January 23, 2006 – Seeking a more robust path toward leading-edge chip technology R&D, Freescale Semiconductor is aligning with longtime partner IBM and its chipmaking alliance including Chartered, Samsung, and Infineon — at the expense of programs currently done through its participation in the Crolles chipmaking partnership.
Freescale will be joining the IBM alliance as “the broadest participant amongst all partners,” according to Sumit Sadana, Freescale’s SVP of strategy and business development and acting CTO, and Lisa Su, VP of IBM’s semiconductor R&D, who discussed the announcement with WaferNEWS. Planned activities include research for advanced technology nodes starting at 45nm; SOI technology development with IBM and partners; creating a roadmap for higher-performance networking technologies; and developing bulk CMOS, low-power wireless, and automotive technologies.
Sadana also pointed to other “obvious” benefits of working with IBM and partners, in a variety of areas: leveraging capacity at IBM partner Chartered, possible wireless codevelopment efforts with Infineon, and exploring interests in networking processors with IBM and AMD. IBM and Freescale may also expand their Power.org work with IP and process core design (which was the nexus of discussions for a broader R&D partnership), Sadana said, adding that both he and Freescale CEO Michel Mayer both came to Freescale from IBM and were “intimately familiar” with IBM’s inner workings.
Freescale will have access to high-volume manufacturing capabilities at multiple IBM alliance sites, including IBM, Chartered, and Samsung, to complement its own internal capacity, but Sadana emphasized that the IBM news is “right now a technology alliance,” and Freescale is still evaluating and “evolving” its manufacturing efforts with STMicroelectronics, but with “no announcement at this time.” He also pointed out that Freescale is not now moving toward a “fab-lite” strategy (the company has been on what it calls an “asset-lite” strategy for several years now, he said), and will continue to leverage internal manufacturing capacities while outsourcing around 25%-28% of its manufacturing volumes.
Ability to invest in leading-edge chip R&D was also a deciding factor in drawing Freescale’s R&D gaze to IBM et al., Sadana explained. The agreed-upon spending levels of the three Crolles participants can’t match what the IBM alliance offered in terms of a higher level of investment in a technology platform, with IBM’s leadership, and “a significantly higher level of partners,” he said.
All of Freescale’s R&D work at Crolles will be transferred out by the end of the year, but some work will be “stopped immediately,” Sadana noted — most notably for SOI, which “was never really done very effectively out of Crolles,” he admitted, because “neither ST nor NXP have products that relate to that level of performance… We were the only company [in the Crolles alliance] with that requirement.” Working with the IBM/Chartered partnership, Freescale’s SOI roadmap will be “accelerated very significantly” and “as fast as practical,” he said.
Aside from pulling out of R&D, Freescale says it will continue to exercise its option to use its portion of the Crolles2 300mm fab, characterized as basically a pilot fab and not production-level output, “for some period of time after 2007.”
With Freescale shifting its leading-edge R&D efforts out of Crolles, coupled with the recent news that NXP (nee Philips Semiconductors) will not renew its participation in the Crolles chipmaking partnership at the end of 2007, means that “the Crolles alliance as it stands today with three partners will cease to exist,” Sadana acknowledged. (IBM’s Su quieted recent rumors that IBM was poised to join the Crolles partnership, saying “we’re very satisfied with our alliance model” and IBM’s work based out of Fishkill, NY.) Sadana acknowledged that the Crolles partnership “did meet the goals it set out to accomplish,” including leveraging partners’ infrastructure and achieving volume production at several nodes. But he also applauded the joint development model that IBM et al. have created, and suggested that “a similar model could exist elsewhere. It’s a matter of taking the lead and executing. It can be done elsewhere if the right ingredients exist.” — J.M.
With the imminent departure of NXP and at least an R&D exit for Freescale, that leaves just original Crolles partner STMicroelectronics holding the bag. So what’s the future of the six-year chip collaborative effort, and who if anyone might be asked to come in and help keep it alive?
First and foremost, any potential new partner has to have the resources and wherewithal to bring significant funding to the table, according to Jim Hines, Gartner research director, who estimates the Crolles participants would have had to spend ~$600 million around this timeframe to expand the group’s 300mm fab and continue working on 45nm and beyond nodes. Beyond that there needs to be a good fit from a technology standpoint (“which shouldn’t be hard to do, since Crolles work is not at all out of the mainstream,” he said), and pursuing the same basic approaches for semiconductor technologies, something that apparently was a sore point for Freescale and its SOI efforts.
So who might match up on a short list of possible candidates? IBM was rumored to have been wooed to join the Crolles alliance, but says it’s not interested (and if it had joined, archrival and Crolles associate member TSMC likely wouldn’t have stayed, noted Hines). Most other major IDMs who have the technology R&D clout are already part of another alliance or going their own way. And smaller candidates who might pool investment resources to participate probably aren’t on the same technology path.
One possibility floated by Hines: Texas Instruments, a leading IDM with a relatively strong technology position and vocal intention to pursue more collaborative R&D efforts. TI also has long worked with Taiwan foundry UMC, which also has leading-edge process technologies and hasn’t really closely tied up with another alliance. Hines pointed out, however, that TI also has close ties to TSMC (whose leader Morris Chang originally hailed from TI), and a Crolles decision would represent “a fairly significant change in strategic direction.” Furthermore, comments this week from TI execs discussing financial results suggest the company wants to reign in, not expand, investments in semiconductor operations.
Should ST push to keep Crolles2 going, it almost certainly will have to expand its search beyond the effort’s initial European focus. “If ST wants to continue Crolles going forward as an alliance, it has to be thought of as more global, with whatever semiconductor partners make sense from a technology and product strategy point of view,” Hines said. Indeed, the partnership has already changed significantly from its original European triumvirate of Siemens/Philips/ST. And TSMC was brought into Crolles in 2002 mainly to make sure the chip designs were more easily spun into manufacturing, but today most companies (including NXP) just work directly with the foundries themselves. “To limit it to a European effort really [would be] the end of it,” Hines said. — J.M.