Cash-strapped Japanese chip makers think they may have a way to economically get into the 0.09-micron to 0.10-micron processing fray. The new thinking is for a half dozen or so chip firms to join together to equip a single 0.10-micron or below fab to act as a foundry for all.
What's even better is that they hope the government's Ministry of Economics, Trade and Industry (METI) will buy an existing fab for them.
Some dozen Japanese semiconductor makers have already joined hands with the government in a Project Azusa for initial exploratory development of 0.10-micron technology technology. That effort reportedly has moved far enough that the participants are considering the next stage -- actual qualification of fab lines and initial production of the new generation chips.
Some Japanese industry and financial analysts think they have a candidate fab for the 0.10-micron camp to take over with government help. It's the former Tricenti 300mm joint venture fab of Hitachi Ltd. and UMC Corp. that was dumped solely into Hitachi's hands when UMC several weeks ago sold back its 40% interest.
The Hitachi 300mm fab is ramping up production, but sources in Japan said it is still a far cry from running at efficient capacity and yields. It was launched amidst the savage global chip recession when trying out a new foundry experiment in Japan. It would have to add 0.10-micron processing equipment,but analysts believed that could be done at a fraction of the cost of building a new 300mm facility from the ground up.
The 0.10-micron foundry project would assuredly want a 300mm fab to compete with foreign rivals that will be launching their own 0.10-micron processes in the next-generation fab size. Building a 300mm fab from scratch could be prohibitively expensive for the capex-limited Japanese firms.
Japanese chip makers have increasingly diverted production of some chips, primarily commodity devices, from their own fabs to overseas foundries. But they still retain core competencies at home. The joint 0.10-micron fab could possibly allow them to have the best of both worlds -- sustaining state-of-the-art chip technology and keeping the business in Japan.
The high tech foundry is strangely reminiscent of the U.S. chip industry's abortive U.S. Memories joint DRAM foundry idea in the late 1980s, when then-embattled American vendors feared that was the only way to compete with Japan Inc. How times change.