Category Archives: Manufacturing

Busch, LLC, manufacturer and retailer of vacuum pumps, compressors and blowers with a reputation for reliable high-performing vacuum products, this week announced plans to build a new 44,000 sq. ft. building in Austin, Texas. The new facility will offer single piece flow re- manufacturing with four flow line capabilities, processing 16 modules per day from disassembly to testing. It also has the potential to serve as a distribution hub for pumps and parts.

Some upgraded features of the building include additional space, a training center, a fully exhausted disassembly area and visual production planning by way of large screens in each area tracking actual movements in the flow lines. Additionally, the new facility offers climate controls for the production area and process measurement capability of all hard parts. A visitor walkway will allow visitors to view the production area without entering it, and customers will be able to track their repairs via the web in real time.

Additionally, the entire workflow of the building is in line with the seven steps of flow line production: purge and de-systemize, disassembly/hot wash, blast, presentation, assembly, frame assembly, and testing.

Beyond its gloom, the MEMS industry is showing numerous emerging devices that hold promise for future growth. These innovative MEMS solutions were listed by the MEMS & Sensors team of Yole Développement (Yole) in the Status of the MEMS Industry 2016 report (Yole Développement, May 2016). Today, more than 100 businesses, startups and large companies are involved in exciting developments using MEMS technology. The MEMS approach can be defined as a transfer function: It lowers cost and improves integration and performance.

transfer function

“MEMS can be seen as a ‘transfer function’ using semiconductor and micromachining technologies to create devices replacing devices that are more complex, bulky or less sensitive,” explains Dr. Eric Mounier, Sr. Technology & Market Analyst at Yole. Yole has identified at least 5 criteria that determine the success of a MEMS device. They are: size reduction, potential cost reduction, “good enough” specifications, batch manufacturing compared to existing solutions, and reliability.
At least 10 to 15 years of development are required to achieve all the successful criteria.

“Based on this segmentation, and out of all the MEMS devices in development that could undergo significant growth in the future, we foresee ultrasonic and gas sensors as well as microspeaker as the next success for the MEMS industry,” details Dr. Mounier.

As Yole’s market forecast announces, the gas sensor market is showing a 7.3% CAGR for the 2014–2021 period. The market should reach US$920 million in 2021. Moreover Yole’s analysts highlight a potential upside market of almost US$65 million in 2021. This positive scenario might be possible if gas sensors are widely adopted in consumer products, analysts say (Source: Gas Sensor Technology & Market report, Yole Développement, February 2016).

Microspeakers could be part of the success story as well. Indeed a big transition is happening now: for the first time, silicon speakers are ready for volume production, enabling the creation of a brand-new multibillion-dollar market for MEMS manufacturers. Last month, Yole’s analysts had an interesting interview with USound, an Austrian company founded three years ago by several veterans of the MEMS industry.

“Prototypes of the first balanced-armature replacement and the first micro-tweeter are currently being sampled to selected customers,” USound asserted. “Pre-production will start at the end of the summer, along with internal qualification. The technology is ready for adoption and will revolutionize the personal-audio market, similar to what happened with the MEMS microphone.”

USound intends to evolve into an audio-system developer, offering complete solutions ranging from hardware to firmware, in order to simplify technology adoption and help our customers achieve optimum product performance. To read the full interview, click USound.

For the next few months, Yole will pursue its investigation into the MEMS world. Numerous technology and market reports will be released, and Yole’s MEMS & Sensors team will attend many key conferences to present its vision of the industry.

For example, in mid-September Yole will be part of two major events in Asia: MEMS & Sensors Conference Asia and Sensor Expo & Conference – China. At both conferences, Yole will present attendees with the status of the industry and its new virtuous cycle. Yole’s Speaker, Claire Troadec, MEMS & Semiconductor Manufacturing Analyst, will focus her presentation on the Chinese MEMS industry, which is steadily transforming from “Made in China” to “Created in China.” Claire will also review the Chinese MEMS players and the new virtuous cycle the MEMS industry.

