ST: Crolles to stop at 45nm, 32nm partners sought

January 25, 2007 – Though it will follow through with 45nm work done with its Crolles2 alliance through the end of this year, STMicroelectronics will seek to pursue 32nm development elsewhere with partners and/or in the framework of an alliance, executives indicated in the company’s quarterly results conference call. Crolles2, meanwhile, will narrow its focus to “derivative technologies” that support ST’s wireless and mobile applications efforts.

The 45nm platform developed at Crolles2 will be funded and supported through 2007, said Carlo Bozotti, president/CEO. But “starting from 2008, there will be a discontinuation” as the company seeks core 32nm technology through additional partnerships with industry leaders. The timeframe for 32nm work will depend upon who the partners are and the alliance that ST either joins or develops, another ST representative told WaferNEWS.

“It is a clear change in the strategy,” noted Bozotti, a shift he said is being dictated by the required increases in R&D efforts and investments to pursue 32nm work. But the move also is also being hastened by the imminent departure of NXP at year’s end, and Freescale’s decision to pursue leading-edge technology R&D work with the IBM Common Platform alliance (though Freescale will keep rights to utilize Crolles manufacturing capacity for an undetermined period after 2007).

Beyond 2007 and 45nm completion, the future of Crolles will be to focus on what ST calls “derivative technologies” that support its wireless and mobile technologies — namely analog CMOS (power management) and RF CMOS (communications) in cell phones, and image sensors for camera modules. For bulk CMOS, “we will align with the industry leaders and make sure that this will be available in our facilities to integrate and develop the derivatives on one side, and also to support a portion of our manufacturing activity,” said Bozotti, adding that manufacturing will be supported “by a standard foundry.”

Discussing the company’s financial results and current market environment, Bozotti projected a “market slowdown” in 1H07 amidst an inventory correction, due primarily to the wireless segment and lower-than-expected sales of higher-end phones. He reiterated the company’s expectations of improvement due to a shift from 150mm to 200mm wafer processing, and a “wave” of new products being introduced. He also confirmed that ST plans to complete its separation of flash memory activities by the end of this quarter. Bozotti also noted that the company expects no further investments into its flash business (which totaled $1.57 billion sales in 2006, ~16% of the company’s $9.85 billion in sales), and the company is “moving on with discussions with potential partners” for the unit.

Alain Dutheil, COO, also noted during the call that the company will continue to decelerate its capex along a trend over the past couple of years — ~$2 billion in 2005, $1.5 billion in 2006, and just $1.2 billion projected for 2007, in an effort to reduce capex/sales ratio from >20% to 12%. Methods to reduce capex will include a combination of a less capital-intensive product portfolio, increased usage of foundries for nonproprietary technologies (currently 10% of production, but seen rising to 15% or more), and optimization of manufacturing facilities, according to Dutheil. “This year we are not going to spend $1 on increasing our capacity” at Crolles2, and any Crolles spending “will be mainly for R&D and we will be moderate,” he said.


Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.