ZT: With NXP closing down wafer fabs

With NXP closing down wafer fabs ICH in Hamburg, Germany and ICN5 in Nijmegen, the Netherlands, and announcing plans to close ICN6 by early-to-mid 2011, the fab-lite movement is gathering pace at the chip company. And the conventional wisdom that fab-lite is a strategy that outsources leading-edge digital CMOS to avoid R&D and capital expenditure costs but keeps analog and mixed-signal IC manufacture in-house because design, performance and process are intimately linked, also seems to be going away at NXP. Now that NXP has moved its DTV and STB businesses into Trident Microsystems Inc., NXP has reduced its direct interest in digital ICs. But increasingly NXP is also coming to rely on outsourcing for its mixed-signal IC manufacturing. According to senior executives at NXP the C14 mixed-signal process, which offers 140nm minimum geometries, is likely to remain the work-horse internal process technology for the foreseeable future. NXP also designs to a 90nm mixed-signal process it calls C90 for external manufacture and on occasion uses a 65nm RF CMOS process that it labels C65, which is again a process that NXP cannot manufacture internally. C14 might undergo a shrink or two down to 120nm or 110nm minimum geometries but will essentially remain the same for a number of years, executives said. At the same time is unlikely that NXP will bring the C90 or C65 processes in-house. More likely is the addition of options to extend NXP's high-performance mixed-signal process at above 100nm. "A large part of our applications fit very well on 140nm," said Rene Penning de Vries, chief technology officer with NXP. "We are considering our next step to push the envelope," he added. Going fabless?
Some observers are distrustful of the fab-lite model and suggest that it merely puts a gloss on what is effectively a slow and steady move to fabless status. And the same observers point out that when demand for ICs exceeds supply companies that rely on external manufacturing may found themselves unable to source their silicon or having to pay high prices. Nonetheless the opportunity to reduce R&D costs and capital expenditure seems to make that a price many companies are willing to pay.
With the closure of ICH in January, with ICN5 due to close at the end of Q2 10 and ICN6 now slated to close in 1H 11, NXP is coming to rely on ICN8, which is the 200mm wafer fab in Nijmegen and Systems on Silicon Manufacturing Co. Pte Ltd (SSMC) in Singapore. SSMC is a joint venture 200mm wafer fab owned by NXP and Taiwan Semiconductor Manufacturing Co. Ltd in which NXP has a 61 percent stake. When asked if pursuit of a high-performance mixed-signal strategy required internal manufacturing Rick Clemmer, CEO of NXP, said: "We will be balanced. SSMC is not outsourcing. We will continue to focus on proprietary technologies." But when asked whether NXP would own a 65nm mixed-signal process technology and bring it up in its own fabs, Clemmer said: "No. We can acquire 65nm mixed-signal externally." Clemmer made the point that with mixed-signal the added value is more about what a company designs than the process it designs in, particularly as analog functions do not scale the way that digital circuits do. He said as the work-horse internal process C14 would be adequate for the next half-decade. "A lot of our requirements are above C14. The important thing is that we bring a total solution to our customer," Clemmer said. Focus on lighting, energy
For legacy reasons NXP is active in a number of markets that are enjoying renewed popularity. NXP has focused on automotive but it is also looking to address medical electronics and environmental markets such as renewable energy and it has always been involved in the lighting market, because of the interests of its erstwhile parent Philips. The interest in climate change and clean technology solutions such as electric cars and solar power is providing a boost to many of the markets in which NXP is already established, Clemmer said. It may also provide some hope for otherwise redundant chip workers, at least for some at NXP's Nijmegen site. Clemmer agreed that the making of solar cells from silicon is a potential use of former IC wafer fabs. With regard to Nijmegen Clemmer said: "There are opportunities to look at other production technologies. It's not something we want to pursue ourselves but if someone else wanted to do it... We have discussions going on." When asked if the rapidly increasing demand for LED lighting was a reason for NXP to consider LED manufacture in its older wafer fabs, Clemmer said that LED manufacture was not interesting to NXP which was focused on LED driver ICs amongst other products. He added that there are no discussions on LED manufacture, only on solar power. - Peter Clarke
EE Times Europe