Despite strong double-digit percentage increases in annual unit shipments, semiconductor sensor sales growth has become uncharacteristically lethargic because of steep price erosion in several major product categories. Strong unit demand is being fueled by new wearable systems, greater automation in vehicles, and the much-anticipated Internet of Things (IoT), but sharply falling average selling prices (ASPs) on accelerometers, gyroscope chips, and magnetic-field measuring devices are capping annual growth of total sensor revenues in the low- to mid-single digit range, based on data in IC Insights’ 2016 O-S-D Report—A Market Analysis and Forecast for Optoelectronics, Sensors/Actuators, and Discretes.

The 2016 O-S-D Report shows worldwide dollar-volume revenues for sensors rising by a compound annual growth rate (CAGR) of 5.3% between 2015 and 2020 compared to an 8.9% annual rate in the last five years. In contrast, total sensor unit shipments are expected to climb by a CAGR of 12.4% in the five-year forecast period compared to a blistering 20.5% rate of increase in the 2010-2015 period, when new sensing, navigation, and automated embedded control functions in smartphones drove up strong growth along with steady increases in automotive and industrial applications.

Despite recent years of weak sales growth—just 1% in 2015 to $6.4 billion—the sensor market is expected to end this decade with 10 consecutive years of record-high revenues and reach $8.3 billion in 2020 (Figure 1). Unit shipments of sensors have reached record high levels each year since the beginning of the last decade—even in the 2009 downturn year, when worldwide unit volume grew 9% while sensor revenues dropped 3%. Record sensor shipments are expected to continue for another five years, reaching 28.9 billion units in 2020, according to the 360-page 2016 O-S-D Report, which contains a detailed five-year forecast of sales, unit volume, and ASPs for more than 30 individual product types and device categories in optoelectronics, sensors/actuators, and discretes.

Figure 1

Figure 1

Competition between suppliers and requirements for low-cost sensors in new high-volume applications drove down ASPs from about $0.66 in 2010 to $0.40 in 2015.  The need to squeeze more sensing solutions into wearable systems, far-flung IoT-connected applications, and multi-sensor packages for increased accuracy and multi-dimensional measurements is exerting more pricing pressure in the market, concludes the 2016 O-S-D Report.   The report’s forecast shows sensor ASPs dropping by a CAGR of  6.3% in the next five years to only $0.29.

Total sensor sales are expected to grow by about 3% in 2016 to $6.6 billion with worldwide shipments rising 13% to nearly 18.2 billion units this year.  Sales of sensors made with microelectromechanical systems (MEMS) technology (i.e., accelerometers, gyroscope devices, and pressure sensors, including microphone chips)—are expected to grow by 4% in 2016 to $4.8 billion with unit shipments increasing 10% to 7.6 billion.  The 2016 O-S-D Report projects MEMS-based sensor sales rising by a CAGR of 5.5% in the next five years to $6.1 billion in 2020 with unit shipments growing by an annual rate of 11.9% to nearly 13.4 billion.  ASPs for MEMS-based sensors are expected to decline by a CAGR of -5.7% to $0.45 in 2020 from $0.61 in 2015, according to the annual O-S-D Report.

Although shipments of microelectromechanical systems (MEMS) sensors used in automotive applications grew 8.4 percent in 2015, revenues were flat compared to the previous year, reaching $2.7 billion. In contrast, the value of this market is expected to recover this year, rising 4.3 percent to reach $2.8 billion in 2016, according to IHS Markit (Nasdaq: INFO).

The automotive MEMS market is forecast to grow at a compound annual growth rate of 6.9 percent from 2015 to 2022, to reach $3.2 billion in 2022. Global shipments will exceed two billion units for the first time at the end of this period, according to the IHS Markit Automotive Sensor Intelligence Service.

“Just three types of MEMS devices used in the automotive industry account for more than 95 percent of market value: pressure sensors, accelerometers and gyroscopes,” said Richard Dixon, principal analyst, automotive sensors, IHS Markit. “The primary systems relying on these devices are electronic stability control systems, airbags, tire-pressure monitors and manifold absolute-pressure sensors, although IHS tracks 34 other automotive MEMS applications.”

While these markets will remain, by their nature, still relatively small by 2022, the fastest growing volume applications in the coming years will include the detection of pedestrians, air-intake humidity measurement, microphones for hands-free calling in infotainment systems and microbolometers for night-vision systems used in driver assistance. New sensor areas on the horizon include scanning mirrors for head-up displays and adaptive LED headlights.

