LONDON – Morris Chang, chairman of foundry Taiwan Semiconductor Manufacturing Co. Ltd., has said his company has no intention of acquiring a wafer fab from struggling Japanese chipmaker Renesas Electronics Corp., according to a Focus Taiwan news report.
It was recently reported in Japan that Renesas was in negotiations with TSMC that, as well as increasing TSMC's role as a foundry supplier of microcontrollers to Renesas would see it take over a wafer fab in Yamagata and take over the employment of roughly 1,400 employees there.
The move would have been part of massive re-organization that could see Renesas close or sell more than half its domestic factories and trim its workforce by about 12,000 people or 30 percent.
Renesas has been making losses since its formation in 2010 as a joint venture that brought together the chip making interests of Hitachi, Mitsubishi Electric and NEC. On Tuesday (July 3) the company announced some details of its restructuring including offers to workers to take early retirement or to leave the company for about 5,000 workers. However, plans to trim the company's market engagement and to increase the outsourcing of manufacturing were vague.
Chang said he expects TSMC to provide more advanced chip production to TSMC but that the acquisition of the wafer fab was not on TSMC's agenda, the report said.
In May the two companies announced that they had agreed to extend microcontroller technology collaboration to include 40-nm embedded flash process technology and that in addition TSMC will be able to make the MONOS (Metal-Oxide-Nitride-Oxide-Silicon) embedded flash platform available to other customers.
If I had a definite answer to that I would have put it in article, so this is just my opinion.
TSMC/Chang has a strong tradition of keeping all its manufacturing based in a few mega centres in Taiwan. As an aggregator of manufacturing it is all about economies of scale. There are exceptions in Cama, Wash., Singapore and Shanghai.
But TSMC declined to put a fab in "ailing" Europe and it looks like it will decline to do so in Japan.
It looks like Renesas was trying to make the fab transfer the price of going with exclusively with TSMC as its foundry partner. Chang appears to be saying that Renesas needs TSMC's support more than TSMC needs Renesas's business.
This looks like a perfect opportunity for GF as their strategy is to build fabs around the world and demonstrate that they can pull this off even if rumors are saying they are struggling with a German fab.
Any opinions on that?
Fab business is not a game of decentralization. It is very expensive and the model of GF to be building mini-fabs may not work out. I think if you remove the Petro dollar, GF is losing money. That is not a good business.
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