Amid the rising of emerging applications in the AI market, the booming demands for high-performance computing (HPC), high-bandwidth memory (HBM), CoWoS advanced packaging, and high-performance storage, have energized the wafer foundry industry.

Given the broader applicability of 12-inch wafer in advanced process chips, the global expansion of 12-inch wafer production has accelerated in recent years. Leading companies like TSMC, Intel, UMC, Vanguard International Semiconductor (VIS), SMIC, and Huahong have successively released production capacity.

• VIS’ Singapore 12-Inch Fab Got Approved

On September 4, VIS and NXP jointly announced the approval of their Singapore-based 12-inch wafer fab joint venture by regulatory authorities in Taiwan, Singapore, and other regions.

The joint venture, named VisionPower Semiconductor Manufacturing Company (VSMC), will begin construction of its first 12-inch (300mm) wafer fab in the second half of this year.

VIS estimates that trial production will begin in 2027, with profitability expected by 2029. TSMC will provide technological support, and the market holds a favorable long-term outlook for the company’s operations.

Upon its mass production, both companies may consider building a second fab. Currently, VIS operates five 8-inch fabs located in Taiwan and Singapore. Three of the 8-inch fabs are in Hsinchu, and one in Taoyuan. The average monthly capacity of its 8-inch fabs in 2023 was about 279,000 wafers.

• TSMC Expands Production Worldwide

On August 20, TSMC held a groundbreaking ceremony for its new German fab, ESMC, which is set to begin construction by the end of the year and aims to start production by the end of 2027.

The project involves an investment of over EUR 10 billion and is expected to have a monthly capacity of 40,000 12-inch wafers, utilizing TSMC’s 28/22nm planar CMOS and 16/12nm FinFET process technologies.

In early September, Taiwan’s Ministry of Economic Affairs announced that TSMC plans to build a third fab in Japan to produce advanced semiconductors, with construction expected after 2030.

TSMC’s first fab in Kumamoto, Japan, officially opened on February 24, 2023, and will begin mass production in Q4 this year using 28/22nm and 16/12nm process technologies, with a monthly capacity of 55,000 wafers.

The second fab in Kumamoto is planned, with construction expected to start by the end of this year and operations to begin by the end of 2027, targeting 6/7nm nodes.

Additionally, TSMC’s 2nm fabs in Hsinchu (Fab 20) and Kaohsiung (Fab 22) in Taiwan are scheduled to start mass production next year.

In the U.S., TSMC’s first fab in Arizona is scheduled to begin producing chips using 4nm technology in the first half of 2025. The second fab will produce both 3nm and 2nm chips using next-generation nanosheet transistors, with production starting in 2025.

Plans for a third fab are also underway, with production of chips using 2nm or more advanced processes expected to begin in 2028.

• UMC’s Fab 12i in Singapore has Set Equipment in Place

On May 21, UMC held a ceremony for the settlement of equipment at its expanded Fab 12i in Singapore with the arrival of the first equipment.

UMC has operated 12-inch fabs in Singapore for over 20 years, and in February 2022, it announced the plan to invest USD 5 billion to expand Fab 12i, adding a new 12-inch fab with a monthly capacity of 30,000 wafers, focusing on 22/28nm processes. Mass production is expected by early 2026.

• Toshiba’s 12-Inch Wafer Fab Completed

On May 23, Toshiba Electronic Devices & Memory Corporation announced the completion of its new 300mm power semiconductor manufacturing fab, with a total investment of JPY 100 billion and plans to begin production in March 2025.

The fab will be built in two phases, with the first phase starting production within the 2024 fiscal year. Once fully operational, Toshiba’s power semiconductor capacity will be 2.5 times that of 2021. Equipment installation is underway, with mass production expected in the second half of FY2024.

• Powerchip Begins Construction of Two New 12-Inch Fabs

On March 13, Powerchip held a groundbreaking ceremony for a 12-inch wafer fab in partnership with India’s Tata Group, located in Dholera, Gujarat, with a total investment of INR 910 billion rupees (about USD 11 billion).

The fab will have a monthly capacity of 50,000 wafers and will produce chips using 28nm, 40nm, 55nm, 90nm, and 110nm nodes.

In early May, Powerchip also announced plans for a new 12-inch fab to expand advanced packaging capacity to support growing demand for AI devices. Powerchip’s chairman stated that the company will provide interposers, one of the three components in CoWoS packaging technology.

• Texas Instruments Built Three New 12-Inch Fabs

Texas Instruments is currently expanding its 300mm capacity to meet future demand for analog and embedded processing chips. TI plans to invest USD 30 billion in building up to four interconnected fabs (SM1, SM2, SM3, SM4) in the coming decades.

