Update on Wafer Fabs: Shortages, Slowdowns, and New Facilities
To keep pace with booming demand for 200-mm and 300-mm wafers, leading manufacturers are investing in new fabs globally.
Historically, wafers have steadily grown in size. From 76 mm in 1972, the latest wafers come in sizes of 450 mm and 675 mm. The larger the wafer’s diameter, the more dies can be fabricated from it, thus lowering the cost of high-scale manufacturing. Today, the demand for wafers between 150 mm and 300 mm in diameter dominates the market.
While 200-mm wafers are most sought after, wafer capacity and wafer starts have been volatile for two decades. Wafer capacity began decreasing in 2002 with the lowest downturn occurring during the 2009 economic recession.
Manufacturing process of silicon wafers. Image courtesy of Research Gate
Now, with more wafer starts being pushed in 2021, wafer capacity is expected to grow to 8.7% in 2022. Even with this latest growth spurt in wafer capacity—10 new 300-mm fab foundries will be added in 2022 in addition to the 13 in 2021—the wafer industry remains tenuous.
Changes in global wafer capacity from 1994 to 2021. Image courtesy of IC Insights
Wafers are typically made in either full-cycle integrated device manufacturer (IDM) plants that design, manufacture, and sell wafers or in fab foundries that use someone else’s design for fabrication. Taiwanese, South Korean, Japanese, and Chinese foundries precede North American and European fabs in global wafer capacity.
FABS and CHIPS Acts to Support U.S. Chipmakers
In the House of Representatives in March 2021, the Semiconductor Industry Association (SIA) introduced the U.S. Facilitating American-built Semiconductors (FABS) Act—a supplement to the CHIPS Act passed previously that may partially address the 200-mm and 300-mm wafer shortage.
Both the FABS and CHIPS Acts are an important step forward in promoting the U.S.' place in global chip manufacturing, which has fallen down from 37% in 1990 to the current 12%. With a focus on investment funding, it seems the federal government is on board with the proposed financial stimuli.
Incentivizing designers, researchers, and manufacturing companies to domesticate chip manufacturing is a long-term strategy. Strengthening the U.S. economy with new jobs, increased competitiveness, and national security are three key benefits of this bipartite legislation. At least some stateside electronics companies will skip a few places ahead in the long waiting lines for 200-mm wafers.
Global Surge of 200-mm and 300-mm Foundries
A number of companies have recently announced new manufacturing efforts to soften the effects of the shortage.
Infineon Technologies recently invested more than $2 billion in constructing a 200-mm foundry in Kulim, Malaysia. The Malaysian foundry uses the same technology as Infineon subsidiaries in Dresden and Villach that operate with 300-mm wafers, strengthening the German chipmaker’s position in the market of wide bandgap SiC and GaN wafers.
200-mm SiC wafer by Wolfspeed. Image courtesy of Wolfspeed
Wolfspeed, another leader in power switching and RF devices, is building a 200-mm wafer fab for SiC-based components in Mohawk Valley, New York. The automated fab foundry is the largest of its kind in the world and constitutes a significant milestone in Wolfspeed’s efforts to transition from Si to SiC electronic components.
Wolfspeed has partnered with Lucid Motors to supply the carmaker with silicon carbide devices and support the EV industry in its sustainability plans. Wolfspeed intends to open another facility in Durham, North Carolina, making the Durham and Mohawk Valley factories part of the national SiC corridor on the East Coast.
An early-plan rendering of Intel’s Licking County factory. Image courtesy of Intel
In the Midwest, Intel is tackling the task of reinstating U.S. leadership in semiconductor innovation and supply chain security. The $20 billion investment in Licking County, Ohio, is part of the company’s IDM 2.0 Strategy that will expand Intel’s foundry capacity services, create thousands of jobs, and foster leading-edge wafer production.
Finally, Singapore-based United Microelectronics Corporation (UMC) will invest $5 billion to build an additional 300-mm wafer facility for 22/28nm technologies that can be implemented in a wide range of consumer devices and electric vehicles. The manufacturing process is expected to start in 2024 and deliver 30,000 new wafers per month.
Moving Forward: Supply Chain Challenges and Solutions
The next two years will be crucial for making more accurate predictions about the status of wafer fabs. Global competition in wafer manufacturing is on the rise. Although some supply chain analysts believe the chip shortage may soon wane, others predict it extending beyond 2024. The issue of demand outstripping supply has pushed governments to localize chip manufacturing and improve the resiliency of the wafer supply chain. Some of the key issues facing the semiconductor industry include:
Insufficient fab capacity
- Equipment shortages
- Security risks
- Design specifications
- Extended lead times
- High costs to build new partnerships
Such global market interdependence is causing anxiety about the long-term health of the semiconductor supply chain. Two focus areas for improving the shortage include reduced costs of photolithography tools and more robust software systems that support hardware.