Section 2. Worldwide IC Vendors - Smithsonian …smithsonianchips.si.edu/ice/cd/STATUS96/Section2.pdfOVERVIEW Figure 2-1 provides a breakdown of worldwide IC sales by North American,

OVERVIEW

Figure 2-1 provides a breakdown of worldwide IC sales by North American, Japanese, European,and Rest-of-World (ROW) companies for 1975-1995. As can be seen, sales by North Americancompanies were overwhelmingly dominant in the mid-1970’s. However, by the mid-1980’s themajority of the world’s IC sales were about evenly split between North American and Japanesecompanies. By 1990 the Japanese had increased their share of worldwide IC sales to 48 percent,but in 1992 Japan’s economy weakened causing their share to begin falling. A persistent econom-ic slump in the following years coupled with the Koreans’ success in the MOS memory marketcaused the Japanese share to continue falling.

INTEGRATED CIRCUIT ENGINEERING CORPORATION 2-1

2 WORLDWIDE IC VENDORS

Year

70%

18%

10%

2%

63%

27%

8%

2%

43%46%

9%

2%

36%

48%

10%6% 7%

42%

36%

15%**

Per

cen

t

= North American Companies

= Japanese Companies

** Korean companies' share is 10 percentage points.

= European Companies

= ROW Companies��

13743RSource: ICE, "Status 1996"

0

10

20

30

40

50

60

70

80

��

��

��

��

��

19951990198519801975

Figure 2-1. Marketshares of Worldwide IC Sales ($)

For the past 21 years European companies have continued to represent between seven and tenpercent of worldwide IC sales. Meanwhile, the ROW companies have increase their share fromabout one percent to 15 percent. 1992 was the first year that the ROW IC companies (primarilyKorean and Taiwanese) sold more ICs (in dollars) than the indigenous European companies! In1995, sales by ROW IC companies were more than double those of European IC companies.

A ranking for the world’s top ten merchant semiconductor sales leaders in 1995 is given in Figure2-2. These companies grew by an average of 37 percent during the year, and together, they heldroughly 58 percent of the overall semiconductor market.

The 1995 top fifteen world integrated circuit sales leaders are listed in Figure 2-3. The mostnotable aspect concerning this list is the fact that Samsung, LG Semicon, Hyundai, and Micron,each a major non-Japanese DRAM supplier, are all quickly moving up in the ranks.

NORTH AMERICAN MERCHANT IC VENDORS

Provided in Figure 2-4 is a listing of those North American merchant IC vendors with sales of atleast $25 million in 1995. The figure includes sales for both IC manufacturers and fabless IC sup-pliers. For the manufacturers, IC “sales” include all revenue from ICs produced by their own fab-rication facilities and by external foundries. Also, sales by the major ASIC firms (e.g., Xilinx,Altera, and LSI Logic) include revenue from sales of software design tools.

Worldwide IC Vendors

INTEGRATED CIRCUIT ENGINEERING CORPORATION2-2

Rank

1994 1992Company

1995 IC Sales ($M)

1995 Discrete

Sales ($M)

1995/1994 Percent Change

1

2

3

5�

4�

7�

6�

N/A

8�

9

—

3�

1�

2�

5�

4�

11�

6�

N/A�

8�

7

—

Intel

NEC

Toshiba

Hitachi

Motorola

Samsung

TI

IBM Microelectronics

Mitsubishi

Fujitsu

Total

13,590�

11,045�

8,100�

8,630�

7,196�

8,182�

7,700�

5,705�

4,690�

4,010�

78,848

—

1,230�

1,900�

1,195�

1,736�

234�

50�

—�

820�

430�

7,595

1995 Total Semi Sales

($M)

13,590�

12,275�

10,000�

9,825�

8,932�

8,416�

7,750�

5,705�

5,510�

4,440�

86,443

38�

39�

24�

41�

24�

68�

40�

25�

39�

33�

37

18072JSource: ICE, "Status 1996"

1995

1

2

3

4

5

6

7

8

9

10

—

Figure 2-2. Worldwide Top Ten Merchant Semiconductor Sales Leaders

On average, sales for IC vendors headquartered in North America grew 34 percent in 1995 versus27 percent in 1994. Of the 85 companies listed in the figure, only a dozen or so are estimated tohave experienced anything less than double digit growth in 1995.

Those companies with the most dramatic sales gains for the year are shown in Figure 2-5. Notethat the list includes only those companies with sales of more than $100 million thereby makingthe growth rates more comparable. A close look at the figure reveals two interesting points. First,half of the companies listed in the figure are involved in graphics and/or multimedia-related ICs;and second, two-thirds of them are fabless.

Figure 2-6 lists selected North American IC companies and the end-user markets they rely on.Those companies that are heavily dependent on the computer industry have benefited from abooming market for PCs. At the same time, however, they are more susceptible to downturns.Those companies that sell to a balance of computer, communications, and consumer product man-ufacturers are generally more resilient to cyclical fluctuations.

Excluding the effects of a change in the classification of Cirrus Logic from fabless supplier in 1994to manufacturer in 1995, sales for the region’s fabless IC companies grew by more than 50 percentin 1995. With the reclassification taken into account, the growth in sales for the year drops to 20percent.



Rank

1994 1992Company


1�

2�

4�

7�

3�

6�

5�

N/A�

8�

9�

15�

17�

10�

13�

19�

—

2�

1�

4�

9�

3�

6�

5�

N/A�

8�

7�

21�

27�

14�

13�

26�

—

Intel

NEC

Hitachi

Samsung

Toshiba

TI

Motorola


Mitsubishi

Fujitsu

LG Semicon

Hyundai

SGS-Thomson

Philips

Micron

Total

1995 Total IC Sales

($M)

13,590�

11,045�

8,630�

8,182�

8,100�

7,700�

7,196�

5,705�

4,690�

4,010�

3,300�

3,000�

2,947�

2,850�

2,705�

93,650

38�

41�

45�

70�

26�

40�

23�

25�

43�

35�

83�

71�

34�

35�

72�

41

20458Source: ICE, "Status 1996"

1995

1

2

3

4

5

6

7

8

9

10�

11�

12�

13�

14�

15

—

Figure 2-3. Worldwide Top Fifteen Merchant IC Sales Leaders



ACC Microelectronics

Actel

Allegro MicroSystems2

Alliance Semiconductor

Altera

AMCC2

AMD

AMI

Anadigics3

Analog Devices2

AT&T Microelectronics2

Atmel2

Brooktree

Burr-Brown2

C-Cube Microsystems

Catalyst

Cherry Semiconductor2

Chips and Technologies

Cirrus Logic

Cypress2

Cyrix

Dallas Semiconductor

Elantec2

Electronic Designs

Exar2

Exel

Gennum

Harris2

Honeywell

IBM Microelectronics2

IC Works2

ICS

IDT2

IIT

IMP

Intel2

International Rectifier

ISD

ISSI

Lattice

Level One

Linear Technology2

Linfinity Microelectronics2

LSI Logic

CompanyMOS Bipolar IC Total MOS Bipolar IC Total


1995 (EST)1994

30�

108�

47�

260�

400�

15�

2,260�

210�

53�

483�

1,255�

609�

150�

46�

115�

44�

8�

139�

1,235�

600�

235�

225�

8�

28�

120�

37�

—�

425�

42�

4,815�

43�

112�

642�

47�

70�

13,590�

29�

60�

153�

185�

75�

97�

10�

1,262

—

—�

124�

—

—

37�

120�

—

—

442�

220�

—

—

184�

—

—�

95�

—

—

—

—

—

21�

—

40�

—

40�

95�

3�

890�

—

—

—

—

—

—

—

—

—

—

—

228�

32�

—

30�

108�

171�

260�

400�

52�

2,380�

210�

53�

925�

1,475�

609�

150�

230�

115�

44�

103�

139�

1,235�

600�

235�

225�

29�

28�

160�

37�

40�

520�

45�

5,705�

43�

112�

642�

47�

70�

13,590�

29�

60�

153�

185�

75�

325�

42�

1,262

20

42�

23�

174�

101�

11�

11�

23�

51�

29�

18�

64�

33�

39�

174�

–4�

37�

88�

59�

48�

–4�

24�

26�

12�

3�

54�

18�

5�

—�

25�

43�

12�

65�

15�

23�

38�

32�

54�

139�

38�

60�

43�

5�

40

x�

x�

�

x�

x�

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�

�

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�

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�

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�

�

�

�

x�

�

x�

�

�

�

x�

x�

x�

x

25�

76

40

95

199

11

1,993

171

35

365

1,035

372

113

30

42

46

4

74

777

406

246

181

5

25

91

24

—

405

42

3,725�

30

100

389

41

57

9,850

22

39

64

134

47

51

9

902

—

—

99

—

—

36

142

—

—

350

215

—

135

—

—

71

—

—

—

—

—

18

—

65

—

34

90

3

850�

—

—

—

—

—

—

—

—

—

—

—

177

31

—

25�

76

139

95

199

47

2,135

171

35

715

1,250

372

113

165

42

46

75

74

777

406

246

181

23

25

156

24

34

495

45

4,575�

30

100

389

41

57

9,850

22

39

64

134

47

228

40

902

1 No more than approximately 25 percent of wafer requirements are met by wholly- or partially-owned fabs. 2 BiCMOS ICs included under MOS. 3 GaAs ICs included under MOS.

9998Y

Fabless1

Source: ICE, "Status 1996"

Figure 2-4. North American Companies’ IC Sales ($M)



Figure 2-4. North American Companies’ IC Sales ($M, continued)

Maxim2

Micrel2

Micro Linear2

Microchip Technology

Micron

Mitel Semiconductor

Motorola2

National2

Oak Technology

Opti

Orbit Semiconductor

Paradigm

Pericom Semiconductor

QLogic

Quality Semiconductor

Raytheon Semiconductor2,3

Rockwell Semiconductor3

S-MOS Systems

S3

Sierra Semiconductor

Silicon Storage Technology

Silicon Systems2

Standard Microsystems

Supertex

Symbios Logic

Synergy Semiconductor

TelCom Semiconductor2

Texas Instruments2,3

Trident Microsystems

TriQuint3

Tseng Labs

Unitrode2

UTMC

Vitesse3

VLSI Technology

VTC

Western Digital

WSI

Xicor

Xilinx

Zilog

Others

Total

Company

347�

48�

18�

267�

2,705�

68�

5,714�

1,200�

190�

155�

58�

52�

40�

40�

47�

37�

650�

153�

306�

205�

37�

205�

140�

37�

500�

—�

36�

5,920�

138�

47�

40�

10�

30�

45�

725�

—�

150�

36�

105�

545�

255�

737�

52,415

—�

6�

40�

—

—

—

1,482�

1,130�

—

—

—

—

—

—

—

65�

—

—

—

—

—�

170�

—

—

—

30�

4�

1,780�

—

—

—

105�

—

—

—

160�

—

—

—

—

—

42�

7,585

347�

54�

58�

267�

2,705�

68�

7,196�

2,330�

190�

155�

58�

52�

40�

40�

47�

102�

650�

153�

306�

205�

37�

375�

140�

37�

500�

30�

40�

7,700�

138�

47�

40�

115�

30�

45�

725�

160�

150�

36�

105�

545�

255�

779�

60,000

80�

50�

38�

40�

72�

21�

23�

16�

280�

16�

35�

58�

74�

–29�

24�

2�

26�

6�

119�

88�

825�

25�

32�

85�

41�

15�

60�

40�

62�

57�

–50�

37�

—�

22�

24�

48�

—�

29�

1�

70�

14�

40�

34

193�

31

10

191

1,575

56

4,640

1026

50�

134

43

33

23

56�

38

26

515

145

140

109

4�

120

106

20

354

—

22

4,125

85

30

80

7

30

37

587

—

150

28

104

321

223

515�

38,370

—

5

32

—

—

—

1,228

988

—

—

—

—

—

—�

—

74

—

—

—

—

—�

180

—

—

—

26

3

1,375

—

—

—

77

—

—

—

108

—

—

—

—

—

38�

6,450

193�

36

42

191

1,575

56

5,868

2,014

50�

134

43

33

23

56�

38

100

515

145

140

109

4�

300

106

20

354

26

25

5,500

85

30

80

84

30

37

587

108

150

28

104

321

223

553�

44,820

MOS Bipolar IC Total MOS Bipolar IC Total1995/1994

Percent Change1995 (EST)1994

x

x�

x

x

x�

x

x

x

x

x�

x

x

x

x

x

x

Fabless1

1 No more than approximately 25 percent of wafer requirements are met by wholly- or partially-owned fabs. 2 BiCMOS ICs included under MOS. 3 GaAs ICs included under MOS.

9998YSource: ICE, "Status 1996"

As Figure 2-7 shows, the percent share of total North American IC sales held by fabless compa-nies is more than double what it was in 1988. Still, combined sales by the fabless suppliers in 1995was less than one-tenth that of their fabbed counterparts. Their influence on the integrated circuitindustry, however, goes way beyond what those statistics suggest. The fast pace of product inno-vation maintained by fabless companies has led to increased competition in the industry, often-times by forcing the manufacturers of ICs to lower their cost structures and be more aggressive inadvancing their process technologies.

Top Ten North American Fabless IC Suppliers

Figure 2-8 provides a ranking of the top ten North American fabless IC suppliers. With few excep-tions, the leading fabless firms enjoyed very strong sales gains in 1995, several with gains in thetriple digits. On average, sales for the ten companies increased 67 percent in 1995, versus 40 per-cent in 1994.



Oak Technology C-Cube Microsystems Alliance Semiconductor Integrated Silicon Solution S3 Altera Sierra Semiconductor Chips and Technologies Maxim Micron Technology Xilinx IDT Atmel Trident Microsystems Cirrus Logic

Rank Company 1995 Percent Growth Primary Products

1��

2��

3��

4��

5��

6��

7��

8��

9��

10��

11��

12��

13��

14��

15

Peripheral control ICs, graphics and multimedia ICs, and chipsets. Digital video and still image compression chips. Low-voltage fast SRAMs. Fast SRAMs, EEPROMs, and flash memories. Graphics and video accelerator ICs. Programmable logic devices. Mixed-signal ICs for communications and multimedia applications. Graphics controllers and accelerators, video circuits, and chipsets. Analog and mixed-signal ICs. DRAMs and fast SRAMs. Programmable logic devices and FPGAs. SRAMs, logic products, and RISC microprocessors. Programmable nonvolatile memory and logic chips and analog ICs. Graphics and multimedia-related devices. Peripheral control ICs, graphics and multimedia devices, and modem chips.

280��

174��

174��

139��

119��

101��

88��

88��

80

72��

70��

65��

64��

62��

59��

13727RSource: ICE, "Status 1996"

* With sales of at least $100M in 1995.

Figure 2-5. Top North American IC Sales Growth Companies*



Altera

Atmel

Cirrus Logic

Cypress

Dallas Semiconductor

Exar

IDT

Intel

Linear Technology

Maxim

Microchip Technology

Motorola

Silicon Systems

Trident Microsystems

TriQuint Semiconductor

Vitesse Semiconductor

Xilinx

Zilog

Computers, Peripherals

Communications Consumer Other Markets

18957B

>75% of sales >50% of sales >25% of sales >10% of sales <10% of sales


Figure 2-6. North American IC Companies’ End-Market Reliance

0

1

2

3

4

5

6

7

8

9

19951994199319921991199019891988Year

Per

cen

t S

har

e o

f N

ort

h A

mer

ican

C

om

pan

ies'

IC S

ales

19434ASource: ICE, "Status 1996"

* Had Cirrus Logic remained fabless in 1995, the share would have been 10 percent.

8%*

Figure 2-7. Growing Presence of Fabless IC Firms (In Terms of Sales)

Fabless IC companies are generally focused on one or maybe two IC products types. Therefore,their sales are dependent on the condition of the markets for those particular products. The strongperformances of Xilinx, Altera, and Lattice are linked to the healthy market for CMOS program-mable logic devices. The flourishing graphics/multimedia and communications markets haveaccelerated sales for S3, Sierra, and Oak Technology. High demand for fast SRAMs has fueledsales at Alliance Semiconductor.

Although Cyrix is involved in microprocessors, a market that grew 28 percent in 1995, its saleswere hurt by continued price erosion in the 486-level market. Exar is just beginning to see the ben-efits of the major product transitions it has made during the past two years. The companydropped many low-margin product lines and replaced them with higher margin lines through theacquisition of several companies.

Top Ten North American Merchant IC Manufacturers

The top ten North American IC manufacturers of 1995 are listed in Figure 2-9. Most of these com-panies enjoyed another year of healthy sales revenues. Collectively, they reported 32 percentgrowth in their sales of integrated circuits for the year, which comes after 27 percent growth in1994.

Since becoming the largest North American IC company in 1990, Intel has widened the gapbetween it and second place to more than $5.8 billion. Intel has been very successful in promot-ing its Pentium CISC microprocessor through aggressive pricing and marketing strategies. Thecompany also has the top selling RISC processor (i960) and is the leading flash memory supplier.



321�

199�

140�

95�

246�

109�

50�

134�

156�

134�

1,584

Company1995 Rank

1994 1995 (EST)

Xilinx

Altera

S3

Alliance Semiconductor

Cyrix

Sierra Semiconductor

Oak Technology

Lattice Semiconductor

Exar

Opti

Total

1

2

3

4

5

6

7

8

9

10

545�

400�

306�

260�

235�

205�

190�

185�

160�

155�

2,641



70�

101�

119�

174�

–4�

88�

280�

38�

3�

16�

67

Figure 2-8. 1995 Top Ten North American Fabless IC Suppliers ($M)

After losing momentum in the early 1990’s, Texas Instruments has had two record-setting years ina row, allowing it to capture the number two spot from Motorola in 1995. Its IC business grew 36percent in 1994 and 40 percent in 1995. Much of the company’s strategic emphasis in semicon-ductors is on digital signal processors, and as a result, its DSP sales have grown substantiallyfaster than the DSP market in the past couple of years. TI also saw strong demand for its DRAMs,mixed-signal/analog ICs, and application-specific devices in 1995.

A broad-based product portfolio has helped Motorola to maintain consistent IC revenue growthover the past several years. PowerPC RISC microprocessors, fast SRAMs, digital signal proces-sors, customer-specific microcontrollers, CMOS gate arrays, and embedded processors wereMotorola’s strongest product groups in 1995.

1995 marks the first year in which ICE classified IBM Microelectronics as a merchant IC company(i.e., more than about 25 percent of its total IC production is sold on the open market). The com-pany’s external IC sales represented approximately 30 percent of its total IC production in 1995.As a result, the company is now the fourth largest merchant IC manufacturer in North America.Figure 2-10 provides a look at IBM’s merchant product offerings.

Consistently high demand for DRAMs, coupled with stable memory pricing, has helped Micronto propel itself up five spots from its position at the bottom of the top ten list in 1992. Micron’s ICsales (DRAMs and fast SRAMs) grew 93 percent in 1993, 68 percent in 1994, and 72 percent in 1995.To free itself of the DRAM product cycle, Micron is busy developing other products such as flashmemories and radio frequency identification (RFID) chips.



9,850�

5,500�

5,868�

4,575�

1,575�

2,135�

2,014�

1,250�

902�

777�

34,446

Company1995 Rank

1994 1995 (EST)

Intel

Texas Instruments

Motorola


Micron Technology

Advanced Micro Devices

National Semiconductor

AT&T Microelectronics

LSI Logic

Cirrus Logic

Total

1

2

3

4

5

6

7

8

9

10

13,590�

7,700�

7,196�

5,705�

2,705�

2,380�

2,330�

1,475�

1,262�

1,235�

45,578



38�

40�

23�

25�

72�

11�

16�

18�

40�

59�

32

Figure 2-9. 1995 Top Ten North American IC Manufacturers ($M)

Capacity constraints, price erosion in the 486 microprocessor market, and delays in the introduc-tion of its fifth-generation K5 microprocessor stalled AMD’s sales in 1995. The company was hithardest by a decline in Am486 MPU revenues. Demand for its other IC products, namely flashmemories, Ethernet devices, and CMOS programmable logic devices, was very strong during theyear.

After reporting nearly flat sales in 1994, National finished 1995 with relatively solid growth insales. The company’s rebound can be attributed to a shift toward higher-margin analog andmixed-signal products and away from low-margin standard logic and memory businesses.Easing of capacity constraints also helped boost sales.