Top 10 automotive MEMS sensor suppliers

For second-tier suppliers of automotive sensors, 2015 was a good year. However, significant devaluations of the Euro and Yen affected the businesses of several companies. Leading Germany-based sensor supplier Robert Bosch was among the companies hit by exchange rate weakness, but its business continues to soar in local currency and shipments.

Sensata followed Bosch in the second-ranked position, exhibiting subdued 2015 revenue growth, despite last year’s acquisition of CST, including the sensor business of Kavlico. Along with its strong position in powertrain pressure sensors, Sensata benefits from its high-profile acquisition of Schrader, which made it the leading supplier of tire pressure monitors.

A name new to the MEMS sensor business is NXP, whose acquisition of Freescale last year catapulted the company into third-ranked position. NXP is known for its automotive magnetic sensors, while pressure sensors and accelerometers are the key sensors brought to the company via the Freescale acquisition.

The remaining seven companies also showed subdued results, with Japanese companies like Denso (ranked fourth) and Panasonic (ranked sixth). Both companies were adversely affected by the continued softness of the Yen.

Top_MEMS_Suppliers_IHS

It looks like a small piece of transparent film with tiny engravings on it, and is flexible enough to be bent into a tube. Yet, this piece of “smart” plastic demonstrates excellent performance in terms of data storage and processing capabilities. This novel invention, developed by researchers from the National University of Singapore (NUS), hails a breakthrough in the flexible electronics revolution, and brings researchers a step closer towards making flexible, wearable electronics a reality in the near future.

Associate Professor Yang Hyunsoo from the National University of Singapore, who led a research team to successfully embed a powerful magnetic memory chip on a plastic material, demonstrating the flexibility of the memory chip. Credit: National University of Singapore

Associate Professor Yang Hyunsoo from the National University of Singapore, who led a research team to successfully embed a powerful magnetic memory chip on a plastic material, demonstrating the flexibility of the memory chip. Credit: National University of Singapore

The technological advancement is achieved in collaboration with researchers from Yonsei University, Ghent University and Singapore’s Institute of Materials Research and Engineering. The research team has successfully embedded a powerful magnetic memory chip on a flexible plastic material, and this malleable memory chip will be a critical component for the design and development of flexible and lightweight devices. Such devices have great potential in applications such as automotive, healthcare electronics, industrial motor control and robotics, industrial power and energy management, as well as military and avionics systems.

The research team, led by Associate Professor Yang Hyunsoo of the Department of Electrical and Computer Engineering at the NUS Faculty of Engineering, published their findings in the journal Advanced Materials on 6 July 2016.

Flexible, high-performance memory devices a key enabler for flexible electronics 

Flexible electronics has become the subject of active research in recent times. In particular, flexible magnetic memory devices have attracted a lot of attention as they are the fundamental component required for data storage and processing in wearable electronics and biomedical devices, which require various functions such as wireless communication, information storage and code processing.

Although a substantial amount of research has been conducted on different types of memory chips and materials, there are still significant challenges in fabricating high performance memory chips on soft substrates that are flexible, without sacrificing performance.

To address the current technological challenges, the research team, led by Assoc Prof Yang, developed a novel technique to implant a high-performance magnetic memory chip on a flexible plastic surface.

The novel device operates on magnetoresistive random access memory (MRAM), which uses a magnesium oxide (MgO)-based magnetic tunnel junction (MTJ) to store data. MRAM outperforms conventional random access memory (RAM) computer chips in many aspects, including the ability to retain data after a power supply is cut off, high processing speed, and low power consumption.

Novel technique to implant MRAM chip on a flexible plastic surface

The research team first grew the MgO-based MTJ on a silicon surface, and then etched away the underlying silicon. Using a transfer printing approach, the team implanted the magnetic memory chip on a ?exible plastic surface made of polyethylene terephthalate while controlling the amount of strain caused by placing the memory chip on the plastic surface.

Assoc Prof Yang said, “Our experiments showed that our device’s tunneling magnetoresistance could reach up to 300 per cent – it’s like a car having extraordinary levels of horsepower. We have also managed to achieve improved abruptness of switching. With all these enhanced features, the flexible magnetic chip is able to transfer data faster.”

