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Ogemaniac
It is obvious where the fab is going to wind up: it will be stuck very tightly ...
conneally
London Calling: TSMC next for New York fab?
Peter Clarke
11/22/2012 6:45 AM EST
Evidence is starting to mount that foundry chip maker Taiwan Semiconductor Manufacturing Co. Ltd. could be about to follow Globalfoundries Inc. in building a wafer fab in up-state New York.
If negotiations play out it could be one of the first commercial-scale wafer fabs set down ready to manufacture on 450-mm diameter wafers whenever that transition should come. And it could be set down next door to Globalfoundries' Fab 8 in the Luther Forest Technology Campus in Saratoga County, one of the sites under consideration.
Reports have been circulating through November that a major semiconductor company has retained consulting firm Deloitte Touche Tohmatsu Ltd. to find a location for a 3.2 million square foot production facility.
Operating under the codename Project Azalea Deloitte has reportedly considered sites multiple sites in upstate New York as well as possibilities in California and Texas. The facility is expected to create about 1,000 jobs adding to the speculation that this is a multibillion dollar, leading-edge wafer fab, which restricts the list of possible companies. The location is expected to be selected before the end of 2012 and land negotiations concluded by the end of February 2013.
This has been put together with reports that U.S. congressman Bill Owens, representative for New York, visited TSMC in December 2011, which at the time prompted speculation that TSMC was considering building a wafer fab in the New York area.
Globalfoundries is already on the ground there; Intel already has multiple centers away from New York; Samsung has its U.S. manufacturing focus in Austin Texas, and so circumstantial evidence is starting to point to TSMC as the likely owner of Project Azalea.
And even though TSMC has always been a strong advocate of clustering its fabs together at campus sites in Taiwan, such a move would make sense because New York state has become a center of excellence for nanoelectronics, extreme ultraviolet lithography and is the global center for pioneering the technology around 450-mm diameter wafers. In additon, having a leading-edge manufacturing site in the United States would not hurt TSMC's efforts to take the manufacturing of processors for Apple away from rival Samsung.
As well as being the manufacturing location for IBM and Globalfoundries, New York hosts the College of Nanoscale Science and Engineering (CNSE) at the University of Albany. Perhaps more significantly the Global 450 Consortium (G450C) was established in 2011 at CNSE's Albany NanoTech Campus. G450C comprises the five leading chip companies with an interest in the next-generation wafer production; IBM, Intel, Globalfoundries, Samsung and TSMC.
There is a high degree of uncertainty about the introduction of 450-mm wafer production by TSMC or by any other semiconductor manufacturer with estimates varying from 2015 to 2018. That does, perhaps raise the possibility of consortium-owned 450-mm wafer fab being set down in New York, but in general the semiconductor industry finds it hard to work in this way in the competitive commercial world.
And it is interesting to note that in Chinese culture the Azalea is known as the "thinking-of-home" bush.
Related links and articles:
Taipei Times story
www.g450c.org
News articles:
London Calling: GloFo and the end of easy money
TSMC said to plan 450-mm production for 2018
Europe's role in wafer transition at risk, says analyst
London Calling: Intel's 14-nm process delay
UMC replaces CEO in management shuffle
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Cowan LRA Model
11/22/2012 8:29 AM EST
Hi Peter - if this plays out, that is, if TSMC does in fact build a fab "next" to GF in upstate NY, this would be the epitome of competitor intimidation. I guess all is fair in "love" and semiconductor customer competition, especially in the foundry business.
Mike C.
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m00nshine
11/22/2012 8:44 AM EST
unlike state like Texas and California, New York economy is so bad they are just giving huge cash away to Globalfoundries to make their fab. I think same situation for another company...just more business friendly in New York right now. But yes, end result may be intimidating to global
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NY King Wolf
11/22/2012 1:17 PM EST
If you look at the capital region NY our economy is doing great.
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ChrisGar
11/23/2012 4:40 PM EST
Yes -- especially compared to California. I don't think there is any way a company would consider a fab in Calif. right now.
The author doesn't mention it, but geographical diversity would help TSMC -- ensure stable production.
