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September 29, 1998

PHILIPS CHOOSES SINGAPORE FOR 200mm FAB

By CBR Staff Writer

Philips Electronics NV is putting $576m towards the cost of a new $1.2bn logic fab in Singapore which will start producing 200mm wafers by the end of 2000. Philips, which will own 48% of the venture and 60% of its capacity, is joined by Taiwan Semiconductor Manufacturing Co (27.6% owned by Philips) which will own 25% and the facility and 40% of its capacity, while the Singapore government’s investment board will own 20%. Philips’ investment is welcome news for Singapore and is unlikely to be the last in the region, as US and European technology companies swoop for bargains in the current economic turmoil. The Dutch giant expects the market for logic chips to recover by late 2000 when the fab comes on stream, while full production – 360,000 wafers per year – will be reached in 2003. It will start with an 0.25 micron process. Philips Semiconductor group, which has been evaluating several sites for some months (including a UK location) said it chose Singapore because it does 40% of its sales in Asia but currently has no capacity there. The world’s ninth biggest chipmaker does 75% of its wafer manufacturing in Europe, 10% in the US while 15% is subcontracted. The new facility will account for around 10% of its capacity by 2003. Philips will use a small amount of wafer production for multimedia chips and the majority for its emerging TriMedia audio/graphics chipsets, telecom and consumer products. The worldwide slump in memory chip demand has slowed investment in 300mm (12) wafer plants. Although many microprocessor vendors are moving to300mm technology for next-generation processes below 0.18 microns although there’s also been a big increase in development of new copper interconnect technologies which can leverage existing wafer technology. Only a few weeks ago Philips bought IBM Corp’s stake in their jointly-owned semiconductor Submicron Semiconductor Technology GMBH, plant in Boblingen Germany which is being converted to the manufacture of logic chips for its mobile phones.

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