X-Fab Rides IPO to New Growth
"What is important is that we have been doing automotive for 25 years, we have a track record, and our customers are keeping track of what we can do."
X-FAB CEO Rudi De Winter
With a successful initial public offering (IPO) now behind it, X-FAB Silicon Foundries is readying a capacity expansion drive for increased MEMS and analog/mixed-signal IC production across the six fabs it operates.
X-FAB has a combined capacity of around 94K 200mm-equivalent wafer starts per month (WSPM), and employs approximately 3,800 employees worldwide. The IPO, conducted in April on the Euronext stock exchange in Paris, yielded about $426M, much of which will be invested in X-FAB operations in Corbeil-Essonnes, France; Kuching, Malaysia; and Lubbock, Texas, where a silicon carbide (SiC) power IC capability is starting to ramp (see sidebar below). X-FAB’s facilities in Germany are also slated for expansion.
X-FAB CEO Rudi De Winter said the foundry’s traditional focus on automotive mixed-signal IC production positions it well for the transportation transitions underway, where new semiconductor solutions are needed for hybrid and electric vehicles (EVs) and advanced driver-assistance systems (ADAS).
De Winter is confident the additional capacity will be needed. "We have a strong pipeline of prototyping over several years and these are now going into production. Typically, we see a four-year period between prototyping and significant volume growth. And we are seeing a different mix of products, with more automotive."
In September 2016, X-FAB acquired Altis Semiconductor after a Paris bankruptcy court approved X-FAB’s plans for continued investments and employee retention. The Altis fab in the Paris suburb of Corbeil-Essonnes, with a capacity of 35K 200mm WSPM and a copper back-end capability, increased X-FAB’s overall 200mm capacity by 60%. A $60M expansion is underway at X-FAB-France to convert its capacity to X-FAB’s technology mix. Beyond that, the site has unused space of roughly 9,000 square meters, which—if equipped—could bring total capacity of the site up to 55K WSPM.
"When we acquired the fab it was 66% loaded. It is a 130nm fab, so it was perfectly suited to our further expansion," said De Winter, noting that the toolset at the Paris fab is similar to that at X-FAB’s Kuching, Malaysia, 200mm fab, also slated for expansion.
Corbeil-Essonnes, De Winter said, "has been running logic and RF parts, which we are still running, but we are going to add more automotive, where the process ﬂows are somewhat different. Our further automotive growth will be mapped into that factory. It has a quite-sizeable capacity, and our challenge is to fill that going forward."
X-FAB has benefited from the shift by other chip manufacturers to 300mm digital foundry services, opening up opportunities in products best suited to 200mm production. X-FAB expanded capacity from 54K 200mm-equivalent WSPM in 2014 to 94K WSPM at the end of 2016, even as utilization improved from 47% in 2012 to 79% in 2016.
And the growth in automotive expansion is likely to be good for the company’s bottom line. ASPs for automotive products at the foundry have increased slightly in recent years while communication-related ICs have seen steady ASP declines.
X-FAB’s overall revenues have roughly doubled over the past five years, from $258.5M in 2012 to $512.9M in 2016 (including $31.6M from one quarter of operations at the Corbeil-Essonnes fab) and the company serves end markets with strong growth. IC Insights predicts a worldwide 9.8% compound annual growth rate (CAGR) for automotive device revenues from 2016–2021, and even higher 12.3% growth for medical devices.
Medical applications—including lab-on-a-chip products—are expected to require additional MEMS and mixed-signal capacity. About 15% of the prototyping efforts underway by X-FAB’s customers are in medical; currently, medical ICs account for about 3% of revenues.
X-FAB is a specialty foundry in that it eschews leading-edge digital CMOS production in favor of mixed-signal (analog-digital), MEMS, RF, and other processes. In automotive, for example, De Winter said X-FAB produces solutions with "more layers on average, higher voltages, a wider temperature range, more implants, some sensors, embedded ﬂash, and so forth."
