EE Times: Some in the industry are worried that the technology gap between SMIC and other leading foundries is widening. What's your view?
Tzu-Yin Chiu: Probably not with TSMC... but I think we are narrowing our technology gap with other foundries. We are keeping pace with the industry, and we are quite confident of the progress we're making.
EE Times: What other foundries are you referring to?
Chiu: I'd rather not name names.
EE Times: Help me understand with which specific technologies you think you are narrowing the gap with your competitors.
Chiu: For one, we're very happy with our 40nm/45nm ramp. In 2013, 40nm/45nm revenue contribution was more than $200 million. [SMIC's 45/40 nanometer revenue increased significantly, to account for 16% of the revenue in the second half of 2013.]
Second, our 28nm node technology for both high-k metal gate (HKMG) and POLY/SiON processes were frozen by the end of 2013. Through our Multi-Project Wafer offering, we're entertaining commercial ICs and customer product verification. We are getting very good feedback.
SMIC's technology nodes by percentage
EE Times: How big is your 28 nm capacity?
Chiu: Beijing will be our main 28 nm fab, where we will have a capacity of 6,000 wafers per month by the end of the third quarter this year. We're moving our equipment to Beijing as we speak. But we also have a capacity in Shanghai, capable of addressing the 28 nm technology.
With Beijing and Shanghai combined, our 28 nm capacity is 15,000 wafers per month.
EE Times: Is that enough?
Chiu: It all depends on the needs of our customers. As you know, our 28 nm process technology is fungible. In other words, those new 28 nm process lines are also capable of 40 nm products. Our plan is that over the next three years, we will build our Beijing facility to have a capacity of 35,000 wafers per month.
EE Times: What do you have to do in order to make that happen?
Chiu: We need to bring in customers and ramp up our technology. [SMIC already did the first Multi-Project Wafer (MPW) late last year. The company is planning on four more MPW shuttles in 2014.]
We also need to make sure that there is enough capital for full ramp-up to 35,000 wafers per month.
SMIC's 28 nm technology milestones
EE Times: I understand that your Beijing project is 55 percent funded by SMIC and 45 percent by other JV shareholders. You previously said that you're spending about $570 million for your new Beijing project. Is your Beijing fab sufficiently funded?
Chiu: Yes, we're getting what we need, and we're confident of it. This is well within our means.
EE Times: I've been hearing about the Chinese government's strong interest in investing really big money into the domestic semiconductor industry -- over the next five to 10 years -- as part of the nation's initiative to encourage innovation and advance its economy. I'd imagine SMIC could be a big beneficiary of that.
Chiu: We'd welcome the policy to encourage investment in semiconductors. But we are not aware of any details.
EE Times: We all agree about the stability and focus you've brought to SMIC. What were three major factors that you think contributed to the company's steady growth last year?
Chiu: This has been a result of the efforts by the whole team.
But first, I should point out that the successful ramp-up of new technology -- namely, 40nm/45nm processes -- contributed to our revenue in the past year.
Second, our differentiated technology in such areas as CMOS image sensors, power management ICs, and embedded non-volatile memory. All three differentiated technologies combined, we achieved an average of more than 40 percent growth in revenue.
Third, robust growth in China contributed to our success. Forty percent of our revenue comes from Chinese customers.