A noticeable trend over the past year has been the resurgence of the old Integrated Device Manufacturers (IDMs) using Taiwan's dedicated foundry services for more and more of their production needs.
Mostly, this has been a result of necessity. As Asia's economy and the IC industry slumped over the past two years, Taiwanese foundries such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積1q, www.tsmc.com) and United Microelectronics Corp. (UMC, 聯1q, umc.com.tw) continued to buy the latest IC fabrication equipment. They thus put themselves in an advantageous position, being apply to supply first-tier IC fabrication capacity which the IDMs are now finding they need, but had not purchased equipment in sufficient volumes to do on their own.
Two Taiwanese IC fabrication companies, however, are bucking this trend away from the standard IDM model. Winbond Electronics Corp. (Winbond, 華?1q?l, www.winbond.com) and Macronix International Co. (Macronix, 旺宏1q?l, www.macronix.com) continue to both design and manufacture their own ICs.
Winbond maintains that the IDM strategy is still the way to go. "We have developed over 100 new products," said Hander Chang, a Winbond spokesman. "We believe that the IDM strategy is still very viable."
Winbond does do some foundry work, however, and also makes DRAM under contract to Toshiba. Products that Winbond has designed include communication ICs, controller ICs, multi-media chipsets, SRAM, EPPROM, flash memory and RISC chips for peripheral devices.
A few years ago, UMC got out of the IDM business to concentrate on pure foundry work. "UMC couldn't compete," said Chang. "We have a very high quality design engineering staff that allows us to stay in the IDM business."
Macronix is Taiwan's largest maker of flash-memory chips. The company is poised to start building its third 8-inch silicon wafer plant in Taiwan during the first quarter of next year with a capital injection of US$967 million.
In addition, Macronix will start construction of a 12-inch silicon-wafer factory in 2001. The company is currently seeking partners to invest in the 12-inch factory.
The company said rising demand for mobile phones, digital cameras and Internet switching products has spurred the growth of the non-volatile IC market since the beginning of the year "Macronix has been seeing a steady inflow of orders for mask ROM and flash memory chips," said Tom Yu, a senior executive at Macronix. "The production lines are operating around the clock to meet demand, and are expected to remain that way until at least the second quarter of next year."
"Macronix has its own 16Mb SRAM design that it is now producing," said one securities analyst. "Currently, they are ramping the product up with volumes of about two to three thousand wafers per month. Capacity is the key in SRAM, since it now is a commodity product. In the short term, due to the earthquake, Macronix is going to have some packaging problems though."
Macronix's Fab 3 will supplement the deficient output of flash memory chips and embedded memory products. The new fab will be devoted to the production of 8-inch wafers. Monthly output is projected at 35,000 units at the initial stage of production.
Yu pointed out that Macronix has been enjoying a 20-30 percent growth in output in flash memory chips over the past two years. Since the prevalence of mobile phones, digital cameras and Internet switches is spurring the demand for the product, faster growth in orders and shipments is anticipated. Macronix therefore signed an OEM contract with Israel's Tower Semiconductor Ltd, which will serve as a second source for Macronix's 8Mb flash memory chip products for five years, beginning in the first quarter of 2000.
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