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ST Microelectronics reveals future of Crolles2 |
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Jan 29, 2007 at 05:18 PM |
 With the completion of 45nm process technology development expected at the end of 2007, the announced exit of NXP Semiconductor from the Crolles2 Alliance at that time, and the expected withdrawal of Freescale, the future of Europe's leading semiconductor R&D facilities is in doubt.
"Starting from 2008, there will be a discontinuation and the discontinuation is such because of the increase of the effort that would be required to fully support the 32nm platform [at] Crolles 2," said Carlo Bozotti, ST Microelectronics' chief executive officer, during a conference call with financial analysts last week. "We have decided that the core technology on the 32nm would become available through partnership with industry leaders in this field and, of course, it is obvious that we have alternatives."
Confirming comments made by Bozotti, ST will seek alternative partnerships to develop 32nm & below process technology. ST said that it was in discussions with ‘several potential partners about establishing or joining leading-edge technology projects.'
Though ST has yet to reveal possible partners and to which alliances they are referring, the chip manufacturer will definitely stop advanced CMOS development at Crolles2 at the end of the year.
ST would seem committed to Crolles2 as a facility, which had received approximately $1.4 billion in investments by 2005 and an estimated 1,000-plus employees. Significantly, ST believes that 4,500 indirect jobs had been created by the same timeframe.
That commitment will incorporate the development of derivative technologies, such as CMOS RF, CMOS Imaging, and Power Management technologies. However, these devices are not at the leading-edge process nodes. ST plans ‘leading-edge' development of these types of devices at Crolles2, which are inherently varied.
The company reiterated that leading-edge CMOS production at Crolles2 will continue at the 90nm and 65nm nodes with the capability to produce 45nm devices. ST cited the need for dual-facility manufacturing capability that is being increasingly stipulated by customers, so production at these nodes through to 45nm will come from internal and external fabs as demand dictates. According to ST, it does not plan to add capacity for production purposes at Crolles2 in 2007, and if then, only when demand dictates.
There was also concern that ST would not require M6, its shuttered 300mm fab in Italy, as it pursues a higher outsourcing percentage of production to its foundry partners than previously guided (15 percent). With the move to go above 20 percent as it ramps foundry production over the coming years, coupled to an already high loading of 90nm and below production at foundries, the future need for M6 was therefore in doubt.
However, ST reiterated that M6 is currently still within its future manufacturing plans, but the company gave no indication as to when in the future that may be, nor did they indicate at what technology node the fab would start to be used.
There would seem to be little possibility that M6 would initiate production in 2007 as the company plans to focus efforts on efficiency drives at its existing 200mm fabs and has no need to add capacity at Crolles2 this year.
Capital spending at ST will also be lower in 2007 ($1.2 billion) compared to 2006 ($1.5 billion). However, as part of a major shift to utilize foundries, the company is putting in motion plans to reduce the CapEx-to-sales ratio from 15.6 percent to 12 percent as part of a long-term goal. This was approximately 20 percent only a few years ago.
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