Chartered looks for partners to fund $3 billion 300-mm fab
Semiconductor Business News
(01/31/01 06:00 a.m. PST)
SINGAPORE -- Chartered Semiconductor Manufacturing Pte. Ltd. is in talks with more than one potential foundry partner to help it equip a new chip facility here as a 300-mm wafer fab. Last year, Chartered planned to set up its new Fab 7 as a 200-mm facility in 2001, but this week it announced a one-year delay in equipping the plant so that it can bring it up as a 300-mm fab.
The potential investment in Fab 7 jumped from the original target of $2.1 billion to $3 billion for a volume 300-mm (12-inch) facility. "It is a big facility. I would like to think we would have a partner or two," said Barry Waite, president and chief executive officer of the world's third largest pure-play silicon foundry.
In a phone interview with SBN today, Waite said Chartered expects to receive initial tool deliveries for Fab 7 late in the third quarter of 2001. Pilot production will start in the middle of 2002 using a mature 0.18-micron product design, and then Chartered expects to quickly transition to 0.13-micron process technologies, he told SBN.
Delaying Fab 7 took care of two a couple of issues facing Chartered at the end of last year. First, the foundry supplier suddenly found that its customer base no longer needing a significant increase in capacity during 2001--as was expected a year ago--and the delay gives its process development staff enough time to prepare 300-mm tools for volume production. The pushout and move up to 300-mm processing is similar to Intel Corp.'s decision to delay its Fab 24 microprocessor plant in Ireland and bring it up as a 300-mm facility in 2002, instead of 200-mm in 2001 (see Dec. 13 story).
"When we built Fab 7, we were under pressure to demonstrate to our customers that we would have adequate capacity coming on stream in the year 2001 to support what they were telling us they needed," Waite explained. "The only way we felt we could with confidence show them that the factory would be there and ramp in an aggressive manner was to make it a 200-mm facility." He said Chartered did not believe 300-mm was ready for volume ramp in 2001.
"Now the need for capacity has slipped out and we don't need the capacity out of Fab 7 for may be nine months later," said Chartered's CEO. "That nine months is just 'day and night' between having our 300-mm tool set production ready."
Chartered has been preparing for the day it needs 300-mm wafer processing. The Fab 7 building and cleanroom facility was constructed to accommodate the tools and wafer transport systems used in 300-mm diameter fabrication. The Singapore foundry company also expanded its partnership with Agere Systems (formerly Lucent Microelectronics) to explore the readiness of 300-mm tool sets and processes (see Dec. 4 story).
Waite won't discuss which companies are potential partners for the 300-mm Fab 7 plant. Sources have suggested that Agere is a likely candidate, and the issue is whether there will be a third partner in the $3 billion fab.
Looking ahead, Chartered officials are expecting a difficult first half of 2001 but they believe the inventory corrections now underway in targeted communications applications will play out by the second half of this year. On Monday, Chartered told investors that it expects revenues to fall 15-to-20% in the first quarter of 2001 from the company's record revenues of $318.7 million in Q4 2000. The company also posted a net income of $77.4 million for the fourth quarter while it cut its growth outlook for 2001 (see Jan. 29 story).
Overall, Chartered expects revenues to grow 12-18% in 2001. It's average capacity utilization rate is expected to tumble down to the low-to-mid 70% range in the first quarter compared to the mid-80% range in the fourth quarter. A year ago, Chartered's plants were operating at 102% of their capacity. By the fourth quarter of 2001, the company expects its capacity utilization rate to be back up in the mid-90% range.
"It looks more like an industry adjustment than a recession," Waite told SBN. "That's pretty much what all of our customers are telling us. We think it will be a pretty difficult first half, and then we think we will see it come back in the second half, but we will still see year-on-year growth overall."
Subject 50522 |