Product Technology

PowerPC 601 RISC MPU (50-100MHz) PowerPC 602 RISC MPU (66MHz) PowerPC 603/603e RISC MPUs (66-100MHz) PowerPC 604 RISC MPU (100-133MHz) PowerPC 620 RISC MPU (133MHz, 64-bit) 486 DX2/SX2/SX3/SLC2 MPUs MC196 16-bit MCU PowerPC 403GA/403GB 32-bit Embedded MCU 4M, 16M DRAMs 4M VRAM 1M Synch. SRAM/High-Performance Synch. SRAM PCMCIA Memory Cards, SIMMs/DIMMs PCI Core Logic Chips Digital ASICs – CMOS2 – CMOS4L – CMOS4LP (3.3V) – CMOS 5L – CMOS 5S Analog and Mixed-Signal ASICs (5V and 3.3V) RGB Palette DAC Graphics ICs Adaptive Lossless Data Compression (ALDC) ICs MPEG-2 Digital Encoders and Decoders Mwave DSP System-On-A-Chip

0.5/0.6µm CMOS, 4-layer metal 0.5µm CMOS, 4-layer metal 0.5µm CMOS, 4-layer metal 0.5µm CMOS, 4-layer metal 0.5µm CMOS, 4-layer metal CMOS CMOS CMOS CMOS, 5V and 3.3V CMOS CMOS — 0.8µm CMOS 1.0µm, 60K gates, 3-layer metal 0.8µm, 260K gates, 4-layer metal 0.8µm, 260K gates, 3-layer metal 0.5µm, 1,240K gates, 4/5-layer metal 0.5µm, 1,600K gates, 4/5-layer metal CMOS, bipolar, BiCMOS 0.8µm CMOS 0.8µm CMOS 0.5µm CMOS CMOS


Figure 2-10. Sampling of IBM’s Merchant Market Offerings

AT&T Microelectronics’ strongest products in 1995 were FPGAs and DSPs. LSI Logic has beenvery successful in the standard cell ASIC market with its broad library of CoreWare functionalmodules. Cirrus Logic experienced growth across all of its product lines in 1995, with growth ledby graphics and audio chips.

Provided below are selected announcements made by the top ten North American merchant ICmanufacturers in 1995.

Top Ten North American IC Manufacturer Highlights

Intel — Wafer Fab Announcements

• Announced the establishment of a new $1.5 billion fab facility at its Leixlip, Ireland, site. Fab14 will produce advanced logic devices, including future generations of the Pentium Promicroprocessor. Scheduled for completion in 1998, the factory will run 200mm wafers and a0.25µm process.

• Will build its Fab 18 in Kiryat Gat, Israel—a $1.6 billion plant dedicated to flash memory pro-duction. Weekly 200mm wafer capacity is expected to reach 7,500 units. The facility isexpected to start production of 0.25µm design rule devices in 1998.

• Plans to convert its Fab 9 in Albuquerque, New Mexico, from logic to flash memory deviceproduction in order to increase flash capacity until Fab 18 in Israel is opened in 1998. Intelwill also increase the 150mm wafer starts at its flash-only Fab 7 in Albuquerque by 25 per-cent in 1996.

• Announced plans for its fourth fab in Oregon, a $2.2 billion plant that will initially be usedfor R&D and eventually for mass production of its P6 and P7 microprocessors. The firstphase will cost $565 million and is scheduled to come on-line in 1997.

• Will phase out its Fab 4 in Aloha, Oregon, by early 1997. The facility is the company’s onlyremaining NMOS process fab and is no longer profitable due to a decline in interest in theolder technology.

Intel — Key Agreements

• Agreed with SanDisk Corporation to cross-license the full inventory of their respective flashmemory patent portfolios. The agreement does not, however, include any technology shar-ing or codevelopment of products.



• Signed a cross-licensing agreement with Micron that allows Micron to be a true alternatesource for Intel’s flash memory products. Initial shipments of 4M devices began in 2H95.

Intel — Product Briefs

• Introduced lower voltage (2.7V) versions of its 4M and 8M flash memories. The new chipsoffer read capabilities of anywhere from 2.7V to 5V, but they write at 5V. Both are initiallyimplemented in a 0.6µm CMOS process, but will be converted to a 0.4µm process in 1H96.

• Extended its core-logic chip business from the desktop to the notebook market. The newIntel 82430MX PCIset chipset includes active clock throttle (ACT), an element that allows amicroprocessor to run at full speed for a given duration for performance-sensitive applica-tion. When the application is finished, the system automatically drops into a lower speed.

• Entered the merchant market for Fast Ethernet LAN ICs, almost a year after Intel’s network-system division began offering Fast Ethernet network-interface cards.

• Unveiled its long-rumored low-power embedded 486, code-named Hummingbird, for use inhandheld systems. The chip is offered in two versions, the 486SXSF with a 32-bit data busand the 486GXSF with a 16-bit data bus. Both are built in Intel’s mature 0.8µm CMOSprocess.

• Formally launched volume production of its sixth-generation Pentium-successor MPU in4Q95. Intel has confirmed that the so-called Pentium Pro (P6) will migrate from the current2.9-volt, 0.6µm BiCMOS process to a 2.5-volt 0.35µm CMOS process in 1996.

• Unveiled a new power management technology called Voltage Reduction Technology (Vrt)and new 75MHz and 90MHz Vrt Pentiums for the mobile computing market. Vrt is said toallow the core of the processor to operate at 2.9V while still maintaining its compatibilitywith existing 3.3V core logic and cache devices.

• Began sampling its long-awaited i960 “P2P” microprocessor, which features dual, bridgedPeripheral Component Interconnect (PCI) interfaces for handling local network functions onsecondary PCI buses. The P2P is the first in a series of i960s called IQ, which will be dedi-cated for networking intelligence.

• Announced the availability of a design guide and software concerning the use of its NativeSignal Processing (NSP) technology. NSP is said to make the company’s Pentiums capableof performing digital signal processing functions, such as multimedia and communications,thereby eliminating the need for additional dedicated DSP chips.



• Introduced a new version of its 8-bit 80C51 MCU that the company claims improves systemperformance up to 15 times. Intel also introduced an addition to its MCS 96 family of 16-bitmicrocontrollers that is targeted at the automotive market.

Texas Instruments — Wafer Fab Announcements

• Will invest an estimated $500 million to $1 billion to boost logic and memory chip produc-tion at its fab in Japan. The company plans to install equipment with a weekly 200mm waferoutput capacity of 5,000 to 7,500 units by the year 2000.

• Agreed with Kobe Steel to invest about $500 million to double the capacity of KTISemiconductor Ltd., their joint manufacturing venture in Japan. The expansion will allowfor the production of 64M DRAMs using 0.35µm process technology beginning in the springof 1997. Once completed, KTI will have the capacity to produce 6,250 200mm wafers perweek.

Texas Instruments — Key Agreements

• Expanded its long-standing agreement with Philips on standard logic devices with plans toadd a new Advanced Low-Voltage CMOS family of 3.3V parts.

• Formed a joint venture with MEMC Electronics Materials to set up a new company inSherman, Texas, to produce raw 200mm silicon wafers. Named MEMC Southwest Inc., theoperation will supply wafers for TI’s internal use and for the merchant market beginning in1997.

• Settled its legal dispute with Cyrix that arose in late 1993 concerning the alleged breaches ofa 1991 agreement between the two. As a result of the settlement, TI was granted licenses tocertain Cyrix-designed microprocessors and the option to take licenses under certain futureCyrix patents, in exchange for royalty payments. However, TI was not given rights to thedesign of Cyrix’s next-generation M1 processors.

• Collaborating with IMEC, an independent Belgian R&D organization, on a 0.18µm pho-tolithography process technology for next-generation gigabit-class ICs. The team hopes tohave the capability to manufacture 1G DRAMs by the year 2001.

• Provided Ericsson with its 0.5µm CMOS process technology for the production of ASICsbased on TI’s TEC3000 gate array family in Ericsson’s new fab facility in Sweden. Ericssonplans to upgrade the fab to 0.35µm technology, also to be provided by TI.



Texas Instruments — Product Briefs

• Began sampling the first member of a new microcontroller family that integrates the ARM7RISC core from Advanced RISC Machines with a 100,000-gate gate array. The chip is fabri-cated using a 0.6µm, triple-layer metal process.

• Announced a low-cost (less than $100) version of its MVP digital signal processor (theTMS320C80). The new 320C82 offers a peak performance of 1.5 billion operations per sec-ond using a 50MHz clock, at a price that is less than half that of the original C80.

• Introduced its first synchronous DRAM. Volume production of the 16M part began in mid-1995.

• Launched the first members of a family (C54x series) of 16-bit fixed-point DSPs for wirelesscommunications applications. Separately, TI announced a new 32-bit floating-point DSP thatis positioned as a mass-market device at the same price point that the company has tradi-tionally put its fixed-point devices.

• Sold its antifuse FPGA business to Actel Corporation in April 1995. As a result of the trans-action, TI will no longer market the parts, but will increase the volume of FPGA manufac-turing it does for Actel. TI had been a licensed second-source of Actel’s FPGAs since 1988.

• Unveiled its TGC3000 scalable gate array, which is based on a 3-volt, 0.5µm CMOS processand offers up to 1.15 million usable gates and 700 I/Os. The chip is targeted at customers inthe telecom and computer industries.

• Introduced a modular mixed-signal microcontroller library, called the cMCU370, thatincludes the firm’s first 16-bit controller core and other elements necessary to build integrat-ed, application-specific MCUs. The company is planning to add flash memory to the library.The 0.8µm cMCU370 library is the most recent fruit of a partnership with Delco Electronicsthat began in 1990.

Motorola — Wafer Fab Announcements

• Announced plans to build a $1.5 billion DRAM fab in the United States in partnership withSiemens. The location of the fab site was to be selected by the end of 1995. Motorola has saidit is not seeking to become a top tier DRAM producer. Rather, it is seeking to meet demandfor DRAMs from its customers.



• Building a $720 million 200mm wafer fab in Tianjin, China, to be named MOS 17.Construction of the facility started in November 1995, and it is set to be operational in 1Q98.Production is expected to ramp to about 3,000 wafers per week.

• Plans to build a major $3 billion IC manufacturing complex near Richmond, Virginia, overthe next several years. Construction of the first $1 billion fab facility started in late 1995.Production at the plant will start in 1998 on 200mm wafers at 0.35µm design rules, with aplanned transition to 0.25µm.

• Will invest about $425 million to build a 0.5µm-0.65µm logic IC production facility at itsNippon Motorola fab in Aizu, Japan. Construction will begin in 1997 and operations in 1998.It will be equipped with 200mm wafer lines that will add 10,000 to facility’s weekly wafercapacity.

• Announced expansion plans for its fab in Research Triangle Park, North Carolina, which waspurchased from Harris in 1994. Phase I, now completed, included the conversion from100mm wafers to 150mm wafers, and an upgrade to 1.0µm CMOS technology. Phase II,scheduled to begin in 1996, will give the factory 200mm wafer and submicron capabilities.

• Purchased Digital Equipment Corporation’s wafer fab in Scotland in early 1995 for $200 mil-lion. Motorola plans to make the site its worldwide center for BiCMOS manufacturing. Aspart of the deal, Motorola agreed to take on an existing foundry contract for AMD’s Am486microprocessors, as well as to continue producing Alpha RISC microprocessors for DEC.

Motorola — Key Agreements

• Announced it would join the IBM-Siemens-Toshiba DRAM R&D team to develop a 1GDRAM device. Through the deal, Motorola will also gain access to work the three othermembers have done on 64M and 256M devices.

• Said its PowerPC microprocessor collaboration with IBM will continue well into the futureas the companies will jointly develop common process technologies to build future genera-tions of the RISC processor.

• Teaming with SGS-Thomson to develop a chipset for the emerging V.34 28.8K/sec modemmarket. The chipset combines Motorola’s 68356 microprocessor, SGS-Thomson’s ST544codec, and the software required to support V.34 data pump functions. The 68356, intro-duced in June 1993, combines a 68000 general-purpose MPU, a dedicated RISC communica-tions engine, and the 56002 24-bit DSP.



Motorola — Product Briefs

• Said the introduction of the PowerPC 620 will be delayed from late 1995 to mid-1996.Motorola and IBM said there were no profound problems with the design; they are re-eval-uating their process options to see if a smaller die and higher performance can be achievedto make it more competitive.

• Unveiled a new family of 24-bit DSPs that deliver 80 MIPS performance at 80MHz for signalprocessing intensive applications such as wireless telecommunications and multimedia. Inaddition, two new 8-bit 68HC11 microcontrollers, primarily targeted at communicationsapplications, were introduced.

• Announced a new line of 0.65µm CMOS gate arrays, the H4EPlus series, that features a corearchitecture with 50 percent greater gate density than previous generations. Available gatecounts for the devices range from 12,000 to 278,000.

• Unveiled a new embedded PowerPC chip for applications in handheld computers and set-top boxes. The MPC821 combines a PowerPC core derived from Motorola’s MPC505 and asecond RISC MPU that controls communications functions.

• Introduced its Customizable Standard Products (CSP) program, which the company starteddeveloping in 1993. The two-pronged program offers a series of customizable application-specific ICs (MC92000 family) targeted at the Asynchronous Transfer Mode (ATM) commu-nications market. For customers seeking greater product differentiation, the chips can beused to build specialized proprietary CSP designs with up to several thousand gates of user-specified logic, memory, and peripheral function blocks.

• Rolled out a pair of 1M synchronous SRAMs, dubbed BurstRAMs, which feature accesstimes as fast as 5ns. The BurstRAMs are intended for use as second-level cache memory forhigh-performance MPUs, including PowerPCs, MC68040s, Pentiums, and 486s.

• Brought out its Coldfire 32-bit microprocessor core technology. Coldfire is a subset of theMotorola 68000 instruction set and is available as an ASIC core that can be integrated withon-chip peripherals and memory to form a low-cost 32-bit single-chip microcontroller.

IBM Microelectronics — Wafer Fab Announcements

• Joined with Toshiba to construct a $1.2 billion 64M DRAM facility in Manassas, Virginia. Thefacility will be equally shared by the partners and will have its own identity. It will be readyfor volume production in late 1997 or early 1998 and will ramp to 6,750 200mm wafers perweek.



• Sold one of its fab facilities in Corbeil-Essones, France, to Wesson France SA, a new compa-ny representing a group of Hong Kong investors. Wesson France is making 1.0µm bipolardevices at the plant primarily for Asian telecommunications markets.

IBM Microelectronics— Key Agreements

• Signed a manufacturing agreement with Ramtron for Enhanced DRAM (EDRAM) produc-tion. Under the agreement, IBM is serving as a foundry for the production of EDRAMsdesigned by Ramtron subsidiary, Enhanced Memory Systems. IBM also gained a non-exclu-sive license to sell a portion of the devices.

• Closed a deal with Cirrus Logic to form a joint IC manufacturing subsidiary, called Micrus,that is producing wafers using 0.8µm to 0.5µm CMOS technology. Micrus operates from arejuvenated IBM plant in East Fishkill, New York. Volume production started in mid-1995.A $320 million capacity expansion is planned for mid-1996 completion.

• Said its PowerPC microprocessor collaboration with Motorola will continue well into thefuture as the companies will jointly develop common process technologies to build futuregenerations of the RISC processor.

• Signed an agreement with S3 Incorporated calling for IBM to manufacture S3’s graphicsaccelerators on a foundry basis.

• Agreed with Philips to form a joint venture to manufacture ICs at IBM’s fab facility inBoeblingen Hulb, Germany. The new company, called SubMicron SemiconductorTechnologies GmbH (SMST), is held 51 percent by Philips and 49 percent by IBM. SMST issupplying products solely to Philips and IBM, manufacturing 4M DRAMs for IBM and0.8µm logic ICs for Philips. The two companies are also discussing the possibility of furthertechnology cooperation.

• Along with its partners Siemens and Toshiba, claimed to have developed their 256M DRAM,touted as the smallest and fastest fully functional device for its density yet produced. The0.25µm device took $1 billion and more than two years to develop.

IBM Microelectronics — Product Briefs

• Launched what it calls its SystemCORE ASIC program, designed to bring additionalPowerPC cores, along with other technologies such as the company’s Mwave DSP and pos-sibly even the NexGen x86 core, into the company’s library.



• Introduced two video palette digital-to-analog converter chips that are designed to enhancethe capability of PCs and workstations to display 3D and digital video images.

• Said the introduction of the PowerPC 620 will be delayed from late 1995 to mid-1996. IBMand Motorola said there were no profound problems with the design; they are re-evaluatingtheir process options to see if a smaller die and higher performance can be achieved to makeit more competitive.

• Added a member to its Mwave family of DSPs, the Mfast (Mwave folded array signal trans-form processor) highly parallel, single-chip DSP. The Mfast is targeted at multimedia appli-cations in the consumer PC arena.

• Started sample shipments of a 167MHz version of the PowerPC 603e microprocessor. Thenew 603e, which is designed for low-power portable computers, uses a five-layer-metalprocess instead of the four-layer-metal process used for previous members.

• Unveiled the latest member of its Power 400 line of microprocessors for embedded controlapplications. The PowerPC 403GC is the first member with an integrated memory manage-ment unit (MMU), allowing it to be used in set-top boxes and PDAs that have multitaskingoperating systems.

• Released what it calls the fastest high-speed CMOS-based SRAM. The 1M synchronousSRAM features an access time of 2.5ns. It’s designed for PowerPC and other high-perfor-mance RISC-based servers and workstations with clock speeds of up to 200MHz.

• Readying a low-cost, intra-frame-only, MPEG-2 single-chip video encoder. The chip will betargeted at a variety of applications ranging from PCs to high-end professional systems.

• Unveiled its CMOS 5S process, a derivative of its leading-edge CMOS 5L technology.Although a 0.5µm process, CMOS 5S provides 0.36µm L-effective features for standard celland gate array devices. New ASICs based on the 5S process provide up to 1.6 million usablegates and support speeds up to 120-125MHz.

Micron — Key Agreements

• Signed a cross-licensing agreement with Intel that allows Micron to be a true alternate sourcefor Intel’s flash memory products. Initial shipments of 4M devices began in 2H95.



Micron — Product Briefs

• Unveiled the first of its burst EDO DRAMs with hopes that the 16M part will lure OEMsaway from SDRAMs as the industry begins shifting to the 16M generation. Micron devel-oped burst EDO DRAM technology as a next-generation high-performance alternative formain memory in PCs.

• Announced it would phase out 5-volt asynchronous SRAMs by the end of 1995.

AMD — Wafer Fab Announcements

• Will add a second fab to its Fujitsu-AMD Semiconductor Ltd. joint venture with Fujitsu inJapan. The new fab will roughly double the site’s wafer capacity. Initial production willbegin in late 1997 at the 0.35µm level.

AMD — Key Agreements

• Acquired rival NexGen Inc. for about $900 million in stock. Under terms of the agreement,AMD will provide production capacity for NexGen’s Nx686 and future-generation micro-processors. AMD will cancel its sixth-generation K86 microprocessor and instead marketNexGen’s Nx686 under the AMD name. AMD still intends to introduce its delayed K5microprocessor in 1996. NexGen will operate as a wholly owned subsidiary of AMD.

• Signed an agreement with Minc Inc. in March 1995 that calls for Boulder, Colorado-basedMinc to take on the responsibility of developing design software and fitter support for allAMD CPLD products.

• Announced the formation of a long-term, strategic relationship with Hewlett-Packard todevelop low-power, highly integrated, silicon engines for the handheld computing market.The devices will feature either 386 or 486 cores.

AMD — Product Briefs

• Revealed its Mach 5 Value Plus family of complex PLDs (CPLDs) that are designed toimprove design flexibility and are targeted at the low end of the FPGA market. The Mach 5set of devices are built on a pure 3.3V process and feature speeds as fast as 7.5ns and densi-ties greater than 300 macrocells.



• Announced its first 8M, 5-volt-only flash memory and laid out plans for a 3-volt-only offer-ing in early 1996. The new chip currently uses 0.5µm technology.

• Admitted that its K5 microprocessor would suffer another delay, with the company now pro-jecting that volume production will not begin until 3Q96. A scaled-down version of the K5(the SSA5) is supposed to start shipping late in 1Q96.

• Announced a clock-tripled 120MHz version of the 486DX4. The company also started sam-ple shipping an MPU called the Am5x86, which is being billed as a fifth-generation-compat-ible MPU based on a 133MHz 486 core.

• Expects to push its 486 microprocessors to 150MHz clock speeds by 1Q96. This will beaccomplished by manufacturing the devices in a 0.35µm process at its new Fab 25 in Austin,Texas.

• Launched what it claims is the first single-chip wireless LAN media access controller (MAC)that can be designed into PCMCIA cards, ISA Plug and Play adapters, PC motherboards, oraccess points that connect mobile users to the network.

• Brought to market one of the fastest 128 macrocell devices, the MACH231, featuring speedsas fast as 7.5ns. The company also unveiled one of the largest in-circuit programmableCPLDs, the 256-macrocell MACH465, said to offer 10,000-gate density in addition to JTAGtesting capability.

National — Wafer Fab Announcements

• Spending $600 million to upgrade its Portland, Maine, manufacturing facility for 0.25µmproduction on 200mm wafers. The upgrade will add 40,000 square feet of new Class 1 clean-room. First silicon is expected in the summer of 1997.

• Expanding its Arlington, Texas, wafer manufacturing site by adding a third module at a costof about $600 million. The new 27,000-square-foot cleanroom will run 150mm wafers with a0.65µm process initially, migrating to a 0.35µm process over the next few years. It is sched-uled to come on-line in mid-1996.

