Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

ChipWatch - Could Chip Manufacturing Make A Return To The US?

Posted by Guest Writer - Matt Grimshaw - October 2, 2009

By Matt Grimshaw, Editorial Director of the Semiconductor Technical Journal Future Fab International

Another week gone of 2009 and almost no-one I know will be sad to see the back of this most depressing of years. However amidst the empty trade shows, wafer thin magazines and ominously empty ad spots on websites I saw some news this week that warmed the gloomy skeptic that's hidden in the dark parts of my soul: Texas Instruments is finally kitting out its 300mm Richardson, Texas Fab (RFAB) that it broke ground on in 2004.

I'd sourced and run a number of papers on the construction of the facility itself a few years back as it was the first (and I think only - apologies if I'm wrong in this) LEED Gold certified semiconductor manufacturing facility in the world - meaning that it's so green the Environmental Protection Agency wants to give it a big hug and introduce it to the wild.

It was doubly impressive because chip fabs are not exactly what you'd call green. They consume enough power in a day to light up a small city, more gallons of water per day than flow down many rivers and generally have a pretty sizable environmental impact including the use of some not very nice chemicals and materials.

Admittedly the chip industry does a very good job of cleaning up its ugly processes when compared to other industries, but it's still a far cry from a bluebirds and butterflies Disney-esque image.

The design of RFAB itself is revolutionary, every detail was considered to make it consume less power and resources, and no detail is too small. For instance, the pipes for transporting chemicals and liquids around the fab have less bends in them, meaning less friction and resistance which allows the use of smaller more efficient pumps... truly groundbreaking stuff.

So it totally rained on the parade a few years back when TI announced that they were pulling out of the manufacturing game and going 'fab light' which essentially means they weren't going to build any more fabs.

This strategy would keep their existing fabs running until they became obsolete but would see a slow switch of manufacturing over to a foundry or foundries that are not owned by TI themselves.

This was announced just after RFAB was completed and was awaiting its new tools leaving a big flashing neon lit question mark hanging over the future of the new jewel in TI's manufacturing crown. News immediately began to swirl around about all manner of semiconductor companies swooping in to buy RFAB but to these eyes it looked like it was just going to be mothballed and forgotten which made me rather sad.

That is until this week when it was announced that they were going to kit out RFAB with all the nearly new equipment they'd bought from the sadly defunked Qimonda fab in Richmond, Virginia.

I quickly dialed up the main author and contact for the papers I'd run on RFAB and had an excellent chat with him about the fab and what's happening there. It turns out RFAB had not been mothballed as I'd thought at all and has been in the fab equivalent of 'snooze' mode waiting until market conditions were right to kit it out; and with the equipment from the Richmond Qimonda facility being available at a very good price, those conditions existed now.

So after a long wait Richardson Texas will soon boast the world's only 300mm analogue fab, sadly at the expense of Virginia's memory fab. However, as of now, there are two 300mm fabs in various stages of construction/outfitting; RFAB and the new 300mm fab in New York for Global Foundries.

Could this be the start of a second renaissance of chip manufacturing in North America? To those that are scoffing at the idea (I can hear you sniggering in the back) take note that the labour costs around the world that originally started pulling manufacturing out of the US are rapidly equalizing as the standard of living across countries like China, Singapore, and Taiwan increases; and sooner or later those same regions are going to want pay back for the massive tax breaks that have been given meaning that other costs should equalize also.

The automotive sector has recognised this already with many manufacturers either mulling moving manufacturing to the US and not just for sales within the US, but for EXPORT... Mercedes is thinking of shifting production of the C-Class here instead of its traditional manufacturing in Germany and Honda already has started exporting the Civic that's made in the US.

So the idea of chip fabs coming back to the US is not all that far fetched. If the various government agencies pull their fingers out and offer some decent incentives, maybe more manufacturers will start eyeing the US again and RFAB and the Global Foundries facilities will not be the last new facilities to open in the country that started the information technology revolution.


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