X-FAB’s capacity has largely shifted to 200mm wafers, and the company is targeting investment of up to $120M in additional 200mm production capacity. In addition to the 200mm investments in Corbeil-Essones, capacity expansions are planned for Dresden and Kuching that will add about 7,000 WSPM. The Kuching fab was acquired in 2006 when X-FAB took over loss-ridden 1st Silicon (Malaysia) Sdn., founded in 1998.
Similarly, Altis was jointly owned and operated by IBM and Infineon until 2010, when a private investor purchased it in an effort to enter the foundry business. After mounting losses, Altis became insolvent and X-FAB stepped in last year.
Mems Plus CMOS Growing
X-FAB got an early start in the MEMS sector and has been making automotive pressure sensors for more than 20 years. Another significant move came in 2015, when X-FAB fully acquired MEMS Foundry Itzehoe GmbH (MFI). Currently, the MFI fab is strengthening its cooperation with the Fraunhofer Institute’s ISIT MEMS Group, and discussions are underway with Fraunhofer about how to best expand the partnership.
X-FAB also plans a significant investment in a MEMS line at the Erfurt facility, as it moves toward its goal to triple MEMS revenues by 2021. With a base of pressure sensors and strain gauges, X-FAB runs about 10,000 MEMS wafers per month. While the majority of those wafers are 150mm, the mix is shifting toward 200mm.
Volker Herbig, vice president of the MEMS business unit, added, "We are confident we will achieve our revenue targets based on the very strong pipeline of products in the automotive, mobile communications and biomedical space."
"The 200mm expansion at Erfurt, the details of which are still being discussed, could result in a 4X increase in capacity over what we presently have in 200mm MEMS," said Herbig.
Combining CMOS functions with MEMS is key to X-FAB’s plans for MEMS growth, with wafer-level bonding playing a key role. "We are taking several different directions," Herbig said. "One is wafer-level packaging (WLP). A customer might have a microﬂuidic MEMS, with some CMOS underneath, and they might need WLP to protect the sensor or cavity."
Another direction is to scale up X-FAB’s through-silicon-via (TSV) capability. "We want to develop and bring to the market special TSVs optimized for sensor applications," Herbig said.
"We also want to work on 3D integration. From time to time it makes sense for our customers to target monolithic integration of CMOS and MEMS. A lot of our business is in the integration of heterogeneous functions, which is why we are bringing new technologies, including micro transfer printing, to the market," he said. In all of these areas, "interacting closely with the customer is key."
Herbig noted that X-FAB and Fraunhofer engage in "extremely close collaboration" in the MEMS field, sharing a clean room at Itzehoe, near Hamburg. "By combining the strengths of Fraunhofer ISIT in developing innovative technologies, with X-FAB’s capability of maturing those technologies for volume production, we have been able to attract a number of new customers," he said.
Recruiting Talent, Finding Tools
Asked about an industry-wide scramble to attract technical talent, De Winter said X-FAB has been able to readily recruit engineers from universities located near the fabs it operates. The Corbeil-Essonnes subsidiary, for example, is the only semiconductor company in the vicinity of Paris, and De Winter said X-FAB is an attractive employer for the young engineers graduating from universities in the Paris metropolitan region.
The shortage of refurbished equipment, however, is a challenge, but De Winter said that "we seem to manage to find what we need."
Herbig said expanding MEMS capacity involves buying some tools that are MEMS specific, and in certain cases X-FAB is buying new 200mm equipment when used tools are not available. When customized solutions are created with key customers, he noted that keeping the utilization rates high for specialty tools is an ongoing challenge.
"In order to grow we need to invest," Herbig said. "Our Chinese friends are buying a lot [of equipment], and what our operations people tell me is that the lead time for equipment is extending. The equipment can be expensive, and on the other side, we are operating in the consumer market where there is sometimes significant pricing pressure."
De Winter said while it may be true that other semiconductor foundries "are now rushing into automotive," X-FAB has an established track record with its customers. "What is important is that we have been doing automotive for 25 years, we have a track record, and our customers are keeping track of what we can do. They recognize us as a long-term, stable supplier. This long history is a plus for us, and that is why we have a good pipeline coming into production in coming years."