• Outlined plans to double the output capacity of its Greenock, Scotland, Fab 2 facility by con-verting it from 100mm to 150mm wafer production by the end of 1996. In addition, the com-pany’s 150mm Fab 3 will be expanded by as much as three times its current capacity over afour-year period. Fab 1, which runs 100mm wafers, will not be expanded.



• Invested over $100 million in a new 20,000-square-foot, Class 1 cleanroom at the company’sFairchild Research Center in Santa Clara, California, for the research and development ofdevices with 0.35µm design rules initially, and 0.25µm design rules in the future. The facili-ty began running 200mm BiCMOS and CMOS wafers in late 1995.

National — Key Agreements

• Joined with SGS-Thomson to jointly develop a digital bus standard for linking home-enter-tainment equipment.

• Agreed to help finance production capacity expansion at foundry-dedicated TowerSemiconductor Ltd., which is located in Israel. The deal follows a three-year agreement thetwo companies signed in early June 1995 that called for Tower to increase its monthly waferproduction commitment to National. As of March 1995, Tower was committed to supplyingNational with 5,000 wafers per month.

• Acquired Comlinear Corporation in early 1995. Comlinear is a Fort Collins, Colorado-basedsupplier of analog signal processing circuits now operating as a separate business unit with-in National’s Analog Mixed-Signal Systems Division.

National — Product Briefs

• Acquired ceramic substrate technology and a manufacturing facility from Hughes AircraftCo., which National plans to use for wireless communications devices. The company plansto embed passive and active components into a multilayer ceramic substrate to create com-pact modules that support frequencies up to 1.8GHz.

• Unveiled its line of 486-compatible chips targeted at embedded applications, rather than thePC market. National designed its NS486 core from the ground up. It may be integrated witha collection of peripherals, including memory controllers, a single PCMCIA slot controller,and an LCD controller.

• Introduced an audio processor that combines a RISC core and a digital signal processor mod-ule as well as a 4M flash memory device using National’s Microwire interface that is aimedat applications requiring audio processing and storage, such as digital answering machines.

• Introduced the industry’s first monolithic CRT driver. It is built on the company’s new pro-prietary VIPIIIH high-voltage, high-speed bipolar process.



• Said it will enter what it calls the broadband transmission support market with a new fami-ly of network devices based on U.S. Synchronous Optical Network (Sonet) and worldwideSynchronous Digital Hierarchy (SDH) specifications.

• Announced a low-cost chipset that allows a digital data path to be transmitted by radio sta-tions for CD-quality sound and other benefits from digital data transmission. Nationalbelieves products incorporating the chipset should appear by the end of 1996.

• Expanded its presence in the electronic security market with the introduction of a pair ofCMOS devices (HiSeC code generator and decoder) for the creation of an automotive key-less entry system that is claimed to be impossible for car thieves to compromise. In 1997,National says it will offer a comprehensive vehicle information system that could include aGPS navigation system, a maintenance system, and a security system that will allow parkedcars to be disabled.

• Began shipping its first Toshiba-derived 16M NAND flash memory chips in February 1995.

AT&T — Wafer Fab Announcements

• Sold its fab facility in Missouri to startup Mid-West Microelectronics, which will use it toserve as a foundry for nonvolatile memory, custom memory, and microprocessor-relateddevices using a 0.5µm CMOS process.

AT&T — Key Agreements

• Formed a deal with Cirrus Logic that will create a joint manufacturing venture at AT&T’scurrent fab in Orlando, Florida. The two partners will double the current size of the plant toaccommodate a new 200mm wafer line that is expected to begin production with a 0.35µmprocess in early 1997. The expanded fab will be capable of 5,000 wafer starts per week, whichthe companies will share equally.

• Signed an agreement with Hewlett-Packard to develop and dual-source fiber-optic trans-ceivers for Sonet/SDN and ATM applications. The first devices were shown in 3Q95.

• Entered a non-exclusive agreement with VLSI Technology to develop a commercial crypto-graphic chip for the protection of data over wireless networks or the Internet.

• Agreed with NEC to extend their cooperative ASIC process development to the 0.25µm level.The partners plan to have a prototype 0.25µm logic chip ready by mid-1996.



• Increased its stake in TriQuint Semiconductor to 8.2 percent and gained guaranteed GaAswafer output for the next 10 years in return for the $1.5 million equity investment.

AT&T — Product Briefs

• Preparing a major push beyond its traditional mixed-signal communications focus in stan-dard cell ASICs. The company plans to add a wide range of cores to its library, including thei960 and Sparc 32-bit MPUs; DSP cores; MPEG-decoder, video processing, and other multi-media cores; communications modules; and DRAM and flash memory arrays.

• Developed a chipset that enables smaller-scale Ethernet hub manufacturers to design anexpandable 12-port, four-segment switching system that can be quickly reconfiguredthrough software.

• Added to its DSP1600 family of digital signal processors a 0.5µm CMOS device that reducesfrom two to one the number of DSPs needed for processing the modem and voice-codingfunction in digital cellular phones.

• Has developed a V.34 28.8Kps modem chipset (Catamaran) that supports the Intel-led digi-tal simultaneous voice and data (DSVD) protocol specifications.

• Disclosed the availability of a 40,000-gate FPGA in April 1995 that is claimed to be the high-est density FPGA on the market. The chip was made possible by a new 0.5µm, triple-layer-metal process. AT&T expects to introduce a 60,000-gate FPGA based on a 0.35µm process in1996.

LSI Logic — Wafer Fab Announcements

• Broke ground on a new fab complex in Gresham, Oregon. The first phase of the new facili-ty is expected to cost between $600 million and $800 million. The line will have the capaci-ty to run 4,000 200mm wafers per week for the production of 0.35µm design rule devices.Initial chip production is expected to take place in early 1997.

LSI Logic — Key Agreements

• Made a $20 million investment in Chartered Semiconductor’s newly built Fab II, in exchangefor guaranteed wafer capacity in 1996. The investment gives LSI a minority stake inChartered and an unspecified number of 200mm wafers.

• Paid $125 million to Kawasaki Steel to purchase the remaining half of their joint ventureNihon Semiconductor. The move supports LSI Logic’s plan to expand capacity to meetdemand for its advanced ASIC devices.



LSI Logic — Product Briefs

• Revealed its G10 series of ASICs that can integrate up to five million usable gates or 49 mil-lion transistors on a single chip, using 0.35µm (0.25µm Leff) process technology. LSI Logicsays the G10 ASICs are application-optimized. That is, customers can select from a varietyof process, core, and library-cell options to make a chip that is better optimized for a specif-ic system.

• Increased its push into high-end communications markets with the launch of a Sonet/SDHinterface core for 155Mbps residential broadband services, and a chip that integrates an ATMnetwork controller and a PCI bus.

• Introduced a family of three Mips R4000-architecture RISC microprocessor cores for build-ing a system-on-a-chip. The first two cores are implemented in LSI’s 0.5µm process technol-ogy and the third will be produced using a 0.35µm process.

• Announced its first mixed-signal ASIC offerings in May 1995. The first two products were afour-wire Ethernet 10Base-T standard cell and an Attachment Unit Interface (AUI) cell. Thecompany plans to expand its cell-based ASIC product line to include a variety of mixed-sig-nal cells.

Cirrus Logic — Key Agreements

• Formed a deal with AT&T Microelectronics that will create a joint manufacturing venture atAT&T’s current fab in Orlando, Florida. The two partners will double the current size of theplant to accommodate a new 200mm wafer line that is expected to begin production with a0.35µm process in early 1997. The expanded fab will be capable of 5,000 wafer starts perweek, which the companies will share equally.

• Decided to invest in a new billion-dollar joint-venture wafer foundry in Taiwan, calledUnited Silicon, as part of its effort to increase its ownership of manufacturing capacity. Ledby Taiwan’s UMC, United Silicon is expected to commence 200mm wafer processing usingUMC’s 0.35µm technology in late 1997..

• Licensed the TrueSpeech family of speech compression and decompression algorithms fromDSP Group Inc.

• Along with Samsung, entered the PC Card market with a full range of mass storage prod-ucts based on flash card controllers and PCMCIA form-factor storage devices from Cirrusand 16M NAND flash memories from Samsung.



Cirrus Logic — Product Briefs

• Introduced its long-awaited single-chip MPEG-1 video decoder specifically designed forPCs. The chip employs an MPEG-1 video core licensed from CompCore Multimedia and itis the company’s first MPEG chip to feature PCI-bus mastering.

• Unveiled its VisualMedia architecture for high-end multimedia graphics controllers basedon the Rambus interface technology that will eventually include graphics, video, 3D, andcommunications functions. The first chip in the family is a full-featured 64-bit graphics con-troller that takes advantage of the 500MByte/sec bandwidth that Rambus DRAMs(RDRAMs) deliver. The device also contains a 170MHz integrated RAMDAC.

• Targeting the booming remote-access networking market with a new dual-channel serialcommunications controller. The chip supports all major remote-access protocols includingPPP, SLIP, and MNP4—the AppleTalk protocol.

• Introduced a pair of hard-drive controller chips featuring “ID-less” technology that it claimscan add up to 10 percent to the capacity of a hard-disk drive.

NORTH AMERICAN CAPTIVE IC MANUFACTURERS

ICE’s definition of a captive integrated circuit manufacturer is provided in Figure 2-11. The maincriteria for an IC manufacturer to be labeled “captive” is that no more than 25 percent of its deviceproduction is sold on the open market, in terms of dollars. Typically, a captive manufacturer is awell established manufacturer of electronic systems that designs and produces ICs internally tohelp differentiate its systems from the competition. ICE also classifies R&D laboratories as cap-tive (Figure 2-12).

The majority of the world’s captive IC manufacturers are based in North America. Of course,there are many Japanese and European system manufacturers that transfer a great deal of ICsinternally. However, they generally sell more than 25 percent of their ICs on the open market andthus are not classified as captive.

North America’s captive IC manufacturers include Hewlett-Packard, Hughes Electronics (HughesAircraft and Delco Electronics), Digital Equipment, Nortel (Northern Telecom), Medtronic,Westinghouse, and until 1995, IBM. By definition, IBM became a merchant manufacturer of ICsin 1995 due to the tremendous growth of its external IC business during the past couple of years.

Figure 2-13 provides details about the captive IC fabrication facilities currently in operation.



Former Captive IC Producers

Besides IBM, there are many other system manufacturers that were once captive producers of ICs(Figure 2-14). Several of the companies, like IBM, saw the external portion of their IC businessesincrease to the point at which they could be considered merchant. Meanwhile, a number of theformer captives discontinued internal IC production completely in favor of out-sourcing devices,such as ASICs. For many, the availability of ASICs eliminated the need for in-house fabrication,while still allowing for some customization of the ICs they use in their systems. Figure 2-15 listsome of the large system manufacturers that do not produce their own ICs.

Figure 2-16 gives some of the advantages and disadvantages of captive IC production. As alreadymentioned, one of the major justifications for captive production is the availability of proprietarydevices that help to differentiate one’s electronic systems. Another major advantage is the conti-nuity of IC supply. Unlike fabless OEMs, captives do not always depend on the well-being of thecompanies from which they receive their IC supply. Captives also have the ability to maintain asupply of obsolete ICs that may be unavailable elsewhere.



Figure 2-11. Captive IC Producer Guidelines

• Sells less than approximately 25 percent of its IC production to the open market

• Has the primary goal of serving in-house needs • May or may not possess a dedicated open-market

sales force8392DSource: ICE, "Status 1996"

• Los Alamos National Labs – Los Alamos, New Mexico

• MCC – Balcones Research Center – Austin, Texas

• Microelectronics Center of North Carolina – Research Triangle Park, North Carolina

• Sandia National Labs – Albuquerque, New Mexico

• Sematech – Austin, Texas


Figure 2-12. Major North American Semiconductor Research Laboratories

Major disadvantages to captive IC production include the high cost of developing advanced sub-micron chips and the higher cost of building and maintaining state-of-the-art fabrication facilitiesin which to make them. This is believed to be the main reason IBM Microelectronics launched aworldwide microelectronics effort in 1992 by offering to sell virtually every product and servicein its technology portfolio. Another likely reason stems from the fact that the semiconductorindustry is in an era of increasingly open standards. In order for IBM Microelectronics’ chipdesigns to set standards, they have to be sold to more customers than just IBM Corporation.

Captive IC Production Values

For comparison with merchant IC companies, ICE categorizes captive firms according to the “ifsold” value of their IC production. This value includes development costs and non-recurringexpenses comparable to what would be charged if the work were contracted to an outside vendor.Estimates of the 1995 IC production value for each of the major captives is given in Figure 2-17.



Aerojet Electronics The Aerospace Corporation Allied Signal Cray Research Digital Semiconductor John Fluke Manufacturing Hughes Electronics Delco Electronics Hughes Aircraft Company Hewlett-Packard Company Avantek, Inc. Lockheed Missiles & Space Co. Lockheed Sanders Martin Marietta Aerospace Co. Medtronic Micro-Rel Nortel (Northern Telecom) Watkins-Johnson Westinghouse

Azusa, CA El Segundo, CA Columbia, MD Chippewa Falls, WI Hudson, MA Everett, WA Kokomo, IN Torrance, CA Newport Beach, CA Fort Collins, CO Corvallis, OR San Jose, CA Newark, CA Santa Clara, CA Palo Alto, CA Fort Worth, TX Nashua, NH Orlando, FL Tempe, AZ Ottawa, Canada Palo Alto, CA Baltimore, MD

100mm

100mm

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Military prototypes, satellite sensors Custom prototype military and rad-hard circuits ASICs; selective outside customers 200mm line is for pilot production of ASICs MPUs, MCUs, MPRs, ASICs, logic ICs, and custom ICs Custom linear ICs and some digital ICs ASICs, MPUs, MCUs, linear ICs, and logic ICs MMICs, MM wave devices, and subsystems ASICs, MPUs, memory ICs, LCD drivers, rad-hard ICs, analog ICs, and foundry services MPUs, RFICs, microwave ICs, and ASICs ASICs and MPUs ASICs; optoelectronics Analog ICs, RFICs MMICs R&D and pilot production of ASICs and rad-hard ICs R&D of custom military products Microwave, MMIC, and linear prototype ICs, and ASICs Prototype MMICs and custom circuits for MM wave radar systems Linear, digital, and mixed-signal ASICs and full-custom ICs Custom and cell-based ICs Microwave circuits R&D through pilot production of ASICs, linear ICs, MPUs, memroy ICs, and MMICs

Company Location Wafer Size

Technology Products/Comments

9477NSource: ICE, "Status 1996"

Figure 2-13. North American Captive IC Manufacturers’ Fab Facilities



Amdahl Honeywell UTMC Tektronix Unisys Data General AT&T Western Digital Honeywell Cray Computer Eastman Kodak Ford Automotive Loral Aeronutronics Honeywell Unisys Commodore Rockwell McDonnell Douglas Xerox IBM

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Discontinued internal IC production Reclassified as a merchant Reclassified as a merchant Reclassified as a merchant Phased out volume IC production Discontinued internal IC production Reclassified as a merchant Reclassified as a merchant Kept solid state electronics center, Plymouth, MN; sold digital products center, Colorado Springs, CO; reclassified as a captive Started captive GaAs IC line Discontinued internal IC production Discontinued internal IC production Discontinued internal IC production Reclassified as a merchant Discontinued internal IC production Discontinued business Reclassified as a merchant Discontinued internal IC production Discontinued internal IC production Reclassified as a merchant

Company Year of Change

Status

13385HSource: ICE, "Status 1996"

Figure 2-14. Companies That Have Changed Captive Status

•Amdahl

•Apple Computer

•Boeing

•Compaq Computer Corp.

•Convex Computer

•Data General

• Ford Motor Company

• Intergraph Corporation

•McDonnell Douglas

•Prime Computer

•Storage Technology Corp.

•Sun Microsystems

•Tandem Computers

•Unisys

•Wang Laboratories

• Xerox

11313GSource: ICE, "Status 1996"

Figure 2-15. “Fabless” System Manufacturers

Overall, the value of captive IC production in North America grew 4 percent in 1995, excludingIBM’s transition from captive to merchant in 1995. As can be seen, without IBM’s estimated $5.4billion in IC production in 1995, the total value of captive IC production is minimal compared tosize of the merchant IC industry.



12100C

DISADVANTAGES

Capital Investment In-house ICs Favored Lacking Second Source Learning Curve Attracting Key Personnel

DISADVANTAGE DESCRIPTION

Fabrication cleanrooms and equipment cost over a billion dollars Difficult to capitalize on open market bargain prices Second source provides insurance Lower volume Many captives lack glamour and appeal of merchants

Proprietary Circuits Reliability Control Innovation Quick Turnaround Continuity Of Supply

ADVANTAGE

Unique ICs can provide competitive edge Direct IC quality control can improve end product Improved systems designed in at chip level Especially important for “Hot” products System house not dependent on open market

DESCRIPTION

ADVANTAGES


Figure 2-16. Major Advantages and Disadvantages for Captive IC Production

Hewlett-Packard Hughes Electronics Hughes Aircraft Delco Electronics Digital Semiconductor Medtronic Micro-Rel Nortel (Northern Telecom) Westinghouse Xerox Others Total

Company 1995 (EST)


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Figure 2-17. Captive IC Production Values

Merchant market activities of the major captives are given in Figure 2-18. Most of the companiesare increasing the emphasis on their external IC businesses. One exception is Hewlett-Packard.Faced with a shortage of manufacturing capacity, HP made a strategic decision in late 1993 to exitthe external IC foundry business (within a year) in order to focus on internal needs.

Provided below are selected IC-related announcements made by the major North American cap-tive companies in 1995.

Captive IC Manufacturer Highlights

Hewlett-Packard

• Unveiled an infrared (IR) transceiver that will transmit data at 4M/sec over distances up toone meter, eliminating the need for cables to exchange files between PCs and peripherals.The devices will suit a range of other applications as well.

• Revealed its PA-7300LC RISC microprocessor in October. At that time, HP claimed the7300LC would outperform (160MHz) every processor on the market except Digital’s 21164Alpha MPU. It is based on HP’s 0.5µm four-layer-metal CMOS process and uses the samecore as its predecessor, the 0.8µm 7100LC. It is designed to offer a lower cost RISC MPU solu-tion for the company’s entry-level servers and workstations and it integrates multimediafunctionality.

• Unveiled its 64-bit PA-8000 microprocessor, which uses several advanced execution tech-nologies to deliver more than 360 SPECint92 and 550 SPECfp92. It is fabricated in a 0.5µm,3.3V CMOS process. The company expects the new chip to appear in systems in 1Q96.



Company Merchant IC Offerings

1994 Value ($M)

Percent of 1995 IC Production Value Sold to

Merchant Market

Merchant Emphasis

Hughes Electronics Westinghouse Digital Semiconductor Medtronic Micro-Rel Hewlett-Packard

ASICs, GaAs ICs, automotive ICs GaAs ICs, memory ICs, MPUs, and linear ICs MPUs, logic ICs, graphics ICs, foundry Foundry, ASICs Telecom and datacom ICs, MPUs

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Figure 2-18. Merchant Activities of Captive IC Manufacturers

• Signed a three-year deal with Tower Semiconductor to increase the amount of wafers HPgets from the Israeli foundry.

• Working with AMD to develop low-power, highly integrated ICs for HP’s handheld com-puters. The chips will be based on either a 386 or 486 core.

• Announced it may not manufacture the 64-bit microprocessor it is jointly developing withIntel, and instead will buy it on the merchant market.

• Launched Tachyon, a gigabit-speed Fibre Channel single-chip controller for networkedmass-storage applications.

• Signed an agreement with AT&T Microelectronics to develop and dual-source fiber-optictransceivers for Sonet and ATM applications.

Hughes Electronics

• Announced the change of its corporate name from GM-Hughes Electronics to HughesElectronics in March 1995.

Digital Semiconductor

• Disclosed the development of a new binary translation and emulation software technologythat will enable x86 32-bit applications to run at near native performance on the company’sAlpha RISC microprocessors. The FX!32 technology is expected to be made commerciallyavailable in mid-1996.

• Agreed with Toshiba to jointly develop 155M/sec asynchronous transfer mode (ATM) seg-mentation and reassembly (SAR) devices for the hub/switch and adapter card markets.

• Unveiled the first member of its so called VGC class of PC graphic coprocessors. TheDECchip 21130 integrates a GUI accelerator, a video controller, and a RAMDAC to translatedigital RGB signals into an analog-monitor feed. The 21130 is Digital’s first graphics/videoaccelerator to support the PCI bus.

• Jointly developed with Advanced RISC Machines Ltd. the first member in a family of high-performance MPUs compatible with the ARM RISC line. Digital expects to begin volumeproducing the StrongARM line of 32-bit MPUs in 1H96 using its 0.35µm CMOS 6 process atits fab in Hudson, Massachusetts. StrongARM will be targeted at applications in digitalimaging, set-top boxes, multimedia, handheld computers, and communications products.



