TSMC and Philips in $1.2 billion fab venture

By Christine Lunday

Singapore — Philips Electronics, the Netherlands, and foundry Taiwan Semiconductor Manufacturing Corp. are planning to build Singapore`s eleventh fab, a $1.2 billion joint venture facility targeted to begin production in the second half of 2000.

Construction on the new fab, a 200-mm facility, is slated to begin in early 1999 in Singapore`s Pasir Ris Wafer Fab Park. The facility will have a capacity of 30,000 wafers per month, and is seen reaching full capacity in 2003; it will begin production using 0.25 to 0.18 micron processes.

Philips and TSMC will hold 48 percent and 32 percent stakes in the venture, and each will take 60 percent and 40 percent of the capacity, respectively. The remaining 20 percent share will be held by a third joint venture partner, EDB Investments of Singapore, the investment arm of the government`s economic development board. EDB has also backed other joint venture fabs in the region, including the Chartered Silicon Partners joint venture between Chartered Semiconductor and Hewlett-Packard.

In addition, this project is not the first tie-up between Philips and TSMC: Philips was a founding shareholder of TSMC, and currently owns 27.6 percent of TSMC shares. The project marks TSMC`s seventh fab project and second fab outside of Taiwan.

The positive news comes at a time when a number of chipmakers are closing down existing fabs and pushing out plans for new facilities, and follows plans by Cirrus Logic to reduce its fixed wafer fab capacity by 70 percent.

Moving toward a fabless model, Cirrus is negotiating with partner IBM to restructure its 48 percent stake in the Micrus joint venture fab. The company is also in separate discussions with Lucent Technologies to sell is 40 percent stake in the Cirent Semiconductor joint fab in Orlando, FL. As a result, Cirrus says it will eliminate 400 to 500 positions and log a restructuring charge of up to $500 million. CR