Fabless companies and the need for foundries
The success of fabless semiconductor companies is well documented with companies such as Qualcomm, Broadcom, MediaTek, AMD, Avago and others selling semiconductors made using the fabless model (see Fabless: The Transformation of the Semiconductor Industry by Daniel Nenni and Paul McLellan for more information). Fabless semiconductor companies are growing faster than the overall semiconductor industry and are becoming more important with each passing year. Mobile devices such as cell phones and tablets are particularly dependent on the fabless semiconductor industry. There are also companies such as Apple and Cisco that produce products that are dependent on semiconductors they design and manufacture using the fabless model. Of course the fabless model can only exist if foundries are available to produce the products the fabless companies design.
In the foundry industry today there are really only four companies that are driving to be first producers of the latest technologies, TSMC, GlobalFoundries, Samsung and Intel. The first four are the only foundries ramping 14nm class processes today and of them only TSMC and GlobalFoundries are pure play foundries. Companies such as UMC and SMIC are now followers with 14nm plans that are not yet implemented. All other things being equal, pure play foundries are the preferred solution because they are focused on foundry, it is their core business. The IDM’s such as Samsung or Intel that offer foundry have other corporate priorities and may even compete with their customers.
The fabless industry is well aware of the dangers of being sole sourced. This was really driven home as recently as the 28nm node where TSMC was the only viable supplier for over a year. It is critically important to the fabless industry to have two or more sources of leading edge technology available and as previously discussed they would ideally be pure play foundries.
In my opinion the preceding discussion makes the case that GlobalFoundries succeeding as a foundry is of great importance to the fabless semiconductor industry!
A Brief History of Global Foundries
Advanced Micro Devices (AMD) is a manufacturer of Microprocessors for Personal Computers (PCs) (among other products). For many years AMD was an Integrated Device Manufacturer (IDM) manufacturing microprocessors in their own fabs and locked in a battle with Intel for success in the PC market place. Intel consistently had larger market share, greater profitability and ultimately greater manufacturing scale and ability to invest in new technologies and facilities. Over time AMD’s cash position eroded to the point where they could no longer afford to make the investments required to stay on the leading edge for fab technology and risked falling behind Intel in performance further eroding their market share. In 2009 AMD reached an agreement to divest their fabs to Advanced Technology Investment Corporation (ATIC) a subsidiary of the Emirate of Abu Dhabi and Global Foundries (GF) was born.
GF started with two 300mm wafer fabs in Dresden Germany with a combined capacity of approximately 45,000 wafers per month and an empty site in Malta, New York where a new 300mm fab was planned. With ATIC as a backer, GF had the financial resources to update and expand Dresden and to break ground in Malta on a new fab. GF also received contracts to supply AMD as part of the deal. From AMD’s perspective, they got a manufacturing source for their microprocessors and no longer had to make the enormous investments to build and upgrade state-of-the art wafer fabs.
In 2010 ATIC followed up their initial acquisition of AMD’s fabs by acquiring Charted Semiconductor. Chartered was a pure play foundry headquartered in Singapore and at the time of the acquisition was the third largest foundry in the world on a revenue basis behind TSMC and UMC. Chartered had always struggled with profitability trailing their larger rivals and the acquisition offered Chartered greater scale and financial resources.
Finally in 2015 GF acquired the microelectronics business of IBM. IBM microelectronics adds additional fabs, a huge portfolio of patents and a large and highly experienced development team. IBM had a long history of leadership in semiconductor technology development having invented scaling, the 1T DRAM cell (used in all DRAM today), developed CMP and copper interconnect and more.
GF now has four – 300mm fabs around the world, Fab 1 (former AMD site) in Dresden producing 45nm to 28nm technologies (22nm is in development) with 60,000 wafers per month (wpm) capacity, Fab 7 (former Chartered site) in Singapore producing 180nm to 40nm technology with 68,000 wpm capacity (they also have several 200mm fabs in Singapore), Fab 8 (greenfield GF fab) in Malta, NY producing 28nm and 14nm, and developing 10nm and 7nm technology with 60,000 wpm capacity and Fab 10 (former IBM site) in East Fishkill, NY producing 90nm to 14nm technology with 14,000 wpm capacity. The IBM acquisition also added a 200mm fab in Burlington, VT producing 180nm to 130nm RF wafers (more about this in part 2).
