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Steve Sept column
Global Foundries (GF) 200 mm MEMS line.2 of 2
Rob Haak
Robert Haak, CEO of Insight interAsia, MANCEF Board Member
Dr. Steven Walsh, Regents professor UNM, MANCEF Board Member
Worldwide foundry-based semiconductor manufacturing is dominated by three firms: Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics Company (UMC) and Global Foundries (GF); all based in Taiwan where today over 80% of commercial semiconductor foundry services are performed. These companies have now entered the MEMS foundry business to compete not only with each other but also with existing MEMS-only foundries. Certainly these massive market entrants will have a significant impact on the MEMS industry and this article explores some of the reasons why. We will also show that two small countries —Singapore and Taiwan — are set to become major MEMS manufacturing hubs in the next few years.
As background, TSMC is largely based in its hometown of Hsinchu, Taiwan and obtained major investment from semiconductor and MEMS firms like Analog Devices. Recently all of their fab construction has been focused around its main campus in Hsinchu. UMC is also based in Hsinchu, but the company has a significant fab in Singapore that produces some of the firm’s highest yields and most complicated products. GF developed differently — with roots in a non-foundry design and manufacturing company (AMD) — and thus has operations spread throughout the world. GF is building its largest and most advanced fab to date in Malta, New York. Its Dresden fab produces the higher value end products; and its Singapore operations — which were purchased in the takeover of Chartered Semiconductor — are running at capacity. One of the Chartered fabs was converted to a state-of-the-art 200 mm MEMS line.
ST Microelectronics (ST) is now considered by many people in the MEMS industry to be the single largest producer of MEMS devices. This is true; however, there is a distinction to be made in that ST is not a pure play foundry and produces a significant amount of MEMS devices for sale under its own brand name. Further to our point, ST has a MEMS operation in Singapore that is one of the oldest continuously running fabs in South East Asia.
Thus, Taiwan and Singapore, two very small countries, have a significant impact on the global semiconductor market, particularly where foundries are concerned. We now see this same trend occurring in micro systems foundry capability and capacity.
TSMC, UMC, and GF have all entered the MEMS foundry business and will use their mass production core competencies to lower costs, while increasing quality and improving device specifications. They also have market power in that consumer electronics companies, such as Apple, are often inclined to prefer suppliers of devices whose products were manufactured by a major blue-chip foundry. In fact, upon entering the MEMS foundry market TSMC fairly quickly established itself as a key player by securing orders from InvenSense (gyroscopes) and Analog Devices (microphones), which were important components in iPhone, iPad, and other mobile smart devices market explosion. Likewise, TSMC has long sought to produce Apple’s micro processors by obtaining that business at the expense of Samsung’s Austin, TX fab. Naturally, TSMC could combine sales efforts for their MEMS and micro processor manufacturing capabilities and offer to Apple a package deal for both products.
Highly efficient manufacturing at very large volumes and extremely high yields is ingrained in the cultures of these companies. As the newer MEMS fabs are able to share space, technology, labour, and internal culture with the traditional semiconductor manufacturing fabs it is possible that MEMS manufacturing capability will see significant improvements. Of course, not all MEMS and semiconductor processes, techniques, tooling, labour, and technology are similar; nonetheless, there is likely to be some internal knowledge transfer between the divisions that will benefit the MEMS industry.
TSMC, UMC and GF share another commonality; they have large cash resources, and this is a resource that MEMS-only foundries today cannot match. This resource position enables a number of competitive strategy positions. For example, they can afford to buy the latest equipment, hire the top talent and generally employ the ‘not invented here’ mentality at any time. Similarly, they could afford to make less profit on MEMS for a few years while their profitable semiconductor operations subsidise their MEMS market share growth.
The governments in Taiwan and Singapore have noticed this trend and have quietly adapted to it. The triple helix construct of industry, government and academia partnerships for economic development is strongly utilised in these countries. ITRI (a triple helix organisation) in Taiwan, for example, (the birthplace of TSMC and UMC in the 1970’s) has significantly increased its MEMS research and development capability. The universities in Taiwan have grown their micro systems programmes to ensure there are enough graduates for TSMC, UMC and smaller players to employ. Similarly, Singapore has stepped up efforts at its A*Star government labs and the Institute of Microlectronics (IME) now has a MEMS consortium of local manufacturers and researchers (GF is a significant member). The National University of Singapore (NUS) and Nanyang Technological University (NTU) have also expanded their MEMS programmes and actively recruit students from overseas. Please see the main image above a picture of Global Foundries (GF) 200 mm MEMS line.
History suggests that TSMC, UMC, and GF will be increasingly important in MEMS manufacturing arena. These companies have a history of entering markets to win and their effort in the MEMS will likely not be different. What may be surprising to some, though, is how quietly Taiwan and Singapore have become critical MEMS manufacturing centers. MEMS is growing and the stakes in MEMS foundary businesses are growing as well.
Rob Haak is the CEO of Insight interAsia, a pan-Asian technical sales, marketing and business development consulting company. He is a board member of MANCEF. Prior to joining Insight interAsia, Robert worked in Tokyo for the Asian technology Information Program (ATIP) where he was also the Beijing Representative Office chief representative. During his career he has also been based in Seoul for the Nippon Sanso Group and in Taiwan for Emcore Corporation. During his career he has been based in Seoul, Singapore, Taiwan, Hong Kong, Kuala Lumpur, Tokyo and Beijing. He has travelled in over 60 countries, primarily as a technical sales/marketing representative in the semiconductor equipment and micro systems marketplace. His formal education includes a BS in Engineering from Tulane University in New Orleans, LA, USA and an MBA in Management of Technology and Corporate Finance from the University of New Mexico in Albuquerque, NM, USA.
Dr. Steven Walsh is the Regents professor at UNM’s Anderson School of Management He has many business service awards including the lifetime achievement award for commercialisation of Micro and Nano technology firms from MANCEF. He has also been named as a Tech All Star from the State of New Mexico Economic Development Department and has been recognised by Albuquerque the magazine as a leader in service to the economic community. Finally, he is exceptionally proud of the Anderson School of Management service to the community award.