• Sold to Motorola its wafer fab in Scotland in early 1995 for $200 million. As part of the deal,Motorola agreed to take on an existing foundry contract for AMD’s Am486 microprocessors,as well as to continue producing Alpha RISC microprocessors for DEC.

Nortel

• Formed a semiconductor foundry joint venture in Shanghai, China, with PhilipsSemiconductors and various Chinese interests. The new company, called AdvancedSemiconductor Manufacturing Corporation (ASMC), is utilizing a fab facility operated byPhilips since 1991. The partners plan to install a new 150mm wafer line for processing 0.8µmBiCMOS and 1.0µm CMOS circuits. Upon completion of the upgrade, the fab will have acapacity of about 3,800 wafers per week.

Medtronic Micro-Rel

• Will upgrade its fabrication facility in Tempe, Arizona, from 100mm wafers to 150mm wafersand from 1.5µm to 0.8µm geometries by March 1997.

Westinghouse

• Expanded its GaAs development and production facility by doubling the fabrication spaceto 10,000 square feet. The facility features a Class 100 cleanroom that will produce chipsetsfor phased-array radar systems, with particular emphasis on power devices.

• Began shipping the world’s first radiation-hardened 64K EEPROM, the first in a family ofdevices that will also include 256K and 1M versions that are currently in design.

U.S. MILITARY IC TRENDS

The U.S. military industry continued to take a beating in 1995. As Figure 2-19 shows, defense-related spending and employment reached their highest levels in the mid- to late 1980’s and havecontinued to steadily decline since then.

U.S. production of military electronics will continue to fall in 1996, the result of ongoing budgetcuts and shifts in spending. Fortunately for the military contractors, defense electronics spendingis forecast to flatten at about $37 billion dollars from 1996 through 2005 (Figure 2-20). A rise inspending on military communications, navigation, and surveillance programs will compensatefor a decline in spending for operations, maintenance, research, and development. Increasingelectronic content in advanced military systems will also help balance spending levels.



Unfortunately, the military IC market has not been immune from many of the cutbacks that havebeen taking place at the Pentagon. Many military IC suppliers have found themselves squeezedbetween two factors—a steep drop in defense spending, which has hit the semiconductor indus-try harder than first anticipated, and the growing acceptance of commercial off-the-shelf (COTS)



0

200

225

250

275

300

325

350

375

400

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4,500

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6,000

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ing

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1980 1982 1984 1986 1988 1990 1992 1994 1996 1997(FCST)

National defense spending (based on FY95 constant dollars)

Total defense-related employment

20235Source: Department of Defense

Fiscal Years Ending June 30

Figure 2-19. The Decline Continues

0

10

20

30

40

50

60

70

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'05'04'03'02'01'00'99'98'97'96'95'94'93'92'91'90'89'88'87'86'85

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1995

Do

llars

(B

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YearNote: 1996-2005 Forecast

19537BSource: Electronic Industries Association/ICE, "Status 1996"

Figure 2-20. DOD Budget Electronic Content Forecast

electronic components in military systems. It is these two factors that in 4Q94 led AMD andMotorola to announce the termination of their military semiconductor product lines by mid-1996.As part of Motorola’s exit from the market, it sold to Omnirel, Inc. in May 1995 various manufac-turing assets, test equipment, and finished goods from its military operation. In November 1995Altera made its formal announcement to exit the military IC business. It will continue to ship mil-itary-grade ICs through 1996.

As the defense budget dwindles, the military will be required to buy more commercial-gradeproducts. The military procurement environment has changed dramatically since DefenseSecretary William Perry announced a directive in June of 1994 that orders commercial-grade partsbe used whenever possible (Figure 2-21).

Figure 2-22 shows how the military percent of the total semiconductor market has declined in 20years. In 1975, the military semiconductor market accounted for 17 percent of the total semicon-ductor market. In 1995, it is estimated to have accounted for barely more than one percent of thetotal semiconductor market.

Figure 2-23 provides an estimate of the worldwide market for military/aerospace semiconduc-tors in 1995. Digital signal processors (DSPs), field programmable gate arrays (FPGAs), and pro-grammable logic devices (PLDs) are a few of the IC products that are actually showing strong



Initial directive announcement made in late June 1994.

Perry ordered that all DoD procurement contracts, including those for semiconductors, use commercial and industrial specs and standards where they exist. The use of a mil-spec device will require a waiver. Radiation-hardened components are exempt from the directive. The directive was to be phased-in by January 1, 1995.

Clarifications of and additions to the directive announced in October 1994.

• The action does not eliminate military specifications and standards. • It applies only to actions by the government and does not apply to standards proposed by a bidder in response to an RFQ. • If no commercial alternative exists that is cost effective, then a waiver may be granted. • Military specifications may be used for reprocurement of items already in inventory. • Military specifications may be cited "for guidance only." • A market analysis will be required for every new program to ascertain if commercial products are available. • Non-government standards such as those used by the automotive industry are preferable alternatives.


Figure 2-21. William Perry’s Initiative

potential in the military market. In contrast, discrete and bipolar products will not be as large ashare of the market in the future. Older ICs that once were in demand, but do not now requirethe dedicated support of a “leading-edge” supplier, are given over to companies such as LansdaleSemiconductor, which manufactures and supports discontinued IC products on a continuing basismaking it possible to extend the lifecycle of past and present technologies.



0

20

40

60

80

100

120

140

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1995198519750

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1995 (EST)

19851975

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= Total Worldwide Semiconductor Market

= Total Worldwide Military/Aerospace Semiconductor Market

Source: TI/ICE, "Status 1996" 18958E

Figure 2-22. Declining Military/Aerospace Presence

Figure 2-23. Worldwide Military/Aerospace Semiconductor Market

Analog 27%

Discrete and Optoelectronics

8%Digital Bipolar

8%

MOS Memory 21%

MOS Micro 9%

MOS Logic 27%

1995 (EST) $1.6B

18537DSource: ICE, "Status 1996"

The top ten military/aerospace IC manufacturers and their sales are shown in Figure 2-24. In1995, many of these military/aerospace vendors were headed in different directions. Grabbingthe headlines in 1994 and 1995 were the stories of lessening emphasis or the phasing-out (e.g.,Motorola) of military semiconductor businesses. Luckily for military semiconductor users, com-panies like TI and Intel stated that they were looking to increase their military business by gain-ing marketshare others were leaving behind.

In general, the military/aerospace market is being influenced by numerous “forces.” Figure 2-25shows some of the positive and negative influences on the market. Although there are some fac-tors that will positively affect the military semiconductor market in the future, the edict to usecommercial ICs whenever possible in military systems will negate these factors. Overall, the U.S.military/aerospace semiconductor market as we now know it is forecast to be no more than about$1.0 billion in the late 1990’s.

JAPANESE IC VENDORS

Japan’s overall economy may continue to resist recovery, but not the country’s semiconductorindustry. After several years of struggling to get by, Japan’s semiconductor manufacturers arefinally on an upswing. The growth has been attributed to the PC industry’s increasing demandfor memory and the global expansion of the communications equipment industry, and even moreto continuing strong demand for memory chips, microprocessors, and ASICs in North Americaand the Asia-Pacific region.



Harris

National

TI

Analog Devices

Intel

LSI Logic

Motorola

Honeywell

Raytheon

AMD

Others

Total

1994 Sales1995 Sales

(EST)Rank Company

1

2

3

4

5

6

7

8

9

10

—

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135�

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100�

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Steady

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Steady

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Steady

Steady

Decreasing

Decreasing

Steady/Decreasing

Note: It is estimated that 25% of the Military/Aerospace IC market is for rad-hard devices. *Decreasing Military, increasing Aerospace.

Figure 2-24. Top Ten U.S. Military/Aerospace IC Suppliers ($M)

Integrated circuit sales for Japanese companies increased 34 percent in 1995 in terms of U.S. dol-lars, or 24 percent in terms of Japanese yen (Figure 2-26). This compares to a 1994 increase of 25percent in dollars or 16 percent in yen. Growth was particularly strong for many of the country’slargest IC producers and somewhat slower for several of the smaller companies.

While Japanese IC manufacturers are investing heavily in 16M and 64M DRAM production, theyare at the same time placing a high degree of emphasis on non-memory devices. Developmentwork is very active in data compression chips, networking ICs, and microprocessors for PDAs,high-performance game systems, and other multimedia equipment.

Top Ten Japanese Vendor Highlights

NEC — Wafer Fab Announcements

• Plans to construct a 1G DRAM pilot production line capable of a 0.18µm process at itsSagamihara development fab. The line is scheduled to begin operating in 1H97 with a week-ly capacity of about 1,250 200mm wafers.

• Plans to start producing its V800 Series RISC MPUs at its Roseville, California, plant by theend of 1Q96.

• Will build a 0.35µm 200mm wafer line at its Hiroshima fab at a cost of about $580 million.Volume production on the line is expected to begin in May 1996 at which time it will beginramping up to 2,500 wafers per week. It will be used for the production of 16M and 64MDRAMs, as well as cache SRAMs.



Negative – Edict to use more commercial ICs in military systems. – Flat military electronics budget. – Increasing use of cheaper plastic packaged devices.

Positive + Increasing IC content in military electronic systems. + Increasing rad-hard aerospace market. + End-of-life buys will temporarily increase military IC

market (1995-1996).


Figure 2-25. Factors Influencing the Military/Aerospace IC Market

• May begin building a new wafer fabrication site in the U.S. as early as 2H96. The facility willmost likely produce 0.25µm 200mm wafers and start operations in 1998. Possible locationsfor the fab include Oregon and Arizona.

• Announced in June 1995 that it would commence work on a new ASIC fab in Tsuruoka,Yamagata Prefecture, with operations to start in 1998. The 200mm wafer fab had originallybeen slated to begin operations in 1993, but plans were put on hold during the Japanese eco-nomic slowdown in the early 1990’s.

• Converting its GaAs wafer fab in Otsu, Shiga Prefecture, from 3-inch wafers to 100mmwafers.



7,280�

5,140�

5,650�

2,890�

2,530�

1,335�

1,630�

1,465�

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38,590

Company1995 Rank

1994

MOS Bipolar Total

1995 (EST)

NEC1,2

Hitachi1,2

Toshiba1

Mitsubishi1,2

Fujitsu1,2

Matsushita1,2

Oki2

Sharp

Sanyo1

Sony

Seiko Epson1

Rohm1

KTI Semiconductor

Nippon Steel

Yamaha

Ricoh1

Asahi Kasei Microsystems

Seiko Instruments

Fuji Electric1

Kawasaki Steel

Others

Total

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17�

18�

19�

20

10,395�

7,780�

7,180�

4,250�

3,580�

1,665�

1,990�

1,860�

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1,305�

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470�

385�

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300�

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150�

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8,630�

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1,875�

950�

870�

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205�

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1BiCMOS ICs included under MOS. 2GaAs ICs included under MOS.

1994: 102¥ = $1.00 1995: 94¥=$1.00

Figure 2-26. Japanese Companies’ IC Sales (Calendar Year, $M)

• Will install a 0.25µm process line at its Kyushu fab in Kumamoto, Japan, for the mass pro-duction of 256M DRAMs. The installation will begin in 1997 with operations starting in 1998and volume production in 1999. With the new line, capacity at the plant ultimately will reach15,000 200mm wafers per week.

NEC — Key Agreements

• Licensed the ARM RISC microprocessor core of Advanced RISC Machines. NEC has theright to develop, manufacture, and market ASICs based on the 32-bit ARM7 RISC micro-processor core.

• Will transfer 0.8µm processing technology to Shougang NEC Electronics Co., a joint ventureit established in Beijing, China, with a local steel company in 1991. The process will be usedto initially produce 8-bit MCUs for consumer electronics products. NEC will also expandShougang NEC’s 150mm wafer output to 1,250 units per week by June 1996 and further to2,000 per week by 1997.

• Agreed with AT&T to extend their cooperative ASIC process development to the 0.25µmlevel. The partners plan to have a prototype 0.25µm logic chip ready by mid-1996.

• Reached a deal with Samsung under which NEC is supplying Samsung with up to 25,000 4MDRAM wafers made by NEC Semiconductors U.K. Samsung assembles the ICs at its back-end plant in Portugal and provides them to European PC makers. The deal will probably beexpanded to the 16M level in the future.

• Invested $2 million in flash memory developer SanDisk Corporation for about a one percentownership in the company. The move comes after an agreement the companies made in 1994to manufacture 256M flash devices in 1997 using NEC’s 0.35µm process technology.

NEC — Product Briefs

• Expects to begin producing 0.35µm ASICs in volume by 2Q96. Using the company’s CMOS-9 technology, the initial devices will operate at 3.3 volts and will feature up to two millionusable gates. CMOS-9 is based on the same 0.35µm process NEC uses for its 64M DRAMs.The company’s fab in Kyushu, Japan, will be the first to produce the ASICs, followed by itsplant in Roseville, California, at a later date.

• Developed a high-speed 0.44µm BiCMOS gate array family (QB8 Family) that is said to oper-ate as fast as 0.35µm CMOS gate arrays and yet feature low power consumption.



• Abandoning burst-EDO DRAM development to concentrate instead on synchronousDRAMs for Pentium systems without level-two cache.

• Introduced its new CMOS-8LHD 0.5µm high-density ASIC technology that allows for thecreation of ASICs with densities ranging from 75,000 to 1,123,000 raw gates (or a maximumof about 674,000 usable gates). The CMOS-8LHD family uses Silicon Architects’ Cell-BasedArray (CBA) technology.

• Announced the availability of a highly integrated cell-based ASIC that is to be used as adevelopment vehicle in designing high-end graphics systems. Developed in conjunctionwith Rambus Inc., the Rambus Unified Graphics Back End (Rugbe) chip incorporates a170MHz, 27-bit RAMDAC cell and a pair of Rambus channels connecting two 16M RambusDRAMs (RDRAMs), allowing for up to 1-Gigabyte-per-second raw frame-buffer bandwidth.Rugbe also comes with a PCI interface compatible with 32-bit or 64-bit bus structures andother analog functions found in many sophisticated graphics controllers.

• Unveiled a 4-bit microcontroller with built-in flash memory that operates on 1.8 volts. Thechip is intended for use in automotive keyless entry systems.

• Added synchronous graphics RAM (SGRAM) chips to its portfolio, with the introduction ofan 8M part. It is manufactured on a 0.45µm CMOS process and operates at speeds of up to100MHz.

• Became among the first to develop a 1G DRAM. The chip uses a 2.0- to 2.5-volt, 0.25µmCMOS process and is expected to be sampled in 1998.

• Presented two 1M BiCMOS synchronous cache SRAMs with operating speeds as fast as 3ns.They are designed for use as buffer memory in RISC-based workstations.

• Began shipping samples of MPUs using Mips’ R10000 RISC technology in 2H95. The chipfeatures a clock speed of 200MHz and provides an estimated integer and floating point per-formance of 300spec and 600spec, respectively. NEC also announced the sample availabili-ty of a 250MHz R4400 designed using a 0.35µm process.

Hitachi — Wafer Fab Announcements

• Purchased the M1 125mm wafer line located at Nippon Steel Semiconductor’s Tateyamaplant. Nippon Steel had been using the line to process 1.2-1.0µm CMOS MPUs and soundICs for Sony and Oki.



• Started building a 0.3µm line for 64M DRAM production at its site in Nakakoma, Japan, at acost of about $850 million.

• Launched mass production of microcontrollers at its German fab in December 1995. TheMCUs are the first non-memory devices to be produced in the fab. It was producing only16M DRAMs in volume.

• Plans to invest about $400 million to add a microprocessor production facility at its Irving,Texas-based fab. The plant will initially manufacture the MPUs using a 0.5µm process on150mm wafers, but it will have the capability of being converted to a 0.35µm process on200mm wafers. Operations are scheduled to start in April 1997.

Hitachi — Key Agreements

• Broadened its licensing and manufacturing partnership with Ramtron to non-standard aswell as standard ferroelectric RAM (FRAM) products.

• Licensed CompCore Multimedia’s MPEG-2 engine, which will be used as the basis for devel-opment of decoder ICs. The first MPEG-2 devices will be sampled in early 1996. Hitachi andCompCore will also pursue MPEG software development and other projects still under def-inition.

• Codeveloping with VLSI Technology a 0.4µm, five-layer-metal CMOS ASIC design processwith an unusually tight metal pitch of 1.4 microns. The companies claim the process willallow for devices that are 30 percent denser than competing processes for cell-based designs.Prototypes are expected to be produced before the end of 1995.

Hitachi — Product Briefs

• Unveiled a 6ns, 1M (32K x 36) synchronous SRAM that supports high-end workstationdesigns with RISC-based microprocessors running at 167MHz clock speeds. Hitachi alsointroduced an 8ns 1M synchronous burst SRAM to meet Pentium level-two cache demand.

• Began selling FPGAs based on Crosspoint Solutions Inc.’s one-time-programmable architec-ture in the Japanese market in October 1995. Hitachi will develop libraries for the FPGAs forcustomers who wish to convert from Crosspoint FPGAs to Hitachi’s larger gate arrays.

• Brought out a new low-power, high-speed 256K EEPROM that the company says willincrease battery life, especially in digital cellular phones. The operating voltage of the 0.8µmCMOS device may range from 2.7V to 5.5V.



• Rolled out its second-generation digital camera chipset that uses only four devices versus thesix-device original generation. The new chipset integrates the timing generator and the D/Aconverter into the digital signal processor.

• Introduced its MicroCore series of cell-based ASICs that can incorporate a variety of cells,including an SH-1 series 32-bit RISC microcontroller core, and up to 250,000 user-definedlogic gates.

• Rolled out two 16M synchronous DRAMs it hopes will edge out EDO DRAMs for PC mainmemory applications by the end of 1996. The 0.5µm chips operate at 3.3V and support datatransfer rates of up to 100Mbytes/sec. Hitachi also began shipping samples of an 8M syn-chronous graphics RAM (SGRAM) that supports data transfer rates of up to 400Mbytes/sec.

• Became among the first to develop a 1G DRAM. The chip was designed using a 0.16µmCMOS process and runs from a 1.5V supply. Sample shipment is slated for 1998.

Toshiba — Wafer Fab Announcements

• Announced it will build its first overseas wafer fabrication facility. Toshiba will join IBM inconstructing a $1.2 billion 64M DRAM facility in Manassas, Virginia. The facility will beequally shared by the partners and will have its own identity. It will be ready for volumeproduction in late 1997 or early 1998 and will ramp to 6,750 200mm wafers per week.

Toshiba — Key Agreements

• Negotiating with Winbond to license its 16M and 64M DRAM technology to the Taiwanesecompany. As part of the agreement, Toshiba is expected to use Winbond as a foundry for aportion of its DRAM capacity. The DRAMs would be manufactured in Winbond’s Fab 3facility, which is under construction and will be completed in 1997. Additionally, Winbondwill likely gain the right to market the DRAMs under its own logo.

• Agreed with Digital Equipment Corporation to jointly develop 155M/sec asynchronoustransfer mode (ATM) segmentation and reassembly (SAR) devices for the hub/switch andadapter card markets.

• Signed on with Ramtron to jointly develop and manufacture ferroelectric RAMs (FRAMs) indensities of 256K and above. Toshiba will have the right to make and sell the devices underits own brand name, and the company will serve as a foundry for Ramtron.

• Extended its 1992 flash memory alliance with Samsung for joint development of 64M NANDflash memories utilizing 0.4µm CMOS technology. Sample shipments will begin in thespring of 1996.



• Licensed the Cell-Based Array (CBA) ASIC architecture technology of design house SiliconArchitects.

• Licensed some of its older 1M DRAM technology to China Huajing Electronics Group Corp.Toshiba and China Huajing also established a joint venture in China to develop and marketICs.

Toshiba — Product Briefs

• Introduced its TC220 Series of gate array, embedded array, and standard cell ASICs that offerup to 1.9 million usable gates (three million maximum). Based on 0.3µm CMOS process tech-nology, the chips offer approximately 40 percent lower power consumption than their pre-decessors.

• Started volume production of 4M and 16M EDO (extended data out) DRAMs.

• Announced its line of mixed 3V/5V ASICs dubbed the TC203 family. The devices are basedon 0.4µm double-layer or triple-layer metal CMOS technology.

• Along with its partners IBM and Siemens, claimed to have developed their 256M DRAM,touted as the smallest and fastest fully functional device for its density yet produced. The0.25µm device took $1 billion and more than two years to develop.

• Introduced the 32-bit R3900 Mips RISC processor core, which the company says achievesR4000-class performance. The R3900 is targeted at the emerging PDA terminal, set-top box,graphics, and multimedia markets in the U.S.

• Rolled out a 0.5µm Rambus ASIC cell (RAC) designed to link a microprocessor with aRambus DRAM (RDRAM) channel in high-end workstation environments.

• Began production of 1M synchronous burst SRAMs with access times as fast as 8ns. Theunusual thing about the chips is that they use 0.5µm CMOS process technology instead ofthe BiCMOS seen in most first-generation synch-burst SRAMs.

