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AUSTIN, Texas ? Motorola Inc.'s Semiconductor Products Sector is seeking to add
manufacturing capacity by taking a stake in the Dresden facility owned by Advanced Micro
Devices Inc., Motorola officials said this week at the Horizons meeting for press and analysts.
Though a deal to share Dresden is far from complete, several Motorola executives noted that
AMD uses a licensed Motorola 0.18-micron process with copper interconnects at the German
fab, and that would make it relatively easy for the two companies to coexist there.
"It is AMD's fab, and it is up to them to decide if they need all of it for the Athlon
[processor]. We could certainly use the capacity, and because we already use the same process,
it would be relatively easy for us to share capacity," a senior Motorola official confided.
Motorola also is angling to create an alliance to cooperatively develop a solution for
embedded DRAMs, said Hector Ruiz, president of the company's semiconductor operation. For
the near term, Motorola will continue to work with United Microelectronics Corp. (Hsinchu,
Taiwan), whose embedded-DRAM technology Moto plans to use in a third-generation
wireless-phone chip set, to be foundried at UMC. Embedded DRAM is needed for the video
processing required in 3G handsets.
Further out, Ruiz wants "the major logic vendors who do not have DRAM technology" to join
hands in finding a way to solve the embedded-DRAM cost and performance equation. He
said Motorola already is talking to several companies, which he declined to name, that find
existing approaches too limiting in terms of performance, and costly as well.
Perhaps five years or more ahead, Motorola also wants to propagate an entirely new approach
? the magnetoresistive RAM. "We think that is a technology that has the potential to replace
all memories: DRAM, static RAM, nonvolatile. It may take five years, but we are pretty
excited about it," Ruiz said.
Will Strauss, president of Forward Concepts (Tempe, Ariz.), said the turnaround at Motorola
has been remarkable. The Semiconductor Products Sector is enjoying strong demand across
all of its product lines.
"At the last Horizons [two years ago in Orlando, Fla.], nobody knew the direction. There was
a lot of uncertainty and discontent, and stability has not been there for the past two or three
years," said Strauss. "Between the combination of Hector [Ruiz] and Fred Shlapak, they
finally have the right combination of management. And besides the foundry strategy working
out for them just when they need it, Motorola has some real good products."
Specifically, Strauss cited the G4 Altivec processor being supplied to Apple Computer Inc.
and the StarCore with PowerQuicc combination, calling the latter product " really
world-class. For certain networking applications, it is more powerful than anything out there
right now, though I'm sure [Texas Instruments Inc.] has something in the back room," said
Strauss. "For the first time in many years, Motorola has got some products that they can
really crow about."
Moreover, the semiconductor market is far more upbeat than just eight months ago, when the
company was shutting down 15 older Motorola fabs and locking up 0.25-micron capacity at
Taiwan Semiconductor Manufacturing Co. (TSMC) and other foundries.
Famine to feast
"Last year we were doing everything we could to get cost out," said Bill Walker, a senior
vice president in charge of manufacturing. "Now, we are ramping capacity as fast as possible.
The lead times on equipment are much longer, but there is no doubt we could use more
capacity, as quickly as we can ramp it."
And while much attention has been paid to Ruiz's pledge to move 50 percent of the sector's
overall production out to foundries by 2002, Motorola is moving just as quickly to add wafers
at its own fabs. Large, underutilized fabs at Phoenix and Austin, MOS 12 and MOS 13, are
being filled as quickly as possible for 0.25-micron and 0.18-micron production.
As of September at Motorola's joint-venture development lab, SC300, also in Dresden, partner
Infineon Technologies was using 300-mm wafers to manufacture commercial 64-Mbit DRAMs,
at yields of 70 percent or more. Walker said that once a full tool set for 300-mm production
is complete, Motorola will move to build a 300-mm line at West Creek, near Richmond, Va.
(and across town from White Oak, a DRAM manufacturing facility now operated by Infineon
but partially owned by Motorola, which does not use it for its own manufacturing).
Motorola has secured all the building permits for West Creek, qualified contractors and put a
small team in place. Once all the lithography and other tools are ready, the company could be
manufacturing devices at West Creek within 15 months, or early 2001.
Walker said he expects a favorable decision by year's end on plans to equip a front-end fab
building at Tianjin, China, that has been on hold as far as wafer fabrication is concerned.
That fab would be used to supply Motorola's extensive wireless and paging business in China
with ICs produced at 0.35-micron design rules, the government-set limit on equipment exports
to the People's Republic, Walker said. He added that he is optimistic about getting a green
light from Ruiz on Tianjin.
At Horizons, Motorola executives exulted over their ability to take over the Tohoku
Semiconductor joint venture, started 15 years ago with Toshiba Corp. in Sendai, Japan.
Toshiba, which had run DRAMs in its half of the building, decided to consolidate memory
manufacturing at larger facilities, giving Motorola the option to purchase Toshiba's share for
logic production. The deal was consummated earlier this week.
Walker said Tohoku represents about 20,000 wafers per month of 6-inch capacity that is
needed for automotive and microcontroller production. Another large building currently
processes about 10,000 eight-inch wafers per month, and that facility will be filled out and
upgraded to tighter design rules this year.
Motorola now gets fully 30 percent of its total wafer fabrication, packaging and test, from
foundries and contract test and assembly houses. That is well ahead of the 24 percent goal
that was expected by this time, an acceleration driven by demand.
Greg White, general manager of the microcontroller division, said MCU sales are expected to
increase 45 percent this year. Asked if Motorola would need to put its customers or
distributors on allocation, White said, "I went through the upturn in '93 and '94, and we are
nowhere near that in terms of capacity limitations. Right now it is hard to keep up, but we
are getting more capacity from our foundry partners. And Motorola is moving a lot quicker
than in the past to tighter process geometries, from 0.5 to 0.35 and to quarter-micron, where
we want the bulk of our production to be."
"We made the decision early this year to lock in a tremendous amount of foundry capacity,"
said Wayne Nesbit, a vice president and director of worldwide external technology. "Our
foundry partners had invested pretty heavily during the last downturn, and we moved early
enough to secure wafers."
Early this year, said Nesbit, Motorola's management was trying to figure out how to fill its
capacity. "We were twiddling our thumbs in January, and then the rebound came on all of a
sudden. By March we didn't know if we'd have enough capacity, and Motorola went into
full-speed-ahead mode. Had we not had our foundry capacity, and had we not built new
factories in Austin and Phoenix that were underused, we would not have had the success this
year that we have had."
Nesbit, Motorola's point man for foundry strategy, said much of the company's foundry
capacity now comes from a network of smaller foundries in Japan, Israel, Canada and the
United States. In addition, by running its own fabs round the clock at higher efficiencies,
Moto "squeezed out the equivalent of two new fabs from internal production."
Production at foundries will triple for Motorola this year, but the unit increase in square
inches of processed silicon will be much larger at Motorola's own fabs, which still account
for 70 percent of production. Walker said he expects that by year's end, wafer production
will have increased by 50 percent over 1998 ? "the sharpest upturn in the 34 years I've been in
the industry."
TSMC is the largest foundry supplier by far to Motorola, Nesbit said, but the company also
has had a long relationship with UMC. Singapore foundry Chartered Semiconductor Ltd.
currently does a relatively small amount of production for Motorola. Nesbit said Chartered is
expected to begin supplying Motorola with significant production capacity by the end of next
year, using Moto's licensed HiperMOS process. |
