Although SMIC saw “a slight drop” its fab utilization ratio, Chiu said that he’s “happy about the loading situation.” According to company data, SMIC’s fourth-quarter utilization rate in 2012 was 91 percent, after reaching 95 percent in the second quarter.
Over the next few years, the most important for SMIC will be the company’s differentiation strategy. “We bring our mature technology to add additional capabilities,” said Chiu.
SMIC’s team reportedly identified “nine market segments,” according to Chiu, where the company thinks it can win through differentiation. He declined to share the entire list, citing competitive reasons. But it includes smart cards, CMOS image sensors and power management ICs.
One of the hottest areas Chiu sees is the Chinese government push for smart cards. This covers SIM cards, social security and health-care, transportation and bank cards. Potential volume aside, cards need to be designed differently–specific to each application, said Chiu. This allows SMIC to work closely with local card vendors and provide differentiation. SMIC’s specialty includes “low power dissipation” especially for smart cards in contactless applications, Chiu said.
Chiu also sees SMIC as a key CMOS image-sensor foundry. SMIC has identified a burgeoning demand for cameras in smartphones, feature phones, home security and surveillance.
SMIC reportedly scored a breakthrough in the development of backside-illuminated (BSI) CMOS image-sensor technology in the last quarter. Chiu noted, during the most recent quarterly financial results call: “The first fab chip demonstrated good image quality. The complete BSI process technology is targeted to contribute revenue in 2014.”
BSI delivers higher resolution to mobile phone cameras and high performance video cameras. This, in turn, allows SMIC customers to address the higher-end market. The differences SMIC can offer in this application include “low leakage capability,” according to Chiu.
Sub 40-nm processes
Perhaps the toughest challenge facing SMIC--and most essential to the foundry’s long-term survival--is the issue of advanced technology.
To keep pace with rivals like TSMC and GlobalFoundries, SMIC must make substantial investments in advanced technology. Yet, the company needs to tread carefully, watching closely both customer demands and the competition’s next steps.
As for 28-nm node, SMIC’s Shanghai facility has been working on its R&D, while high-volume production will take place in SMIC’s Beijing fab. “We will start accepting customers’ tapeout by the end of 2013,” Chiu noted.
He noted that SMIC’s 28-nm offering will be both high-K, metal gate (HKMG) and poly/SiON. Similarly, SMIC’s 20-nm chips will be both planar and FinFET, Chiu said. “We can’t lose our customers” by not doing one or the other, he explained.
When asked about SMIC’s interest in FDSOI, Chiu said, “From a pure physics’ point of view, I think FDSOI has very high potential. I think it gives a competitive device structure.”
But he added, as with many things in life, “Perhaps, this is not the issue of technology but more a matter marketing. It all depends on how many customers will accept FDSOI, and whether FDSOI can build enough of a following,” he said. “Unless there is a clear indication from our customers that FDSOI is what they want,” SMIC is not likely to commit to it.
Chiu acknowledged that SMIC has licensed significant technologies from IBM. But as for the 28-nm HKMG development, Chiu noted, “This is not based on a licensing program with IBM. We are jointly developing it with IBM, using some of our own technology.”