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Expanding Semiconductor Foundry Business in U.S. Offers Growth Opportunity

The semiconductor foundry business is often associated with major pure-play manufacturers based in Asia, like Taiwan Semiconductor Manufacturing Corp. (TSMC), United Microelectronics Corp. (UMC) and Semiconductor Manufacturing International Corp. (SMIC). Collectively, these three foundries — which are solely dedicated to manufacturing semiconductor components for other semiconductor companies – last year generated 57% of all sales made by the world’s semiconductor foundries, according to data published by IC Insights. Impressively, TSMC alone represented 44% of total global foundry sales in 2012.

Although Asia will remain an important region for semiconductor foundries, the U.S. is poised to gain significant new foundry business as major semiconductor manufacturers invest heavily in wafer fab capacity here. The most notable example of this trend is GlobalFoundries, which generated 2012 sales of $4.56 billion and is the world’s second-largest pure-play foundry. GlobalFoundries recently completed construction of its Fab 8 in Malta, New York, which has a maximum capacity of 60,000 300mm silicon wafers per month and cost $6.9 billion to construct, including tools and equipment. Volume production from the facility is expected in 2013. And that may just be the start: GlobalFoundries is reportedly eyeing a $10 billion expansion to the Fab 8 complex, presumably to produce 450mm wafers.

Meanwhile, Samsung Electronics continues to move forward with its $4 billion remodeling/expansion of its Austin, Texas fab. According to EE Times, “The remodeled facility will produce mobile application processors on 300-mm wafers at the 28-nm process node. The boost in production will occur during the second half of 2013 and is expected to alleviate the rapidly growing demand for application processors for mobile devices.”

Last but not least, Intel  announced in February that it had inked a foundry agreement with Altera, a leading supplier of semiconductor devices known as field programmable gate arrays (FPGAs). According to Intel, the company will manufacture next-generation 14nm FPGAs for Altera using its Tri-Gate transistor technology. EE Times reports that Intel’s volume production for Altera is expected in 2014. Then on May 1, 2013, Microsemi announced that Intel would manufacture some of its digital chips using Intel’s 22nm 3-D Tri-Gate transistor technology. Microsemi represents Intel’s fifth foundry customer, according to the Wall Street Journal.

At KMG, we are pleased to see several of the world’s leading semiconductor manufacturers significantly expand their businesses in the U.S. The growth of advanced semiconductor manufacturing here – particularly at the 28nm node and below – is a positive trend for KMG, as we specialize in providing process chemicals that meet the stringent purity specifications required to manufacture these devices. As semiconductor manufacturing technology continues to advance and chemical purity requirements increase even further, we are prepared to meet this challenge through advancements in our purification technologies, high purity packaging and analytics services. For more on KMG’s high purity process chemicals business and the breadth and quality of products we offer, please see the Electronic Chemicals section of our website.

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