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m00nshine
11/23/2012 6:47 PM EST
This is a little off topic, so let me say My family has more than 100 year history living in New York. We know New York economy is not good and are happy at the current efforts.
That said, not sure what metric is being looked at to say NY is better than California, but here is a good one...total state debt. California is horrible, 2x the #2 state, which not coincidentally is NY. So, yes, NY is better than California, but its still worse than all other states in the country. Check the link.
http://www.huffingtonpost.com/2012/08/28/state-debt-report_n_1836603.html
But unlike California, NY wants to spend their way out of debt by encouraging certain big business...like semiconductor. Bill Owens didn't visit TSMC to tell them that NY have a lot of talented workers, he visited to give Morris Chang a gift of land and tax breaks to build a fab.
Another reason to keep fab away from California is environment regulation, it's just harder to have a modern big fab in California, the air regulations just don't allow it. That's one of many resson why there aren't any modern fans in California.
What I'm interested in is opinion if there are any other logical candidate except TSMC for this site selection...I say not samsung, intel, global foundries, or UMC.
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m00nshine
11/22/2012 8:39 AM EST
I wondered when this news would hit EE Times. This is big news for USA.
In 2010 there was big rumor that Apple forced Samsung to open logic fab in US to make the exclusive apple sales contract. If apple will move away from samsung in the future, they again may make US manufacturing requirement.
TSMC new fab in US and specifically new york makes a logical choice, but maybe only if Apple is requiring it. Otherwise just make another fab in Taiwan, or elsewhere in Asia for current customer.
Also intel doubling size of D1X fab in Oregon must have some big customer plan...either of these new fab could supply dedicated chip output to apple. And still samsung is making big expansion of their US fab for apple. So it could be 3-way race in US for apple contract between TSMC, Intel and samsung.
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melgross
11/24/2012 11:33 AM EST
It's known that Apple ( and Qualcomm as well) attempted to convince TSMC to give them all of their production, but that TSMC refused. It's also known that Apple does deals with their manufacturers where they give them very large loans in the form of outright purchasing of machinery, financing for the building of manufactures, training of workers, etc.
I wouldn't be surprised if this move was inspired by Apple, and is even being partly financed by them. If any company can afford that, Apple can. It's said that a new 22nm plant can cost $8 billion. Even Intel is having problems coming up with that cash by themselves. But that's less than a quarter's cash flow for Apple.
This could be a very interesting development.
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resistion
11/22/2012 12:00 PM EST
Why can't it be GF beefing up, in analogy to Intel in Oregon?
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NY King Wolf
11/22/2012 1:15 PM EST
They are already expanding the foundry to have the capability to produce the 450mm wafer and the city just approved the construction of a new 3 story, 565,000sqft manufacturing research center. Combine that with Global Foundries 300,000sqft clean room and that is expanding as well i think they are beefing up quite well.
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m00nshine
11/22/2012 12:45 PM EST
GF future plan for existing site as I know is 3 fabs, and they have dedicated future fab plan team already. So site selection for new land in Albany is not necessary for GF I think.
Intel, Samsung, and this other company (TSMC) have what seems more real and urgent plan. GF would have to act quick to make it happen in same time but has capability but maybe not money, and preferred plan was fab in middle east (crazy plan but that was where the money was)
Who would have think possible foundry capacity race in US??
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NY King Wolf
11/22/2012 1:04 PM EST
Albany/capital region New York would be a wise choice for TSMC's next plant. With a region that is 400 years old & deep in industry & innovation from Thomas Edison's lab to the creation of General Electric. Combine that with the high quality of life the region offers, ranging from the beautiful Adirondack mountains where the Olympics were held twice at Lake Placid. To the home of the 4th best engineering school in the world Rensselaer Polytechnic Institute and also the home of Albany College of Nanoscale Science and Engineering which is the leader and pioneer in nanotechnology education, research and economic outreach. Also Albany is known for one of the most highly educated work forces in the world and is located to some of the most unique & innovative cities in the world like New York City, Boston and Montreal.
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Kresearch
11/22/2012 5:10 PM EST
I believe it is just rumor and will not be true because it conflicts TSMC's cluster manufacturing concept which has worked for a decade. If being true, it only would be Apple urged and co-worked with TSMC to build Fabs in the United States. Location would be near Wafer Tech in Washington State. NY, Texas are not good choice.