Mitsubishi — Wafer Fab Announcements

• Will begin building a $1 billion 256M DRAM production facility at its Kochi, Japan, site in1998. The plant is expected to initially produce 64M DRAMs by the year 2000. Mitsubishi isalso planning to construct a 256M DRAM facility at its fab in North Carolina.



• Will spend $1.1 billion on a new 64M DRAM processing line in an existing building at itsSaijo, Japan, fab facility. Construction will begin in 1996, with initial production starting inlate 1997 or early 1998, depending on the demand for 64M DRAMs.

• Investing $305 million in its plant in Alsdorf, Germany, to enable it to fabricate 16M DRAMs.The plant was established in 1989 and has since engaged in the assembly and testing of 4MDRAMs. The added equipment will also allow for the manufacture of microcontrollers andASICs.

Mitsubishi — Product Briefs

• Will mass produce high-speed synchronous DRAMs starting in April 1996. The companywill sample a 200MHz chip early in 1996.

• Has developed an MPEG-2 chipset that includes a pixel processor chip featuring five billionoperations per second processing capability, a controller IC for controlling the processor, amotion detection engine, and a frame memory chip.

• Developed a 1M synchronous burst SRAM, that operates on 3.3V and runs at up to 75MHz.

• Began sampling 4M and 16M Extended Data Out (EDO) DRAMs. It has said it will also pro-vide 16M burst EDO DRAMs starting in 1996.

Fujitsu — Wafer Fab Announcements

• Will add a second fab to its Fujitsu-AMD Semiconductor Ltd. joint venture with AMD inJapan. The new fab will roughly double the site’s wafer capacity. Initial production willbegin in late 1997 at the 0.35µm level.

• Investing about $1.2 billion to expand its Durham, United Kingdom, fabrication facility overthe next four years. Construction of a 200mm wafer plant started in December 1995 and pro-duction of DRAMs will start in 1H97. When fully operational in 1998, the facility will havea weekly output capacity of 7,500 wafers.

• Will expand its Gresham, Oregon, fab facility by adding a new $1 billion plant. The facilitywill begin making 16M DRAMs in January 1997 and 64M DRAMs at a later date. Capacitywill reach about 7,500 200mm wafers per week.

• Converting its 150mm wafer pilot line at its Mie plant to a 200mm wafer mass productionline for 16M and 64M DRAMs.



• Seeking to establish a manufacturing facility in China by 1997 for the production of 8-bitmicrocontrollers and consumer linear ICs using 1.0µm process technology. The plant mayalso manufacture DRAMs.

Fujitsu — Key Agreements

• May enter into an FRAM development pact with Ramtron. Upon completion of a feasibili-ty study by the two companies, development of a 1M FRAM is planned to begin, followedby a move toward development of a 16M device. Fujitsu will be entitled to sell FRAMsunder its own name and will OEM-supply products to Ramtron.

• Provided China’s second largest IC maker Huayue Microelectronics with bipolar consumerIC processing technology. Fujitsu will also help Huayue convert its fab from 100mm wafersto 125mm wafers.

• Agreed with Hyundai to jointly develop 64M DRAMs. They have had a cooperative rela-tionship through the OEM supply of 4M and 16M DRAMs since 1993.

• Licensed the Cell-Based Array (CBA) ASIC architecture technology of design house SiliconArchitects.

Fujitsu — Product Briefs

• Will withdraw from the mask ROM business. Development efforts for 32M and future gen-eration ROMs has been canceled and Fujitsu will stop producing and shipping its currentline of 16M and smaller products in 1996.

• Announced a new “low-end” 5-volt, submicron ASIC family that features up to 89,000 usablegates in a sea-of-gates architecture and low power consumption. The CG46/CE46 series isbased on 0.65µm CMOS technology.

• Started producing ASICs with 0.35µm geometries in late 1995. The chips are fabricated on anew 200mm wafer line the company completed at its plant in Wakamatsu, Japan.

Matsushita — Wafer Fab Announcements

• Upgraded its Washington-based fabrication facility from 0.8µm lines to 0.6µm lines andincreased the plant 150mm wafer processing capacity to about 5,000 units per week in anattempt to boost 1M and 4M DRAM and MCU production.



• Constructing a 0.35µm, 200mm wafer plant at its site in Tonami, Japan, that is slated for oper-ation by 2Q96. The new line will process 16M and 64M DRAMs, microcontrollers, and ASICson 2,500 wafers per week. Capacity is expected to then be doubled in 1997.

Matsushita — Key Agreements

• Licensed 3DO’s 64-bit M2 graphics acceleration technology. 3DO will provide Matsushitawith all M2-related custom ASICs, reference designs for CD and digital video disc (DVD)systems, MPEG-1 and MPEG-2 decoders, operating system software, and hardware and soft-ware development systems.

• Jointly developed with SanDisk Corporation, a 32M flash memory device. The chip wasdesigned using a 0.5µm, three-layer metal CMOS process and operates on a single 3.3V or 5Vpower supply. Matsushita will supply SanDisk with all flash memories it manufactures.

Matsushita — Product Briefs

• Introduced a low-power, 3.3V programmable 32-bit microcontroller for image processingand other multimedia applications. The 100 MIPS part is Matsushita’s first 32-bit MCU andthe first controller to be based on its 0.35µm, triple-layer-metal CMOS process.

• Started shipping samples of a 16-bit microcontroller with 64K of built-in 3V flash memory.The IC is implemented in a 0.8µm, two-layer metal CMOS process. Samples of an 8-bit ver-sion also started shipping.

Oki — Wafer Fab Announcements

• Will invest approximately $700 million to build a DRAM production facility in Oregon,where it currently assembles DRAMs. The plant is to be equipped with 0.35µm CMOSprocess lines and will be capable of running 5,000 200mm wafers per week for use in 16Mand 64M DRAM production.

• Completed construction of a $800 million wafer fab in Miyagi, Japan, for the production of16M DRAMs and advanced ASICs. The fab has the capacity to process 3,750 200mm wafersper week, but initially started running 1,250 wafers per week in late 1995. The plant is capa-ble of manufacturing 64M DRAMs.



Oki — Key Agreements

• Broadened its DRAM technology transfer agreement with Taiwan’s Nan Ya Plastics toinclude 64M DRAM process technology. Nan Ya is scheduled to launch the production of16M DRAMs based on Oki technology in 2H96 and will likely begin producing 64M devicesin 1998.

• Entered an agreement with design house Mosaid Technologies of Ontario, Canada, to joint-ly develop a 64M synchronous DRAM. Oki expects to start sampling the SDRAMs by mid-1996, about the same time it plans to ramp up its standard 64M DRAMs.

Oki — Product Briefs

• Announced its QuickCore line of application-specific 8-bit microcontrollers. QuickCorechips can include one of Oki’s two nX65K series of microcontroller cores along with pre-char-acterized peripheral functions and user-defined functions with memory, user-defined logic,and various macrocells. The chips are designed using an ASIC environment.

• Unveiled a family of audio ICs that provide either stand-alone or computer-controlledspeech synthesis. With up to 2M of internal mask ROM for sound playback, the chips canstore as many as 127 phrases.

• Began marketing a line of low-power 3-volt GaAs RF ICs that operate in the 850MHz-2.4GHzfrequency range for wireless voice and data communications.

Sharp — Wafer Fab Announcements

• Installing a 0.35µm to 0.4µm process line at its Fukuyama plant in Hiroshima Prefecture bythe spring of 1996 in order to expand flash memory and mask ROM production. The newline will produce over 2,500 200mm wafers per week.

Sharp — Key Agreements

• Signed a pact with Quality Semiconductor to second-source and jointly develop application-specific FIFOs. The agreement called for the two to immediately start reselling each other’sproducts and begin work on developing specialty FIFOs tooled for high-bandwidth appli-cations.



Sharp — Product Briefs

• Built a prototype 256K ferroelectric memory chip using a 0.6µm process incorporating PZTferroelectric material for the capacitor dielectric. Sharp plans to extend the technology to 1MDRAMs.

• Started mass production of 64M mask ROMs. Sharp also introduced a 32M mask ROM fea-turing an industry-leading access time of 100ns.

• Added to its family of 8M and 16M flash memories, devices with 2M and 4M densities.Sharp also OEM-supplies 16M flash memories to Intel.

• Rolled out its first ASSP based on Advanced RISC Machines’ ARM7DI microprocessor core.The ASSP includes on-chip a monochrome LCD controller, a serial data infrared transceiver,SRAM optimized for real-time interrupt, and pulse-width modulators for LCD gain- andcontrast-control.

Sanyo — Wafer Fab Announcements

• Expanded production capacity at its fab in Niigata, Japan, in order to triple its flash memo-ry output by the end of 1995.

Sanyo — Product Briefs

• Started sampling 1M and 2M EDO (extended data out) DRAMs. The ICs are being targetedat applications in hard-disk and CD-ROM drives.

• Introduced an 8-bit microcontroller with 136K of on-chip flash memory for use in memorycards, PCs, and game machines.

Sanyo — Other Noteworthy News

• Restructured its LSI Division into market-specific units. Under the new structure, the MOSLSI Division is in charge of industrial equipment semiconductors and the Bipolar LSIDivision handles consumer electronics semiconductors.

Sony — Wafer Fab Announcements

• Boosting its high-speed SRAM and ASIC production capabilities by installing 0.35µm fabri-cation lines at its fabs in San Antonio, Texas, and Nagasaki, Japan. The new lines wereexpected to be installed by the end of 1995 and are scheduled to become operational in 1996.



Sony — Product Briefs

• Began marketing two MPEG-1-compliant real-time encoders, one for video CD applicationsand the other for VOD (video-on-demand) video servers. The chips support 1.5Mbytes/secand 2-3Mbytes/sec data transfer rates, respectively.

Sony — Other Noteworthy News

• Moved to strengthen its U.S. semiconductor business by forming Sony SemiconductorCompany of America. Based in San Jose, California, the new organization is seeking toestablish itself as a self-sufficient U.S. semiconductor operation by creating new businessopportunities in the U.S., as well as by expanding its current business.

EUROPEAN IC VENDORS

Figure 2-27 displays IC sales for the leading European IC companies in 1994 and 1995. On aver-age, sales by these companies grew 35 percent in 1995, following 30 percent growth in the previ-ous year. The growth was driven primarily by strong demand for PCs in Europe, but also by fast-growing demand for digital mobile phones and other telecommunications equipment, and auto-motive electronics.

SGS-Thomson is focusing mostly on high-growth applications and on high-margin products—particularly focusing on areas such as multimedia, mobile phones, computers, and automotiveelectronics. Its strongest performing IC products in 1995 were SRAMs, flash memories, micro-components (MPUs, MCUs, MPRs, and DSPs), standard cell ASICs, and analog ICs.

Having survived a couple of years of heavy restructuring, Philips Semiconductors is now in amuch better position to compete with the world leaders in the IC industry. Philips is workinghard to be among the world’s top ten semiconductor companies in the near future. The companyaims to maintain its dominant position in consumer electronics-related products, while becomingan established leader in the digital communications and multimedia markets. The company has,therefore, chosen microcontrollers and standard high-performance logic devices as two areas offocus. Philips is already among the leaders in 8-bit MCUs, and it intends to become an equallyserious player in 16-bit parts.

Siemens’ IC group focuses on four strategic product areas: memories, microcontrollers, chipcards, and communications ICs. As Europe’s only DRAM producer, the company plans to beamong the top ten DRAM leaders in the world within the next few years; it is currently within thetop 15. Siemens’ efforts in microcontrollers are targeted at applications in the industrial and auto-motive markets. In communications ICs, the company claims to be the second largest supplierafter AT&T.



Top Ten European Vendor Highlights

SGS-Thomson — Wafer Fab Announcements

• Will build its fourth 200mm wafer fabrication facility in Rousset, France, at the site of anexisting 125mm wafer plant. Construction will begin on the $800 million plant in 1Q96, andfirst silicon is expected by early 1998. The line will have a capacity of 5,000 wafers per weekand the capability to process devices with 0.5µm, 0.35µm, and finer geometries.



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Company1995 Rank

1994

MOS Bipolar Total

1995 (EST)

SGS-Thomson1

Philips1,2

Siemens

Temic

Telefunken

Matra MHS1

ITT Semiconductors3

Siliconix

Dialog4

GEC Plessey

Ericsson

Robert Bosch1,5

Alcatel Mietec

Austria Mikro Systeme

EM Microelectronic

Atmel ES2

Thesys Microelectronics

ZMD

SMI

Thomson Microwave

Micronas1

Elex

Others

Total

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

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11064ZSource: ICE, "Status 1996"


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1BiCMOS ICs included under MOS. 2GaAs ICs included under MOS. 3Acquired by Temic in 4Q95. 4Fabless IC supplier. 5Captive IC manufacturer.

Figure 2-27. European Companies’ IC Sales ($M)

SGS-Thomson — Key Agreements

• Teaming with Motorola to develop a chipset for the emerging V.34 28.8K/sec modem mar-ket. The chipset combines Motorola’s 68356 microprocessor, SGS-Thomson’s ST544 codec,and the software required to support V.34 data pump functions.

• Signed a licensing agreement with Robert Bosch GmbH of Germany that grants Bosch theright to develop and manufacture smart power ICs using the latest generation Bipolar-CMOS-DMOS (BCD) process from SGS-Thomson. The agreement also covers future gener-ations of BCD products. Bosch will manufacture the devices at its new 150mm wafer pro-duction facility in Reutlingen, Germany.

• Agreed to give Western Digital access to its 0.7µm CMOS process capacity through the endof 1997. SGS-Thomson will produce Western Digital’s disk controller and PCI-SCSI devices,as well as future products. The process will migrate down to the 0.5µm level by the end of1995.

SGS-Thomson — Product Briefs

• Announced the ST20450 RISC microprocessor, the first standard product based on its ST20micro core technology. The chip contains a 40 MIPS RISC core, a programmable memoryinterface, a hardware microkernal, and four high-speed serial communications links.

• Added the clock-tripled (100MHz) ST486DX4 family to its range of x86 microprocessors. Thedevices are based on a new proprietary 0.35µm HCMOS process with a low supply voltageof 3.45V. This new technology has also been applied to its ST486DX2 clock-doubled MPUline.

• Rolled out an enhanced 64K parallel EEPROM that features access times as low as 100ns anda programming cycle time of 2ms for a 64-byte page. STM continued the expansion of its64K family with introduction of a low voltage device (3V).

• Introduced a family of single-chip MPEG decoder ICs suitable for video CD products, PCmultimedia, and digital TV applications. The chip has the capability to decode MPEG-1video, MPEG-2 video, and MPEG/Musicam audio.

Philips — Key Agreements

• Licensed the Mips R4000 RISC microprocessor core from Silicon Graphics Inc. for use in itsnext-generation CD-i player and other Philips consumer electronic products under develop-ment. The company gained access to the R3000 core when it acquired HDL Systems in 1994.



• Purchased the multimedia IC business of Western Digital. The acquisition includes theParadise graphics-accelerator cards and the RocketChip family of ICs, which will enablePhilips to enter the growing 3D graphics market.

• Will aid Ashtech Inc. of Sunnyvale, California, in developing a Global Positioning System(GPS) chipset, which will be targeted at OEMs with little or no experience in GPS technolo-gy. The chipset is scheduled to go into production in 2H96.

• Expanded its long-standing agreement with Texas Instruments on standard logic deviceswith plans to add a new Advanced Low-Voltage CMOS family of 3.3V parts.

• Formed a semiconductor foundry joint venture in Shanghai, China, with Nortel (NorthernTelecom) and various Chinese interests. The new company, called Advanced SemiconductorManufacturing Corporation (ASMC), is utilizing a fab facility operated by Philips since 1991.The partners plan to install a new 150mm wafer line for processing 0.8µm BiCMOS and1.0µm CMOS circuits. Upon completion of the upgrade, the fab will have a capacity of about3,800 wafers per week.

• Agreed with IBM Microelectronics to form a joint venture to manufacture ICs at IBM’s fabfacility in Boeblingen Hulb, Germany. The new company, called SubMicron SemiconductorTechnologies GmbH (SMST), is held 51 percent by Philips and 49 percent by IBM. SMST issupplying products solely to Philips and IBM, manufacturing 4M DRAMs for IBM and0.8µm logic ICs for Philips. The two companies are also discussing the possibility of furthertechnology cooperation.

• Negotiating with TriQuint Semiconductor about taking an equity position in the GaAs ICmanufacturer or signing a long-term deal with the company for the foundry supply of GaAsICs.

Philips — Product Briefs

• Developed a new multimedia digital signal processor, called the TriMedia processor, thathandles 2.5-billion operations per second, can handle a real-time mix of audio, video, andgraphics, and is priced at consumer levels. Philips says the performance and price break-through is enabled by the use of a proprietary very long instruction word (VLIW) architec-ture. The company hopes to enter volume production of the chip in late 1996 or early 1997.

Siemens — Wafer Fab Announcements

• Announced plans to build a $1.5 billion DRAM fab in the United States in partnership withMotorola. The location of the fab site was to be selected by the end of 1995.



• Recently broke ground on a new $1.8 billion fab facility in Newcastle, United Kingdom, forthe production of ASICs and other logic devices. First production at the fab is expected totake place in the summer of 1997.

• Announced a $350 million investment in its fab in Villach, Austria, which will expand it intoa center for high-performance power devices used in industrial and automotive applications.

• Spending $215 million to increase the production capacity of its fabrication facility inRegensburg, Germany, in order to meet demand for its memory products. The addition fea-tures over 43,000 square feet of cleanroom area where primarily 1M and 4M DRAMs will beproduced. Upon completion, the plant’s capacity will increase to 10,000 150mm wafer startsper week.

Siemens — Key Agreements

• Announced an agreement with Wind River Systems to port Wind River’s VxWorks real-timeoperating system and WindPower tools to Siemens’ C166 family of 16-bit embedded micro-controllers. The tools and operating system are targeted at high-volume, cost-sensitive mar-kets, especially automotive, telecommunications, and office automation.

• Along with its partners IBM and Toshiba, claimed to have developed their 256M DRAM,touted as the smallest and fastest fully functional device for its density yet produced. The0.25µm device took $1 billion and more than two years to develop.

• Signed a second-source agreement with start-up MoSys Inc. concerning MoSys’ high-speedmemory technology. Under terms of the pact, Siemens will sell MoSys’ Multibank DRAMs(MDRAM) under its own name and will also furnish the parts to MoSys. Siemens was alsogiven the right to develop MDRAM derivatives.

• Forged an agreement with Zoran Corporation allowing Siemens to market its compressionICs under the Siemens label. The deal covers several new Zoran ICs, including an MPEG-1decoder, Dolby AC-3 audio decoders, and multimedia controllers, in addition to a motionJPEG chipset.

• Licensed the TrueSpeech compression technology of DSP Group Inc. for multimedia andcomputer-technology applications.



Siemens — Product Briefs

• Entered the merchant asynchronous transfer mode (ATM) market with its ATMiX family ofproducts. The first three devices are a 155M/sec SONET transceiver for fiber optics, a52M/sec and 25M/sec unshielded twisted-pair transceiver, and a segmentation andreassembly (SAR) chip. Siemens’ first two generations of ATM devices were used internally.

• Began sampling a faster derivative of its C167 16-bit MCU family that runs at 50MHz(25MHz internally) and is targeted at applications such as disk drives, scanners, and antilockbrake systems.

Temic — Key Agreements

• Acquired ITT Semiconductors in Freiberg, Germany. The purchase provides Temic with dig-ital and mixed-signal ICs for TV receivers and multimedia consumer electronics; control andsensing devices in automotive and industrial applications; and discrete semiconductors.

• Licensed DSP Group’s Pine and Oak DSP cores. Initial products based on the Pine core weremade by Matra MHS in 1995, and products based on the Oak core at a later date. They willfirst be used in specific applications of the communications market, but will progressively bemade available for all Temic customers.

Temic — Product Briefs

• Released a new chipset for digital cordless telephones supporting the CT2 standard. The setconsists of four ICs representing the complete RF part of the telephone and a highly inte-grated CT2 controller from AMD.

• Expects to be the first to bring a silicon-germanium (SiGe) IC to the commercial market.Samples of an analog RF IC were scheduled to be shipped in 2H95 with volume shipmentsto follow in 1H96. The SiGe chips are based on a heterobipolar transistor (HBT) structureand are manufactured by Temic subsidiary Telefunken Semiconductors.

• Launched a family of Sparc-based 32-bit RISC microcontrollers through its Matra MHS sub-sidiary. Called the Sparclet, the chip combines a RISC/DSP core with a selection of on-chipperipheral circuits optimized for applications in advanced communications systems such asdigital cellular telephone base stations, ISDN terminals, and video-on-demand systems. Thedevice is fabricated on a 0.6µm, triple-layer metal CMOS process.



• Introduced a data link controller complying with the Vehicle Area Network (VAN) protocolthat can interface directly to a wide range of microcontrollers. The chip can also be used inController Area Network (CAN) sockets. The IC is manufactured by Matra MHS.

