Coming Soon: The Ox-Chip Made in Brazil


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Coming Soon: The Ox-Chip Made in Brazil

Latin America’s First Functional Front-End Fab Debuts First Chips

By Christian Gregor Dieseldorff, SEMI Industry Research and Statistics, San Jose, California

Just two weeks before the world-famous Carnaval, Brazil’s president, Luiz Inacio Lula da Silva, inaugurated CEITEC’s Front End fab in Porto Alegre, Brazil. The February 5th event was of historic importance as this is the first and only semiconductor front-end fab of all Central and South America. Brazilian President Luiz Inacio Lula da Silva, or “Lula” as he is known to his public, was there to mark this important milestone in Brazil’s move towards developing and growing an electronic industry.

Eduard Weichselbaumer, CEO of CEITEC, presents the “Ox-chip” or also called “Chip Do Bois,” which will start risk production in the 2nd half of 2010 in Porto Alegre.

Left to right: Eduard Weichselbaumer, CEO of CEITEC; Luiz Inacio Lula da Silva, president of Brazil; Dilma Rousseff, minister of Civil Affairs; Fábio Pintchovski, director of Manufacturing and Research; behind Dilma Rouseff: Dr. Sergio Machado Rezende, minister of Science and Technology.

Temperatures hovered over 40 C (104 F) during the heavily secured event, as press and industry analysts awaited the arrival of the president, the mayor of Porto Alegre, and national ministers of Civil Affairs (Dilma Rousseff) and Science and Technology (Dr. Sergio Machado Rezende, former professor of electrical engineering at University of California, Berkeley). Along with local and national press, international journalists and semiconductor analysts attended the event with representatives from Nikkei Economic Daily, Global Semiconductor Alliance, EE Times, Webcom Communication, Advantage Business Media, and SEMI World Fab Forecast.

Eduard Weichselbaumer, CEO and president of CEITEC, pointed out that the electronic industry comprises about 12 percent of gross domestic product (GDP) for OECD countries, while it represents only 1.9 percent Brazil’s GDP. This 1.9 percent is generated mostly by semiconductor assembly plants, which receive tax incentives from Brazil’s government. President Lula described Brazil's vision to become a competitive, independent semiconductor industry hub by its bicentennial in 2022. The message at the event was clear: Brazil is proud to have come so far. Although they welcome help from abroad, they strive for a more independent and competitive electronic industry.

President Lula shakes hand with Eduard Weichselbaumer.

Original model of CEITEC shows front building with office and design center to the right and auditorium to the left. Front-End fab is behind.

Unlike the well-known and densely populated industrial city Sao Paolo, Porto Alegre had space available for the facility. As a Brazilian hub of agriculture and industry, it is also home to nine major universities and many others. Porto Alegre’s over 4 million residents boast the highest level of education of any Brazilian capital city. Brazil’s government has invested about 450M-500M Reais (about US$ 250M) in the CEITEC front-end fab project. This is a huge increase from the early days of the project. Weichselbaumer related the history of the choice of Porto Alegre for this capital intensive project.

In 2002, an entire school was relocated to create space for a new semiconductor building. In 2003, a small center to make prototypes and designs run by the Ministry of Science and Technology began with an investment of 7M Reais.

Then in 2003, the government decided to manufacture a small number of chips, so a fab was needed. The fab design was done by Meisner Wurst Zander, and construction began back in 2005 with 6-inch equipment donated by Motorola. The still government-owned company, CEITEC SA (Centro de Excelencia em Tecnologia Eletronica Avancada), was incorporated in August 2008. Progress was very slow, and the dream of a Brazilian fab seemed destined to fade. This all changed when Eduard Weichselbaumer was hired at the end of 2008 and appointed as CEO on Feb 19, 2009. The Design Center adjacent to the fab opened in March 2009, and now the front-end fab is open for business.

CEITEC entrance with auditorium (left) and office and design building (right).

CEITEC front end fab. Photo taken from behind the site.

Press and analysts did not have the opportunity to enter the cleanroom, just to peer at it from the gray room and to view support areas. The fab has a cleanroom size of about 1000m² with a maximum design capacity of about 55,000 wafers per year. The plan is to ramp up in modular phases, where about 800m² are already equipped with 6-inch equipment and space is still remains for additional equipment.