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joepaiii
11/22/2012 9:37 PM EST
Because the cluster methodology will work out really well in the event of a large seismic event in Thailand... it is only a matter of time before TSMC's customers demand some protection from that type of disruption. Plus as you mention, many customers in the US may be pushing TSMC to do it and not just Apple, don't forget qualcomm.
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Kresearch
11/22/2012 10:13 PM EST
Qualcomm and Nvidia execute multi-suppliers tricks to reduce cost successfully in the past. They will be the last ones in my mind for this game which needs commitments.
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melgross
11/24/2012 11:37 AM EST
New York is actually a very good choice. There is excellent transportation, and facilities. A highly educated workforce (believe it or not), and a history of technology, with RIT being one of the most highly regarded institutions in the area. The U of Buffalo Is well respected in technology.
The fact that so many other high tech firms have located here is evidence of its compatibility.
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Kresearch
11/24/2012 6:02 PM EST
It sounds good. There are SUNY Albany, U Syracuse, Rensselaer and others also. But why Intel and Samsung do not build new fabs in NY State? This would be a tricky question.
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Kresearch
11/22/2012 5:14 PM EST
Could that be UMC which is seeking third party as partners? Besides UMC licensed technology from IBM alliances? Or SMIC from China?
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LIM-ET
11/22/2012 8:21 PM EST
Apple ?
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doctorwho
11/22/2012 8:41 PM EST
TSMC is too smart to build a fab in NY.
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doctorwho
11/22/2012 10:25 PM EST
Their US base is in Washington State
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resistion
11/24/2012 7:44 PM EST
I think NY would have courted Samsung besides TSMC. But for either case, a US location needs to be justified. It's always cheaper to build at existing locations.
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resistion
11/24/2012 8:22 PM EST
Besides the actual building cost, there is also the operating/maintaining cost. Samsung and TSMC already have US locations for comparison, why add a different US location? NY one-time subsidy doesn't make up for subsequent operation/resource costs of 10 nm fab, which are very location-dependent.
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Kresearch
11/24/2012 8:59 PM EST
Proprietary Manufacturing Technology protection and transfer cost are another to be considered also.
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resistion
11/24/2012 11:53 PM EST
Well now that Intel 14 nm finfet is supposedly unexpectedly delayed, who wants to dive in now.
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Stanley_
11/25/2012 5:54 PM EST
TSMC doesn't have any benefit having fab in NY. They don't develop technology in IBM camp, so they have to transfer technology from Taiwan, which is not efficient. In addition, Taiwan and China have more flexible and cheaper workforce. Apple asking is non-sense, as Apple and Samsung are simply one negotiation away from getting deal done. Too risky for TSMC to build a fab in NY just for one particular customer.. Maybe joint venture (i.e., different legal entity) with one of larger customers (Apple or Qualcomm) to build a dedicated fab in US may make more sense.
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Mi302
11/25/2012 8:04 PM EST
Advantages:
- They can poach talent from IBM and GE
- Foreign Investor tax break
- Whatever deals they make with New York State and the US government. RPI is close by too!
Disadvantages:
- New York State
- New York State
and most of all
- New York State
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conneally
11/30/2012 1:31 PM EST
Why not Apple?
Can Samsung keep up with production demands for Apple? Could GloFo keep up production demands? Is TSMC and Samsung providing the technology yields necessary to compete? So...highly doubtful Intel would go the NY fab route with the current investment in AZ and OR. What product is driving the industry that needs lower node size technology and higher production capability?
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Ogemaniac
12/20/2012 6:45 PM EST
It is obvious where the fab is going to wind up: it will be stuck very tightly to whichever local government puts forth the biggest and juiciest taxpayer's-hard-earned-money-filled teats.
There was a wonderful article in the NYT a few weeks back about how local and state governments blow $80 billion a year poaching jobs from one another in this stupid, zero-sum manner. The solution is obviously a federal issue, so you can be sure nothing will get done because one party clearly has no incentive to stop this garbage.
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