GEC Plessey — Product Briefs

• Entered the market for off-the-shelf communications microcontrollers by launching a familyof ARM core-based MCUs targeted at the low-power networking applications market. Thedevices incorporate the ARM7 32-bit RISC core and are manufactured in GEC Plessey’s0.7µm CMOS process at its Plymouth, United Kingdom, fab.

Alcatel Mietec — Product Briefs

• Added microcontroller technology to its mixed-signal standard cell library through a licens-ing deal with Norwegian design house Nordic VLSI. Initially, an 8-bit version of Nordic’sµRISC core will be offered, but there are plans to extend the architecture to 16 and 32 bits by1997.

Austria Mikro Systeme — Key Agreements

• Acquired a 51 percent controlling interest in SAMES Ltd., a South African IC manufacturer.SAMES has a 150mm wafer fab that is geared to build ASICs and provide foundry capacityfor CMOS and BiCMOS technology at the 2.0µm, 1.2µm, and 1.0µm levels. The agreementincludes technology transfer from AMS to SAMES and the sharing of process technology.

• Purchased a 51 percent stake in Thesys Microelectronics. Under the deal, Thesys and AMSwill continue to operate separately but will cooperate on product development. While AMSgains access to potential additional fab capacity, both companies stand to benefit from eachother’s expertise in CMOS and BiCMOS technologies.

Austria Mikro Systeme — Product Briefs

• Introduced a 0.8µm mixed-signal BiCMOS process for telecommunications ASICs. The2.5GHz process is suitable for processing highly integrated circuits for GSM, wireless LAN,and similar RF communications systems.



REST-OF-WORLD (ROW) IC VENDORS

Many ROW nations have in recent years undertaken major efforts to establish competitive semi-conductor industries. This has especially been the case for the rapidly developing countries in theAsia-Pacific region (excluding Japan). One of the main driving forces behind these efforts is thedesire many of these countries have to build self-contained electronics industries.

Korean IC Vendors

Korea has grown into a memory chip manufacturing powerhouse in a very short time. Aided byunceasing demand for DRAMs, Korean IC companies continue to watch their sales break records(Figure 2-28). On average, the three main Korean companies, Samsung, LG Semicon (formerlyGoldstar Electron), and Hyundai experienced 70 percent growth in their sales of ICs in 1994 and1995.

On the downside, the Koreans have become highly dependent on the DRAM market, which hastraditionally been very volatile. In fact, DRAMs accounted for more than 80 percent of their ICsales in 1995. However, they are working to lessen that dependence through alliances with andinvestments in companies that have strengths in other areas. A prime example is Hyundai’s early1995 purchase of the NCR Microelectronic Products Division of AT&T Global InformationSolutions, a subsidiary of AT&T Corporation. The newly acquired business, now called SymbiosLogic, gives Hyundai a strong presence in the North American ASIC and ASSP markets.



70�

83�

71�

4�

70

Company

Samsung1

LG Semicon

Hyundai

Others

Total

Rank

1�

2�

3

—

1994

MOS Bipolar Total

1995 (EST)

11725VSource: ICE, "Status 1996"


4,815�

1,750�

1,750�

265�

8,580

—�

50�

—�

60�

110

4,815�

1,800�

1,750�

325�

8,690

MOS Bipolar Total

8,182�

3,200�

3,000�

338�

14,720

—�

100�

—�

—�

100

8,182�

3,300�

3,000�

338�

14,820

1GaAs ICs included under MOS.

Figure 2-28. Korean Companies’ IC Sales ($M)

Korean Vendor Highlights

Samsung — Wafer Fab Announcements

• Plans to build its first U.S.-based fab in Austin, Texas. The new $1.35 billion plant will use200mm wafers and begin producing DRAMs and logic chips with 0.35µm features. It will becapable of production at the 0.25µm level. Production is hoped to start in 1998.

• Broke ground for a new 64M DRAM fab in Kiheung, South Korea, that is expected to costabout $1.5 billion. Maximum weekly capacity will be 10,000 200mm wafers.

• Shifting 8,750 wafers per week of 0.6µm CMOS production from 4M DRAMs to ASICs tomeet demand from fabless companies.

Samsung — Key Agreements

• Licensed the 16-bit microcontroller architecture of NEC, providing Samsung with its firstproducts in the 16-bit market segment. Samsung plans to sell $1 billion worth of MCUs bythe end of the decade.

• Named Florida-based Chip Supply Inc. as a distributor and value-added dealer for itsunpackaged semiconductors. The first available Samsung bare dice will be 1M and 4MSRAMs.

• Signed on as a second source for NexGen’s PCI-based Nx586 chipsets.

• Made an agreement with Weitek that will provide a foundry source for Weitek’s graphicschips plus any jointly developed devices.

• Invested $4 million in video compression chip supplier Array Microsystems (Los Gatos,California). The companies also entered a deal for Samsung to carry Array’s VideoFlow lineof multiprotocol video compression devices. Samsung has been a foundry for Array since1991.

• Jointly developing products with DSP Group Inc. that will use flash memory to simplify andreduce the cost of digital telephone answering devices. DSP Group will develop a family ofDSP chips with a direct interface to a new 4M flash memory (AudioFlash) designed bySamsung for voice storage applications. The first chips are expected to hit volume produc-tion in 1Q96.



• Reached a deal with NEC under which NEC is supplying Samsung with up to 25,000 4MDRAM wafers made by NEC Semiconductors U.K. Samsung assembles the ICs at its back-end plant in Portugal and provides them to European PC makers. The deal will probably beexpanded to the 16M level in the future.

• Extended its 1992 flash memory alliance with Toshiba for joint development of 64M NANDflash memories utilizing 0.4µm CMOS technology. Sample shipments will begin in thespring of 1996.

• Joined up with Aspec Technology to develop a line of gate array and embedded array prod-ucts using Aspec’s 0.6µm HDA technology. The agreement is an extension of a joint productdevelopment agreement made by the companies in 1994.

• Licensed Rambus’ proprietary high-bandwidth (500MHz) DRAM interface technology.Samsung expects to introduce its first Rambus DRAM (RDRAM) in 1996.

Samsung — Product Briefs

• Claimed to have fabricated the first fully functional 256M DRAM. The company says sam-ple shipments of the devices will begin in 1997 or 1998. Samsung also claimed to be the firstto ship engineering samples of a 4M BiCMOS SRAM operating at speeds as fast as 10ns.

• Added a 32M version to its family of NAND flash memories. The chip is based on a 0.5µmCMOS process and operates from a single 3.3V power source. The company plans to intro-duce a 5V version to be compatible with its existing 16M devices and a compatible 3.3V 64Mproduct in 1996.

• Entered the multimedia market by introducing a three-piece chipset for digital video appli-cations. The chip contains a digitizer, an encoder, and a decoder. In addition, the companyintroduced a single-chip audio IC for multimedia products, music synthesizers, and videogames.

• Samsung plans to introduce 50 new MCU products by the end of 1997. The company plansto begin shipments of 16- and 32-bit MCUs in 1996.

LG Semicon — Key Agreements

• Licensed Advanced RISC Machines’ ARM7 microprocessor core technology. The companywill merge the ARM7 into its ASIC library for use in PDA, communications, set-top box, andhigh-end consumer chip applications.



• Announced it signed a deal with Compass Design Automation Inc. (San Jose, California) fordevelopment of ASIC libraries using 0.35µm process technology. LG successfully developed0.8-, 0.6-, and 0.5µm libraries with Compass previously.

• Took a minority stake in flash memory developer SanDisk Corporation, marking LG’s firststep into flash memory. LG intends to manufacture SanDisk’s 16M and 32M flash memoriesusing 0.5µm CMOS process technology. LG has also said it plans to produce 64M flash chipsand eventually 256M devices.

Hyundai — Wafer Fab Announcements

• Building its next 200mm wafer fab in Eugene, Oregon. The new $1.3 billion plant, called E-4, will process 16M and 64M DRAMs. The first of three phases, E-4 will have the capacity torun 7,500 wafers per week at 0.35µm geometries. Operations are scheduled to begin in 1997.However, the fab may face delays to meet environmental guidelines brought on by an envi-ronmentalist group that is campaigning to keep Hyundai from building in the area.

Hyundai — Key Agreements

• Agreed with Fujitsu to jointly develop 64M DRAMs. They have had a cooperative relation-ship through the OEM supply of 4M and 16M DRAMs since 1993.

Hyundai — Product Briefs

• Planned to introduce two 64K x 18 synchronous SRAMs, one with interleaved pipeline andthe other with linear pipeline scheme, by the end of 1995, followed by its first generation 32Kx 32 burst pipeline part in 1Q96.

• Announced a 50ns version of its 256K x 16 fast-page-mode DRAM that is targeted at graph-ics memory applications, emerging set-top boxes, and networking products that requirewide-word configurations.

• Expects to roll out its first flash memory products by the second half of 1996. The memoriesare based on a single-voltage, NOR-type architecture and will initially be available in 4M and16M densities.

• Began sampling in April 1995, a single-chip MPEG-2 device based on an embeddedMicroSparc RISC-core processor licensed from Sun Microsystems Inc.



Taiwanese IC Vendors

In the matter of only a few years, several Taiwanese companies have grown to become significantplayers in the worldwide IC industry. Overall, Taiwanese companies increased their IC sales by55 percent in 1995, up from 50 percent the previous year (Figure 2-29).

A good portion of Taiwan’s IC industry consists of foundry services. The country’s largest IC firm,TSMC, is entirely dedicated to foundry work, while UMC and Winbond, the second and thirdlargest firms, have dedicated more space and funding to increase their foundry capabilities.

Aside from foundry work, IC production in Taiwan is largely focused on lower-margin productssuch as PC chipsets, EPROMs, ROMs, and SRAMs. However, with backing from a pro-technolo-gy government and through partnerships with foreign IC firms, the Taiwanese are shifting theirproduct mixes to more advanced devices like DRAMs, MPUs, flash memories, multimedia ICs,and communications ICs. Although the DRAM is expected to become Taiwan’s industry driver,it is not expected to dominate as it does in Korea.

Taiwanese Vendor Highlights

TSMC — Wafer Fab Announcements

• Expected to begin building a $1.5 billion fab in the U.S., possibly in Oregon, in 1996. Withthe help of at least one partner, the plant will go into production of 200mm wafers in late1997 or early 1998.



COMPANY 1994

TSMC

UMC

Winbond

TI-Acer

Mosel-Vitelic

Macronix

Hualon

Acer Labs*

Holtek

Others

Total

740�

586�

326�

314�

304�

221�

108�

70

70

161�

2,900

1995 (EST)

1,000�

920�

688�

556�

465�

334�

125�

90

85

242�

4,505

17717K

*Fabless SupplierSource: ICE, "Status 1996"

1995/1994 PERCENT CHANGE

35�

57�

111�

77�

53�

51�

16�

29

21

50�

55

1995 RANK

1

2

3

4

5

6

7

8

9

Figure 2-29. Taiwanese Companies’ IC Sales ($M)

• Broke ground on its second 200mm wafer fab in Hsinchu, Taiwan—Fab IV. TSMC expectsthe submicron facility to cost nearly $800 million and to be completed in 1997 or 1998.Meanwhile, the company moved up to November 1995 the ground-breaking date for Fab V.

TSMC — Key Agreements

• Teamed up with Compass Design Automation to simplify the ASIC design process. Underthe agreement, Compass will verify TSMC’s foundry process and characterize physicallibraries to ensure first-time silicon success.

• Negotiating a deal with Rambus Inc. under which Rambus will make its high-speed DRAMinterface technology available to chip vendors that use the foundry services of TSMC.

UMC — Key Agreements

• Announced plans for several independent foundries it will build with various partners.Alliance Semiconductor and S3 are UMC’s major partners in the first fab, due to open in3Q96. Partners in the second foundry venture, due to come on line in late 1997, includeTrident Microsystems, ATI Technologies, ISSI, and Opti. For the third fab, which is sched-uled to begin production in 1997, UMC’s partners include Lattice Semiconductor and OakTechnology. Most recently, UMC announced a joint foundry fab with Cirrus Logic, Xilinx,and prior-partner Alliance Semiconductor that will also commence production in 1997. Eachfab will have the capacity to produce 6,250 200mm wafers per week.

• Granted the right by Alliance Semiconductor to license and manufacture certain AllianceDRAM products in return for manufacturing capacity.

UMC — Product Briefs

• Introduced a new 3.3V, 1M synchronous burst SRAM. The chip operates at speeds as fast as8ns.

• Developing 1M and 2M flash memories which the company expects to begin shipping inmid-1996. The chips are designed around the AMD-type single-voltage architecture.

• Became the first vendor outside of IBM and Motorola to offer a chipset for the PowerPCmicroprocessor. UMC’s new UM8810 chipset is a three-chip solution for the PowerPC 603,603e, and 604 processors. UMC also introduced a three-chip chipset for Pentium-class sys-tems.



• Introduced a line of 50MHz and 66MHz 486DX2-clone microprocessors in 1994 that UMCclaimed provided up to 30 percent more performance than comparable Intel chips.However, legal action from Intel on top of limited success in the business are said to havecaused UMC to exit the x86 market.

Winbond — Key Agreements

• Negotiating with Toshiba to license the Japanese company’s 16M and 64M DRAM technolo-gies. As part of the agreement, Toshiba is expected to use Winbond as a foundry for a por-tion of its DRAM capacity. The DRAMs would be manufactured in Winbond’s Fab 3 facili-ty, which is under construction and will be completed in 1997. Additionally, Winbond willlikely gain the right to market the DRAMs under its own logo.

Winbond — Product Briefs

• Introduced its latest embedded controller based on the PA-RISC architecture licensed fromHewlett-Packard. The W89K-LC is aimed at video conferencing and set-top box applicationsand is available in 66MHz and 80MHz versions.

• Began sampling the first members of a flash memory family of products based on propri-etary EEPROM technology. The first pair of 5V-only memories are available in 256K and 1Mdensities.

Winbond — Other Noteworthy News

• Purchased the remaining shares of its chipset affiliate, Symphony Laboratories, based inSanta Clara. The move was made in order to pour more resources into the operation andaccelerate the development of its chipsets and other IC lines. Under the agreement,Symphony will now operate as an R&D group under the new name of Winbond SystemsLaboratory.

TI-Acer — Wafer Fab Announcements

• Started construction of its second fab facility in Taiwan. Volume production at the $1.35 bil-lion plant is scheduled to begin in 1998. It will have the capacity to manufacture about 10,000200mm wafers per week and will initially produce 16M DRAMs, moving to 64M DRAMs ata later date.



Mosel-Vitelic — Wafer Fab Announcements

• Broke ground in October 1995 on a new 200mm fab facility in Hsinchu City. The plant willbe equipped to manufacture DRAMs, VRAMs, and SRAMs, with geometries beginning at0.35µm. Production is scheduled to begin in July 1997 with a potential wafer capacity of6,250 starts per week.

Mosel-Vitelic — Key Agreements

• Licensed Oki’s 0.45µm CMOS process in return for licensing and royalty fees. Mosel-Viteliccurrently uses Oki’s 0.55µm and 0.6µm processes for the production of its high-speedDRAMs.

Mosel-Vitelic — Product Briefs

• Began shipping a 2M EDO (extended data out) DRAM for use in high-speed, low-cost PCgraphics applications. The roll-out follows an announcement that the company will offer theEDO feature for all its specialty memory parts with access times under 50ns.

Macronix International — Product Briefs

• Entered the Fast Ethernet LAN chip market with the introduction of the first in a family ofFast Ethernet hub controller ICs. The first chip is a 100Base-TX/FX repeater-controller chip,designed to support eight twisted-pair or fiber ports. A transceiver IC will be brought tomarket in January 1996.

• Began production of its 16M flash memory ICs, which were codeveloped with Japan’s NKKCorporation. Macronix planned to introduce a 64M ROM and a 32M flash memory in 1995.

Hualon — Wafer Fab Announcements

• Plans to start building a new semiconductor production facility (front-end and back-end) inMalaysia at the site of a sister company in the near future.



Singaporean IC Vendors

The semiconductor industry is an increasingly important part of Singapore’s electronics infra-structure. Assembly, packaging, and testing remain the primary activities of semiconductor man-ufacturing in Singapore, but investment in front-end device fabrication is rising substantially.Singapore wants to duplicate the success of Taiwan’s semiconductor industry, but it may have adifficult time because of its smaller source of land and people.

Figure 2-30 shows sales for Singapore’s few IC companies in 1995. Like Taiwan’s TSMC,Chartered Semiconductor Manufacturing is having success at focusing all its efforts on providingadvanced silicon foundry services to other IC companies. TriTech Microelectronics, a designerand supplier of ICs for the communications and consumer markets, was split off from CharteredSemiconductor in 1990. TECH Semiconductor is a joint venture between Texas Instruments,Canon, Hewlett-Packard, and the local government.

Singaporean Vendor Highlights

TECH Semiconductor — Wafer Fab Announcements

• Broke ground in 1H95 on its third 200mm wafer fab that will produce 16M and 64M DRAMs.Initial production at the 0.35µm facility, which will be capable of running 6,250 wafers perweek, is scheduled to begin in late 1996. TECH’s fourth 200mm fab is expected to come on-line in 1998.

Chartered Semiconductor — Wafer Fab Announcements

• Began construction of its third fabrication facility, which is scheduled to open in 1997.Located next to the company’s new Fab II, Fab III will be capable of producing about 8,000200mm wafers per week. It will also be capable of migrating to 0.18µm design rules.



Company 1994


TECH Semiconductor

Chartered Semiconductor

TriTech Microelectronics*

Total

1995 (EST)

620

250

75�

945

330

160�

57�

547

88

56�

32�

73

*Fabless Supplier18959CSource: ICE, "Status 1996"

Figure 2-30. Singaporean Companies’ IC Sales ($M)

Chartered Semiconductor — Key Agreements

• Has made several agreements with other companies that have involved investments in itsnew Fab II facility (opened in 4Q95) in exchange for guaranteed portions of the wafer out-put. In February 1994, Actel and Brooktree each invested $10 million in the project, andRockwell $30 million. In February 1995, Alliance Semiconductor invested $10 million toobtain a stake in the facility. In March 1995, LSI Logic obtained access to Chartered’s fabcapacity with a $20 million investment. In April 1995, Standard Microsystems said it wouldinvest $20 million, and in May 1995, Analog Devices announced it would make a similarinvestment, bringing the total equity investment in the plant to over $100 million.

• Cooperated with Simtek Corporation on the development of Simtek’s first two members ofits 256K nonvolatile SRAM family of products. The chips use Chartered’s 0.8µm CMOSprocess technology in conjunction with Simtek’s 0.8µm SNOS technology. Chartered willsupport Simtek in volume production.

SEMICONDUCTOR CAPITAL SPENDING TRENDS

Overview

Attempting to keep up with the world’s seemingly insatiable demand for semiconductors, manydevice manufacturers, especially those in Japan, continually bumped up their 1995 investmentbudgets during the year. In fact, some companies reported that they were moving up expansionsplanned for 1996 into 1995. The result can be seen in Figure 2-31. Total semiconductor capitalspending in 1995 is estimated to have increased a staggering 68 percent! That is by far the high-est growth rate in the past decade. Moreover, the $38.2 billion expenditure outlay is nearly two-and-a half times the level displayed only two years earlier in 1993!

Roughly 95 percent of the spending targeted the manufacture of ICs, while only five percent wasspent for discrete devices. As shown in Figure 2-32, 80 percent of capital expenditures go towardequipment purchases and 20 percent toward plant structures.

Fueled by continuing capacity shortages, foundries are a major source of today’s spending boom.Figure 2-33 lists several foundry-dedicated operations that are being set up around the globe.Note that the majority of these fab sites are located in the Asia-Pacific region.

The 1995 worldwide top ten spenders are ranked in Figure 2-34. For the fifth year in a row Intelwas the largest spender in the semiconductor industry. Samsung has risen quickly in the ranksafter first appearing in the top ten list in 1991. The Korean company spent nearly as much in 1995as Motorola, the second largest spender. Although no European company made the top ten list,Siemens’ capital expenditures increased by 160 percent in 1995, making it the eleventh largestspender.





0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

19961995 (EST)

1994199319921991

Mill

ion

s o

f D

olla

rs

Year19246DSource: ICE, "Status 1996"

11,37512,645

48%

35%-10%

15,385

68%

22,805

(FCST)

38,220

49,500

30%

Figure 2-31. Worldwide Merchant Semiconductor Capital Spending Trends

Building and Improvements

20%

Wafer Processing 52%

Test 17%

Assembly 6%

Other* 5%

Equipment 80%

Source: ICE, "Status 1996" 20459

* Computers, automation, etc.

Figure 2-32. Breakdown of Semiconductor Capital Expenditures



Advanced Semiconductor Manufacturing Corp.

Asian Semiconductor Manufacturing Co.

Chartered Semiconductor Manufacturing Co.

GMT Microelectronics

Interconnect Technology

Huajing Electronics

Lien Hsing Integrated Circuits Co.

Mid-West Microelectronics

Submicron Technology

Tower Semiconductor

Taiwan Semiconductor Manufacturing Co.