To-date GF has successfully brought up 28nm technology in Dresden and in Malta NY but they were later than TSMC. At 14nm GF was developing their own 14nm technology but they abandoned the development effort and licensed 14nm from Samsung. As an outside observer the impression I have of GF is they have a lot of worldwide scale and resources but that they have struggled with execution.
When Daniel Nenni offered me the opportunity to visit the GF Malta and Burlington sites, tour the sites and meet key GF executives for briefings on the company I jumped at the chance to go. In the balance of this article I will discuss our visit to the Malta NY site; in a following blog I will discuss the Burlington VT visit.
Malta Fab 8 Visit
Fab 8 is GF’s flagship site and the home of their most advanced technology development efforts.
Our visit began with a driving tour of the Fab 8 site. There is currently a massive cluster of buildings on the site. Looking at the buildings from the front there are two large administration buildings, behind the administration building to the left is fab 8 – phase 1 and phase 2. Phase 1 is a 200,000 square foot cleanroom with a capacity of approximately 40,000 wpm and phase 2 is a 100,000 square foot cleanroom. The combined phase 1 and phase 2 cleanrooms are equivalent to approximately six US football fields in area! Behind the right side of the administration buildings is another 100,000 square feet of cleanroom space originally used as a Technology Development Center but now renamed phase 3. Phase 1 is currently fully fitted-out with tools and phase 2 and 3 are being fitted-out. Current capacity is stated as approximately 60,000 wpm, presumably when phase 2 and 3 are completely fitted-out that number may be higher depending on the complexity of the technologies being run.
The Malta site also has space for two more fabs similar in size to the existing fab providing the potential to ramp the total site up to approximately 180,000 wpm.
The site also has some interesting pre GF history in rocket development with a lot of old buildings and test structures still in place.
The overall site and buildings are simply massive. The employee parking lot appeared to be full and there was a large contractor area that was also full and busy.
Meeting with Gary Patton
Gary Patton ran development for IBM microelectronics for eight years prior to GF acquiring IBM microelectronics. Gary is now the Chief Technical Officer for GF and responsible for all of their technology development. I asked Gary is being CTO at GF required a change in mind set. I suggested that at IBM development was likely performance first and cost a distant second but Gary disagreed sighting his work on the bulk technologies for the common platform. He said he had a lot of experience with developing for cost and performance per watt. His job now is to accelerate technology development at GF and make sure there aren’t silos. Gary has established a process council with members from the sites around the world to promote cooperative technology development across the company. One of the things that were clear early on in talking to Gary was a focus on execution, “Say what you do and do what you say to establish credibility”. Gary noted that GF was late on 14nm and late starting on 10nm, at 7nm they started early and they are really pushing. The 7nm technology can be run using multi-pattering but EUV may offer some advantages if it is ready.
Gary also noted that even with the acquisition of IBM Microelectronics by GF, IBM is still involved in semiconductor R&D. IBM retained Yorktown Heights and the Almaden Research Center and is involved in Albany Nanotech. R&D developed at those locations then feeds into Malta where the development team bolstered by the influx of IBM researchers is focused on 10nm and 7nm development. The IBM acquisition brought in a lot of experienced researchers to Malta and there is now a dedicated 10nm and 7nm development team whereas in the past development was done by manufacturing. From the IBM perspective the deal has freed IBM from having to invest in low volume production. GF will provide customized processes to IBM for their relatively low volume server requirements. Former IBM operations such as RF that was constrained to Burlington and ASIC that was constrained on IP are now unconstrained (more on that in part 2).
