ROUSSET, France - STMicroelectronics has begun volume production at its newest 8-in.-wafer fab here, announcing plans to scale production in the next year to produce a weekly run rate valued at as much as $50 million.
At a total investment of about $1.4 billion, the fab is part of an overall $2 billion to $2.5 billion in capital investments ST is planning this year to help the company keep up with escalating demand for its products, said Pasquale Pistorio, the company's president and chief executive.
ST posted 53% revenue growth in its first quarter ended April 1 and is on track to generate more than $7 billion in revenue in 2000, compared with $5 billion in 1999. The semiconductor market is expected to grow by 30% in 2000, "and I would be disappointed if we did not significantly outgrow the market," Pistorio said.
The new Rousset fab is located adjacent to an existing 6-in.-wafer fab here. The first devices from the new fab were produced in April. ST plans to produce 1,000 wafers per week at the plant by June, and ramp production to 7,000 wafers per week by the end of next year.
Initially, the fab could provide ST with direct chip revenue of around $5 million per week, growing to as much as $50 million per week when it reaches full production, depending on the types of devices produced, Pistorio said.
The fab will begin producing logic devices to support such applications as data storage, set-top boxes, and digital consumer products. Production of flash memories is planned to begin in the next few weeks, followed by smartcard chips in early 2001. The plant is eventually expected to be ST's primary source for microcontroller-based smartcard chips.
"We maintained our commitment to this project during the most severe downturn in the history of the semiconductor industry, and accelerated the program just before the recent upturn," Pistorio said. "As a result, the investment in the new facility will contribute rapidly and significantly to ST's continued efforts to better serve its customers worldwide."
French Prime Minister Lionel Jospin attended the inauguration of the fab on Monday, pledging to increase the country's effort to advance its semiconductor and Internet-related technologies, which he acknowledged have fallen behind some other countries in Europe, and the United States.
Jospin said investments by companies such as ST, as well as increased government funding, will help close the gap in the next three years.