United Microelectronics Corp.

United Microelectronics Corp.

United Silicon

Shanghai, China

Hsinchu, Taiwan

Singapore

Valley Forge, Pennsylvania

Sarawak, Malaysia

Wuxi, China

Hsinchu, Taiwan

Lee's Summit, Missouri

Bangkok, Thailand

Migdal Haemek, Israel

Hsinchu, Taiwan

Hsinchu, Taiwan

unspecified U.S. location

Hsinchu, Taiwan

Hsinchu, Taiwan

Hsinchu, Taiwan

1996��

1996��

1997��

1996�

1997�

1996�

1996��

1996�

1997�

1998�

1997��

1998��

1998��

1997��

1997��

1997

Company Location Start of Production

Source: ICE, "Status 1996" 20460

Figure 2-33. Foundries Are Popping Up Everywhere

Rank Company Headquarters Location

1995 Capital Spending ($M, EST)


1

2

3

4

5

6

7

8

9

10

–

Intel

Motorola

Samsung

NEC

LG Semicon

Hitachi

Toshiba

Fujitsu

TI

Mitsubishi

Total

U.S.

U.S.

Korea

Japan

Korea

Japan

Japan

Japan

U.S.

Japan

3,500

2,300

2,200

2,010

2,000

1,755

1,545

1,505

1,250

1,120

19,185

46

40

69

80

567

57

66

66

47

62�

71

19820B

94¥ = $1.00Source: ICE, "Status 1996"

Figure 2-34. Worldwide Top Ten 1995 Semiconductor Capital Spenders

Figure 2-35 shows the annual capital spending levels by world region from 1991 to 1995.Although North America has increased its spending the least in the last two years, it continues tobe the largest spender. Note that 1995 marks the first year in which ROW companies (excludingthose in Korea) spent more than European companies. At the rate things are going, combinedexpenditures by Korean and other ROW companies could match that of Japanese companies andNorth American companies within the next couple of years.

Figure 2-36 shows how dramatically the regional share of spending has changed since 1991. Asshown, Japanese companies were once responsible for more than half of the semiconductor indus-try’s capital expenditures. That was before Japan’s economy collapsed in 1992, causing theJapanese producers to slash their budgets substantially. In the years since, Japan has seen its shareof the world’s capital spending shrink to less than one third, despite healthy investment increas-es in 1995.

Leading North American Spenders

Figure 2-37 lists the biggest North American spenders in 1995. Spending by the North Americansincreased 46 percent in 1995, with Intel, Motorola, and Texas Instruments accounting for morethan half of the expenditures.



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

199519941993199219910

2,000

4,000

6,000

8,000

10,000

12,000

199519941993199219910

500

1,000

1,500

2,000

2,500

3,000

3,500

19951994199319921991

0

1,000

2,000

3,000

4,000

5,000

6,000

19951994199319921991

1,060 1,195

1,1601,0004,2953,520

6,280

3,925

EUROPE

KOREA

NORTH AMERICA JAPAN

17875JSource: ICE, "Status 1996"

Year

Year

YearYear

Mill

ion

s o

f D

olla

rs

Mill

ion

s o

f D

olla

rs

Mill

ion

s o

f D

olla

rs

Mill

ion

s o

f D

olla

rs

6,400

9,020

13,130

22%49%

41%

46%

4,925

7,345

11,905

–38% 25%

49%

62%

1,385

16% 19%

2,040

3,310

47%

62%

0

1,000

2,000

3,000

4,000

5,000

19951994199319921991

800785

ROW

Year

Mill

ion

s o

f D

olla

rs

1,015

2% 27%

2,040

4,500

100%

121%

1,660

2,360

13% 39%42%

5,375

128%

(EST)

(EST) (EST)

(EST) (EST)

Figure 2-35. Capital Spending by Region

To maintain its lead in the rapidly changing and increasingly competitive microprocessor market,Intel has invested heavily in new plants and equipment over the past few years. In fact, combinedcapital expenditures in 1994 and 1995 represent about half of what Intel has spent on capital addi-tions since its founding in 1968. The company continues to increase capacity for its Pentiumprocessor and prepare for future capacity needs for its sixth-generation Pentium Pro (P6) MPU,which entered volume production in late 1995.



Japanese Companies

50%North

American Companies

28%

Korean Companies

8%

European Companies

8%

ROW Companies

6%

1991 $12.6B

1995 $38.2B

North American

Companies 34%

Japanese Companies

31%

Korean Companies

14%

European Companies

9%ROW

Companies 12%

19819BSource: ICE, "Status 1996"

Figure 2-36. Capital Spending Make-Up

Company 1995 (EST) 1994


Intel

Motorola

TI


Micron

AMD

National

IDT

Rockwell

Atmel

AT&T

LSI Logic

Cypress

Analog Devices

Zilog

Others

Total

3,500�

2,300�

1,250�

1,000�

855

700�

420�

280�

210�

200

195�

190�

180�

170�

130�

1,550�

13,130

2,400�

1,640�

850�

650

325�

583�

298�

60�

180�

183�

185�

167�

112�

100�

69�

1,218�

9,020

46�

40�

47�

54

163�

20�

41�

367�

17�

9�

5�

14�

61�

70�

88�

27�

46

14538NSource: ICE, "Status 1996"

1995 Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Figure 2-37. North American Merchant Semiconductor-Related Capital Expenditures ($)

Motorola has been relentlessly expanding its existing fabs, building new ones, and acquiring thefabs of other firms. Since December of 1993, Motorola has purchased three fab facilities from othersemiconductor companies: Western Digital’s fab in California, Harris Semiconductor’s fab inNorth Carolina, and Digital Equipment Corporation’s plant in Scotland.

Early in 1995 its was estimated that IBM Microelectronics would spend about $600 million duringthe year expanding its semiconductor production operations. However, by mid-1995 its spendingplans had been revised upward significantly. Its current fab projects include: the expansion andupgrade for 64M DRAM production at the joint venture fab it shares with Siemens and Toshiba inEssonnes, France; the upgrade of its Burlington, Vermont, fab to 0.35µm and 0.25µm process capa-bilities; the expansion of Micrus, its joint venture fab with Cirrus Logic in New York; and the con-struction of a new $1.2 billion 64M DRAM plant in Manassas, Virginia, with Toshiba.

Micron’s high increase in capital expenditures for 1995 is due primarily to the substantial conver-sion of the process lines in its existing fabs from 150mm wafers to 200mm wafers. In addition,construction of its new $1.3 billion Utah manufacturing complex started in August 1995.

IDT’s capital expenditures were substantially higher in 1995 than in 1994 because of the cost asso-ciated with putting up its first 200mm wafer fab. Located in Oregon, the facility is scheduled tobegin operations in 1Q96.

Look for Cirrus Logic to make the North American top ten list in 1996 as the company makes amajor effort to increase its ownership of manufacturing capacity. Formerly the world’s largest fab-less company, Cirrus Logic has said it will invest approximately $2 billion by the year 2000 tobuild up its manufacturing capability through both fab ownership and foundry relationships.Upon completing its expansion plan, the company expects 60 to 70 percent of its wafer require-ments to be met by owned sources and the balance met by its foundry partners. The first elementsof Cirrus Logic’s expansion program are summarized in Figure 2-38.

Leading Japanese Spenders

Figure 2-39 provides estimates for 1995 semiconductor capital spending by several of Japan’slargest semiconductor producers. Overall, 1995 spending levels in the country were 62 percenthigher than in 1994 in terms of dollars, or 49 percent in terms of yen.

Challenged by the Korean and Taiwanese DRAM manufacturers, many of the Japanese producersare adding capacity primarily for the ramp-up of 16M DRAM production and to prepare for 64MDRAM demand. For example, NEC has accelerated the construction of a new 16M and 64MDRAM fab in Hiroshima, now scheduled to start production in May 1996. Meanwhile, Hitachi isbuilding a 64M DRAM production in Nakakoma and Mitsubishi is preparing to begin the con-struction of a new 64M DRAM-dedicated fab at its Saijo site in 1996. Matsushita is building in



Tonami to expand its capacity not only for DRAMs, but also for microcontrollers and advancedASICs. Spending by Sharp and Sanyo are focused on boosting flash memory capacity inFukuyama and Niigata, respectively.



Figure 2-38. Cirrus Logic’s Manufacturing Expansion Program

•Micrus: Further expansion of this joint venture with IBM is estimated to require approximately $195 million over a 12-to-18 month period. IBM has an option to assume up to half of this investment. A major portion of the total investment will be used to purchase state-of-the-art capital equipment that will expand capacity and support the migration to next-generation 0.35- micron process technology. •AT&T: Slated to begin production in early 1997, this new joint venture will operate within an existing AT&T wafer fabrication facility in Orlando, Florida, and be owned 60 percent by AT&T and 40 percent by Cirrus Logic. AT&T will provide facilities, improvements, equipment, working capital and process technology developed by Bell Labs to the new venture. Cirrus Logic will provide equipment, working capital, and certain advance payments for a total commitment of $420 million. The companies will equally share the production output of the newly added capacity, which will focus on 0.35- and 0.25-micron processing of 200mm wafers. •UMC: Under a foundry venture agreement, a new company, United Silicon, Inc., will be formed at an estimated cost of up to $1 billion. Approximately half of this cost will be funded through equity investments made by UMC, Cirrus Logic, and two other U.S. semiconductor companies. Cirrus Logic's investment will total $90 million, of which 25% will be paid immediately, with the balance following over an 18-month period. The new fab will begin production in 1997. •TSMC: Cirrus Logic will expand its current relationship with TSMC to include a long-term purchase agreement. This agreement, which was expected to be completed by the end of 1995, will require Cirrus Logic to lend approximately $120 million to TSMC over a three-year period.

Source: Cirrus Logic/ICE, "Status 1996" 20461

1995 Rank

Company 1994 1995/1994 Percent Change

1995 (EST)

1

2

3

4

5

6

7

8

9

10�

11�

12�

13

NEC

Hitachi

Toshiba

Fujitsu

Mitsubishi

Matsushita

Sanyo

Sony

Oki

Sharp

Rohm

Seiko Epson

Nippon Steel

Other

Total

1,115

1,115

930

905

690

520

365

390

240

340

190

175

75

295

7,345

80

57

66

66

62

86

68

22

65

13

63

77

47

37

62

2,010

1,755

1,545

1,505

1,120

965

615

475

395

385

310

310

110

405

11,905

1994: 102¥ = $1.00 1995: 94¥ = $1.00

19098DSource: ICE, "Status 1996"

Figure 2-39. Japanese Semiconductor-Related Capital Expenditures ($M)

Due in large part to the high value of the yen, Japanese companies have in recent years placedgreater emphasis on spending abroad. NEC is adding a new $800 million 16M and 64M DRAMfab to its Scotland site and expects to begin building another fab in the U.S. starting sometime inthe second half of 1996. Hitachi is working on two fab projects in Texas, the expansion of its exist-ing fab in Irving and the construction of a new joint DRAM manufacturing facility in Richardsonwith TI. Fujitsu announced major expansions of its fab facilities in Oregon and the UnitedKingdom, each costing at least $1 billion, while Mitsubishi decided to enable its DRAM assemblyand test facility in Germany to manufacture 16M DRAMs, microcontrollers, ASICs.

The most significant offshore announcement came from Toshiba, who has until now stuck by itsstrategy to focus its IC production in Japan. The announcement of intentions to establish its firstoverseas wafer fab came in April 1995. A few months later, the company made its officialannouncement; it had agreed to join Motorola in constructing a $1.2 billion 64M DRAM plant inManassas, Virginia.

Leading Korean Spenders

The Koreans continue to invest heavily in semiconductor plant and equipment (Figure 2-40). Themain Korean IC companies, Samsung, LG Semicon (formerly Goldstar Electron), and Hyundai,boosted their semiconductor capital spending levels by 136 percent in 1995. This is an indicationof the country’s commitment to the IC industry and how quickly it has become a global force.

Almost all of the spending in Korea is going toward the ramp-up of 16M DRAM production andthe preparation for next-generation DRAM demand. The fabs going up in Korea are massive,some with weekly 200mm wafer capacities of 10,000 units. It has been rumored that some futureKorean lines will process as much as 12,500 wafers per week.

Furthermore, the Koreas are making a move to establish overseas facilities. Hyundai and Samsunghave announced plans to build large DRAM factories in Oregon and Texas, respectively. Samsunghas set a long-term goal to produce more than half of its products in foreign facilities.



Company 1995�(EST)


Samsung

LG Semicon

Hyundai

Others

Total

2,200�

2,000�

1,000�

175�

5,375

69�

567�

67�

9�

128

13859N

1994

1,300�

300�

600�

160�

2,360

1995 Rank

1

2

3


Figure 2-40. Korean Semiconductor-Related Capital Expenditures ($M)

Leading ROW Spenders (Excluding the Koreans)

Taiwanese semiconductor companies are the big spenders in the ROW region, outside of Korea(Figure 2-41). In fact, the Taiwanese plan to spend some $15 billion on new wafer fabs by 1997.Much of the spending will go for building foundry-dedicated facilities and DRAM plants. TSMCbroke ground in Hsinchu City on the foundry’s second and third 200mm fabs in 1995. Usingfunds from a host of fabless and fabbed capacity seekers, UMC is building several 200mm waferfoundries in Hsinchu. Meanwhile, Vanguard, TI-Acer, Mosel-Vitelic, and new companiesPowerchip and Nanya Technology are all building massive DRAM fabs.

Other firms located in the Asia-Pacific region are also making heavy investments in semiconduc-tor production. For example, Chartered Semiconductor of Singapore, a foundry-dedicated com-pany, recently began construction of its third major plant. Chartered has plans to build three addi-tional fabs by the end of 2000, pushing the country’s plan to have up to 30 fabs operating on thecity-state island within a decade a bit closer to reality. TECH Semiconductor, Singapore’s othermajor IC manufacturer, also plans to build three additional fabs by the end of 2000.

In the coming years, look for semiconductor expenditures in China to grow substantially as thecountry grows to become a significant semiconductor producer. New fabs are also sprouting upin countries like Malaysia and Thailand.



1995 Rank

Company1995 (EST) 1994


1

2

3

4

5

6

7

8

9

TI-Acer

TSMC

UMC

Mosel-Vitelic

HMC

Vanguard

Winbond

Macronix

Holtek

Others

Total

595

550

480

430

400

270

155

120

25

75

3,100

330

400

152

100

80

—

130

42

10

51

1,295

80

38

216

330

400

N/A

19

186

150

47

139

19549CSource: ICE, "Status 1996"

Figure 2-41. Taiwanese Semiconductor-Related Capital Expenditures ($M)

Leading European Spenders

European semiconductor capital expenditures grew 62 percent in 1995 (Figure 2-42). Europe’sthree largest semiconductor suppliers—SGS-Thomson, Philips, and Siemens—increased theirshare of total semiconductor capital spending in Europe to more than 80 percent in 1995. Togetherthe three spent an estimated $2.66 billion in 1995, up 77 percent over 1994.

The majority of Siemens’ spending in 1995 was for the completion of a new $1.5 billion 64MDRAM fab in Dresden, Germany, which came on-line in late 1995. Additional spending was forproduction expansions at its existing fabs in Villach, Austria, and Regensburg, Germany, as wellas for the start of construction on a new $1.8 billion fab facility in Newcastle, United Kingdom.

SGS-Thomson’s investments are focused on adding capacity primarily for microprocessors, flashmemories, and BiCMOS chips. In early 1996, the company will begin building its fourth 200mmfab in Rousset, France, at the site of an existing 125mm wafer plant.

Philips is in the process of upgrading its IC plant in Caen, France, and one in Nijmegen, TheNetherlands. The Nijmegen upgrade will allow for the production of 0.5µm and 0.35µm ICs on200mm wafers. Philips is also busy converting its fab facility in Shanghai, China, into a foundry-dedicated operation modeled after TSMC (of which Philips owns 25 percent) and jointly ownedwith Northern Telecom and several Chinese interests. The new operation, called AdvancedSemiconductor Manufacturing Corp. (ASMC), will be capable of processing circuits with 0.8µmgeometries on 150mm wafers.



Siemens SGS-Thomson Philips Temic GEC Plessey Ericsson Alcatel Mietec AMS Others Total

Company 1995 (EST)

407�

780�

320�

170�

55�

50�

24�

26�

208�

2,040

1994

1,060�

850�

750�

190�

80�

55�

25�

24�

276�

3,310

12143QSource: ICE, "Status 1996"


160�

9�

134�

12�

45�

10�

4�

–8�

32�

62

1995 Rank

1

2

3

4

5

6

7

8

Figure 2-42. European Semiconductor-Related Capital Expenditures ($M)

Future Capacity Trends

In all, 60 new fab facilities or major expansions underwent construction in 1995. Of those, 19 werein North America, 12 in Japan, 11 in Europe, and 18 in other parts of the world. ICE has record of28 more fabs that are scheduled to undergo construction in 1996 with a regional distribution sim-ilar to that in 1995.

Figures 2-43 and 2-44 provide a look at the industry’s capital expenditures as a percent of semi-conductor production from 1979 to 1995, as well as a forecast for 1996. As shown, spending in1995 as a percentage of production was at its highest level since 1985! If spending and marketincreases occur as forecast, the spending percentage figure will reach a record level in 1996.

The high spending level in 1995 may cause some concern about overcapacity. Although ICEbelieves spending in 1995 was uncomfortably high when expressed as a percent of production, itis not believed to indicate “severe” problems to come for the industry. Instead, it is believed thehigh rate of expansion will allow supply to catch up with demand by 1997.



YearWorldwide

Semiconductor Production ($B)

Worldwide Capital Spending

($B)

Capital Spending (Percent

Of Production)

1996 (FCST)

1995 (EST)

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

177.2

148.1

104.6

79.8

62.3

58.5

57.5

55.0

50.5

36.7

29.6

23.7

28.1

18.3

14.4

14.3

13.8

10.9

49.5

38.2

22.8�

15.4�

11.4�

12.6

12.0

11.6

9.4

5.9

4.8

6.3

7.7

4.1

2.8

2.9

2.6

2.0

27.9

25.8

21.8�

19.3�

18.3�

21.5

20.9

21.1

18.6

16.1

16.2

26.5

27.4

22.4

19.4

20.3

18.8

18.3

14532MSource: ICE, "Status 1996"

Figure 2-43. Trends in Semiconductor Capital Spending as a Percent of Production

Overall, it appears that the majority of semiconductor companies’ spending plans are “reac-tionary” to market trends. Thus, when the market is booming, spending will surge. However,when demand slows, most companies will put expansion plans on hold until business picks up.

In hopes of providing some insight into the condition of capacity utilization in the IC industry, anumber of the world’s major IC makers joined together in February 1995 to develop a statisticalprogram to report capacity and utilization data twice a year. As of June 1995, the SemiconductorInternational Capacity Statistics (SICAS) program was supported by 46 IC manufacturers from theU.S. (14 members), Japan (14), Korea (3), Europe (9), and Taiwan (6).

SICAS members supply IC manufacturing capacity and utilization data, which is then subdivid-ed into MOS and bipolar technologies. MOS data is further subdivided into linewidths above andbelow 0.7µm.

Information from the SICAS report can be found in Figures 2-45 and 2-46. An estimated 61 mil-lion 150mm-equivalent wafers were produced in 1995, representing over 95 percent of total IC fac-tory capacity. That translates into a total available wafer production capacity of about 64 million150mm-equivalent wafers in 1995, up 14 percent from 1994.

The production of 150mm-equivalent wafers at 0.7µm and smaller geometries surged during thefirst half of 1995 compared to the 2H94 production level. However, the capacity utilization ratedropped from 97 percent to 95.8 percent. For wafers with 0.7µm and larger geometries, total wafer



18.3

18.8

20.3

19.4

22.4

27.4

26.5

16.216.1

18.6

21.120.9

Year14537R

Per

cen

tag

e


21.5

18.3

21.8

25.8

27.9

’79-’95 Average

19.3

15

16

17

18

19

20

21

22

23

24

25

26

27

28

96 (FCST)

95 (EST)

94939291908988878685848382818079

Figure 2-44. Worldwide Capital Spending as a Percent of Worldwide Semiconductor Production (1979-1996)

starts declined in 1H95 compared to 2H94, while capacity utilization increased from 95.9 percentto 97.2 percent. Bipolar/BiCMOS wafer starts and capacity utilization both increased slightly dur-ing 1H95 compared to 2H94.

Data such as that provided by SICAS is important in helping the IC industry to maintain some-what of a balance between supply and demand. However, with the inevitable market fluctuationsand the lagtime between spending and the start of production, a perfect balance may not be achiev-able. Still, under “ideal” conditions, ICE believes that the semiconductor industry needs to keepits capital expenditure level at about 20 to 21 percent of sales.



