Semiconductor Monthly August 2022

America's FABulous future

It's been two years since the semiconductor shortage exposed the pitfalls of arguably the most important industry of the 21st century, and America is doing everything it can to close the gaps. As multi-billion dollar legislation incentivises private investments across manufacturing, design and packaging, America look to be regaining the global marketshare it lost between 1990 and 2021. Here's a list of all the upcoming fabs in the U.S.A.

Intel

One of the worlds biggest chipmakers has announced plans to build four new fabs that will come online in three years, two in Arizona and two in Ohio, as well as an advanced packaging facility in New Mexico. The fabs in Arizona broke ground almost one year ago and will be using Intel's 20A fab technology to produce chips for both Intel and Intel Foundry Service customers. 

Intel's fabs in Ohio are yet to be named but their scale and importance is hard to overestimate, both for Intel and America's chip industry as a whole. Whilst Intel's investments over the years have been expansions of existing sites, Ohio will be a completely new mega site for the company, with plans for it to house up to eight manufacturing facilities in the future. The project will cost around $100 billion over the next decade to complete, and require the full support of partners (such as equipment and material suppliers) to establish a local presence in Ohio. Out of all the companies building fabs in the U.S. Intel is the only one to build a new site from scratch.

TSMC

In an unusual turn of events, TSMC also announced plans to build a fab in the USA, becoming the third fab in TSMC's history to be built outside of Taiwan. This 5nm capable fab in Arizona is considered to be a major shift in the company's strategy, bringing a fab close to hundreds of their customers in the USA. Although the fab's capacity will only be 20,000 WSPM (wafer starts per month), significantly lower than their fabs in Taiwan, its purpose will be to address a set of very specific customers who serve the U.S. government and military institutions. 

GlobalFoundries

Since completing Fab 8, GlobalFoundries have been gradually increasing its production capacity by expanding cleanroom space and installing more advanced equipment. 2021 was no different, with the company announcing a $1 billion investment into Fab 8, taking it's capacity from 47,500 WSPM to 60,000. In addition to this, GlobalFoundries said it would build an all-new fab in Malta, New York if they can gain financial support from the U.S. government.

Samsung Foundry

In 2005, Samsung's Foundry division was quietly established in 2005 with Qualcomm as a first customer. Since 2009, it produced chips for both Samsung projects and third-party customers in Austin, Texas. Due to Samsung being part of IBM's common platform alliance, it made sense for Samsung to co-develop leading-edge technologies and chips in Austin. At the point where IBM's fab alliance ceased to exist, leaving Samsung with a need for EUV lithograph, it moved this production to South-Korea, forcing their fab in Texas to take on less advanced nodes. This then left a hole for many of Samsung's U.S. customers, leading them to the announcement of a new fab in Texas to the tune of $17 billion.

Whilst no specifics have been revealed around the process technology that will be used at their new site, they will be manufacturing chips for 5G, mobile, HPC and AI applications. These plans have recently been expanded, with Samsung Foundry filing for 11 applications seeking tax breaks in Austin and Taylor for fabs totalling $192 billion. 

Texas Instruments

TI, the worlds largest manufacturer of analog chips has a portfolio of over 45,000 products, servicing almost every imaginable applications that require analog chips. The technological trends of the 21st century including 5G, AI, PHC, edge computing and autonomous vehicles spiked TI's demand for devices throughout lockdown. In response, TI began to build a massive facility near Sherman, TX in May 2022. The fab will be built in four phases, with the first fab becoming operational in 2025. Much like Intel's investment in Ohio, This will be the largest economic project Texas has ever seen, costing TI around $30 billion and taking a decade to complete. To incentivise the project, local authorities approved an incentive that accounts for 90% of TI's property taxes for the fab's first 30 years. Building this new fab in Texas will allow TI to share engineering talent between their 3 other 300-mm facilities in Texas.

