X-Fab ready for global growth says CEO: Part 2

X-Fab ready for global growth says CEO: Part 2

Interviews |
By eeNews Europe

In the first half of this interview De Winter discussed how X-Fab has evolved in the analog and mixed-signal foundry space by moving from 6-inch to 200-mm diameter wafers and by moving into innovative processes such as MEMS and battery-on-silion deposition. But increasingly some of the digital giants of the foundry sector – TSMC, UMC, Globalfoundries – are also offering ‘more-than-Moore’ processes using their own older wafer fabs. How does X-Fab cope with that level of competition?

"If you look across the total foundry landscape there are many processes but they are not all offered in all market sectors," he said. X-Fab is not playing in the pure digital sector nor does it require the very high volume orders that are normal for the larger foundries. "When it comes to more-than-Moore when you look at the levels of integration for non-volatile memory, for high voltage, across a broad temperature range, I believe we are un-matched," said De Winter. "We also put a lot of emphasis on design support, we invest a lot in models, in PDKs [physical design kits] to give customers the best chance of success. Our NVM IP is developed in house, which is important for the automotive market."


Rudi De Winter, co-CEO of X-Fab Silicon Foundries AG.

De Winter said that in the automotive sector multi-party supply chains are not favored by customers that must control and attest to the rigor of design and manufacturing for safety.

Emphasizing the support to design teams that X-Fab can provide De Winter added: "In MEMS we also have IP blocks and offer pressure and inertial sensor platforms."

X-Fab’s sales by major industry sector breakdowns as: automotive 46 percent, industrial 15 percent and communications and consumer about 33 percent. The high automotive tally is largely due to the work done for automotive component company Melexis NV, a sister company that is also controlled by Xtrion. "Melexis is around a third of our business," said De Winter.

Does X-Fab’s acquisition of 1st Silicon as the next domino in its chain of globalization indicate that is it grows it is choosing to, or being forced to, de-emphasize Europe? "We are glad to have our fab in Asia. It is well received by our Asian customers," De Winter responded.

Airbus of chips: How would that work?

But European Commissioner Neelie Kroes with her call to create an Airbus of Chips and her 10/100/20 strategic plan wants €10 billion of European tax-payers’ money to leverage €100 billion of industry investment to enable Europe to double manufacturing as percentage of the global total to 20 percent by 2020. Surely that represents a regional opportunity for X-Fab?

"I am glad such statements are made, but 20 percent is a very aggressive number. The European Commission wants to stimulate the semiconductor equipment industry for 450mm diameter wafers. That’s not something for us. They also want to stimulate ‘more-Moore’ [leading edge], which is for STMicroelectronics and Globalfoundries. More-than-Moore is somewhere we could participate and we want to contribute and also to grow. We are working in MEMS in Europe for example. But it is not yet clear how this strategy will benefit us."

De Winter is also skeptical about plans for setting down large fabs for More-than-Moore operations such as MEMS. "If you look at the MEMS market in mobile the volumes are big but the margins are small. There are a lot of smaller MEMS opportunities in market niches. In those sectors it is often engineering and research that makes the difference rather than just manufacturing capacity. And, in fact, Europe is well placed in that regard."

X-Fab will therefore continue with the strategy of acquiring shells and converting them.

"We will be acquiring one day. We get offers of fabs to buy every day but there is nothing very serious at the moment. At present we are consolidating in our current facilities. It might be something to think about in three-years’ time."

And what about an IPO for the privately-held parent Xtrion NV or X-Fab to fund expansion? De Winter indicated that this was unlikely on the grounds that if the business model is working why try to fix it.

Related links and articles:

News articles:

X-Fab ready for global growth, says CEO: Part 1

European Commission repeats call for "Airbus of chips"

Analog foundry put up for sale

X-Fab takes control of MEMS Foundry Itzehoe

AMS provides 2014 MPW schedule


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