AMS pulls out of $2 billion wafer fab project

AMS pulls out of $2 billion wafer fab project

Business news |
By Peter Clarke

AMS, a developer of analog, mixed-signal ICs and sensors, has held discussions with foundry Taiwan Semiconductor Manufacturing Co. Ltd. (Hsinchu, Taiwan) about making increased use of its services as an alternative, according to an AMS executive.

The wafer fab project, based at Marcy in the Mohawk Valley in upstate New York, had already broken ground with a ceremony back in April 2016 but reports started to appear of problems and of a lack of activity on the site in December 2016.

AMS issued a statement later in December that it had decided to withdraw from the project because of “further delays outside AMS’ control”

The statement quoted CEO Alexander Everke saying: “this decision was taken after thorough evaluation of the wafer fabrication project and its current status. We see no impact to our financial targets including our stated profitability expectations as we have a strong mix of internal and ample external capacity available to implement our strategy.”

The project – originally negotiated by AMS’s previous CEO Kirk Laney – was unusual in that the fab shell suitable for manufacturing on wafers of 200mm and 300mm diameter was due to be built and owned by the State of New York and leased to AMS (see Austria’s AMS is shopping for a wafer fab and AMS plans to rent a wafer fab in New York). AMS planned to rent the operational wafer fab for a period of 20 years for a nominal yearly amount and only incur operating expenses on the wafers produced. AMS would still have had to invest in production equipment but that ramp up would be under its control and could be done as slowly or quickly as customer demand indicated.

AMS was due to work in partnership with New York State and the State University of New York (SUNY) Polytechnic and the College of Nanoscience and Engineering (CNSE) to build, staff and operate the 200/300mm wafer fab. It was due to create 700 full time jobs and 500 additional jobs for contractors, sub-contractors, suppliers and partners.

Next: Accusations

The project was originally under the supervision of Alain Kaloyeros, the former CEO of SUNY Polytechnic Institute. But responsibilities were moved when Kaloyeros was accused of rigging bids for contract work for economic development projects across the state. According to reports Kalyeros was indicted in November 2016 with allegations that he and others had committed bribery and rigged the handing out of contracts. Kaloyeros has denied the allegations, according to reports.

Opinions differ as to whether the initiation of investigations into alledged fraud created delays at SUNY and Fort Schuyler Management Corp., which was handling construction of the fab shell. There has been speculation that the delays caused AMS to lose confidence in the project or that it did not feel that it could meet its timing requirements in terms of getting to chip production.

It remains to be determined, who the State of New York now find to take-over the wafer fab project – which had been tailored to AMS requirements. A spokesperson for Mohawk Valley EDGE, the economic development body responsible for the Marcy Nanocenter site, said there is as yet no news on replacements.

AMS still has manufacturing capability at its headquarters in Austria but these facilities are relatively mature and tend to be used for specialized processes that do not require the smallest geometry manufacturing. However, the ambition to expand that internal capabiity appears to have been put on hold. Moritz Gmeiner, senior director of investor relations at AMS, told eeNews Europe that AMS could meet its requirements through increased outsourcing of manufacturing. He added that AMS had discussed long-term plans with TSMC about out-sourcing as it had noticed the New York plan falling behind schedule. Gmeiner added that AMS’ spending on the New York project had been minimal.

A call to the New York State Governer’s office were not returned by the time this story posted.

Related links and articles:

News articles:

AMS to spend $2 billion on New York wafer fab

Could AMS’ expansion be bad news for Europe?

CEO interview: Everke of AMS on four pillars of sensing

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