Samsung Ramps U.S. Fab and Plans China Plant
By Mark LaPedus, SemiMD senior editor
Amid the IC downturn, many chip makers are slowing down their fab expansion plans.The leading-edge silicon foundries, for example, have already cut their capital spending plans for 2012. Most of the memory and logic crowd are next.
But not all are in the same boat. Gearing up for demand from Apple Inc.’s iPad, iPhone as well as other end-user products, South Korea’s Samsung Electronics Co. Ltd. is moving on three chip fronts.
First, Samsung’s U.S. fab unit, Samsung Austin Semiconductor, has completed the ramp to volume production of its previously announced 300mm, logic fab in Austin, Texas — in record time, said Buddy Nicoson, vice president of the engineering division and general manager for Samsung Austin Semiconductor. The fab, dubbed S2, is reportedly dedicated for Apple Inc., sources said.
In addition, Samsung said it has applied for the Korean government’s approval for establishing a NAND fab in China. The idea is to mass produce NAND products at 20 nanometer-class or below, according to Samsung. The company aims to start building the production line in 2012 and begin operation in 2013. The company plans to invest between 4 trillion won ($3.5 billion) and 5 trillion won on the fab, according to reports.
And on another front, Samsung is quietly ramping up a 21nm NAND flash line and readying a 16nm offering for Apple and other OEMs in various and undisclosed Samsung fabs. Previously, Samsung’s leading-edge NAND production was a 27nm line. “They’re actually ramping 21nm at the moment,” said Gregory Wong, an analyst with Forward Insights.
Generally, despite the downturn, there is still strong demand for chips in mobile devices, especially NAND flash. C.J. Muse, an analyst with Barclays Capital, said: “In terms of industry supply dynamics, we currently don’t see irrational behavior by (NAND) memory vendors and model 77 percent year-over-year bit growth in 2011 and 78 percent year-over-year in 2012 with industry demand bits up roughly inline at 76 percent and 70 percent, respectively. We expect most of the NAND manufactures to expand their wafer capacity to meet the strong demand from smartphones and SSD.”
Tablets are also hot. Worldwide purchases of touch-screen tablet computers are expected to increase at a CAGR of 81 percent between 2010 and 2015, while standard notebook PCs are forecast to grow an annual average rate of slightly more than 7 percent in this time period, according to IC Insights Inc., a research firm.
IHS iSuppli now predicts global media tablet market shipments will amount to 64.7 million units in 2011, compared to the previous forecast issued in August of 60 million. The total shipment level represents 273 percent growth from 17.4 million units in 2010.
Apple remains the dominate vendor in the tablet market. But just weeks after its introduction, Amazon’s Kindle Fire already is shaking up the market, with the device expected to surpass all other iPad rivals to take second place in the global media tablet business in the fourth quarter, according to iSuppli.
Coming up from zero in the third quarter, Amazon will ship 3.9 million Kindle Fire tablets during the last three months of 2011, according to iSuppli. Amazon will have a 13.8 percent share of global media tablet shipments in the fourth quarter, exceeding the 4.8 percent held by No. 3 Samsung, and second only to Apple’s commanding 65.6 percent portion of the market, according to the firm.
Apple's iPad, Amazon Fire take tablet market by storm
The good news for Samsung is that it provides an inordinate amount of chips for Apple’s iPad, including NAND flash. For some time, Apple has developed its own ARM-based processors for the iPad and iPhone. The devices have been manufactured on a foundry basis by Samsung, including the current A5 processor. As reported, Apple will exclusively use Samsung as its foundry for the next-generation A6 processor — and not Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) — as previously expected.
To gear up for the next-generation iPads and iPhones, as well as other products, Samsung Austin Semiconductor last year announced plans to expand the capacity of its 300mm semiconductor fabrication plant in Austin with a $3.6 billion investment.
Previously, Samsung had two fabs in Austin. Now, it has two 300mm fabs, plus a copper facility. An older fabrication plant, which produced chips on 200mm wafers, was closed in 2009 and refurbished for copper metal process for 300mm fabrication.
Another 300mm facility was built in 2007 and is currently making NAND flash devices. Today, in that fab, Samsung is building NAND flash devices at the 2xnm node, said Samsung’s Nicoson.
The $3.6 billion, 300mm fab in Austin – S2 – produces logic devices and provides foundry services, reportedly for Apple only. In an interview with SemiMD, Nicoson did not specify Apple, saying the S2 fab is geared for “a range of customers.”
The S2 line is designed to manufacture devices utilizing Samsung’s 45nm logic process. In the so-called S1 fab in Korea, Samsung is ramping up a 32nm/28nm logic process, based on high-k and metal gates. And it has also recently announced a 20nm-class logic process for standard products and foundry purposes.
Asked if Samsung is looking to ramp up a next-generation process in Austin, Nicoson said: “It’s definitely something we are working on.”
He did not elaborate. Meanwhile, within only five months after the initial silicon wafer was produced, the S2 line in Austin reached its targeted capacity of 40,000 wafer starts per month in October 2011. The company has also synchronized its global production network between Austin and Samsung’s other major logic fab, S1 in Giheung, South Korea.
Samsung Austin Semiconductor has grown to more than 2,400 employees in Austin. Steve Hah, vice president of Samsung Austin Semiconductor, is heading the S2 line. The S2 fab “enables us to support customer requirements in a timely manner and enhances customer’s level of confidence with us as well as our advanced production competitiveness,” he said.
In September, Samsung begun operations of its Line 16 memory fab, which the company said will have the world’s largest memory production capacity. The announcements were made during a ceremony at Samsung’s Nano City Complex in Hwaseong, Gyeonggi Province, where Line 16 is located. The line has started NAND production, the company said.