Commenting on the significance of the breakthrough, Assoc Prof Yang said, “Flexible electronics will become the norm in the near future, and all new electronic components should be compatible with flexible electronics. We are the first team to fabricate magnetic memory on a flexible surface, and this significant milestone gives us the impetus to further enhance the performance of flexible memory devices and contribute towards the flexible electronics revolution.”

Assoc Prof Yang and his team were recently granted United States and South Korea patents for their technology. They are conducting experiments to improve the magnetoresistance of the device by fine-tuning the level of strain in its magnetic structure, and they are also planning to apply their technique in various other electronic components. The team is also interested to work with industry partners to explore further applications of this novel technology.

Unisem reported it recently shipped its one billionth packaged MEMS device and continues to invest capex in both MEMS assembly equipment and the development of additional factory floor space for this expanding market.

With MEMS device revenues forecasted to grow from 11.9 Billion USD in 2015 to 20 Billion USD by 2021 (Yole), Unisem sees MEMS as a strategic part of their technology and growth plans moving forward. With over 9 years of experience developing MEMS packaging solutions, Unisem estimates that their MEMS unit volumes will grow by over 50 percent over the next 12 months.
Part of Unisem’s growth strategy for MEMS packaging includes the dedication of additional factory floor space. In its factory in Chengdu, China, the company has recently completed the installation and certification of a 1200 sq. meter class 100 clean room to support the assembly needs of MEMS microphones, combination cavity packages, and other devices that either require or benefit from this level of controlled environment.

In addition to the new class 100 clean room, Unisem also has brought in Film Assisted Molding capability to support the expansion of their MEMS molded cavity package offerings. Film Assisted Molding allows Unisem to target both the automotive and industrial MEMS pressure sensor market as well as the growing market for consumer pressure, humidity, temperature, gas sensors and combinations of these. This technology enables Unisem to use leadframe based packages and to mold the sensor device itself leaving only the sensing area exposed in the cavity.

Unisem continues to make MEMS packaging a key component to its growth moving forward with continued investments in technology, equipment and factory floor space to meet their demands as they move into their next billion units of MEMS devices assembled.

Unisem is a global provider of semiconductor assembly and test (OSAT) services for electronics companies.

EV Group (EVG), a supplier of wafer bonding and lithography equipment for the MEMS, nanotechnology and semiconductor markets, today introduced new capabilities on the EVG ComBond automated high-vacuum wafer bonding platform specifically designed to support high-volume manufacturing (HVM) of advanced MEMS devices. These capabilities include a new vacuum bond alignment module that provides sub-micron face-to-face alignment accuracy essential for wafer-level MEMS packaging, and a new bake module that performs critical process steps to achieve outstanding bond quality and performance of encapsulated MEMS devices.

The addition of these two new modules–coupled with existing capabilities on the highly configurable EVG ComBond platform such as room-temperature covalent bonding of engineered substrates–enables customers to meet the wafer bonding requirements for both current and emerging types of MEMS devices. Examples include gyroscopes, microbolometers, and advanced sensors for autonomous cars, virtual reality headsets and other applications.

“When EV Group introduced the EVG ComBond platform, we set a new standard in high-vacuum wafer bonding by building the product around a modular, highly customizable cluster design concept. This has enabled us to continually expand the capabilities of the platform over time, with applications ranging from advanced engineered substrates, power devices and solar cells to high-performance logic and ‘Beyond CMOS’ devices,” stated Paul Lindner, executive technology director,
EV Group. “With the addition of new vacuum alignment and bake modules, those wafer bonding capabilities have been expanded yet again to address the volume manufacturing needs for high-end MEMS devices.”

Challenges of scaling MEMS wafer bonding into production

Many MEMS devices have extremely small moving parts, which must be protected from the external environment. Wafer-level capping can seal a wafer’s worth of MEMS devices in one operation, and these capped devices can then be packaged into much simpler and lower-cost packages. Metal-based aligned wafer bonding is the preferred approach to MEMS wafer bonding, but is challenging to implement due to the high process temperatures involved as well as the presence of oxides that form on the bonding metal layers. As MEMS die and feature sizes decrease, achieving tighter wafer alignment accuracy also becomes increasingly important.

