Innovation, technology and the right people. Graham Pitcher finds out why Europe is important to TSMC.
Europe doesn't immediately strike you as a strong customer for the world's largest semiconductor foundry, yet it continues to be important for a number of reasons. The most obvious is sales. While Europe represented 10% of TSMC's 2010 revenues, it grew faster than any other area, with a number of stand out companies. But the more traditional integrated device manufacturers (IDMs) are moving from fabbed to fablite to fabless as time goes by. And Europe is relatively strong in such areas as automotive and industrial. But there is another area which could be seen as fundamental to the company's future: technology. And its importance, TSMC has recently doubled the number of people in Europe. These investments have been made at Belgian research institute imec, where a lot of work is being done on future process technologies, and at European universities, working on such topics as material research and analysis. Maria Marced is president of TSMC Europe. She said: "European revenues grew by 49% in 2010, based on couple of things. Firstly, some of the fabless companies in Europe have done a good job. Nordic Semiconductor grew by 125%, CSR grew by 33% and Dialog outgrew the market. But IDMs are becoming fabless over time." Europe is also playing an important role in a TSMC innovation – solar cells. "We are building a fab and will have the first solar cells in the second half of 2011," said Marced. "These will be made into modules by Central Solar in Germany." The result will see TSMC selling own branded products for the first time. "We are hiring in Europe," Marced added, "and will have 10 people running the solar business by the end of the year." A further venture is still being defined, in this instance led lighting products. "We're building a fab in Taichung to make the leds," said Marced, "but the business model is still being defined." Meanwhile, TSMC continues to benefit from what Marced calls a 'buoyant market'. The company expects to produce 13.6million 8in equivalent wafers in 2011, up from last year's 11.3m. Revenues will also rise significantly from 2010's $13.3billion. ARM based product driving growth Revenues are being driven by a number of factors, said Marced. "The growing role of ARM is one, because ARM is closely linked with foundries." And IDMs are outsourcing more and more. "But there has also been a growth in demand for the 'internet of things'; for example, M2M connectivity, e-metering and the smart grid. The convergence of computing and communications is another driver. Tablets and smartphones require a lot of innovation and all these factors are fuelling growth." Meeting growing demand needs serious levels of investment. This year, the company will spend $7.8bn on capital equipment (capex), including fabs. A further $1.1bn will be spent on R&D activities. Part of the capex will be on TSMC's so called 'gigafabs'. These fabs are capable of producing more than 1m wafers per year and there are three examples: Fab 12 phase 6; Fab 14 phase 4; and Fab 15 phase 1. And the high levels of investment need to be matched by an equally high level of hiring. Last year, TSMC added another 10,000 people. "It has been a challenge to find the right talent," Marced admitted. "Our HR department has been creative." Most of the company's 32,000 employees are engineers and many of these are qualified to PhD level. One of the surprising aspects of TSMC's business is the speed with which advanced technologies are being taken up by customers and the 28nm node is an example. "28nm is ready for prime time," said Marced. "We have around 70 tape outs planned and 28nm will represent around 5% of TSMC's revenues by the end of this year." This level of activity is well ahead of how quickly the 40nm process was adopted. While pushing forward to meet the demands of Moore's Law, TSMC is also moving to larger wafers. After a deal of speculation, the company has announced it will manufacture on 450mm wafers in the next couple of years. "We have firm plans to build a 450mm pilot line in Fab12 phase 6, which will start with 20nm devices in 2013/2014. Volume production will be in Fab 15 in 2015/2016," Marced confirmed. Going to 450mm wafers was a simple business decision, she added. "Everything about 20nm is expensive. We have to go to 450mm wafers, otherwise it will be extremely difficult to make the business case viable." Financial challenges She said two factors had to be traded off – power and performance against density and cost. "These drive Moore's Law. Achieving price parity on more advanced nodes will be a challenge because the cost of design and manufacture will be higher." The only sensible choice, she implied is making more chips per wafer. "Moore's Law is safe technically, but not financially." Tools for 450mm wafers are also likely to be a challenge. "We expect they will come from the usual providers," she said. "There are several groups working on different aspects of 450mm, including lithography, and TSMC is participating in all of them. The key will be how TSMC collaborates with interested parties to make sure 450mm happens." One question is whether 450mm/20nm production will need extreme ultraviolet lithography. That's a question that hasn't yet been answered. "We're waiting for the first system to be delivered and analysing what will be required," she concluded. Maria Marced Maria Marced has been president of TSMC Europe since 2007, joining the company from NXP (Philips) Semiconductors, where she was senior vice president and general manager of sales and marketing. Marced joined Philips Semiconductor in September 2003 as senior vice president and general manager of the connected multimedia solutions business unit. Prior to this, she was vice president and general manager EMEA for Intel. She holds a PhD. in Telecommunications Engineering from Universidad Politecnica de Madrid.