Rising SOI tide lifts Soitec into profit

Rising SOI tide lifts Soitec into profit

Interviews |
By Peter Clarke

For its 2017 financial year (FY17) ended March 31, 2017, Soitec reported a net profit of €8.2 million (about $9.1 million) on sales of €245.7 million (about $275 million) up 5 percent on the previous year. The net profit contrasts with a net loss in FY16 of €72.2 million (about $80 million).

During FY17 Soitec strengthened its balance sheet by raising €150 million with strategic investors CEA Investissement, NSIG and Bpifrance: each ending up with 14.5 percent of Soitec’s share capital. Of the sum raised €110 million was used to repay bridge loans and partially buy back Oceane bonds. The remaining €40 million has been set aside for investment in 300mm wafer production capacity at Bernin.

Paul Boudre, CEO of Soitec.

“The adoption of the FDSOI technology by the semiconductor industry is gaining momentum,” said Paul Boudre, CEO and chairman, of Soitec, in a statement. “A few FDSOI technology-based products have now been released for automotive and Internet of things applications. Our decision to go ahead with investing in capacity dedicated to FDSOI wafers at our French industrial site in Bernin is fostered by further commitments made by strategic clients to build FDSOI capacity and extend the FDSOI roadmap,” he added.

Boudre told eeNews Europe that the financial results represented a turning point for Soitec’s turn around following its exit from silicon for solar conversion business. The decision to exit solar energy conversion was made at the beginning of 2015 and accompanied by the stepping down from the CEO post by Andre Jacques Auberton Herve, one of Soitec’s co-founders.

Next: Back on track

“We are back on track and the results represent the end of chapter one. In chapter two we need to capture the growth in front of us and do it the smart way.”

The Bernin 200mm facility is operating at full capacity due to demand for RFSOI and power SOI. “We have a partner in Shanghai called Simgui that is making wafers for us as a foundry. We are also an investor and own 5 percent,” said Boudre.

Simgui has been granted the exclusive right to market, distribute and sell 200mm SOI wafers in China, but not anywhere else in the world. Simgui also acts like a foundry for 200mm wafers. Soitec buys the wafers from Simgui and sells them to customers in all territories except China.

However, the Bernin facility for 300mm wafer production remains heavily underutilized, so is Boudre’s enthusiasm premature?

Boudre explains that capacity utilization at 300mm reached a low point in the second quarter of FY17 of 14 percent as a result of the expected contraction of the activity for PD-SOI products. Production picked up strongly in 2HFY17 due to demand for FDSOI and other technologies and the capacity utilization rate reached 29 percent in 4QFY17 and is expected to gradually reach around 50 percent by early in FY19.

“We raised the money [for capex] in the second quarter of calendar 2016 and up until now we have not seen the need to spend it. Now we have decided to spend it across financial years 2018 and 2019,” Boudre told eeNews Europe.

Next: Other wafer suppliers

Soitec is not only benefitting from increasing demand for FDSOI wafers for logic but also RFSOI on 300mm wafer and emerging SOI products such as photonics-SOI and SOI for image sensors, Boudre said.

Bernin II full capacity is about 650,000 wafers per year and the plan is to increase FD-SOI production capacity from 100,000 per year to 400,000 wafers per year while keeping the overall capacity at the same 650,000 wafer per year. In order to address long-term demand for FDSOI wafers, Soitec intends to reopen a 300mm facility in Singapore. Boudre said that requalification of the Singapore facility could take 16 or 17 months.

Many processes now target FDSOI wafers. Source: Soitec.

Soitec may not be the only beneficiary of any increased demand for SOI wafers although the French company is closely associated with the lengthy development of the FDSOI process by IBM and STMicroelectronics that is now being taken to market in high volume by Samsung and Globalfoundries.

“At 300mm the only licensee is SEH [Shin-Etsu Handotai]. GlobalWafers, which acquired SunEdison, is out of the game for now. They will focus on 200mm before moving to 300mm wafer,” Boudre commented. “At Soitec we believe we are way ahead of SEH.”

For the next 12 months at least the climate seems set fair. “We think revenue will increase in the range of 25 percent year-on-year and we take EBITDA [earnings before interest, tax, depreciation and amortization] up to 20 percent of sales from 16.7 percent, Boudre said.

Boudre concluded: “We are not going to let profitability slip.”

Related links and articles:

Soitec: RFSOI wafer characterization

News articles:

CEO interview: Semeria ushers in change at Leti

Europe commits $40M to improve FDSOI for IoT

Samsung adds 4nm and FDSOI processes to roadmap

Globalfoundries, Chengdu to spend big on FDSOI design

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