2011 SEMICONDUCTOR INDUSTRY OUTLOOK
In 2009, we saw an unprecedented abundance of surplus equipment, fab shells, and operational fabs. The economic downturn forced IDMs to right-size and shed assets while memory companies closed 200mm fabs in favor of 300mm manufacturing. Demand decreased as uncertainties in the market led to a significant reduction in capital expenditures. In 2010, we witnessed a reversal with a declining number of opportunities due to fab closures and sales to companies seeking to add cost-effective capacity.
So what can we expect in 2011? Given the market rebound and renewed confidence, fewer companies will be actively seeking to divest their operational fabs. With increased demand for operational fabs, IDMs will express interest in adding cost-effective capacity, and niche foundry start-ups and second-tier foundries will remain active. We continue to meet with many global technology companies to gain an understanding of their ever-changing needs and business goals, and what we continue to find is that no two transactions are ever the same, and that one size does not fit all. Today’s volatile and competitive global economy will continue to dictate and boost market demand for increased flexibility, creativity, and responsiveness to meet a new breed of business needs in four distinct areas – organic growth, cost reduction and rationalization, strategic growth, and manufacturing / R&D strategy.
Being able to inform decisions in these new areas with the latest market knowledge and insights constitute a new paradigm shift that will manifest itself in a variety of ways and open up a new world of opportunities, from strategically acquiring second-hand assets such as Texas Instruments purchasing the Qimonda Richmond 300mm tool set or Spansion’s Japanese assets, to accelerating a move to a fab-light model as pioneered by Atmel Corporation. But the most notable example is the consortium model that is attracting increasing interest from IDMs and foundries who wish to mitigate risk and increase manufacturing capacity. To learn more about this particular topic, I invite you to read the Qimonda Dresden Update article later on in this newsletter.
President / Managing Principal
COME HEAR ATREG SPEAK AT SEMICON CHINA AND GSF SINGAPORE
ATREG is pleased to announce that it will be presenting at two upcoming industry conferences in Asia-Pacific:
- Doug Barrett, Senior Vice President and Principal, will present Top Six Critical Elements for a Successful Fab Sale on March 11th at the Global Semiconductor Forum in Singapore.
- Barnett Silver, Senior Vice President and Principal, will present Top 10 Considerations When Acquiring or Disposing of Advanced Technology Manufacturing Assets on March 16th at SEMICON China in Shanghai, China.
Should you not be in Singapore or Shanghai, you can connect with the ATREG team at the GSA Silicon Series Luncheon, April 28-29, in Santa Clara, CA. Email us to request a copy of our presentations.
ATREG FACILITATES SALE OF FREESCALE’S DUNFERMLINE, UK FAB
Freescale Semiconductor, Inc., based in Austin, TX, retained ATREG to sell its wafer fabrication facility located in Dunfermline, Scotland. Built in 1997, the one million-sq. ft. campus was never fully completed, nor occupied, and comprises a large cleanroom shell designed for 200mm wafer processing with potential to convert to 300mm.
After three years on the market, the fab was acquired by Shepherd Offshore Services Ltd. headquartered in Newcastle upon Tyne in the UK. This sale facilitated by ATREG is the only sizeable property transaction to have occurred in Scotland since the end of Q4 2008.
QIMONDA DRESDEN 300MM FAB SALE UPDATE: THE NEW PARADIGM SHIFT
To compete in today’s volatile economy, global technology companies need to inform their business decisions more accurately than ever before. A key part of this process is to not only have access to the most up-to-date market knowledge, insights, and relationships, but also to be able to think outside the box and consider all available choices and scenarios.
ATREG has introduced a new 300mm manufacturing consortium model that is changing the way semiconductor companies view manufacturing assets. This approach, which has already attracted interest from leading IDMs and foundries, involves the creation of a joint-venture whereby select, leading semiconductor companies acquire and re-tool a facility for 300mm production.
The test bed for this approach is Qimonda Dresden’s 300mm campus. The site consists of a north production fab and an expandable south R&D fab that can be integrated into 300mm production, or could be left out of the transaction entirely. The facility and cleanroom are maintained in an equipment-ready state. The 300mm production fab was designed and dimensioned for high-volume production. Approx. 250 65nm capable production tools remain available on the cleanroom floor.
A consortium model provides the following advantages for all partners involved:
- Capital efficiency
- Business model innovation
- Space utilization
- Risk mitigation
- 300mm roadmap
- Cost reduction
- R&D collaboration
- Revenue enhancement
- Varying core competencies
- Pooling resources
- Independent business entity
- Market pricing
This year, the companies that show flexibility by being open to creative solutions are the ones that will achieve their objectives and succeed. The Qimonda Dresden facility presents a unique opportunity for semiconductor corporations to innovate with their business models and be better prepared to compete in today’s volatile global economy.
AVAILABLE FOR PURCHASE: FREESCALE’S OPERATIONAL 150MM FACILITY, SENDAI, JAPAN
Freescale Semiconductor, Inc. invites offers from buyers to acquire its 150mm operational semiconductor manufacturing facility located in Sendai, Japan. Immediate revenue through a supply agreement with Freescale is part of the offering (length and scope to be negotiated).
This fab, which includes a fully integrated operational tool line of well-maintained process tools, currently manufactures MEMs, Flash memory embedded microcontrollers, analog / digital embedded microcontrollers, pressure sensors, and acceleration sensors.
Additional facility highlights:
- Campus size: 22 acres
- Cleanroom: 110,000 sq. ft. (Class 10-1,000) with installed capacity of approx. 42,000 wafers / month
- Automotive-qualified: Efficient and stable running processes through 0.5 microns, portable to new products
- Workforce: Efficient, well-trained, and highly motivated workforce with a long history at the facility
- Location: Situated in Japan’s Tohoku region, one of the country’s major semiconductor manufacturing areas