The IBM 14nm technology will stay in East Fishkill (Fab 10 now). 14LPE acquired from Samsung is run in Malta plus 14LPP is built off of the 14LPE base and will also run in Malta. 14LPP is the same design rules as 14LPE and offers a 10% to 14% performance improvement over 14LPE. When 28nm was brought up in Malta there was no base to work off of, now the 14nm ramp is leveraging the 28nm experience. Both 14LPE (E for early) and 14LPP (P for performance) are ramping in Malta and have “world class yields”. 10nm and 7nm development is all being done in Malta.
I asked Gary for his view of FDSOI versus FinFETs. He said he didn’t see it as “versus”. FDSOI body bias is a great capability but FinFETs are better for high-end smart phones and performance and FDSOI is better for low power. Throughout the interview Gary was very poised and confident. He was very interesting to talk to and I would have been happy to have had more time for the discussions.
Meeting with Tom Caulfield
Tom is the senior VP responsible for the Fab 8 site. Tom noted that Fab 8 was originally going to be an AMD fab. Phase 1, 2, and TDC (now phase 3) are now close to 400,000 square feet. Development on the site is now done as a development “corridor” inside the manufacturing “corridor”.
As was covered above the 14nm technology was licensed from Samsung, the transfer was done as a copy smart. Some recipes were transferred one to one, some had to be modified because the tools were different. There were approximately twenty Samsung engineers on site and morning and afternoon conference calls. During the transfer they were always within one quarter of where Samsung’s S1 fab was and typically within 2 months. By buying Samsung’s process Samsung and GF basically split the cost of the development. The Samsung and GF 14nm processes are PDK compatible.
At 10nm/7nm the technology will be IBM driven. He thinks 7nm options are so limited that industry wide the processes will be similar. Current optical technology capabilities have defined how 7nm will be done. The usage of 14nm and even 10nm is driven by performance, at 7nm the driver will be economics. 7nm as defined today is economical even if done optically; EUV will be an opportunistic adder.
We talked a bit about the pyramid of systems companies supported by semiconductor companies supported by materials and equipment companies. Equipment companies used to just build tools but now they have to provide processes. They even supply some modules but individual steps are better. Tom talked about how the Eco system has to have a value proposition at each level or the model collapses.
In terms of why GF acquired IBM microelectronics:
GF now has the “Malbany” corridor, Malta to Albany in about 29 minutes. The scale they are building is reaching the point that suppliers are setting up locally. For example, bulk hydrogen peroxide transportation is a big part of the cost coming from Texas, but now a hydrogen peroxide plant is being set up near Malta.
Tom also noted that 28nm launched at Fab 8 in June of 2014 established manufacturing so that infrastructure was in place for 14nm. GF currently has 14LPE in production on one part and 14LPP has two parts ramping production now and they will exit Q1-2016 with a least six parts.
We also talked about 20nm/16nm and the possibility that 10nm/7nm will be similar. Daniel has noted that 20nm and 16nm shared the same equipment set and 20nm ended up being a very short lived node. Daniel thinks 10nm may also be a short lived node with a quick shift to 7nm using the same equipment. Tom noted that at 20nm foundries didn’t make their R&D investment back and 10nm could be similar. 20nm succeeded at TSMC because Apple designed down to it and paid for the technology. Others who didn’t design down to it weren’t successful because the power performance wasn’t there.
I asked Tom about FDSOI versus FinFET and got my favorite quote of the trip. “FDSOI and FinFET competition is like a screwdriver and hammer fighting, they are different tools”. FDSOI is Internet of Things (IOT) and FinFET is big data. Earlier in the session we had discussed how IOT doesn’t really get interesting until you load the data up into a server and start running expert systems on it. They are complimentary pieces.
As a final observation Tom said you put values in place to judge behaviors. GF is focused on execution and measuring against that. They have met everything they said they would at 14nm.
Throughout our interview Tom was enthusiastic and energetic about GF and where they are going. I would also say that everything I heard from Gary and Tom matched up very well especially on the need for execution.
In summary at Fab 8 in Malta GF seems to have gotten the message that they have to execute and they are focused on making it happen! I came away both impressed and optimistic for the future of GF.
In the next installment I will discuss Burlington. Going in I expected Malta to be the highlight of the trip but Burlington held it own and has it’s own really interesting pieces to add to the GF puzzle.