CEITEC plans to produce 50 million chips this year and hopes to double its output to 100 million chips by next year. As previously reported in mid-2009, CEITEC has no current plans to upgrade to 8-inch equipment, but will qualify and stabilize its process and resources on 6-inch equipment first. Backend and assembly will be done by a Brazilian/Korean joint venture, HT Micro, also located in Porto Alegre.

At the opening ceremony, Weichselbaumer reflected upon the hurdles he faced in 2009. Although equipment donated by Motorola a long time ago was a trigger point, it had become outdated and needed to be refurbished and replaced. Certain materials and chemicals required to operate the equipment and run processes had never existed in Brazil before, thus requiring development of new import and supply systems. Also, although Brazil has excellent universities, the workforce did not have the necessary experience in chip design; therefore, trainers, designers and other skilled personnel from abroad had to be called in.

CEITEC already makes chips through its partnerships with companies such as the U.S.’s Cadence and the German foundry X-Fab. CEITEC now plans to begin risk production of its flagship product, nicknamed the “Ox-Chip” (also called “Chip Do Bois” or “chip for beef” in Portuguese), in the second half of 2010, starting with its 0.6 micron process and then gradually upgrading to 0.35 micron.

The Ox-Chip is a small RFID tag embedded in a yellow round plastic material which will be clipped on the ear of a cow. Brazil alone has about 200 million head of cattle; turnover in this market means that chips will need to be replaced about every four years.

Another RFID application is for passports and drivers licenses. CEITEC is also providing products to support applications for wireless communication and digital media. For example, Brazil (along with Chile, Argentina, Venezuela and Peru) recently decided to adapt the Japanese digital TV modulator (based on Japanese ISDB-T) to support Brazil's SBTVD standard. The first TV stations started to broadcast digital programs in February 2009 and by end of 2012 all stations will be digital. CEITEC already developed the chip for modulation and is working on the chip for demodulation. This chip will not be produced in Porto Alegre but at a foundry partner.

At its incorporation in August 2008, CEITEC had just nine employees. During the first half of 2009, CEITEC was one of the few semiconductor companies worldwide actively hiring, during a time when many companies were laying off staff, and ended 2009 with 120 staff including 80 design engineers. By March 2010, just one quarter later, the optimistic hiring goal is to reach 250 employees.

Weichselbaumer describes CEITEC’s initial “fab-lite” strategy: development, then design, then manufacturing. The company will focus on getting people trained, then establishing infrastructure, and demonstrating that semiconductor manufacturing can be done in Brazil. He sees the fab at full capacity in 2 to 3 years. President Lula’s vision is that CEITEC’s success (with capital-intensive support by the government) will attract other electronic companies to Brazil.

CEITEC raises its flag, the lone fab south of the Rio Grande. Although it begins as a small 6-inch fab with relatively low monthly capacities, it may be the seed of a growing Brazilian electronics and semiconductor industry.

The Industry Research & Statistics department of SEMI is closely following progress of both the fab and the Brazilian semiconductor industry, with data reflected in the Fab Database reports such as World Fab Forecast and World Fab Watch.

SEMI World Fab Forecast report provides high-level summaries and graphs; in-depth analysis of capital expenditure, capacity, technology and products, down to the detail of each fab; and forecasts for the next 18 months by quarter. These tools are invaluable for understanding how 2010 and 2011 will look, and learning more about capex for construction projects, fab equipping, technology level and products.

Please visit www.semi.org/fabs for additional information on World Fab Forecast reports.

Note: On Wednesday May 12th, Sergio Rezende, Brazil’s minister of science and technology, and Eduard R. Weichselbaumer, CEO of Brazilian chip-making CEITEC S.A, www.ceitec-sa.com, will be in San Jose to meet with select business executives to discuss the limitless possibilities of the next emerging technology market: Brazil, the gateway to South America.

For further information, contact Michele Kinman at michele.kinman@wmcmarketing.net or by calling her at (408) 241-7449.

April 6, 2010