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Semiconductor manufacturing strategy: Where in the world to locate a fab or cleanroom?
Keywords: Manufacturing strategy, Manufacturing assets, Fab / cleanroom location
The global market for advanced technology manufacturing assets is becoming ever tighter, compelling semiconductor companies (OSATs, IDMs, foundries) to carefully explore all available options when planning manufacturing operations (fabs, cleanrooms, tools). Despite the semiconductor industry’s optimistic growth forecasts, global uncertainty generated by trade wars between the U.S. and China is generating anxiety among advanced technology companies and compelling them to constantly rethink their manufacturing strategies – buy vs. build, best location, risk mitigation, local incentives, etc. 2018 was mainly a buy-side year with increased interest in U.S.-based manufacturing as well as a continued lack of 200mm and 300mm capacity. As we have seen with the recent sale of Texas Instrument’s 150 / 200mm facility in Greenock, Scotland to Diodes and VIS’ acquisition of GLOBALFOUNDRIES’ 200mm Fab E3 in Singapore, 200mm fabs are still in very high demand and companies are becoming increasingly proactive as they look to expand capacity. In 2019, infrastructure-rich cleanroom manufacturing assets are going to continue to play an essential part in shaping these strategies to ensure global competitive advantage as more wafers are needed and more facilities are being built worldwide, e.g. in China or Intel’s $11 billion expansion in Israel. Despite a slowdown in semiconductor M&A activity, the global semiconductor market will continue to consolidate as the manufacturing needs of companies evolve with market changes. This has put a strain on manufacturing space and resulted in a number of new capital projects and expansions that may become difficult to fulfill in the current market. A shortage of existing manufacturing space means cleanrooms and operational fabs will sell at a premium. Many companies are also looking at greenfield sites with Government incentives playing an active role. Running in tandem, there is still a shortage of used and new production tools with lead times in excess of one year to purchase new fabs from OEMs or equip new fabs.
Stephen Rothrock, President & CEO
Seattle, WA
United States

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