0

200

400

600

800

1,000

1,200

1,400

1H952H941H94

Th

ou

san

ds

of

150m

m-E

qu

ival

ent

Waf

er S

tart

s P

er W

eek

Source: SICAS/ICE, "Status 1996"

1,042

1,111

1,224

14%

67%

19%

18%

64%

18%

26%

56%

18%

= MOS <0.7µm = MOS ≥0.7µm = Bipolar/BiCMOS

20454

Figure 2-45. IC Wafer Capacity According to SICAS

Wafer Type

Capacity Utilization* (Percent)

1H94 2H94

MOS <0.7µm

MOS ≥0.7µm

Bipolar/BiCMOS

Total

96.3�

95.7�

86.7�

94.0

97.0�

95.9�

88.2�

94.7

1H95

95.8

97.2�

90.9�

95.7

* Figures expressed are for 150mm equivalent wafers.Source: SICAS/ICE, "Status 1996" 20354A

Figure 2-46. Wafer Production Capacity Utilization According to SICAS

The most likely capacity scenario for the semiconductor industry through the year 2000 is one ofbrief periods of relatively minor shortages and surpluses. These periods will be most noticeablein specific leading-edge product segments such as DRAMs and advanced MPUs.

STARTUPS

Despite the increasingly competitive nature of the semiconductor industry, startup companiescontinue to emerge. Development programs cost more, require more time, and are much morerisky. As a result, many technology advances require the financial resources of huge semicon-ductor companies. Nevertheless, many innovations are still brought forth from small, entrepre-neurial ventures.

Anymore, startups in the U.S. rarely begin operations with a new fab. Looking back on the for-mative years of the semiconductor industry (the 1960’s), most firms included funding for a pro-duction facility as part of the capital needed to initiate business. In most cases, a wafer fab was amandatory part of being in the IC business. With few exceptions, this thought process continuedthroughout the 1970’s and early 1980’s. Figure 2-47 lists the few firms that have started operationswith a fab in recent years. It should be noted that three of the four companies in the figure (GMT,Micrus, and Mid-West) operate fabs that were already in existence.



Company Location Products Processes Start Up Date

Comments

GMT Microelectronics

Micrus

Mid-West Microelectronics Twinstar Semiconductor Inc.

Valley Forge, PA

Hopewell Junction, NY

Lee's Summit, MO Richardson, TX

ASICs, foundry

DRAMs, logic ICs

Foundry

16M and 64M DRAMs

CMOS, BiCMOS

CMOS

CMOS

CMOS

1996

1994

1996 1996

A group of investors led by GMT management purchased the facility formerly owned by Commodore. The operation offers 1-, 2-, and 3-micron double-level metal CMOS, 1-, 2-, and 3-micron BiCMOS, and active-matrix LCD process capabilities. Joint manufacturing venture between IBM and Cirrus Logic. MiCRUS fabricates DRAMs for IBM and logic ICs for Cirrus in one of IBM's plants in New York. Former AT&T fab. Mid-West Micro intends to upgrade the facility to make memory and microprocessor-related chips. A joint venture of Texas Instruments and Hitachi. The company will produce DRAMs for the partners at a $500 million, 200mm wafer plant under construction in Texas. Initial production of 16M DRAMs is expected to begin in the summer of 1996.


Figure 2-47. Sampling of North American Startups With Fabrication Facilities

Production costs increased as process geometries shrank and the financial burden associated withfab ownership became too great for many startup companies. Thus, going the fabless route andusing foundry capacity became the most common method for startup companies to get their prod-ucts to market. Figure 2-48 lists a number of fabless companies that have recently started opera-tions in the U.S. One interesting fact to note about the companies in the figure is, about half ofthem are involved in graphics and /or multimedia-related chips. Another interesting fact is thatthey are all located in Silicon Valley.

ICE is not aware of any new Japanese IC manufacturers that have started operations in the pastcouple of years. Most startups in Japan in the past were the result of the country’s large automo-bile, steel, and chemical manufacturers and other conglomerates seeking to diversify their busi-nesses to include semiconductor production.



COMPANY LOCATION PRODUCTS PROCESSSTART

UP DATE

COMMENTS

Aptos Semiconductor Inc. Chromatic Research, Inc. Corsair Microsystems Inc. DynaLogic Corp. Galileo Technology Inc. NeoMagic Corp. nVidea Inc. Sensory Circuits, Inc. Silicon Magic Corp. Synema Corp. 3Dfx Interactive, Inc.

Santa Clara, CA Mountain View, CA San Jose, CA Sunnyvale, CA San Jose, CA Santa Clara, CA Sunnyvale, CA San Jose, CA Cupertino, CA Palo Alto, CA Mountain View, CA

FIFOs, PROMs, and fast SRAMs Multimedia processor and software High-performance cache-memory subsystems FPGAs FIFOs and core logic chips Graphics controller for mobil PCs Multimedia chips Speech-recognition chips High-performance EDO DRAMs Graphics controller chip 3D graphics accelerator

1994

1993

1994

1993

1993

1993

1994

1994

1993

1994

CMOS

CMOS

CMOS

CMOS

CMOS

CMOS

CMOS

CMOS

CMOS

CMOS

CMOS

Founded by former Cypress vice president. Will second-source memory chips until design of its own ICs can be started. Developed its Mpact Media engine and software that processes video, 2D and 3D graphics, audio, fax/modem, telephony, and video conferencing on a single chip. Will produce MCMs based on fast SRAMs from various partners. Targeting very high-speed FPGA market. Introduced what it claims to be one of the largest synchronous SRAM-based FIFOs (32-bits wide) Its single-chip graphics controller integrates an SVGA accelerator, local-bus interface, RAMDAC, LCD controller, and nearly 1M of frame-buffer memory. Its ICs combine graphics, video, and 3D-rendering capabilities. Supplier of low-cost speech-recognition ICs that are based on neural network technology. The company uses TSMC and Chartered for the production of the chips. The company's charter is to find a place as a supplier of high-performance embedded memory solutions in graphics and multimedia applications. High-performance graphics for personal computers. The company's first product is scheduled to make its debut in coin-operated arcade games in 1Q96.

12995VSource: ICE, "Status 1996"

Figure 2-48. Sampling of Recent North American Fabless Startups

Figure 2-49 shows a few of Europe’s recent startups. Two of the three companies in the figure(SMST and Wesson) operate what were once IBM-owned and operated fabs.

Recent startups in the Asia-Pacific region have been located primarily in Taiwan. Taiwan’s semi-conductor industry continues to pump large sums of money into its fab facilities. Figure 2-50 pro-vides a sampling of recent IC startup firms in the Asia-Pacific region.

SEMICONDUCTOR CONSORTIUMS

Increasingly, survival in the fast-paced semiconductor industry is dependent not only on how wella company competes, but also on how well it creates new technologies to maintain its competitiveedge. Some of the technological prowess, whether in design or in manufacturing, originates in thefacilities of consortiums around the world who, in turn, pass along their findings to member/con-tributing companies or to regional companies or to the industry in general.

Provided below is an overview of activities and highlights at several semiconductor consortiumsaround the world.

North American Consortiums

Sematech

Established in 1987 to improve U.S. competitiveness in the semiconductor industry, Sematechnow consists of 11 major U.S. semiconductor manufacturers, each of whom contributes an equalamount to match the funding the consortium receives from the government. The consortium hasspent over $1.2 billion in government and industry funds since its founding.



SubMicron Semiconductor Technologies GmbH (SMST) Wesson France Zentrum Mikroelektronik Dresden GmbH (ZMD)

Boeblingen, Germany Corbeil-Essones, France Dresden, Germany

DRAMs, logic ICs Telecommunications devices ASICs, DRAMs, SRAMs, MCUs, DSPs, Foundry

CMOS Bipolar CMOS, BiCMOS

1994

1995

1993

A joint venture of IBM and Philips to manufacture chips at the former IBM-owned fab. Initially, the company is manufacturing 4M DRAMs for IBM and 0.8-micron logic ICs for Philips. The fab was purchased from IBM by Wesson France SA, a new company representing a group of Hong Kong investors. The plant will process 1.0-micron bipolar chips primarily for Asian telecom markets. Emerged as a private company in 1993.

CommentsFab StartProcessProductsLocationCompany

18545FSource: ICE, "Status 1996"

Figure 2-49. Recent European Startups With Fabrication Facilities

Annual funding of Sematech by the U.S. government has been declining in recent years, but it issupposed to last through 1996 (Figure 2-51). However, a statement by the House-Senate confer-ence committee in September 1995 recommended that the consortium receive $39 million in 1996instead of the full $89 million Sematech had anticipated. If 1996 funding is cut, Sematech willaccelerate its planned downsizing, which includes a reduction in its headcount by about 200 andcut in the number of active research projects from 100 to about 60 or 70. Beginning in 1997Sematech’s budget will be entirely funded by private financing.

There have been many successes at Sematech including increased equipment reliability, improvedsoftware, and the development of standards for equipment safety, cleanliness, and integration. Itsfab has become a lab for advancing new technology and passing that on to member companies(member companies are those who are mostly involved with high-volume, multi-product IC man-ufacturing).



Advanced Semiconductor Manufacturing Corp. of Shanghai (ASMC) Asian Semiconductor Manufacturing Co., Ltd. Interconnect Technology Lien Hsing Integrated Circuits Co. Nanya Technology Corp. Powerchip Semiconductor Corp. Shougang NEC Sintek Submicron Technology Syntek Tatung Co. TECH Semiconductor Singapore Ltd. Vanguard International Semiconductor Corp. (VISC)

Shanghai, China Hsinchu, Taiwan Sarawak, Malaysia Hsinchu, Taiwan Taipei, Taiwan Hsinchu, Taiwan Beijing, China Hong Kong Bangkok, Thailand Taiwan Taiwan Singapore Hsinchu, Taiwan

Foundry Foundry Foundry Memories, graphics chips, foundry DRAMs 16M and 64M DRAMs, logic ICs MCUs, linear ICs SRAMs, ASICs Foundry 4-bit, 16-bit MCUs, other domestic appliance ICs 16M and 64M DRAMs 4M and 16M DRAMs 4M and 16M DRAMs

CMOS, BiCMOS CMOS CMOS CMOS CMOS CMOS CMOS, Bipolar CMOS, BiCMOS CMOS CMOS CMOS CMOS

1996

1996��

1997��

1996��

1996

1996

1993

1993

1996

1994

1996/1997

1993

1995

CommentsFab StartProcessProductsLocationCompany


Originally established by Philips in 1991, the fab is being converted into a foundry operation jointly owned by Philips, Northern Telecom, and several Chinese parties. Building a 200mm wafer fab with a production capacity of 3,750 wafers per week. Malaysia's first front-end wafer fabrication facility. Located at UMC's manufacturing complex, this company is jointly owned by UMC (50%), Alliance Semiconductor (20%), S3 Inc. (20%), and local investors (10%). The Formosa Plastics subsidiary plans to begin processing 1,250 200mm wafers/week by July 1996 in a new fab it's building. Joint venture between Mitsubishi and Taiwan's UMAX group, a scanner maker that took over Elitegroup, Taiwan's second largest mother board manufacturer. Mass production of 200mm wafers is expected to begin in 4Q96. Full capacity is expected to reach 5,000 wafers/week. NEC Corp. (40%) and Shougang Corp. (60%) joint venture. 150mm wafers and 1.2-3.0µm feature sizes. Sintek plans to offer a standard-cell ASIC design service for ICs with embededded SRAM and ROM. Alphatec, traditionally a contract chip assembler, is building an $800 million wafer fab in Bangkok. Plans call for 6,000 200mm wafers per week capacity. 28,500 sq. ft. fab completed in 1994. Will use 1.2µm CMOS technology on 150mm wafers with 3,750 wafers/week capacity. One of Taiwan's largest consumer electronics businesses, Tatung, will enter the DRAM market with an unnamed joint venture partner. The company began building a fab facility in 1995. Joint venture between TI, HP, Canon, and Singapore Economic Development Board. Producing 200mm wafers. Purchased from the Taiwanese government by a consortium of companies including TSMC and Winbond. The consortium plans to build a second fab by 1996, at a total cost of $1-1.45 billion

Figure 2-50. Recent Asia-Pacific Startups With Fabrication Facilities

Listed below are some of the key events at Sematech announced in 1995.

• Approved plans to create a new organization devoted to the development of 300mm waferfabrication capability. The International 300mm Wafer Initiative will receive $120 million infunding through 1998. It will be located at Sematech in Austin, Texas, and will lease facili-ties to test and qualify 300mm wafer process tool sets. The new consortium is open to non-Sematech members, as well as foreign chip producers who have wafer fabs in the U.S.Several foreign companies have indicated they will join, with the exception of those in Japan,many of which have said they will join a Japanese 300mm wafer program instead.

• Plans to establish a new program called “Virtual Bank” that will permit corporations, includ-ing non-Sematech members, to help fund the consortium’s semiconductor infrastructureresearch after 1996. The first area of focus under the plan will be lithography issues for0.18µm-generation devices.

• Although AT&T Microelectronics reserved the option to withdraw from Sematech by the endof 1995, the company has said that it will continue its membership in the organization.

• Launched a major effort to bring EDA up to speed with the semiconductor industry’s aggres-sive deep-submicron road map. Sematech hopes to research and develop the software need-ed to enable more efficient 0.25µm design by 1998.



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Source: Solid State Technology/ICE, "Status 1996" 20462

Figure 2-51. Sematech’s Shrinking Budget

Semiconductor Research Corporation (SRC)

The SRC was formed in 1982 by the Semiconductor Industry Association to strengthen and main-tain the vitality of the North American semiconductor industry. It is a non-profit organization thatplans and implements an integrated program of basic research conducted by faculty and gradu-ate students at leading universities in the U.S. and Canada.

More than 60 companies fund research in five major areas: manufacturing systems, manufactur-ing processes, design, microstructure, and packaging. The $28 million budget includes $10 mil-lion for the university research program at Sematech. Research at SRC accounts for more than halfof all silicon-related research conducted at U.S. universities.

The Fabless Semiconductor Association (FSA)

A group of 40 companies (including Actel, Cyrix, and Sierra Semiconductor) formed the FablessSemiconductor Association in 3Q94. The group cooperates with IC producers that have fabs onforecasting capacity and process technology trends.

It is not surprising that IC foundry companies like TSMC and Chartered Semiconductor are work-ing with FSA. With fabless IC companies representing an increasing share of total IC sales inNorth America each year, the timing of the creation of the FSA seems appropriate.

Strategic Microelectronics Consortium (SMC)

Canada’s Strategic Microelectronics Consortium (SMC) is seeking to help the nation’s semicon-ductor industry achieve its objective of $1 billion in sales by the year 2000. It has been estimatedthat semiconductor sales in Canada reached about $450 million in 1994.

The consortium is funded 50 percent by its members and 50 percent by the Canadian government.Several key projects for 1995 include the development of image resizing DSP devices, theachievement of very low power signal generation and clock recovery at data rates exceeding twogigabytes per second, and work in asynchronous transfer mode (ATM), radio frequency (RF), andferroelectric structure technologies.

Japanese Consortiums

Semiconductor Industry Research Institute Japan (SIRIJ)

The Semiconductor Industry Research Institute Japan, based in Tokyo, was established in 1994 byten leading Japanese semiconductor makers: Fujitsu, Hitachi, Matsushita, Mitsubishi, NEC, Oki,Sanyo, Sharp, Sony, and Toshiba. The institute is serving as an independent organization, main-



taining cooperative relations with the semiconductor industry, the government, and academia. Itwill focus on research concerning the development and promotion of semiconductor technology,world environment problems, international cooperation, and technology exchange. SIRIJ is work-ing to put together two separate programs to develop 300mm and 400mm wafer technology.

Super Advanced Electronics Technology

The Super Advanced Electronics Technology project is a long-term, government-funded project todevelop the basic technologies required for future process generations. It will focus on such lith-ography issues as synchrotron-generated X-ray lithography, plasma etching, and mask production.

European Consortiums

Intra-university Microelectronics Center (IMEC)

IMEC, a consortium based in Belgium, has become one of the most influential research organiza-tions in the region and is committed to the design, production, and testing of ICs. It is a majorcontributor to both Europe’s ESPRIT and JESSI projects.

Major 1995 research projects for IMEC included the development of 0.25µm CMOS technologies,the development of VLSI methodologies for real-time data processing, the development of newASIC design tools for use in commercial products, and the research of optical lithography tech-nology for processes in the 0.35µm to 0.25µm range.

Other projects underway focus on such technologies as ultraclean processing, silicides and inter-connects, software development, compound semiconductor processing, materials processes,packaging, and microsystems.

Joint European Submicron Silicon Initiative (JESSI)

JESSI is Europe’s largest collaborative semiconductor project. Its goal is to develop tools andtechnology by sharing R&D resources, which will position Europe as a significant player in vari-ous aspects of the worldwide semiconductor market. Since its founding in 1990, JESSI has had toovercome numerous cultural and financial hurdles in order to survive.

Over the years there have been many critics of JESSI, saying that it has too many companies, toomany projects, and too many people, all of which results in too few tangible benefits. Today, how-ever, the project has a better image following its successes in developing such things as chipsetsfor GSM digital cellular and ATM data communications equipment, digital audio broadcast tech-nology, the first open framework in the world for CAD tools, a less expensive 0.7µm CMOSprocess, a 0.5µm CMOS process, and flexible wafer fabs using minienvironments.



Although the JESSI project is supposed to end in 1996, a follow-on project named MicroelectronicsDevelopment for European Applications (MEDEA) is being put together. Work under theMEDEA could begin as early as mid-1996. Funding is expected to be about the same as for JESSI,but fewer companies will be involved and there will be fewer projects. MEDEA will likely bemore market-driven than the technology-driven JESSI.

Listed below are some of the key events at JESSI announced in 1995.

• JESSI is developing sub-half micron processes that make use of optical lithography, therebydelaying the high capital equipment and associated costs connected with e-beam and X-raylithography. At the 0.25µm level, JESSI is working on two processes, one employing deep-UV lithography with excimer lasers and the other i-line steppers with phase-shift masking.Deep UV with phase-shift techniques will be used for a 0.18µm process that employs opticallithography by the end of 1996. Specifications for a 0.12µm process, also based on opticallithography, are expected to be laid out beginning in 1996.

• Soitec (Grenoble, France), a maker of silicon-on-insulator (SOI) wafers, is working with JESSIto develop standard 200mm SOI wafers for advanced CMOS applications. The project willbe based on 200mm wafers produced by Wacker-Chemitronic and a low-dose Simox (sepa-ration by implanted oxygen) process prepared by Soitec.

Open Microprocessor Systems Initiative (OMI)

OMI was launched in 1992 as part of the European Union’s ESPRIT program. OMI membershipis open to all organizations carrying out R&D in Europe, including foreign companies with R&Dfacilities in Europe. Motorola, IBM, Apple Computer, and Sun Microsystems are among the non-European members of OMI. The list of European members includes Advanced RISC Machines(ARM), SGS-Thomson, GEC Plessey, University of Edinburgh, Matra Hachette MultimediaSystems (France), Gemplus (France), Syndesis (Greece), Etnoteam (Italy), and IMEC (Belgium). Inall, there are more than 400 companies, universities, and research establishments working on morethan 40 projects under OMI.

OMI’s original mission was to challenge U.S. dominance of the European MPU market by pro-viding European manufacturers easy access to current and future generations of microsystemsarchitecture. This would be accomplished not by developing new microprocessor technology butby forming a technical bridge between European and non-European technology.

In mid-1995, OMI began exploring the possibility of international collaboration with other coop-eratives. Members of OMI met in the U.S. with members of the Microelectronics and ComputerTechnology Corporation (MCC) consortium, Austin, Texas, in part to explore ideas on forming aninternational semiconductor consortium.



ROW Consortiums

Taiwan Submicron Consortium

The Taiwan Submicron Consortium operates under the leadership of Taiwan’s ElectronicsResearch and Service Organization (ERSO) and the Industrial Technology Research Institute(ITRI) and is supported by both the local semiconductor industry and the Taiwanese government.

The consortium’s Submicron Process Technology Development Project was instituted in 1990 withthe goal of establishing Taiwan as a major force in the global semiconductor and electronics indus-tries. This project has played a major role in developing the country’s first 200mm wafer fab andachieving 0.7µm process technology, which was transferred to UMC and TSMC. The consortiumhas also developed 0.5µm 16M DRAM and 4M SRAM technologies, which are to be provided tolocal IC manufacturers by 1996.

Early in 1994, ERSO began searching for investors to spin off its R&D fab facility, with processtechnology and research personnel to be included. In July 1994, it was announced that the 200mmwafer fab would be acquired by a 10-member consortium, led by TSMC. The consortium turnedthe fab operation into an independent commercial DRAM company—Vanguard InternationalSemiconductor Corporation (VISC).

In 1995, the Taiwan Submicron Consortium started a new program called the DEEP SubmicronJoint Development Project, which is geared at uniting local IC manufacturers, research organiza-tions, and equipment suppliers to develop 0.25µm process technology.



Documents

Section 2. Worldwide IC Vendors - Smithsonian …smithsonianchips.si.edu/ice/cd/STATUS96/Section2.pdfOVERVIEW Figure 2-1 provides a breakdown of worldwide IC sales by North American,