SAN JOSE -- Faced with an internal and worldwide capacity glut, Motorola Inc. has quietly delayed the production schedule of its wafer fab in China by several months, it was learned.
Motorola was originally supposed to move its 8-inch fab in Tianjin into mass production in the first half of 2002. Now, the company's MOS17 fab will not move into production until "the second half of this year," according to a spokesman for Motorola in Austin, Tex.
"The industry downturn has caused us to delay our original schedule [for MOS17]," the spokesman said.
The MOS17 fab was officially announced in the summer of 2000 after years of planning. In fact, the fab was announced back in 1993. The 200-mm wafer facility is part of a planned $1.9 billion manufacturing complex that will include a wafer fab and a systems assembly plant for wireless telecommunication products (see Aug. 21, 2000 story ).
In the spring of last year, Motorola processed the first wafers at the fab (see March 28, 2001 story ). The 8-inch (200-mm) wafer fab is being equipped for 0.35- and--eventually--0.25-micron process technologies, which will be used to fabricate ICs for cellular phones and other high-volume products in China.
While Motorola claims it is committed to the China fab, the company faces a major problem: it has too much internal capacity, according to analysts.
In June, the company reiterated its so-called "asset-light" strategy, which is geared to shift more of its production to foundries. At the same time, it expanded its silicon foundry alliance with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) (see July 26 story ).
The strategy has forced Motorola to cut costs by slashing its own, internal capacity. Continuing its painful measures to cut costs, Motorola last month took a $3.5 billion charge, reduced its workforce by approximately an additional 7% or 7,000 positions, and consolidated more of its chip-making plants (see July 27 story ).
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