Flash Fabs costing $7 billion and more roar with capacities never seen
How Megafabs change the landscape: Less fabs generate more capacity.
By Christian Gregor Dieseldorff, senior analyst, Industry Research and Statistics
Back in March 2006, the joint venture between Toshiba and SanDisk, Flash Partners, stated that its Fab 3 in Yokkaichi was first planned to have a capacity of 100,000 wafers per month (wpm). In July 2006, the plan was to reach 70,000 wpm by end of the second half of their fiscal year (FY) 2006. This would have made the fab, when fully ramped to 100,000 wpm, already the largest fab in the world to date.
However, Toshiba and SanDisk exceeded their previously announced plans with an even more aggressive ramp. Fab 3 reached 90,000 wpm by the end of 2006 and the plans now are for the fab to build out to 130,000 wpm by end of 2007. The total costs of this fab with a maximum capacity of 135,000 wpm will reach at least, according to our estimates, $7 billion.
This fab has reached superlatives regarding the huge amount of added capacity in the allotted timeframe, but also because of total planned capacity and total capital expenditure. It makes it the largest fab ever—one would think. However, this record, worth being added in the Guinness Book of Records, is about to be broken by the same joint venture.
According to the SEMI ‘FabFutures’ and ‘Fab Capacity Report’ databases, which track and forecast the latest developments of semiconductor fabs on a quarterly basis for the next six quarters, more capacity is expected. The second planned fab, Fab 4, of the joint venture, called Flash Alliance, is planned to have a capacity of more than 150,000 wpm, exceeding the capacity of Fab 3. This could drive the total cost of Fab 4 to about $8 billion according to our estimates.
SanDisk has a 49.9 percent ownership interest and Toshiba 50.1 percent in Flash Alliance Ltd., which was formed on July 7, 2006. In the venture, SanDisk and Toshiba will collaborate in the development and manufacture of NAND flash memory products.
Fab 4 started construction in August 2006 with plans to come on-line by the end of 2007. By that timeframe Fab 3 will have reached 130,000 wafers per month. Fab 4 is planned to have a capacity of 67,500 wafers per month by end of 2008.
Only IM Flash, the joint venture between Micron and Intel plans to follow this path of Megafabs with their fabs in Lehi and Singapore. We believe these fabs will reach capacities of 130K–150K wpm and will have a total cost of about $7 billion. The fab in Lehi is expected to start with first silicon in March of this year; while the fab in Singapore is expected to start ground breaking in the second half of this year.
We see huge amounts of capacity being generated by a smaller number of fabs. Where we have seen traditionally about three to four fabs generating a capacity of 150,000 wpm, we see now one fab. Fabs such as the Toshiba and Sandisk jojnt venture in Japan as well as the planned fab by the IM Flash joint venture in Singapore change the landscape of new capacity being added per country with a smaller number of fabs. The IM Flash fab will be one of the largest front-end fabs in the world. Southeast Asia is also housing the largest non-memory fab in the world as Infineon is ramping a 100,000 wpm fab in Malaysia making ICs for the automotive market.
The rise of Flash-making megafabs are an indication of promising growth in the Flash market However, as noted in March, NAND component prices have deteriorated by approximately 50 percent in the past two months due to excess supply coupled with seasonally weak first quarter demand. SanDisk, for example, has countered these developments with cost-reduction measures, though it believes that lower prices will accelerate demand that will strengthen its market leadership with the next wave of flash products.
It appears that this joint venture is preparing for this increased demand because by end of 2008 the Toshiba and SanDisk joint ventures will have a total capacity of almost 200,000 wpm coming from just two fabs, Fab 3 and Fab 4. Accelerated by the positive outlook, plans are emerging for a third fab, Fab 5, with the location to be determined.
FabFutures: the Next 6 Quarters lists fab details of two quarters including a forecast of the next six quarters for more than 200 fabs in which major capital expenditures are taking place. The report is in an easy to use Excel format and lists by quarter cost of construction and equipment spending by fab, the capacities, geometries and wafer sizes, key mile stone dates, product types and more. Other reports are subsets of FabFutures such as the Fab Equipment Monitor which focuses on fabs being equipped and the Fab Construction Monitor which focuses on fabs being constructed.
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