At the same time, vacuum encapsulation is increasingly needed for certain MEMS devices in order to reduce power consumption caused by parasitic drag, reduce convection heat transfer, or prevent oxide corrosion. Maintaining the required vacuum level for the entire wafer bonding process has been a key challenge for ramping these devices into high-volume production.

The EVG ComBond platform provides a complete end-to-end high-vacuum environment (10-8 mbar range) throughout all wafer handling, pre-bonding and bonding processes. This modular configuration significantly improves serviceability, as modules can be swapped out without breaking the vacuum level within the cluster or modules and interrupting tool operation.

New MEMS wafer bonding capabilities

New to the EVG ComBond platform is the vacuum alignment module (VAM) with wafer clamping, which enables sub-micron face-to-face alignment accuracy based on EVG’s proprietary SmartView alignment process, as well as backside and IR alignment, in a high-vacuum environment. Also new is the programmable dehydration bake and getter activation module, which accelerates the removal of sticking gas molecules prior to bonding the substrates–resulting in improved bond quality as well as reduced gas pressure in device cavities.

In addition, the EVG ComBond platform features an optional ComBond Activation Module (CAM), which enables covalent and oxide-free wafer bonding processes at room temperature or low temperatures. Integrated into the ComBond platform, the CAM allows low-temperature bonding of metals, such as aluminum, that re-oxidize quickly in ambient environments–enabling customers to reduce production costs and achieve higher wafer-bonding throughputs.

The EVG ComBond platform with the new alignment and programmable dehydration bake and getter activation modules is currently available and can be demonstrated at EVG’s headquarters.

Media, analysts and potential customers interested in learning more about EVG’s suite of wafer bonding solutions, including the EVG ComBond platform, are invited to visit the company’s booth #1017 in the South Hall of the Moscone Convention Center in San Francisco, Calif., at the SEMICON West show on July 12-14.

By Pete Singer, Editor-in-Chief

A new roadmap, the Heterogeneous Integration Technology Roadmap for Semiconductors (HITRS), aims to integrate fast optical communication made possible with photonic devices with the digital crunching capabilities of CMOS.

The roadmap, announced publicly for the first time at The ConFab in June, is sponsored by IEEE Components, Packaging and Manufacturing Technology Society (CPMT), SEMI and the IEEE Electron Devices Society (EDS).

Speaking at The ConFab, Bill Bottoms, chairman and CEO of 3MT Solutions, said there were four significant issues driving change in the electronics industry that in turn drove the need for the new HITRS roadmap: 1) The approaching end of Moore’s Law scaling of CMOS, 2) Migration of data, logic and applications to the Cloud, 3) The rise of the internet of things, and 4) Consumerization of data and data access.

“CMOS scaling is reaching the end of its economic viability and, for several applications, it has already arrived. At the same time, we have migration of data, logic and applications to the cloud. That’s placing enormous pressures on the capacity of the network that can’t be met with what we’re doing today, and we have the rise of the Internet of Things,” he said. The consumerization of data and data access is something that people haven’t focused on at all, he said. “If we are not successful in doing that, the rate of growth and economic viability of our industry is going to be threatened,” Bottoms said.

These four driving forces present requirements that cannot be satisfied through scaling CMOS. “We have to have lower power, lower latency, lower cost with higher performance every time we bring out a new product or it won’t be successful,” Bottoms said. “How do we do that? The only vector that’s available to us today is to bring all of the electronics much closer together and then the distance between those system nodes has to be connected with photonics so that it operates at the speed of light and doesn’t consume much power. The only way to do this is to use heterogeneous integration and to incorporate 3D complex System-in-Package (SiP) architectures.

The HITRS is focused on exactly that, including integrating single-chip and multi­chip packaging (including substrates); integrated photonics, integrated power devices, MEMS, RF and analog mixed signal, and plasmonics. “Plasmonics have the ability to confine photonic energy to a space much smaller than wavelength,” Bottoms said. More information on the HITRS can be found at: http://cpmt.ieee.org/technology/heterogeneous-integration-roadmap.html

Bottoms said much of the technology exists today at the component level, but the challenge lies in integration. He noted today’s capabilities (Figure 1) include Interconnection (flip-chip and wire bond), antenna, molding, SMT (passives, components, connectors), passives/integrated passive devices, wafer pumping/WLP, photonics layer, embedded technology, die/package stacking and mechanical assembly (laser welding, flex bending).

