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AVAILABLE FOR SALE: OPERATIONAL COMPOUND SEMICONDUCTOR FAB, USA

ATREG has been retained to facilitate the divestment of a U.S.-based, state-of-the-art compound semiconductor-capable fab. This facility offers immediate access to more than 50 epitaxial reactors suitable for a variety of compound semiconductor technologies across multiple industries and end-markets. This fab is well positioned to produce gallium nitride (GaN) devices for power and RF applications, gallium arsenide (GaAs) devices, and even silicon carbide (SiC) given the epitaxy experience on site. Combined with a seasoned staff who have decades of experience with compound semiconductor processes and the compound semiconductor toolset, this facility offers a significant time-to-market advantage over comparable greenfield sites. It also provides significant existing production capacity of industry leading epitaxy processes with a possibility of a multi-year supply agreement.

The acquirer would inherit best-in-class manufacturing, operations, and R&D teams with deep expertise in equipment maintenance and customization. The facility offers extensive existing power, water, and materials infrastructure with complete environmental permitting and room for expansion, both via buildings on site and available land to construct new facilities if desired. The fab location provides competitive access to high-caliber talent, innovative research and development initiatives, and is situated in a strategic location for supply chain considerations.

FACILITY HIGHLIGHTS

• Compound semiconductor capabilities, including a workforce with more than a decade of experience dealing with compound semiconductor manufacturing and a toolset capable of conversion for GaN, GaAs, or SiC device production
• Robust infrastructure, including enough power capacity to support almost 100 epi reactors, extensive specialty chemicals and gases storage, and nearly a million gallons of water capacity
• Sizeable facility with up to 65,000 ft² of cleanroom and 450,000 ft² of building space
• Flexible expansion opportunities, including multiple buildings on site and possibility for additional building expansion
• Flexible supply agreement to help cover fixed costs while ramping in new products
• Thorough regulatory compliance across local, state, and federal authorities with completely up-to-date permitting
• Impressive workforce and facilities team which has achieved substantial productivity achievements with a lean headcount
• Multi-functional space, including ballroom cleanroom, labs, office space, an auditorium, and conference rooms
• World-class talent ecosystem with access to leading manufacturing, design, and software employees with top-ranked universities nearby
• Partnership/joint-venture opportunity for a buyer looking to share costs and space in a highly strategic ecosystem to be situated in

For more details about this manufacturing asset, please email ATREG Senior Vice President Annie Rothrock.

AVAILABLE FOR SALE: OPERATIONAL 200MM FAB, USA

ATREG has been hired to assist with the disposition of an operational 200mm, automotive-certified discrete fab located in the United States. This cost-effective facility produces 3µm to 0.35µm low-, medium-, and high-voltage MOSFETs as well as IGBT technologies for a variety of end-applications. The opportunity includes a high-end, fully integrated line of 200mm tools capable of manufacturing more than 20,000 wafer starts per month (based on a ~9 mask layer process average). This facility offers significant flexibility and opportunity for expansion both within existing buildings/cleanroom and on adjacent land, and comes with a supply agreement.

The fab team of approx. 200 experienced employees includes an efficient and cohesive process integration workforce consisting of a team of 60+ engineering, functional, and management staff, as well as 130+ technicians, operators, and other operations support staff. The facility offers an efficient 37,500-ft² Class 1000 cleanroom with a sub-fab (Class 1 SMIF). The facility features roughly 200 well-maintained operational front-end tools consisting of equipment from OEMs such as AMAT, LAM, TEL, KOKUSAI, ASML, NIKON, DISCO, KLA-TENCOR, AXCELIS, and NOVELLUS.

For more details about this 200mm U.S. manufacturing facility, please email ATREG Senior Vice President Nick Papa.

GLOBAL COMPOUND SEMICONDUCTOR OUTLOOK

Compound semiconductors, led by gallium nitride (GaN) and silicon carbide (SiC), are rising to prominence as they attempt to meet the heightened demands of emerging technologies such as artificial intelligence (AI) and electric vehicles (EVs). Relative to their conventional silicon-based semiconductor forbearers, compound semiconductors offer reduced power consumption and improved performance across durability, density, voltages, and operating bandwidth. According to French industry research firm Yole Group, the global compound semiconductor substrate and epiwafer market is projected to reach $5.8 billion by 2029, driven by strong expansion in power and photonics applications.

