor industry's transition to making chips on 450-millimeter wafers is better described as a "transformation," Jonathan Davis of Semiconductor Equipment and Materials International writes. "The shift to 450mm will take a several years to manifest and numerous complexities are being skillfully managed by multiple organizations and consortia," he writes, adding, "However, once the changeover occurs, in hindsight, most in the industry will recognize that they participated in something transformational."

Even for the segments that continue manufacturing semiconductor devices on 300mm and 200mm silicon wafers, the industry will change dramatically with the introduction of 450mm wafer processing. The 450mm era will impact industry composition, supply chain dynamics, capital spending concentration, future R&D capabilities and many other facets of today’s semiconductor manufacturing industry — not the least of which are the fabs, wafers and tools with which chips are made.

The shift to 450mm will take a several years to manifest and numerous complexities are being skillfully managed by multiple organizations and consortia.   For those reasons, the evolutionary tone of “transition” seems appropriate. However, once the changeover occurs, in hindsight, most in the industry will recognize that they participated in something transformational.

No transformation occurs in isolation and other factors will contribute to the revolutionary qualities of 450mm.  Market factors, new facilities design, next generation processing technology, the changing dynamics of node development and new materials integration will simultaneously affect the industry landscape.

While reading about the implications of 450mm is valuable, I believe that there is much to learn by being a part of the discussion. How is this future transformation being envisioned and acted on today?  I hope that you will join us — at our “live” event, where you will have the opportunity to hear first-hand information… direct from well-informed experts in the industry.

Potential revisions in the 450mm wafer specification are under consideration.  At least two issues are currently being evaluated by the industry and both portend significant ramifications for wafer suppliers, equipment makers and those technologies that interface with the wafer.

First, the wafer orientation method may be revised to eliminate the orientation “notch” on the perimeter of the substrate. The notch was introduced in the 300mm transition as an alternative to the flat.  However, both equipment suppliers and IC makers, through a constructive and collaborative dialog, have concluded that eliminating the notch can potentially improve the die yield, tool performance and cost.

Secondly, reduction of the wafer edge exclusion area — that peripheral portion of the silicon on which no viable device structure occurs — also offers potential yield advantages.  The current 450mm wafer specification (SEMI E76-0710), originally published in 2010, calls for a 2mm edge exclusion zone.  IC makers believe that reduction of this area to a 1.5mm dimension offers the cost equivalence of a 1 percent yield increase.  Though a percent may sound trivial, it is represents substantial increased value over time.

Along with cost and efficiency improvements, IC makers and consortia driving the transition to 450mm manufacturing expect to achieve similar or better environmental performance. Larger footprints and resource demands from 450mm facilities in conjunction with mandates for environmentally aware operations are compelling fabs and suppliers to consider sustainability and systems integration at greater levels than ever before.

Experts in fab facilities, energy, water and equipment engineering will discuss the implications of 450mm to environment, health and safety during the SEMICON West 450mm Manufacturing EHS Forum on Wednesday, July 10.

Included in the presentations are perspectives from the Facility 450 Consortium (F450C) including Ovivo, Edwards and M+W Group.  A holistic Site Resource Model that provides semiconductor manufacturers visibility into effective reduction of total energy and water demands for individual systems, as well as for the entire facility will be reviewed by CH2M Hill. The model is an integrated analytical approach to assess and optimize a semiconductor facility’s thermal energy, electrical energy, and water demand, as well as the cost associated with these resources.

India needs homegrown wafer fabs for its electronics

The government of India is offering up to $2.75 billion in incentives for the construction and equipping of the country's first wafer fabrication facility. India imported $8.2 billion in semiconductors last year, according to Gartner. Getting its own wafer fab is said to present a number of challenges to India, especially in the necessary infrastructure and an ecosystem of suppliers.

The domestic purchasing mandate, known as the “preferential market access” policy, seeks to address a real problem: imports of electronics are growing so fast that by 2020, they are projected to eclipse oil as the developing country’s largest import expense.

India’s import bill for semiconductors alone was $8.2 billion in 2012, according to Gartner, a research firm. And demand is growing at around 20 percent a year, according to the Department of Electronics and Information Technology.

For all electronics, India’s foreign currency bill is projected to grow from around $70 billion in 2012 to $300 billion by 2020, according to a government task force.

Read more…

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India fab decision likely this quarter

BANGALORE, India—A decision on the long-pending proposal to set up a domestic wafer fab in India is likely to be made by the end of March, semiconductor industry executives said.
India has been debating building a wafer fab for years. A decision on whether to move forward with a plan to build a fab here had been promised by the end of 2012. But that deadline came and went with no decision made.

Still, semiconductor industry executives here said they are now far more confident that a decision on the plan by India's national government is imminent. Their optimism is based on some policies conducive to domestic electronics manufacturing being adopted last year, with still others in the works.

"Electronics manufacturing is being looked at more progressively," a representative of the India Semiconductor Association (ISA) said here Tuesday (Jan. 22).

A study conducted by the ISA and market researcher Frost & Sullivan on this market projected a compound annual growth rate of nearly 10 percent for India's electronics, system design and manufacturing market from 2011 through 2015. The market is expected to grow to $94.2 billion in 2015 from $66.6 billion in 2011, according to the study.