According to its 2022 roadmap, TI will build six 300mm fabs by 2030, with RFAB2 in Richardson, Texas, and LFAB (acquired from Micron) already starting production in 2022 and 2023, respectively. Two of the Sherman fabs were completed in 2023, with two more planned for 2026-2030.

In addition to the plan mentioned above, TI also announced the plan for a second 300mm fab in Lehi, Utah in February 2023, adjacent to its existing 12-inch fab, with production estimated to begin in 2026, focusing on producing analog and embedded processing chips. These fabs will be combined into one once the construction is completed.

On August 16, Texas Instruments announced that it received USD 1.6 billion in funding from the U.S. CHIPS Act. This funding will be used to build a cleanroom for the SM1 fab and complete the pilot production line, construct a cleanroom for LFAB2 to begin initial production, and build the shell for the SM2 fab.

• Intel Focuses on U.S. Projects in Arizona and Ohio

Intel has disclosed chip expansion plans in multiple regions, including Arizona, New Mexico, Ohio, Oregon, Ireland, Israel, Magdeburg, Malaysia, and Poland. However, due to market challenges and poor financial results, some of Intel’s expansion plans have been delayed.

Currently, Intel is advancing the construction of large semiconductor manufacturing plants in Arizona and Ohio for the production of cutting-edge semiconductors, as well as working on equipment development and advanced packaging projects at smaller facilities in Oregon and New Mexico.

• GlobalFoundries Revved up Investment in the U.S. and Portugal

On February 19, the U.S. government announced a USD 1.5 billion subsidy for GlobalFoundries. According to a preliminary agreement with the U.S. Department of Commerce, GlobalFoundries will establish a new semiconductor manufacturing facility in Malta, New York, and expand its existing Fab 8 plant in the same location.

The facility will leverage manufacturing technology already implemented in GlobalFoundries’ plants in Germany and Singapore to produce automotive chips, effectively introducing mature-node technology into Fab 8.

In February of this year, GlobalFoundries also announced a partnership with Amkor Technology to build a large packaging facility in Portugal.

It plans to transfer the 12-inch wafer-level packaging production line from its Dresden plant to Amkor’s facility in Porto, Portugal, aiming to establish Europe’s first large-scale backend facility. GlobalFoundries will retain ownership of the tools, processes, and IP transferred to Porto.

• China’s 12-Inch Wafer Production Lines Entered New Stages

In China, companies like SMIC, Huahong, CR Micro (Shenzhen), and Zensemi (Guangzhou) are making new progresses in 12-inch wafer production.

SMIC expects its monthly 12-inch wafer capacity to increase by 60,000 by the end of the year.

Huahong is speeding up the construction of its new 12-inch fab in Wuxi, with the first lithography machine installed on August 22, aiming for production in 1Q24.

CR Micro’s 12-inch fab in Shenzhen has entered the stage of equipment installation and debugging, with production expected to start in late 2024.

Zensemi’s 12-inch wafer manufacturing production line has went into production.

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• [News] Two Contrasting Trends Emerge in Wafer Foundry Industry

(Photo credit: TSMC)

The risks associated with the United States’ suppression of China’s semiconductor industry and the ongoing tension in China-US relations continue to permeate the supply chain. However, most customers of foundries are adopting a cautious approach, either maintaining a wait-and-see attitude or gradually introducing second sources to mitigate risks.

The operational conditions and challenges faced by China’s two major foundries, SMIC and HuaHong, differ to some extent. In the case of SMIC, despite being added to the U.S. Entity List as early as 2020, most of its customers continue to place orders with SMIC due to concerns about the time-consuming and costly nature of verification.

According to a survey by TrendForce, only one U.S.-based brand is actively pursuing a decoupling strategy in response to U.S. government bids, while other brands are mostly conducting risk assessments of their supply chains without fully implementing a complete decoupling strategy.

In particular, SMIC still maintains a competitive edge in terms of lower prices and the advantage of the domestic Chinese market, which keeps most of its customers placing orders and prevents a significant drop in overall capacity utilization rate compared to other foundries. Its utilization rate in 1Q23 was approximately 65-70%, and it is expected to slightly increase to nearly 70% in 2Q23.

HuaHong, on the other hand, is taking a cautious approach to address the risks arising from the China-US tension. HuaHong’s subsidiary, ICRD, primarily focuses on process technology R&D, with a particular emphasis on the 28/14nm process nodes.

It is currently setting up a specialized 28nm production line, which uses photolithography equipment from two major international manufacturers, ASML and Nikon. For all other equipment, Chinese domestically manufactured machines are being used as substitutes.

The planned total production capacity for this production line is 40Kwspm ( wafer starts per month). Considering the possibility of both Japan and the Netherlands potentially joining trade sanctions later this year, the future expansion plans for HuaHong’s production capacity are uncertain.

(Photo Credit: SMIC)