These private investments, alongside the CHIPS Act, amount to just under $400 billion across the USA alone, and it's more than likely that it won't be the last. As America and Asia take massive strides towards closing the semiconductor shortage, the UK are falling further and further behind.

On your marks, get set…….. no go.

Whilst the two countries aren't comparable, the efforts that America are making to strengthen their semiconductor industry has highlighted just how far the UK are falling behind. The most important question, however, isn't whether or not the UK have missed the boom, it's whether or not they can join the race at all.

If the semiconductor shortage is a race then the finish line is still a few years off. Almost every plan that has been executed across the globe in reaction to the shortage won't come to fruition for another couple of years due to the massive lead times of building new fabs or expanding on existing ones.

As the EU, U.S. and Asia are ramping up production on all fronts, the most notable change in the UK semiconductor industry has been the takeover of the Newport Wafer Fab by Nexperia, a step backwards by most accounts. Inquiries have been made and extended by the British government into matters of national security surrounding the takeover, but little to nothing is happening in terms of tangible or definitive answers or policies. The debates over Newport Wafer Fab's future reflects a wider concern about the future of the UK's semiconductor industry, which seems to be echoing history.

In the immediate wake of the Brexit, ARM, one of the UK's leading semiconductor companies was acquired by SoftBank, a Japanese owned tech investor. Fast forward to present day and the UK tried to persuade SoftBank to partially list ARM on the London stock Exchange, but these plans have been put on hold following Boris Johnson's resignation and the political turmoil that ensued. So what now?

Andrew Rickman, founder of Rockley Photonics, is aware that the UK isn't going to catch up anytime soon against the likes of the USA, Taiwan or China. He believes instead that the Newport Wafer Fab should be used as an open-access foundry to scale up next-generation chips, focusing on quality instead of quantity. The fab itself is largely empty as production of wafers have been moved to a neighbouring building, and would easily act as a collaborative space without the need for investment if the sale is stopped. This would allow the chip-focused start ups in the UK to collaborate, creating new IP for the next-generation of semiconductors. Is this the future of the UK's semiconductor industry? Only time will tell…

Consultant spotlights; the team behind our recruiting excellence

A consultancy is only as good as the people who represent it, and luckily for us, our people are pretty damn good. Moving forwards, we will introduce a number of our consultants every month to help you get to know us!

Sophie Delves - Semiconductors, US & EU

https://www.linkedin.com/in/sophie-delves-0b0861150/

Sophie started her recruitment career servicing the educational industry in the UK before joining MRL in March 2022, joining Jake Harrington's team to support some of our legacy clients across Europe and the USA.

Sophie has had an incredible start to life at MRL in the semiconductor industry, building fantastic relationships with our clients and candidates. Her bubbly and charismatic personality resonates with everyone she meets, showing encouragement and support to the rest of our team every single day. 

Having now spent 7 months at MRL, Sophie has earn't herself the title of 'the cupid of recruitment' having placed a husband and wife into one of our most established clients. There isn't an angle or option that will get past Sophie, so to everyone who picks up a call from her, trust us, it's more than worth your time!

Morgan Di Via - Semiconductors, France & EU

https://www.linkedin.com/in/morgan-di-via-794a48137/

Morgan Di Via is today's consultant in the spotlight; one of the newest members of our team over in Sophia Antipolis, France!

Morgan joined our team in the South of France to support us through one of the biggest projects MRL has ever taken on, and to say she's making a difference would be an understatement! Her tenacity and personable nature is matched only by her industry knowledge, having worked internally for one of the biggest semiconductor manufacturers in the world! 

It's an absolute pleasure to have Morgan as part of our team in France, and we can't wait to see what the future brings for her!

Cindy Hohne, Office Manager, DE

Cindy has been with MRL for over 5 years, looking after our team of consultants in Germany ever since!

If you've ever dealt with any of our consultants in Germany, chances are that Cindy has played a part in the process. She's a constant source of happiness, encouragement and someone that we're extremely happy to have called a colleague and friend for so many years.

Thank you for all you do Cindy!