Tuesday, June 21, 2022
French silicon-on-insulator (SOI) wafer supplier Soitec announced it will build an extension to its 300-mm SOI wafer fab in Pasir Ris, Singapore. The ambition is to double the capacity to meet the strong and continuous demand for semiconductors.
As the digitization of our own lives and businesses accelerates, semiconductor markets have boomed, with sales growing by more than 20% to about US$600 billion by 2021, according to McKinsey. Based on a series of macroeconomic assumptions, the consulting firm now predicts that the semiconductor industry’s aggregate annual growth could average 6% to 8% per year through 2030.
At a press conference in Paris, Paul Boudre, CEO of Soitec, said, “The semiconductor market is set to double in the next seven to eight years. You can imagine the capacity that needs to be put in place. What we have done in 30 years, we have to do in eight years.”
He added, “To get everything working at the right speed, from our major customers to our raw material suppliers, we are transforming the contractual mode in place. We’re giving ourselves more visibility, and we’re taking on longer and stronger commitments.”
Soitec benefits from a longer visibility with its customers, thanks to contracts signed for three to five years. “Before, visibility was on average two years,” said Boudre. “We’ve doubled in visibility, but the financial commitments associated with these contracts are also stronger.”
To keep pace with its customers’ needs and support their increasing demand, Soitec announced in March a new facility at its headquarters in Bernin, France, primarily to produce silicon carbide wafers, based on its SmartSiC technology, for the electric-vehicle market.
Boudre said, “For thirty years, we were always anticipating the ‘next big thing.’ With the PC and then the laptop, the telephone and then the smartphone, we were always on one growth vector. Today, you have 10, 15 [vectors]. This heralds a major shift in semiconductor performance for the next 10 years.
“In view of the demand, we have had to invest and increase our production capacity of 300-mm SOI wafers,” he added.
Pasir Ris extension
The Pasir Ris extension comes in response to strong demand for SOI wafers and specifically 300-mm SOI wafers, Boudre said. “When we talk about an extension, we’re not talking about a small extension, as we intend to double the capacity of this site and add 1 million wafers per year, which will allow us to go to a total capacity of 2.7 million 300-mm wafers [per year].” This does not include 150- and 200-mm SOI wafers.
Boudre continued, “Demand for SOI wafers is driven by RF-SOI for mobile; FD-SOI [fully depleted silicon-on-insulator] for automotive, mobile, and smart devices; and photonic SOI.”
The fab extension will enter production by 2025, but Boudre did not say when it would reach full production capacity. “We don’t have the visibility for 2029–2030, but today, considering the contracts we have, we know we need it in our five-year [2022–2026] plan.”
In 2008, Soitec announced it had manufactured its first SOI wafers in Asia at its Pasir Ris facility. At the time, the unit featured 4,000 square meters of cleanrooms and had a production capacity of 1 million 300-mm wafers per year. In September 2017, Soitec launched a pilot line to produce FD-SOI wafers to meet customer demand. This investment in Singapore was approximately US$40 million.
Why Pasir Ris? Why not Bernin?
Located in the heart of the Grésivaudan Valley, the small town of Bernin is surrounded by mountains. Today, Soitec occupies all available space and cannot expand further. To unblock the situation and be able to embrace growth opportunities, Boudre said, “We are working to recover space and to be able to continue to expand in the future.”
When Soitec laid the cornerstone for its new 2,000-square-meter Bernin 4 plant, just a few meters from its historic site, the company said it was its last available piece of land.
Soitec is currently building two facilities in Bernin. “We can’t do three at the same time,” said Steve Babureck, senior vice president of strategy, corporate development, and investor relations at Soitec.
And because we are talking about an extension of the Pasir Ris site and not the construction of a new site, Boudre speaks of “synergy.” It is the same technologies, the same products, and the same environment. Such synergy means faster qualification, increased agility, and cost control. “If we build an extension, our customers feel that it is the same fab. If we do it in Limoges [France], we have 12 to 18 months of product qualification. That time we put toward our production cycles.”
€1.4 billion investment
To support its growth and strategic priorities, Soitec announced in June 2021 a five-year capital expenditure program of approximately €1.1 billion for the period from fiscal year 2022 to fiscal year 2026.
When asked if the company’s extension in Pasir Ris was included in the investment plan, Léa Alzingre, head of corporate finance at Soitec, answered affirmatively to EE Times Europe. She then stressed that the cost of equipment was included but that the cost of buildings was not. “Over the period from fiscal year 2022 to fiscal year 2026, we remain on our envelope of €1.1 billion,” she said. “Adding the buildings we will need for Bernin 4 and the Pasir Ris extension, we come to €1.4 billion.”
For the Pasir Ris plant, Alzingre said that the cost of buildings was budgeted at €200 million and, in the envelope of €1.1 billion, the overall equipment installation represents 20% over the period from fiscal year 2022 to fiscal year 2026.
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