Should Abu Dhabi build a MEMS fab?
Some people may remember that along with the creation of foundry chipmaker Globalfoundries Inc. in 2009 and 2010 by an investment vehicle of the Abu Dhabi government, came a plan to set down a wafer fab down on the Persian Gulf. It was seen as way in which Abu Dhabi could spend its way from present-day oil riches to wealth-creation for a post oil-economy era.
The word in early 2011 was that ground would be broken for an $8 billion Abu Dhabi wafer fab in 2012 with chip production starting in 2015. However, since Ajit Manocha took over as CEO of Globalfoundries in October 2011 the plan appears to have gone on the back burner. This is despite sustained efforts to build up academic, semiconductor research and training efforts in the emirate.
But perhaps the Abu Dhabi government and Advanced Technology Investment Company (ATIC) – the investment vehicle that owns Globalfoundries – could dust off the plan and update it by inserting the prefix MEMS. The benefits are numerous, not least that the market for MEMS components is growing faster than the overall market for semiconductor ICs.
The next obvious benefit is that it would provide a much lower cost of entry into chip manufacturing for the United Arab Emirates. About $500 million would allow the creation of a purpose-built 200-mm going on 300-mm wafer fab that could be the best in the world for the production of MEMS.
This would also allow Globalfoundries to focus its big spending – of the order of $10 billion – in upstate New York where it must now be considering whether its next fab will be for the production of ICs on 450mm diameter wafers. This is probably not something that would be done in a new location.
A third factor in a MEMS plan for Abu Dhabi is somewhat double-edged and might be a source of contention.
On the plus side Globalfoundries already makes MEMS and so would be a good partner to carry the plan forward. The bad news is that Globalfoundries makes MEMS in Singapore and that city-state might be lobbying to keep MEMS expansion there. There is also the issue that by tradition MEMS production has moved into old, amortized facilities as IC production has moved out. To purpose-build a MEMS factory in Abu Dhabi would be ground-breaking on multiple fronts.
And the most significant issue would be the possibility that Abu Dhabi and Globalfoundries have a different sense of urgency about this; one born of the difference between political and commercial interests.
The idea of building a shell for a MEMS foundry in 2014 for production in 2016 would not be too far behind the original wafer fab plan and might make sense for the Abu Dhabi government and bureaucrats. But would a new-build MEMS fab make sense for Globalfoundries in a sector where the fabless-foundry business model is not yet fully established?
I asked ATIC about plans they might have for a MEMS wafer fab and the response was: "We are committed to establishing a manufacturing and technology presence in Abu Dhabi, but have not established a concrete timeline or announced specific details about the facility." There was no acknowledgement of my reference to MEMS but nor was there a denial of its relevance.
I also asked at Globalfoundries. The response: "We are still committed to establishing a manufacturing and technology presence in Abu Dhabi, but we have not established a concrete timeline or announced specific details about the facility. Given the volatility in the world economy and the decline in global semiconductor demand due to economic conditions, we are reviewing our expansion plans to ensure they are fully aligned with customer needs." The first sentence shows Globalfoundries and ATIC singing in unison. The second sentence shows a slightly different emphasis.
But, of course, Abu Dhabi’s sovereign wealth funds have deep pockets and ATIC is not obliged to pursue a MEMS wafer fab with Globalfoundries exclusively or alone. STMicroelectronics might make a suitable partner or a consortium arrangement might make sense.
However, this would also beg the question: "If a purpose-built MEMS foundry would make sense for Abu Dhabi why can’t the continent of Europe choose to afford to do something similar to be located within Europe?"
Related links and articles:
GlobalFoundries to make big MEMS push
GlobalFoundries charts road to 14nm
MEMS market to reach $17 billion in 2013
Grab the medical MEMS opportunity
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