Companies and governments are taking the compound semiconductor opportunity seriously, with GaN and SiC chips already seeing use in lucrative commercial sectors such as data center computing and electric mobility as well as in vital national security spheres such as surveillance, autonomy, and missile defense. 

In Asia, Japan’s Mitsubishi Electric is spending approx. $1.8 billion on a new fab in the Kumamoto Prefecture to manufacture SiC power chips. Across the East China Sea to the west, China has been working to quickly gain market share, with the country expected to account for roughly half the market for SiC chips in 2024. Chinese company Innoscience is already one of the world’s leading IDMs developing eight-inch GaN technology. In Europe, German company Infineon bought Canada’s GaN Systems in October 2023 for $830 million, an indication of how important the automotive chip IDM sees GaN to be to the future of chip manufacturing. Finally in North America, the CHIPS & Science Act in the United States has doled out plenty of funding to compound semiconductor players, with GlobalFoundries (GF) and Rocket Lab being two prominent recipients. The $1.5 billion earmarked for GF will in part be used to support a GaN foundry in Essex, VT, while Rocket Lab’s $23.9 million will help expand production of the company’s compound semiconductors powering spacecrafts and satellites.

All this activity points to an obvious concern – overcapacity. With demand for many compound semiconductor wafers directly tied to EVs, manufacturers have been somewhat underwhelmed in recent months as EV demand has fallen below previous forecasts. Even so, investments into innovative compound semiconductors take the better part of a decade to pay off, so short-term demand won’t deter those with serious ambitions and a strong belief in future applications. Still, the pace of compound semiconductor adoption is dependent on numerous factors, including national security, consumer demand, and unit economics, so expect established IDMs such as TSMC, Texas Instruments, Infineon, and Innoscience to lead the way on compound semiconductor capacity. 

Geopolitics is unsurprisingly also a key factor in the development of compound semiconductors. Aforementioned companies like Rocket Lab and GlobalFoundries are getting the attention of the U.S. government because of how crucial their chips are to national security applications such as satellites. From the perspective of industrial policy, China is happy to subsidize SiC growth, even at poorer yields, if it gives them the ability to weaken international competition and establish leverage with European automakers. For its part, the U.S. is not only targeting CHIPS Act investments at compound semiconductors but is also working with allies to keep sensitive GaN patents and innovations out of China. Capacity is likely to be bifurcated into distinct supply chains, with companies operating in the U.S. or China requiring different regional fabs for different customers. 

Compound semiconductors are sure to be the next great leap for semiconductor development – the technical merits are proven, and the investment is already flowing. How quickly these ambitions can be realized, however, depends on many factors outside of the control of politicians, executives, and engineers. There is still no consensus on the state of the global economy and painful bumps in the road remain, especially for those companies that don’t have the agility to adjust to changing industry dynamics. 

Interested in acquiring a compound semiconductor facility in North America? Please contact ATREG Senior Vice President Annie Rothrock to inquire about the second-largest operational compound semiconductor site in the United States that is currently available for purchase.

RISE IN CAPTIVE CAPACITY CORRIDOR ADOPTION 

The global semiconductor industry has greatly changed since AMD Founder Jerry Sanders spoke these words – “Real men have fabs.” A few years later, AMD itself was to become fabless, spinning off its manufacturing facilities as GlobalFoundries and starting a transformative period for the whole industry. In an effort to secure dedicated access to silicon chips and gain more control over their manufacturing in the wake of the challenges caused by the global Covid pandemic, companies want to become less dependent on single sourcing and regain control over their supply chain at a lower cost than owning a wafer fab.

