GlobalFoundries to Sell 200-mm Fab 3E to Vanguard, Exits MEMS Businessby Anton Shilov on February 1, 2019 12:00 PM EST
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GlobalFoundries announced on Thursday that it had agreed to sell its Fab 3E in Singapore to Vanguard International Semiconductor (VIS) as part of a broader plan to exit the MEMS business by the end of the year. The deal will be a wholesale handoff to Vanguard, and both the customers that use the fab and the personnel that work there will be transferred to the new owner. For their part, selling the fab and exiting the MEMS business will allow GlobalFoundries to raise the capital it needs upgrade its other fabs, as well as further invest in technologies that are used to make chips using the company’s other specialized manufacturing processes.
Under the terms of the agreement, GlobalFoundries will sell its Fab 3E located in Tampines, Singapore, to Vanguard for $236 million with transfer of the ownership set to be completed on December 31, 2019. The fab is used to make microelectromechanical systems (MEMS) as well as analog/mixed signal chips, with a production capacity of around 35,000 200-mm wafer starts per month. In addition to the building and equipment, Vanguard will also get GlobalFoundries’ MEMS-related IP. Vanguard in turn will offer employment to the staff of Fab 3E, essentially continuing with the current team. Furthermore, VIS will inherit customers currently served by the production facility.
Vanguard’s existing manufacturing have been running at full capacity since 2018, so by getting GlobalFoundries’ Fab 3E VIS will not only get new customers, but it will also expand its production capabilities. Because MEMS is a growing market, the deal is a clear win for the company.
Meanwhile GlobalFoundries will get $236 million for the sale, which it will invest in other 200-mm fabs and technologies where the company is more clearly differentiated from its competitors. This includes RF, embedded memory, advanced analog, and so on. Since specialized manufacturing processes are a lucrative business, shifting from MEMS is a logical move for the company. Plus it will also help GlobalFoundries reduce its operating costs.
“This transaction is part of our strategy to streamline our global manufacturing footprint and increase our focus in Singapore on technologies where we have clear differentiation such as RF, embedded memory and advanced analog features,” said GF CEO Tom Caulfield. “Consolidating our 200mm operations in Singapore into one campus will also help reduce our operating costs by leveraging the scale of our gigafab facility in Woodlands. VIS is the right partner to leverage the Fab 3E asset going forward.”
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HStewart - Friday, February 1, 2019 - linkI wonder how much this has to do with stopping it 7nm development. That development may have hurt GlobalFoundries a lot.
CiccioB - Friday, February 1, 2019 - linkWhat many do not understood is that 7nm is a very expensive node both for R&D and for production point of view.
GF simply can't sustain that expenses and for such is now relegated as foundry playing in B league.
For me in 5 years GF will be dead or sold to a bigger foundry that may be interested in their buildings, not their technology or it will play in very niche market (RF, low power cheap IC, anything that is CHEAP) where it won't be able to come out anymore to fab for high performance industry unless a complete change in materials and cheaper machinery will come.
In few years will be left with only 3 fabs capable of using latest PPs: TSMC, Intel and Samsung, and I'm not sure there will be a place in the market for all three of them.
FreckledTrout - Friday, February 1, 2019 - linkAgree and I do see a place for all three fabs going forward. I wonder if they will start sharing IP once we see 4-5nm as its going to even more expensive than 7nm.
sing_electric - Monday, February 4, 2019 - linkThat was my thought, too, that we're likely to see more extensive sharing of IP between companies as we shrink processes further. That's not the worst thing in the world, especially if it helps keep all 3 in the market. Every process shrink from 180nm down to 7nm has resulted in at least one foundry dropping out of the "bleeding edge" market (with the exception of the 22-14nm shrink), and it's bad enough there's only 2 choices for a fabless company (like AMD, Nvidia, etc.) to place orders for the latest process.
0ldman79 - Friday, February 1, 2019 - linkYou've got to wonder.
I do think that lithography is coming to a point of diminished returns, so 12nm and above might work well for SSD, I/O, wireless, NIC, memory, etc...
Eventually they'll have to go to the next step otherwise they're done for. Everyone will settle in at 7nm, 5nm or 3nm, but we're still at the end of process improvements moving the industry forward.
flgt - Friday, February 1, 2019 - linkThere is a ton of money in RF, ADC/DAC’s,power management. There is probably 10X more revenue in those areas for the products I work on than the processor, so no reason they won’t be around awhile. The key is just to know what you want to be and focus on it. Seems like that’s what they’re doing.
CiccioB - Monday, February 4, 2019 - link10x revenue but 1/10 net profits.
It is not by chance that TSMC started ramping up their PP investments only after ARM SoC using latest available PP boom happened.
If you want to make real money you have to produce with the latest PP. Otherwise you are a general foundry like any other (and you may know that all foundris, TSMC, Intel and Samsung operate in the same RF and network, which is another big market, as well).
Declaring their debacle on the new PP, GF simply puts itself in the second lines of foundries on the global market and with diminishing profits (while being a quite large company) it probably will further go behind to 3rd ot 4th line.
In 5 years they be none you will know bout as a consumer and will probably be swallowed (or will merge with) other small foundries to try to create a better marketing scale value, that is essentially what makes foundries make money.
sing_electric - Monday, February 4, 2019 - linkThe death of companies making latest process silicon really is striking. (Here's a chart going from 130nm to 22nm): http://www.fabtech.org/news/_a/bleading-edge_found...
With the exception of 14nm, EVERY process shrink has kicked at least one competitor out of the game, and this is NOT good for consumers.
We're in a similar situation with say, DRAM production, where 3 suppliers now contorl the market.
frenchy_2001 - Friday, February 1, 2019 - linkThey stopped development of 7nm and beyond because costs are prohibitive and they could not compete.
Their execution had been lacking for the past few years, especially in process.
They had to *license* Samsung's 14nm process, instead of using their own, as planned.
Process is only getting more expensive and competition is moving faster. They retreated on their own, differentiated processes. What nobody else offers.
This is rather smart. They have a market to serve and the competence to do so, with less competition. Their future, 5~10 years, is assured. Beyond that, they may finally push for smaller sizes at a much lower cost (and similarly add their own twist to it, like on their 12nm processes).
There is a place for such niche manufacturing, even if it is less glamorous.
qcmadness - Friday, February 1, 2019 - linkIntel has poured billions into 10nm and what do they get? <10% yield for a dual-core product.