KUCHING, Malaysia A once dead fab project has been resurrected in the jungles of Borneo. A foundry named 1st Silicon announced Tuesday (March 30) that it has obtained both the financing and the technology support that will enable it to build an 8-inch, 0.25-micron wafer fabrication facility in Malaysia.
A $200 million syndicated loan from a consortium of European banks backed by Commmerzbank AG of Germany cemented the deal. Sharp Corp. will be the technology partner for 1st Silicon and will also purchase a significant amount of the foundry's initial production facility, located here.
Pilot production is due to commence in the later part of 2000. "We are now beginning to construct the substructure," said Claudio Loddo, chief executive officer of 1st Silicon. "We already have 70 employees and are actively looking for engineers, especially Malay engineers, to staff the fab."
Finding enough engineers to staff the facility will be an issue by late next year. A more immediate problem for 1st Silicon the securing of financing was recently solved. "The German bank deal wasn't easy," said Loddo. "In the early '90s while working for another company, I worked closely with both the German government and banks. I thus had a good relationship with those entities. In September 1998, I approached them for a loan for 1st Silicon. The German government and banks did months of due diligence until this loan was finally given the go ahead in January 1999."
Under the technology transfer arrangement with Sharp, the Japanese company will transfer 0.25-micron IC fabrication technology to 1st Silicon at ramp up. Sharp will also introduce 0.18-micron technology to 1st Silicon.
"I believe that 0.25-micron process technology will have a longer life span than usual," said Loddo. "We will thus be able to offer value to our customers."
At full capacity, 1st Silicon will be able to produce 30,000 eight-inch wafers per month. "We feel that it's important that there be other foundry sources other than in Taiwan," said Loddo. "The globalization of the industry allows foundries to be situated in places such as Sarawak," the region of Malaysia that is home to Kuching.
Unlike Taiwan, Sarawak has abundant water and power resources, which will help the 1st Silicon project. "Natural resources are not a problem here," said Loddo. "The addition of a high-tech IC fab helps complement the major industries here of timber and oil."
A project to open an IC fab in Sarawak was originally begun two years ago with a partnership between the Malaysian government, the Sarawak state government and Interconnect Technology. That deal fell through last year due to a lack of financing and technology partners.