TI reportedly to forge foundry deal with China's SMIC

TI reportedly to forge foundry deal with China's SMIC
By Mark LaPedus, Semiconductor Business News
August 29, 2002 (2:22 p.m. EST)
URL: http://www.eetimes.com/story/OEG20020829S0043

SAN JOSE -- Texas Instruments Inc. is reportedly in talks to forge a silicon foundry alliance with a new and surprising provider--China's Semiconductor Manufacturing International Corp. (SMIC), SBN has learned.

Sources believe that TI and foundry startup SMIC are not talking about "trailing-edge" technologies. But rather the two companies are looking to co-develop more advanced foundry processes, reportedly including 0.13-micron technologies, according to sources.

SMIC is not expected to have 0.13-micron technology for some time, according to analysts. The Shanghai-based company is currently ramping up its 0.25-micron process within its 8-inch fab, and just rolled out its initial 0.18-micron technology (see Aug. 16 story ).

But still, TI has been looking for an additional "logic IC" foundry partner to bolster its stated chip-outsourcing efforts. If TI were to str ike the deal, the move would expand the company's foundry partnerships to four players: Korea's Anam Semiconductor Inc., Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), Taiwan's United Microelectronics Corp. (UMC), and now, SMIC.

Dallas-based TI is reportedly forging a manufacturing alliance with SMIC in an effort to pave its way into the world's largest semiconductor market--China.

The semiconductor output in China will more than double from under $4 billion in 2002 to more than $8 billion by 2005, according to iSuppli Corp. However the supply of Chinese chips will fall far short of local demand which will approach $25 billion during the same time frame, the company said (see Aug. 28 story ).

Joseph Xie, senior director of marketing for SMIC, declined to comment on the reported SMIC-TI foundry alliance. "I can't comment on potential customers," he told SBN. Xie also declined to comment on SMIC's 0.13-micron devel opments.

Ironically, SMIC's top management consists of former members of TI. SMIC has one 8-inch fab in production, while readying two other 8-inch plants. It has forged foundry alliances with Fujitsu, Toshiba, and others.

A spokesman from TI declined to comment. "It's not anything that we can confirm," the TI spokesman said. "We are satisfied with our current foundry relationships."

TI builds the vast majority of products within its own fabs. But the Dallas-based company has also been deploying an aggressive foundry strategy as well. For years, Anam has been making digital signal processors (DSPs) on a foundry basis for TI. Anam's fab is a 0.18- to 0.25-micron processing plant.

To obtain more advance technology, TI developed own 0.13-micron technology. But the company also recently forged separate 0.13-micron alliances with TSMC and UMC. The move is part of a new manufacturing strategy aimed at outsourcing up to 50% of the company's most advanced ICs from third-party wafer fabs in the nex t couple years (see May 16 story ).