Grace Semiconductor Manufacturing Targets High-Growth, High-Value Markets
Dr. Ulrich Schumacher, CEO and president of Grace Semiconductor Manufacturing, provided a “standing room only” audience with detailed insights and plans into the IC foundry’s strategic priorities and technology mix as part of the keynote address at SEMICON China. The presentation was important because it reflected a continuing trend toward highly targeted technology specialization occurring in the foundry segment.
Located in the Zhangjiang Hi-Tech Park in Pudong, Shanghai, Grace is a specialized semiconductor foundry with a strong focus on advanced value-added technologies, including embedded nonvolatile memory, high-voltage, and low-leakage processes. The company started operations in 2003 and today has more than 1,600 employees. Grace operates three 300mm fabs and an 8-inch wafer fab from 0.25 to 0.13 micron geometries, and with 90 nanometer technology in development.
Dr. Schumacher’s presentation, entitled, “China Foundry’s Opportunities
in a Recovering Market” began with an overview of the China chip gap that underlies the long-term expectations for chip manufacturing in the world’s most populated country. While China became the world’s largest IC consumer in 2007 and is projected to account for one-third of all ICs in the world by 2014, for the foreseeable future China will be able to produce less than 20 percent of its total demand. The resulting chip gap between supply and demand suggests continued investment and growth in China’s growing semiconductor manufacturing infrastructure.
As one of China’s leading chip companies, Grace aims to be a major contributor to closing the country’s chip gap. Dr. Schumacher said the company has already seen revenues rebound to Q3 2008 levels and forecasts all-time quarterly revenue levels in Q1 and Q2 2010. The company’s customers are widely distributed by regions (over 50% of revenues from the U.S., followed by China and Taiwan, each contributing 16%), and by technology: logic (44%) memory (16%) and embedded flash (10%).
Like many semiconductor manufacturing companies today, Grace has no intention of keeping pace with Moore Law. Their strategy is to be the most trusted foundry partner for specific set of differentiated IC technologies. They aim to excel with a technology portfolio designed to meet a targeted selection of applications in the consumer, communication, computer, and automotive applications. According to Dr. Schumacher, achieving the low-cost position in profitable value-added niches still requires consistent technology innovation and capital investment. It also requires, “highly effective technology transfers based on partnerships and services along the value chain.
To explain the Grace strategy, Dr. Shumacher provided detailed market size, growth and technology trends for key application segments, including microcontrollers, SiGe/RF, SmartCards, touch panel controllers, LED drivers, and power management. The target applications drive a Grace technology portfolio that includes geometries of 0.35µm, 0.25µm, 018µm, 0.15 µm, 0.13 µm, and 90 nm. Complementing the mix of geometries are dedicated technology platforms for NOR, EEPROM, embedded Flash, SiGE, and PowerMos optimized for fast time-to-production, yield and cost.
A key component of the Grace plan is the company’s capabilities in stand-alone memory and embedded flash solutions. Dr. Shumacher sees Grace as the “leading foundry for stand-alone NOR Flash technologies” with high-volume production at the 0.25/0.18/0.12 µm nodes. In embedded flash, Grace delivers what they see as industry leading process expertise in 0.35/0.25/0.18/0.15/0.13 µm volume production, with key manufacturing and design licenses down to 90nm, including unique rights from SST. Dr. Schumacher said that Grace offers extensive embedded Flash IP design capability at most competitive macro sizes to meet a wide range of applications.
Like many IDMs and fab-lites, Grace has developed a “More than Moore” technology strategy that is based on savvy market specialization, coupled with dedicated production platforms built on lowest cost investment, including significant reliance on refurbished equipment. For companies like Grace, financial success with this model will be based not on timing massive capital outlays to meet anticipated market demand and capacity constraints (Moore’s Law), but on serving multiple mid-tier technology segments that need value-added services and specialized platforms. Equipment and materials suppliers who understand the detailed elements of the strategy will be best positioned to benefit by offering targeted solutions tailored to address specific technology needs of each production platform.
April 6, 2010