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1st Silicon's Wafer Expansion
Drive Manufacturing company 1st Silicon of Malaysia will
invest US$129 million to ramp up production in anticipation of an upswing
in the semiconductor industry led by the emergence of new wireless,
handheld and telephony products.
The semiconductor industry has
suffered six sluggish quarters with analysts predicting a turnaround as
late as the second half of 2003. The cautious forecast however has not
deterred the foundry maker, located at the Sama Jaya Free Industrial Zone
in East Malaysia, from bumping up the volume.
CEO Dr John Nelson
is confident that the market cycle is at its turning point. "The end
market is showing signs of recovery driven by the take off of new
applications such as wireless connectivity, home networking and
Voice-over-Internet-protocol," he said.
As part of the expansion
plan, 1st Silicon has placed orders for the new equipment to produce
0.18-micron wafers. "Our foundry has an installed capacity of 8,500 wafers
a month and we expect to increase to between 15,000 and 17,000 wafers a
month by end of the year," he said, adding it will signal a steady rise of
production capacity from 56% to 80%.
Nelson said that the new
equipment, when installed, will be able to produce 0.15-micron and
0.13-micron wafers that are expected to fetch higher prices than the
0.25-micron wafers the company has been producing over the past several
years. "We will start the development of 0.15-micron wafer this year, and
probably 0.13-micron wafer next year," he added.
Break-Even
Target
According to Nelson, the manufacturing technology for
0.13-micron is complicated and time consuming compared to the migration
from 0.18-micron to 0.15-micron. The development phase for each product is
expected to be between 12 and 15 months and qualification process of
0.18-micron wafers is underway with mass production expected in the next 4
to 5 months. "We will optimize the production of 0.18-micron wafers
because of higher profit margin gained compared to what we get from the
0.25-micron wafers," he said. Projected production for 2003 is 10,000
pieces of 0.18-micron wafers and 8,000 pieces of 0.25-micron wafers. The
production of 0.15-micron wafers is targeted for 2004.
The company
recorded a 400% growth in revenue in 2002 and has set a target of between
100% and 150% growth for 2003. Nelson expects 1st Silicon to break even
and be self-sufficient by 2004 when its monthly production hits 80%
capacity at between 20,000 and 22,000 wafers a month. He added that the
company will set up sales offices in Europe, Japan and Korea this year.
Also on the drawing board for 2003 are plans to set up the first
fabless design house to provide wafer designs for 1st Silicon. The company
is currently working with 17 fabless clients from the US, Europe and Asia
and two integrated device manufacturers.
by Anita
Devasahayam
(April 2003 Issue, Nikkei Electronics Asia)
Copyright (c)
1996-2003, Nikkei Business Publications Asia Ltd,
Nikkei Business
Publications, Inc. All Rights Reserved.
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