If not pure-play foundries,
MEMS manufacturers could be among the candidates looking at old fabs in
Japan. Itow said, “MEMS manufactures are beginning to take advantage of
larger wafer sizes, i.e. moving from 6” wafers to 8” wafers.”
One good example is Kionix who is a MEMS company and already owns a fab in Japan.
MEMS companies could move from fabless to fab-lite, Itow pointed out.
Alpha Omega Semiconductor is an example that changed strategy from
fabless to fab-lite. The company specializes in discrete/power IC
products and until last year primarily used HHNEC. “In 2011, Alpha
Omega purchased a 16-year-old fab in Oregon from IDT. They are now
classified as a fab-lite company,” she added.
As for Fujitsu Semiconductor, the company completed the transfer of its
Iwate Plant to Denso Corp. last fall. Fujitsu’s assembly lines in Aizu,
Miyagi and Kyushu were transferred to J-Devices Corp. last December.
Fujitsu’s 300mm wafer lines in Mie remain unsold, currently in
“deliberation on transfer to a new foundry company, including TSMC,”
according to Fujitsu.
Meanwhile, Renesas, even after announcing production structural reforms,
will still have seven sites and nine lines left for its front-end
production; and two sites for back-end.
Renesas High Components, a back-end production site in Aomori, was
transferred to Aoi Electronics Co., Ltd. in January. Three other
back-end process sites – including Hakodate, Fukui and Kmamoto – are
being sold to J-Devices in early June.
While Renesas has not spelled out which sites – among those left – will
be targets for the “transfer, closure and streamlining” of its
production scales, the Japanese company said earlier this year that it
plans to reduce depreciation cost and lease fees for the fiscal year
ending March 2014 by approximately 25% from the fiscal year ending March
2013 and approximately 35% from the fiscal year ending March 2011.
Seems to me once "good enough" (and cheap) replaced "best" as the key metric, the Japanese semiconductor industry was sunk. They simply cant move fast enough to change an entire culture. If automobiles had a Moore's Law moving every 18 months, the Japanese auto industry would also be on its last legs. Tech is unforgiving: have a hiccup, miss a cycle, and you are dead. Autos do not: GM and Chrysler survived near-death experiences, and Toyota overcame the accelerator debacle. No tech company could have done that. Only reason to buy a Japanese fab is to buy a customer you couldnt get any other way.
People will pay less than 10% of original equipment price and ship it out to China and outsource the manufacturing at less cost. Knowledge/know-hows of product design can stay in Japan but does not make sense to have these old machines sitting there doing nothing. Also for MEMS, you need more than these old machines to make things you want to make. It 's additional CAPEX Japan does not want to invest for no ROI.
any1, you are absolutely correct, I think, by saying that many Japanese companies delayed too long in "restructuring" their semi operations. Renesas is no longer the owner of its own company and it does not control its own destitny.
Fujitsu, keen on getting rid of its semi division, isn't interested in proposing anything new to reverse the direction either.
Herd mentality is exactly where Japanese companies are in now.
It is, however, an opportunity for chip companies in other countries.
Junko, what is your opinion on this trend? Conventional wisdom says dump all of your old fabs. But conventional wisdom is often wrong. It seems that many Japanese companies delayed too long in "restructuring" their semiconductor operations. But now there seems to be a mad dash to exit. Sort of a herd mentality that says if company X is selling then we need to sell as well before it's too late. But it's been too late for some time now for conventional strategies. Throw out the accountants and put some engineers in charge. It's time to try a contrarian strategy. Don't bet the whole company on it, just part of it.
It does seem odd that foreign companies are interested in the fabs but someone in Japan is not.
I agree that the Japanese companies have to expand their focus a bit and try to wring as much (second-tier) value out of these facilities as they can.
I am assuming that this lack of effort on the part of Japanese companies is not a technological problem so it may be a failing of the capital markets in Japan. Very strange.
I agree, this article is correct in that MEMS, discrete power, and many other devices could be manufactured in these legacy fabs. But instead of selling them to other companies already in these businesses, why not develop in house capabilites and products in these areas instead of selling all of these fabs at way below replacement cost? They should take the millions that they would have to write off as losses and invest that money in themselves while they still can. They could save at least some of these fabs. Whatever happened to Japanese companies taking the longer view towards their futures? This trait was one of the strengths that made them great.