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Spin wins with Intel‚??s Fab 68

10 September 2007 | By Mark Osborne | Editor's Blog

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Intel Corp. may have announced groundbreaking at its first front-end 300mm fab in Asia (Dalian, China) but more specifically, according to Intel in its press release; this symbolises Intel's manufacturing leadership, ability to cultivate engineering talent, acceleration of the growth of the IT ecosystem as well as Intel's culture of environmental leadership.

When Fab 68 goes into production in 2010, Intel believes the fab ($4 billion total investment) will spur the revitalisation of industries in China's Northeast region, in part by the need of equipment and materials suppliers to have support operations close by.

Heavy stuff indeed for an average-sized 300mm facility (15,000 square meter clean room) that will not be ramped straight away. When it does ramp it will have to use trailing-edge technology!

I know news of this nature receives a certain level of hype, but can Intel really claim all this and get away with it?

Firstly, Intel has chosen a greenfield site far, far away from developing clusters in China such as Shanghai and Beijing.

This is the first time Intel has not built a 300mm fab within an existing cluster, which adds risk and costs. However, the site selection experts at Intel rarely get their sums wrong so the decision to establish a fab base in Dalian is intriguing.

Perhaps Intel is concerned about the security of processing and design IP. Isolation may be perceived by the company as its best tactic to protect its IP, but I remain curious as to why they picked this location!

The mere fact that this is a greenfield site will mean that China's regional agencies will be investing in all the key infrastructure supporting a 300mm fab will require. Secure reliable power supply, good road and airport links as well as fast track customs and distribution facilities are required, but how good is the airport and its connections?

Equipment and materials suppliers and a whole host of related support industries will have to set up offices, facilities and staff local to the fab, which typically generates around 5,000 jobs in addition to those required by Intel directly.

This can be looked on as an up-front cost for those suppliers, but the purchasing power of Intel means that few will refuse to bear that expense.

This all results in a significant boost to the local economy over the lifetime of Fab 68, rendering Intel's economic impact and the companies attracted by the endeavour as significant.

Again, because Fab 68 is on a greenfield site, Intel has to invest money in the local university educational system if it is going to find the right pool of engineering skills.

Not surprisingly, Intel also announced that it was partnering with the Dalian University of Technology and the Dalian Municipal Government to establish the Semiconductor Technology Institute. This would mean provision of a complete 200mm wafer processing tool set for training purposes.

Although I am sure Intel will want to be guaranteed the cream of the technology institute, support industries will also need skilled staff. The recruiting scope has to be made larger to provide for more than just the needs of Intel.

However, Intel has to start from scratch, meaning that in that respect, the company is ‘helping to cultivate engineering talent,' necessary to get the fab off the ground.

The point made about environmental stewardship at its fabs is nothing new from Intel. Regardless of where in the world it operates and regardless of the type of facility, the company has global EHS strategies, policies and methodologies. Fab 68 will be no different.

However, the wording in the press release gives the impression that some or all existing fabs in China are not as environmentally friendly as Intel will be with Fab 68.

Since when can Intel claim the high moral ground on environmental leadership in the semiconductor industry - or any industry, for that matter?

Intel claimed that Fab 68 would ‘accelerate the growth of China's information technology (IT) ecosystem.' Two broad terms - IT and ecosystem - that have become almost meaningless these days!

I won't ask Intel to actually explain that one or quantify the ‘acceleration' element across China as that is probably a job for a team of economists to determine sometime in the future.

The final claim made by Intel for Fab 68 centred on the manufacturing leadership such a facility gives Intel.

Yes, Intel has more fabs than its direct competition, but it is being caught up with and surpassed when you throw in memory manufacturers to the equation. The fact that the fab will be trailing-edge makes such claims almost meaningless.

That said, a $4 billion investment over a period of years while investments continue to take place in other Intel clusters is of course impressive and duly noted.

Perhaps the key aspect of Intel's move to build a 300mm fab in China is that it's the last piece of the jigsaw to be put in place in the country. Intel has two assembly and test plants in Shanghai and Chengdu, along with R&D centres and labs in Beijing, Shanghai and elsewhere.

As a foreign company, that and that alone is very impressive. 

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