Austin, Texas IBM Corp. and Chartered Semiconductor Manufacturing Pte. Ltd. last week extended their process and foundry partnership to include a second-source relationship for silicon-on-insulator (SOI) chips. Chartered is expected to begin 90-nanometer production for IBM by mid-2005 at Chartered's new 300-mm wafer fab, for both SOI and bulk-silicon-based chips.
In November 2002, Chartered (Singapore) and IBM (Armonk, N.Y.) agreed to co-develop bulk-CMOS process technology at the 90- and 65-nm nodes. They also struck a related second-source agreement for bulk-CMOS foundry parts, now ex-tended to SOI, that was intended to give IBM's foundry customers assurance of sufficient manufacturing capacity.
Chartered vice president John Martin, who manages the relationship with IBM for Chartered, said the jointly developed 90-nm bulk CMOS process will be fully qualified at Chartered's 300-mm wafer fab in Singapore by second-quarter 2005 and will move into volume production in the second half of that year.
Though Chartered has not participated in SOI development with IBM, Chartered will be able to make 90-nm IBM SOI chips at the same time as the bulk-CMOS 90-nm parts because most of the process steps are the same, Martin said.
The SOI agreement bolsters Chartered's often-delayed plans for its 300-mm fab, which is expected to begin pilot production by the fourth quarter. Kevin Meyer, vice president of marketing at Chartered, said the company's 300-mm fab, called Fab 7, "when fully facilitized will have twice the capacity of IBM's 300-mm fab," at 30,000 wafers per month.
"The agreement provides Chartered with a lead driver for Fab 7," a spokeswoman for Chartered said. "It doesn't change our schedule, but it firms up our plans and enhances our potential to reach critical mass." Chartered will update its capital expenditure plans Jan. 29 when it announces its 2003 results, she said.
Rick Doherty, principal analyst at the Envisioneering Group (Seaford, N.Y.), said the Chartered relationship eases the concerns of IBM's high-volume foundry customers that the chip maker might run out of capacity at its 300-mm fab in East Fishkill, N.Y.
ATI, Nvidia, Nintendo, Sony, Qualcomm, Via and Xilinx are among the announced foundry customers for IBM, and all have products with the potential for high-volumes that could exhaust the production capacity at East Fishkill.
With IBM also working with Microsoft Corp. to develop silicon for the next-generation Xbox game machine, Doherty said, another high-volume part could be made at both Chartered and IBM fabs.
"We could see a capacity crunch coming as soon as late spring," said Doherty.
Last October, IBM chief financial officer John Joyce told financial analysts that the Fishkill fab was starting about 350 wafers per day, equivalent to about 10,000 wafers per month. Reports surfaced last year that IBM was laying the groundwork, in terms of zoning and site licenses, for a second fab at Fishkill. But to date the company has not formally announced plans for a second fab.
It is not clear how many of IBM's foundry customers will use SOI. Martin, a technologist who earlier worked at International Sematech here, noted that SOI can help resolve current-leakage problems, which he called the biggest challenge at the 90-nm node.
Though SOI wafers are relatively expensive and the design process is tricky, Meyer said he believes that SOI will move beyond its "historical niche" of performance-oriented processors to a broader class of customers over the next few years.
Doherty said he believes IBM eventually will strike a deal with Advanced Micro Devices Inc., investing in the 300-mm fab AMD is building in Dresden, Germany.