Taiwan, with $100 billion foreign reserves, hopes to cash in its chips
07/01/1998
Taiwan, with $100 billion foreign reserves, hopes to cash in its chips
While most of Asia wallows in debt, Taiwan chipmakers are pushing ahead rapidly with fab expansion plans backed by more than $100 billion in foreign reserves its banks have piled up over the past few decades.
Interviews with key economic officials and semiconductor and computer industry executives during a visit to the Republic of China (ROC) revealed their optimism that the current troubles elsewhere in Asia will provide an opportunity for Taiwan to become a major world player in semiconductor fabrication. Already Taiwan, only 280 miles long and 60 miles wide, leads the world in production of a number of electronic products and assemblies (see table), and is second in notebook PCs (32% of world production in 1997) and graphic cards (44%). There are already about 20 wafer fabs in the Hsinchu Industrial Science Park, according to Kung Wang, director general, and further expansion is planned. This year`s fab expansions will make tool buying in Taiwan roughly equivalent to that in Japan, which has dropped off with the Asian crisis, officials predict.
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UMC plans five 300-mm wafer fabs. Probably the most ambitious plans were outlined by H. J. Wu, president of United Microelectronics Corp. (UMC), in a briefing at the company`s headquarters in Hsinchu`s Science Park. He laid out an ambitious 10-year, $15 billion plan for one 200-mm and five 300-mm wafer fabs in the new Tainan industrial park now being built in an agricultural center about 380 km from Hsinchu in southern Taiwan. While completion of UMC`s fourth 200-mm fab is expected by the end of the year in Hsinchu (it is being refurbished after equipment in ramp-up was destroyed in a recent fire), the timetable for Tainan is being delayed because of a slowdown in the market, Wu explained. He said sales have been flat from February to April, a period when volume is generally ramping up for the year.
UMC will try to get about half the financing for new fabs from its customers, such as Xilinx, Sandisk, Realtech, and ISSI. By early next year, the company is aiming for 100,000 wafer starts/month in its Hsinchu fab complex (see figure on p. 88). While currently shifting from 0.35- to 0.25-?m capability, the fabs plan to move to 0.18 ?m by Q2-Q3 in 1999, according to Wu.
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United Microelectonics Corp.`s lithoghraphy operations in Hsinchu are in Class 0.1 cleanrooms.
UMC has been jockeying for second spot in the foundry business with Chartered Semiconductor of Singapore, which recently opened a sales office in Taiwan to do battle with its chief competitors on their home turf. Wu said UMC had recently sold off its devices business to concentrate on foundry work.
Both trail Taiwan Semiconductor Manufacturing Co. (TSMC), UMC`s Science Park neighbor, which is already the giant in the business but is still adding 40% more capacity in 1998 in spite of market softness. TSMC`s sixth fab, planned for 60,000 wafer starts/month, may be the world`s largest when completed. While this will be a 200-mm fab, the seventh, now in planning, will be for 300-mm wafers.
Winbond joins with Toshiba for SOCs. Winbond, a Science Park neighbor without the government subsidies that have helped the rapid growth of TSMC and UMC, has joined with Toshiba in its own ambitious expansion program. The company expects that its fourth fab should be in full production (15,000 wafers/month) by the end of this year, according to Dr. Ding-Yuan Yang, president. A fifth fab is planned for 1999.
The new fabs will use Toshiba`s trench process for DRAMs, and will produce system-on-a-chip (SOC) or system LSI products, including embedded memory, for a variety of markets, including multimedia, set-top boxes, Internet appliances, electronic cameras, telecomm, and toys, says Yang. The company is moving away from the motherboard business to emphasize its chip products, he explained. The push into multimedia is needed to make up for a significant loss of cache memory business when Intel shifted from Pentium I to Pentium II.
Toshiba will gain some added DRAM capacity in the fab planned for next year. One reason it went into partnership with Winbond on the new fabs was the ability to borrow from well-heeled Taiwan banks. Yang is enthused about Toshiba`s trench process because he feels it works better with CMP than other DRAM technologies for the multilayer metal devices that will be needed for SOCs. Multimedia chips, which will require embedded DRAM, will generally use three layers of metal, he said, while high-performance microprocessors might need five.
Winbond expects to shift over to 0.25-?m designs by the end of this year, and the Toshiba technology will go down to 0.20 ?m, he believes. Toshiba will get some capacity for 64-Mbit synchronous DRAMs in the new fab, and the equipment should be capable of moving into the 128-Mbit (in-between) generation of DRAMs. Current production requires Winbond to do some of its production in outside foundries, particularly Chartered in Singapore, according to Yang. The company farmed out about 30% last year, mostly SRAM products, and plans about 12% outside production this year.
Winbond had a fire in a fab that was ramping up in 1996, in the area where cleaning pots are located. Yang speculates that vendors installing cleaning equipment may have put some wrong settings into the microprocessor that controlled cleaning stations. This area is being refurbished and will become Winbond`s Fab #5 next year. - B.H.