The European Commission has published a report that claims the region runs a high risk not only of missing out on the next wave of electronics production but also of losing existing facilities and employment if companies and government agencies do not act.
The study – prepared under contract by two market-research firms, France-based Decision and Future Horizons from the UK – was completed in February, but the Commission delayed full publication until early June. It analyses the problems caused by the likely shift of large semiconductor manufacturers from production on 300mm to more economic 450mm-diameter wafers.
The report says: “High-tech industries can only close competitive gaps during technological shifts. The 450mm shift is one of them and most likely the last one for the semiconductor industry. The 450mm transition is a unique opportunity to launch a European industrial policy... Not having a 450mm production infrastructure in Europe will thus mean abdicating production of advanced semiconductor technologies.”
Malcolm Penn, president of Future Horizons and one of the report’s authors, argues that 450mm will not only be more economic for future processes but also for older technologies, which will make existing European fabs vulnerable to competition from Asian companies that upgrade to the larger wafer size.
The report claims, because of the of the way in which conventional Moore’s Law scaling is drawing to a close, the 450mm transition “will very likely be the final wafer scale-up for the industry and will define the geographical locations of the next (and perhaps final) 10 to 15 most advanced semiconductor production areas worldwide.”
Although the authors concede that 450mm fabs are not considered important by the remaining indigenous manufacturers, and will not greatly increase manufacturing employment because of their high levels of automation – TSMC expects labour-cost savings of close to one-third when it makes its move to 450mm production – they argue that the strong base of suppliers to fabs worldwide will see them move operations overseas if there is no local 450mm fab.
“What all of these companies have found is that Asia now represents the majority of their sales and Europe only a very small portion. If this is not remedied then it is quite possible that more of their operations, including eventually R&D, could move to be nearer their customers,” the report asserts.
A spokeswoman for GlobalFoundries, which operates a large-scale fab in Dresden, Germany, told E&T: “We see considerable headroom left in 300mm manufacturing and continue to stay focused on driving efficiencies in this manufacturing process and associated tools, facilities, and systems. However, we do recognise the economic benefits of scaling and agree that a wafer size conversion to 450mm is inevitable.
“As a key part of our efforts to prepare for the 450mm transition, we have joined the Global 450 Consortium, a $4.8bn, first-of-its-kind collaboration,” she added. This consortium is building a pilot line in Albany, New York that is being funded by five large chipmakers: IBM, Intel, GlobalFoundries, TSMC and Samsung.
Because of the scale of the investment, the Decision/Future Horizons report argues that “national 450mm strategies do not make sense and a European 450mm ‘master plan’ is the only sensible scale”.
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