Building blocks for integrated photonics.

Building blocks for integrated photonics.

“We have a large number of components, all of which have been built, proven, characterized and in no case have we yet integrated them all. We’ve integrated more and more of them, and we expect to accelerate that in the next few years,” he said.

He also said that all the components exist to make very complex photonic integrated circuits, including beam splitters, microbumps, photodetectors, optical modulators, optical buses, laser sources, active wavelength locking devices, ring modulators, waveguides, WDM (wavelength division multiplexers) filters and fiber couplers. “They all exist, they all can be built with processes that are available to us in the CMOS fab, but in no place have they been integrated into a single device. Getting that done in an effective way is one of the objectives of the HITRS roadmap,” Bottoms explained.

He also pointed to the potential of new device types (Figure 2) that are coming (or already here), including carbon nanotube memory, MEMS photonic switches, spin torque devices, plasmons in CNT waveguides, GaAs nanowire lasers (grown on silicon with waveguides embedded), and plasmonic emission sources (that employ quantum dots and plasmons).

New device types are coming.

New device types are coming.

The HITRS committee will meet for a workshop at SEMICON West in July.

Scientists and doctors in recent decades have made vast leaps in the treatment of cardiac problems – particularly with the development in recent years of so-called “cardiac patches,” swaths of engineered heart tissue that can replace heart muscle damaged during a heart attack.

Thanks to the work of Charles Lieber and others, the next leap may be in sight.

The Mark Hyman, Jr. Professor of Chemistry and Chair of the Department of Chemistry and Chemical Biology, Lieber, postdoctoral fellow Xiaochuan Dai and other co-authors of a study that describes the construction of nanoscale electronic scaffolds that can be seeded with cardiac cells to produce a “bionic” cardiac patch. The study is described in a June 27 paper published in Nature Nanotechnology.

“I think one of the biggest impacts would ultimately be in the area that involves replaced of damaged cardiac tissue with pre-formed tissue patches,” Lieber said. “Rather than simply implanting an engineered patch built on a passive scaffold, our works suggests it will be possible to surgically implant an innervated patch that would now be able to monitor and subtly adjust its performance.”

Once implanted, Lieber said, the bionic patch could act similarly to a pacemaker – delivering electrical shocks to correct arrhythmia, but the possibilities don’t end there.

“In this study, we’ve shown we can change the frequency and direction of signal propagation,” he continued. “We believe it could be very important for controlling arrhythmia and other cardiac conditions.”

Unlike traditional pacemakers, Lieber said, the bionic patch – because its electronic components are integrated throughout the tissue – can detect arrhythmia far sooner, and operate at far lower voltages.

“Even before a person started to go into large-scale arrhythmia that frequently causes irreversible damage or other heart problems, this could detect the early-stage instabilities and intervene sooner,” he said. “It can also continuously monitor the feedback from the tissue and actively respond.”

“And a normal pacemaker, because it’s on the surface, has to use relatively high voltages,” Lieber added.

The patch might also find use, Lieber said, as a tool to monitor the responses under cardiac drugs, or to help pharmaceutical companies to screen the effectiveness of drugs under development.

Likewise, the bionic cardiac patch can also be a unique platform, he further mentioned, to study the tissue behavior evolving during some developmental processes, such as aging, ischemia or differentiation of stem cells into mature cardiac cells.

Although the bionic cardiac patch has not yet been implanted in animals, “we are interested in identifying collaborators already investigating cardiac patch implantation to treat myocardial infarction in a rodent model,” he said. “I don’t think it would be difficult to build this into a simpler, easily implantable system.”

In the long term, Lieber believes, the development of nanoscale tissue scaffolds represents a new paradigm for integrating biology with electronics in a virtually seamless way.

Using the injectable electronics technology he pioneered last year, Lieber even suggested that similar cardiac patches might one day simply be delivered by injection.