The latest costs of purchasing and operating a manufacturing fab are indeed staggering. In a report published in September 2023 (Navigating the Costly Economics of Chip Making), research firm Boston Consulting Group (BCG) predicts that in 2026, a brand-new greenfield fab could carry a 10-year total cost of ownership (TCO) of $35 to $43 billion – 33% to 66% higher than today’s costs. Therefore, more and more companies now opt for the second-best option – secure a captive capacity corridor and acquire dedicated space within a third-party wafer fab or foundry that has excess capacity. Or a company could own the tools within a foundry or an IDM facility, enjoying guaranteed chip production, so it is not subject to being placed on allocation by foundries.  

Back in early 2023, ATREG was already predicting that fab sharing would become the norm and a popular trend in our industry, a trend that started with STMicroelectronics and GlobalFoundries joining forces to create a new high-volume 300mm fab adjacent to ST’s existing 300mm facility in Crolles, France. As recessionary times happen, fab sharing is a very smart move for chip makers to build on existing semiconductor clusters, share risks, and produce at a lower cost.  

If your company is looking to share its cleanroom or seeking third-party manufacturing capacity, ATREG can help make those global connections! Please email Senior Vice President Annie Rothrock to learn more.

SUCCESSFUL EDITION FOR SEMICON INDIA 2024 

ATREG President & CEO Stephen Rothrock had the opportunity to attend SEMICON India held from September 11 to 13 in Delhi. Co-located with Electronica India and Productronica India, the conference is Southeast Asia’s single largest platform for showcasing the latest advancements in the electronics and semiconductor industries with over 250 exhibitors from across the global semiconductor supply chain. Indian Prime Minister Shri Narendra Modi inaugurated the event, followed by an opening ceremony featuring keynotes by prominent industry leadership from SEMI, NXP, Foxconn, PSMC, Renesas, Tata Electronics, and CG Power. The impressive speaker line-up showcased valuable insights into innovations and trends in key areas such as advanced packaging, design / EDA, flexible hybrid electronics (FHE), smart manufacturing, smart medtech, supply chain management, sustainability, and workforce development. 

“India is primed to blossom as a global semiconductor hub, as the chip industry seeks to bolster supply chain resiliency, serve the rapidly growing electronics market, and employ the region’s wealth of engineering talent,” explained Ajit Manocha, SEMI President and CEO. “SEMI is bringing the collective power and expertise of our member companies in the global electronics design and manufacturing supply chain to SEMICON India, along with hallmark SEMICON opportunities for networking, new business, and tech and market updates from top experts.” 

“SEMICON India is signaling a significant stride in advancing India’s domestic semiconductor ecosystem and connecting it to the global industry,” adds Stephen Rothrock. “With over $17 billion in total investments over the last 32 months, India is now a player to be reckoned with on the global semiconductor manufacturing map.”

Estimates predict that India might account for almost one-fifth of all chip design activities worldwide, owing to the availability of native technical expertise. This trend has prompted several renowned firms to extend their operations in India. In July 2023, AMD announced a $400 million investment to expand its chip R&D activities. Tata Electronics’ forthcoming semiconductor fab in Dholera, Gujarat is being created in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). Scheduled for completion in 2027, the fab will create 3 billion chips per year, with an emphasis on die sizes of 28nm, 50nm, 55nm and 90nm, a project that requires a $10.9 billion investment backed by both government and state incentives. Micron Technology has announced a $2.75 billion assembly, testing, marking, and packaging facility. 

CONNECT WITH US AT GLOBAL Q4 INDUSTRY CONFERENCES

Is your company looking to acquire or divest a manufacturing facility in the coming months? Members of the ATREG team will be taking meetings at various global conferences during Q4 to discuss your specific infrastructure-rich semiconductor manufacturing asset needs, whether brownfield, greenfield, or partnerships. Please email us to set up an appointment with an ATREG fab transaction advisor at one of the following global events. See you there!  

• GSA U.S. Executive Forum, September 26, Menlo Park, USA 
• FOA Q4 Members Meeting, October 23-24, South Portland, USA 
• International Trade Partners Conference (ITPC), November 3-6, Ko Olina, USA 
• GSA WLI WISH Conference, November 7, San Jose, USA 
• SIA Annual Awards Dinner, November 21, San Jose, USA 
• GSA Annual Awards Dinner, December 5, Santa Clara, USA