"This is a fantastic growth rate and should show the way to product development and value-added manufacturing domestically, rather than relying on imports and low value-added screwdriver assembly," the ISA said.

Fears loom over the import bill for electronic products though, with 65 percent of India's demand currently being met by imports.

Another worry is the projected decline in high value-added manufacturing within the country. Of the total electronics market of $44.81 billion in 2012, high value-added domestic manufacturing was just $3.55 billion. The ISA is concerned that this decline in high value-manufacturing will cause a cumulative opportunity loss of a whopping $200 billion by 2015.

India’s semiconductor market revenue was an estimated $6.54 billion in 2012. The country's semiconductor design industry is expected to grow at a 17 percent CAGR, amounting to over $10 billion in 2012. Of this, VLSI design accounted for $1.33 billion, embedded software for $8.58 billion and board/hardware design for $672 million.

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SEMI Industry spending $32.4B this year on IC gear

Fab equipment spending saw a drastic dip in 2H12 and 1Q13 is expected to be even lower, says SEMI, which reckons that the projected number of facilities equipping will drop from 212 in 2012 to 182 in 2013.

Spending on fab equipment for System LSI is expected to drop in 2013. Spending for Flash declined rapidly in 2H12 (by over 40 %) but is expected to pick up by 2H13. The foundry sector is expected to increase spending in 2013, led by major player TSMC, as well as Samsung and Global foundries.

Fab construction:
While fab construction spending slowed in 2012, at -15%,  SEMI  projects an increase of 3.7 % in 2013 (from $5.6bn in 2012 to $5.8bn  in 2013).

The report tracks 34 fab construction projects for 2013 (down from 51 in 2012).  An additional 10 new construction projects with various probabilities may start in 2013. The largest increase for construction spending in 2013 is expected to be for dedicated foundries and Flash related facilities.

Many device manufacturers are hesitating to add capacity due to declining average selling prices and high inventories.

However SEMI reckons flash capacity will grow 6%  by mid-2013, with nearly 6 % growth, adding over 70,000wpm.

SEMI also foresees a rapid increase of installed capacity for new technology nodes, not only for 28nm but also from 24nm to 18nm and first ramps for 17nm to 13nm in 2013.

SEMI cautiously forecasts  fab equipment spending in 2013 to range from minus 5 to plus 3.

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Inside TSMC – A FAB Tour

An up to date and current overview of semiconductor manufacturing technology from TSMC in Taiwan. Nicely produced and informative if you tune-out the voice-over slightly. Better access than any Fab tour.
Recommended if you have any interest in how semiconductors are made/manufactured in volume right now.

In the microelectronics industry a semiconductor fabrication plant (commonly called a fab) is a factory where devices such as integrated circuits are manufactured.

A business that operates a semiconductor fab for the purpose of fabricating the designs of other companies, such as fabless semiconductor companies, is known as a foundry. If a foundry does not also produce its own designs, it is known as a pure-play semiconductor foundry.

Fabs require many expensive devices to function. Estimates put the cost of building a new fab over one billion U.S. dollars with values as high as $3–4 billion not being uncommon. TSMC will be investing 9.3 billion dollars in its Fab15 300 mm wafer manufacturing facility in Taiwan to be operational in 2012.

The central part of a fab is the clean room, an area where the environment is controlled to eliminate all dust, since even a single speck can ruin a microcircuit, which has features much smaller than dust. The clean room must also be dampened against vibration and kept within narrow bands of temperature and humidity. Controlling temperature and humidity is critical for minimizing static electricity.

The clean room contains the steppers for photolithography, etching, cleaning, doping and dicing machines. All these devices are extremely precise and thus extremely expensive. Prices for most common pieces of equipment for the processing of 300 mm wafers range from $700,000 to upwards of $4,000,000 each with a few pieces of equipment reaching as high as $50,000,000 each (e.g. steppers). A typical fab will have several hundred equipment items.

Taiwan Semiconductor Manufacturing Company, Limited or TSMC is the world's largest dedicated independent semiconductor foundry, with its headquarters and main operations located in the Hsinchu Science Park in Hsinchu, Taiwan.

Facilities at TSMC:

1. One 150 mm (6 inches) wafer fab in full operation (Fab 2)
2. Four 200 mm (8 inches) wafer fabs in full operation (Fabs 3, 5, 6, 8)
3. Two 300 mm (12 inches) wafer fabs in production (Fabs 12, 14)
4. TSMC (Shanghai)
5. WaferTech, TSMC's wholly owned subsidiary 200 mm (8 inches) fab in Camas, Washington, USA
6. SSMC (Systems on Silicon Manufacturing Co.), a joint venture with NXP Semiconductors in Singapore which has also brought increased capacity since the end of 2002

TSMC announced plans to invest US$9.4 billion to build its third 12-inch (300 mm) wafer fabrication facility in Central Taiwan Science Park (Fab 15), which will use advanced 40 and 20-nanometer technologies. It is expected to become operational by March 2012. The facility will output over 100,000 wafers a month and generate $5 billion per year of revenue. On January 12, 2011, TSMC announced the acquisition of land from Powerchip Semiconductor for NT$2.9 billion (US$96 million) to build two additional 300 mm fabs to cope with increasing global demand. Further, TSMC has disclosed plans that it will build a 450-mm fab, which may begin its pilot lines 2013, and production as early as 2015.