LUND, Sweden The Swedish government is scrambling to keep open at least one of the nation's last two operating fabs, both now owned by Infineon Technologies AG and both scheduled to be boarded up.
As the government searches for a prospective buyer, one fab's closing is weeks away while the second, a submicron facility, is scheduled to shut down within the next year. Both facilities had been owned by Ericsson Microelectronics in Kista, near Stockholm, and were acquired when Infineon bought Ericsson's internal semiconductor operations last year. When the deal was announced in June 2002, the purchase price was put at about $378 million.
The first shutdown is scheduled at a high-voltage bipolar and low-density MOS fab, internally called Fab 51, while the later closing is at Fab 6, which is capable of running a 0.18-micron process.
Infineon took over Ericsson Microelectronics' business to expand its wireless infrastructure and mobile phone portfolio. The acquisition included 400 Ericsson employees in Kista and 200 in Morgan Hill, Calif., most of them R&D engineers. In negotiating the acquisition, the companies agreed to close both Ericsson manufacturing facilities, a spokeswoman at Infineon Technologies Wireless Solutions AB said.
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Details of the submicron fab's production capacity, the types of equipment already installed, its work force and other specifics have not been made public. Swedish government agencies now trying to structure a deal have not gotten Ericsson's approval for such disclosure. The manufacturing equipment in the submicron fab and its work force are leased to Infineon, but they are still Ericsson's property and employees, sources said. The fab today is completing orders already placed by Ericsson and others.
The fab reportedly can turn out about 450,000 wafers per year, making it “too small for mass production and too big for R&D prototyping, in my personal opinion,” said Engelmark. Whatever company takes over the facility must figure out the right products high-value added as well as relatively low volume.
Despite the government's enthusiasm, Ericsson is no longer interested in running a submicron fab. “The fab was once an important part of our operation, when we were trying to control everything at Ericsson,” said Pia Gideon, vice president at Ericsson. But as the Swedish telecom equipment giant has gone through a host of restructurings and become heavily dependent on outsourcing, Ericsson has determined that it is no longer economical to keep its fab.
Sandeep Chennakeshu, president of Ericsson Mobile Platforms, agreed. His unit, responsible for system engineering for mobile handsets, not only develops software for Ericsson mobile platforms but also does silicon design. But Chennakeshu said that the fabrication of such chips is best left to chip vendors already invested heavily in the advanced process technologies for 90-nanometer or smaller geometry, he said. “The key is to establish good partnerships with a few chip companies.”
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