AsiaFocus

07/01/1999

Taiwan's Wafer Work seeks niche in smaller wafers

Wafer Work Group, a two-year-old Taiwan-based wafermaker with affiliated operations in the US and China, has begun shipping polished wafers from its Taiwan facility and is planning an aggressive move into the market for 3-, 4-, 5-, and 6-in. silicon wafers.

The Taiwan Wafer Work Corp. facility, equipped with new-generation crystal-growing machinery from Hemco (more than five units), Ferrofluidics (two units), and SpeedFam (four polisher units), can produce 5-in. and 6-in. substrates for CMOS, BiCMOS, and DMOS devices. Wafer Work's Jin-Hwa Technology, a joint venture with Shanghai Silicon Material Factory in Shanghai, China, can produce 3-in. through 6-in. wafers, for CMOS, discrete, and MEMS applications. Sales in the US will be made via the Helitek Co. unit, Hayward, CA, which also has polishing, cleaning, and QA equipment; capacities can be increased five-fold by 2002. Capitalization of the Group is about $50 million, with funds being raised among public companies and investment banks in Taiwan, venture capitalists, and management teams from the US and Taiwan. Management holds the largest stake in the company, owning approximately 30% of the business.

Jack Yu, Wafer Work director of marketing and sales, said there are both supply-side and demand-side reasons for pursuing sales of smaller wafers. He suggested that one of three things can happen to older (pre-8-in.) facilities: continued operation at existing design rules, upgrade to tighter specs, or transfer to a region with lower production costs. Upgraded fabs will need small wafers with tighter specs, like those made at Wafer Work in Taiwan; and Yu said the company should have access to fabs in lower-cost nations like China and India. Yu expects geographical demand to shift, with the overall small wafer market declining only about 3-6% per year. "It is a good enough pond for a fish our size," he said.

On the supply side, he noted, prices on smaller wafers have dropped sharply since 1997, making them less attractive to the major wafer vendors. Although prices are still softening, he said, "our lower overhead and better efficiency shall overcome this." Plans call for monthly output of 360,000, 6-in. wafers by 2001, which should be "far from a flood on the market," Yu said.

Heading the Wafer Work Group are chairman Nasa Tsai, a 30-year semiconductor industry veteran with experience at ProMOS, Mosel, and Intel, and CEO Patrick Chiao, a former Siltec executive. Y. I. Hsu is president of Wafer Work Corp. Helitek managers include John Souza, head of operations, and Tom Gentemann, sales; both have experience at Unisil. - Peter Dunn

SubMicron sets up Singapore wet processing subsidiary

After securing another round of funding from two investment firms, SubMicron Systems Corp., Allentown, PA, is moving ahead with a new wet processing subsidiary in Singapore.

The new operation, known as Akrion, will begin operations selling and servicing existing SubMicron systems, but plans call for a rapid ramp of local manufacturing and new product development activity. The two investment firms - Celerity Partners, Menlo Park, CA, and New York-based Equinox Investment Partners - are providing up to $6.1 million in financing; funds have already been funneled toward Akrion operations. To date, the firms have invested over $30 million in SubMicron.

David Ferran, CEO and president of SubMicron, said Akrion is expected to have a process applications lab running by the end of the year in Singapore, with the subsidiary beginning manufacturing by 1Q00. First products to be manufactured by Akrion will be modified versions of SubMicron's fully automated, high-end wet stations. The company is also applying for a Singapore government-sponsored Innovative Development Scheme (IDS) grant for local development and manufacture of a next-generation platform for wet cleaning. Ferran said Akrion will share cross development and manufacturing licenses with parent SubMicron. First beta site shipments of the new wet cleaning 200mm/300mm platform are planned for 2Q00, with production following by the end of 2000, Ferran said.

Akrion is also looking at a possible contract manufacturing/outsourcing alliance with strategic partner HongGuan Technologies. Akrion's facility is located in the same building as HongGuan, and Ferran noted the alliance could possibly include an equity investment in Akrion.

Ben Kimura has been named president of Akrion. Prior to joining Akrion, Kimura was the senior manager of strategic sales at Tokyo Electron Ltd. He also spent 21 years at Texas Instruments working on advanced DRAM technology development. Formerly of Samsung, Jae Song is Akrion's marketing and process technology VP. In total, Akrion has about 34 employees; depending on funding levels, the employee base will grow to about 65 by year-end and to about 185 by the end of 2001, with offices also established by then in Taiwan and Korea.

"We're bucking the trend here, staffing up, and investing," Ferran said. SubMicron's investment levels in Akrion run in the $400,000 to $500,000 range/month, and are rising. In SubMicron's 1Q ended in March, Akrion incurred $625,000 in selling, general, and administrative expenses and $80,000 in R&D expenses. While the subsidiary "is a cash drain at a time when we don't have a lot of cash," Ferran said the investment is warranted because "there are a whole lot of fabs that are going to be built" in the resurging Asian region. - Christine Lunday

ASIA BRIEFS

Arch Chemicals, Norwalk, CT, and Lee Chang Yung Chemical (LCY) of Taiwan have signed a letter of intent to form a 50/50 joint venture that will manufacture, distribute, and market process chemicals and thin-film systems to chipmakers in Taiwan. The joint venture is expected eventually to expand sales from Taiwan to the People's Republic of China, and possibly to Southeast Asia. The new entity will not sell Arch photoresists and related ancillary products; these are already sold in Asia by an existing joint venture between Arch and Fuji Photo Film of Japan.

Sony Computer Entertainment, a Sony wholly owned subsidiary in Tokyo, and Toshiba Corp., Tokyo, have established a new firm in Oita, Kyushu Island, in order to manufacture 128bit microprocessors for Sony's next-generation video games, PlayStation2. Named Oita TS Semiconductor, the joint firm is owned 51% by Toshiba, and 49% by Sony Computer. They will use the existing wafer processing line in Toshiba's Oita Works in Oita. Additional expansions are planned as the new PlayStation system reaches market late next year.