Officials underscore Brazil's chip-making ambitions

Fab-lite model
Targeting a fab-lite model, Ceitec is using a foundry for production of its initial product, an RFID tag for cattle known as Chip de Boi. CEO Eduard Weichselbaumer declined to disclose Ceitec's foundry partner, but the company has previously disclosed a relationship with Germany's X-Fab Semiconductor Foundries AG, through which it also licensed a 0.6 micron technology process believed to be used to make the chip. Ceitec has other products in the works, including a digital TV modulator to support Brazil's SBTVD standard, which is based on the Japanese standard ISDB-T.

Weichselbaumer has said that Ceitec expects its fab here to be at capacity in two years. At that point, the company will outsource more product to foundries and look to raise capital—probably through taking the company public—in order to build a large, modern wafer fab somewhere in Brazil.

President da Silva echoed this strategy in his speech Friday, suggesting that several more fabs could follow in years to come.

Brazil has previously stated its intention to build a semiconductor manufacturing hub. Some are skeptical, pointing out that similar initiatives in recent years by other governments have yielded mixed results.

Bill McClean, president of market research firm IC Insights, recently told EE Times that governments that make semiconductor manufacturing part of the national agenda often don't fully appreciate the capital intensive nature of the business. He noted that building a fab is not like building an automotive manufacturing plant—an initial investment of several billions of dollars will have to be augmented by billions more down the road to keep fab equipment up to date with the latest processing technology.

"It's a never-ending demand for cash," McClean said.