“It may actually be that, in the future, this won’t be done with a surgical patch,” he said. “We could simply do a co-injection of cells with the mesh, and it assembles itself inside the body, so it’s less invasive.”

SMIC acquires LFoundry


June 27, 2016

Semiconductor Manufacturing International Corporation, the largest and most advanced foundry in mainland China, jointly announces with LFoundry Europe GmbH (“LFE”) and Marsica Innovation S.p.A. (“MI”), the signing of an agreement on June 24, 2016 to purchase a 70% stake of LFoundry for a consideration of 49 million EUR.

LFoundry is an integrated circuit wafer foundry headquartered in Italy, which is owned by LFE and MI. At the closing, SMIC, LFE and MI will own 70%, 15% and 15% of the corporate capital of the target respectively. This acquisition benefits both SMIC and LFoundry, through increased combined scale, strengthened overall technology portfolios, and expanded market opportunities for both parties to gain footing in new market sectors.

This also represents the Mainland China IC foundry industry’s first successful acquisition of an overseas-based manufacturer, which marks a major step forward in internationalizing SMIC; furthermore, through this acquisition, SMIC has formally entered into the global automotive electronics market.

As the leading semiconductor foundry in Mainland China, in the first quarter of 2016, SMIC recorded profit for the 16th consecutive quarter with revenue of US$634.3 million, an increase of over 24% year-on-year. In 2015, SMIC recorded annual revenue of US$2.24 billion. In fiscal year 2015, LFoundry revenue reached 218 million EUR.

This acquisition will bring both companies additional room for business expansion. At present, SMIC’s total capacity includes 162,000 8-inch wafers per month and 62,500 12-inch wafers per month, which represents a total 8-inch equivalent capacity of 302,600 wafers per month. LFoundry’s capacity amounts to 40,000 8-inch wafers per month. Thus, by consolidating the entities, overall total capacity would increase by 13%; this combined capacity will provide increased flexibility and business opportunities for supporting both SMIC and LFoundry customers.

SMIC has a diversified technology portfolio, including applications such as radio frequency (“RF”), connectivity, power management IC’s (“PMIC”), CMOS image sensors (“CIS”), embedded memory, MEMS, and others—mainly for the communications and consumer markets. Complementarily, LFoundry’s key focus is primarily in automotive, security, and industrial related applications including CIS, smart power, touch display driver IC’s (“TDDI”), embedded memory, and others. Such consolidation of technologies will broaden the overall technology portfolios and enlarge the areas of future development for both SMIC and LFoundry.

Dr. Tzu-Yin Chiu, the CEO and Executive Director of SMIC said, “The successful completion of the LFoundry srl acquisition agreement is an important step in our global strategy. Both SMIC and LFoundry will mutually benefit from the shared technology, products, human talents and complementary markets. This will additionally expand our production scale and allows us to service the automotive IC market and for LFoundry to enter into China’s consumer electronics market, thus bolstering our overall development and growth. Through the acquisition, communication and cooperation in the semiconductor industry between China and Europe has been further enhanced, and contributes to the mutual success of the integrated circuit industry in both regions. In the future SMIC will continue to enhance, strengthen, and further expand leadership in the global semiconductor ecosystem.”

Sergio Galbiati, the Managing Director of MI and Chairman of LFoundry srl, said, “This is the beginning of a new era for LFoundry and our Italian fab. We are pleased to become part of a very strong worldwide player, SMIC. Together we can further improve LFoundry’s strength on optical sensor related technology, which is well recognized worldwide, and continue to contribute to the growth of technology in Europe, thanks to our partnerships with many relevant players. The agreement with SMIC will enable us to have a stronger level playing field in Europe.”

Günther Ernst, the Managing Director of LFE and CEO of LFoundry srl, said, “We have made significant efforts in achieving technology excellence. The agreement with SMIC will further enable us to better use our own manufacturing capacity and have access to SMIC’s extremely diverse technology offerings while taking advantage of SMIC’s commercial network and overall capacity. As part of SMIC, LFoundry will continue to pioneer technology to help our customers achieve success and drive value for our partners and employees around the world. We look forward to working closely with the SMIC team to ensure a smooth transition.”