Joanne Itow's blog

With reports of Q2 2009 foundry sales doubling compared to Q1 2009, foundries are increasing capital expenditures, beefing up design enablement tools and keeping their fingers crossed that improved sales will last for more than just two quarters.
The big news is that GLOBALFOUNDRIES is already making progress on their goal to win new sales from major semiconductor manufacturers with their announcement of STMicroelectronics as a strategic customer. Not only is STMicroelectronics a significant addition, their product focus with GLOBALFOUNDRIES will start with low power 40nm products. That’s a very nice win as the big three foundries are also courting new customers at that technology. But will GLOBALFOUNDRIES be able to keep up with all the design enablement offerings that are being developed by their competitors?
The Common Platform has taken another step toward a full service design to manufacturing service with the addition of the Synopsys design flow system Lynx into their ecosystem. The focus of this ARM-Synopsys-Common Platform partnership is on ARM’s high performance low power processor architecture combined with IBM’s high-k metal-gate 32/28nm low power process and the Synopsys design flow. Common Platform customers will have access to all this expertise with the potential benefit of getting 32nm/28nm products to market much earlier than originally planned.

At a time when most companies are cutting back on capital investment and capacity expansions, the challenge of developing a high technology industrial park appears to be an impossible task.  But Silicon Border continues to seize that challenge. 

Silicon Border is a 10,000 acre science park located in Mexicali, capital of Baja California.  The park hopes to attract semiconductor, flat panel display, photovoltaic and other technology-driven manufacturing tenants. 

Since breaking ground in 2005, Silicon Border has invested $20 million in preparing the infrastructure to support the needs of high technology manufacturing such as access to power generation (1600 MW), onsite water and waste treatment facility, advanced data and voice communication systems. 

In late-May 2009, solar-cell manufacturer Q-Cells, a manufacturer of solar cells,  announced plans to locate its North American manufacturing facility in the Silicon Border area with an investment of up to $3.5 billion.  This certainly makes sense.  Tenants of the Silicon Border Park enjoy free trade with 43 different countries, strong IP protection laws, a young, educated workforce and location incentives from the Mexican government. 

For selfish reasons, I am partial to locations in Arizona, however, this Park certainly provides an attractive option for companies that need easy transport access to U.S. markets while still enjoying low cost of operations. 

This has been an active week for big foundry announcements.  On March 2, 2009 Intel/TSMC announced an MOU to collaborate on technology and IP infrastructure for SoCs.  At the same time, AMD announced it had closed their deal with Advanced Technology Investment Company (ATIC) and Mubadala Development Company of Abu Dhabi. Within 24 hours, GlobalFoundries was launched.  GlobalFoundries is a new business formed through the spinoff of AMD’s manufacturing operations.  The company will provide manufacturing services to AMD as well as offer services to third-party customers.   

Semico Spin

Most observers would wonder why any company would want to enter the foundry business at this time in our world and industry downturn.  What will differentiate GlobalFoundries from TSMC, Chartered, Samsung or UMC?  Those companies are struggling to get capacity utilization back up.  Going after blue chip, high volume customers is already an established strategy among the large foundries.  Wouldn’t it be nice if they established a foundry in the U.S. that enabled innovation and growth opportunities for the fabless companies in the U.S.? 

The foundry market players continue to provide almost as much nail-biting suspense as a  TV reality program.  Drawing most of the media attention is the battle for large volume IDM and advanced technology customers.  Companies such as TSMC and the members of the Common Platform are developing strategies which involve unique advanced technologies.  The competition involves a fight over the biggest and strongest semiconductor manufacturers .

But that is not the only show in the foundry arena.  Smaller foundry suppliers such as Tower Semiconductor are finding ways to grow faster than the overall semiconductor industry by focusing on products that don’t require the bleeding edge technologies but do require differentiated technologies specifically designed for small to medium sized manufacturers.  The so-called niche players are actually targeting markets such as MEMS, RF CMOS, telematics, and portable medical that are growing faster than the overall industry.