Joanne Itow, foundry analyst at Semico Research (Phoenix, Arizona), said X-FAB has been a role model for other foundries seeking to expand their analog/mixed-signal production. That has intensified the competition in certain areas.
"X-FAB used to be the specialty foundry everyone wanted to copy, so it is a good thing that they are broadening their offerings with MEMS, SiC, and automotive SOI. They are still an analog/mixed-signal company, but they are offering a lot of different solutions."
MEMS is a challenging area, according to Itow, with "a lot of competition, with very specialized, custom processes." Also, a certain fraction of the MEMS toolset, such as DRIE etch and wafer bonding, necessitates buying new tools because older generation equipment is not available, she said.
Itow added that it is not unusual that X-FAB is doing well. "More than a decade ago, they were seen as one of the premier analog/mixed-signal foundries. They don’t spend an exorbitant amount on R&D. They are slow and methodical to get things running, but that is normal for analog/mixed-signal."
For additional information on X-FAB, contact the company at www.xfab.com
SIDEBAR: X-Fab Texas
Pioneers Silicon Carbide Foundry Service
The ﬂatlands of northwest Texas are perhaps best known for Buddy Holly, cotton farming, and rodeo. But a legacy 150mm (6-inch) wafer fab in Lubbock, Texas, is making its own mark: reinventing itself by moving into the forefront of silicon carbide (SiC) power ICs.
With its origins in the 1970s memory chip production era of Texas Instruments, X-FAB acquired the fab from TI in 1999 and converted it into an analog/mixed-signal facility, producing largely automotive-use ICs.
That business continues, but as new chip designs are targeted at 200mm (8-inch) fabs, the Lubbock fab is ensuring its long-term survival by offering a 150mm SiC power foundry capability.
Companies making power modules for emerging markets such as solar energy or electric vehicles (EVs) are beginning to adopt SiC, attracted by reduced switching losses, higher power density and better heat dissipation.
General Electric, for example, has introduced a solar inverter that utilizes SiC power MOSFETs. (See related article at https://www.pv-tech.org/products/ges-advanced-silicon-carbide-technology...)
Above 650 V, silicon-based insulated-gate bipolar transistors (IGBTs) now predominate, but Andy Wilson, manager of X-FAB Texas’s Silicon Carbide business unit, argues that those power ICs have "significant switching losses that limit their operational frequency."
An inverter converts power more efficiently at the higher frequencies supported by SiC power devices, he said.
In electrical vehicles, for example, IGBTs are used in almost all motor controllers today, but Wilson said automakers are expected to convert to SiC-based solutions in the 2022–2025 timeframe, if not sooner. "If they can convert to SiC, they can improve the efficiency, as well as reduce the size and weight, of the controller. That results in increased electric vehicle (EV) range—or in hybrids, improved fuel efficiency."
However, silicon-based IGBTs have a significant price advantage, based in large part on the cost differential of the starting substrates.
Bonding silicon and carbon into a largely defect-free wafer is a major challenge. Even the 4-inch SiC wafers have much higher defects—and costs—than silicon wafers. But SiC wafer manufacturers are rapidly porting the learning gained in 4-inch production to 6-inch SiC wafers, which is where X-FAB is focused.
X-FAB’s Lubbock operation is "at the forefront of the transition from 4- to 6-inch wafers" for SiC IC production, Wilson said. With several SiC wafer vendors able to ship significant quantities of 6-inch SiC substrates, he said "the 6-inch substrates are getting pretty close to the quality we are seeing today in 4-inch wafers, although there is still huge room for improvement."
The market for 900 V and higher power ICs—dominated by silicon-based IGBTs—is in the $3B range. While SiC-based solutions are gaining a toehold, the integrated device manufacturers (IDMs) in the SiC power IC space, led by Infineon, Mitsubishi, ST Microsystems, Rohm, and others, are the dominant players thus far.
Strong Growth Expected
Rob Lineback, who tracks the power IC and power diode markets for IC Insights, said SiC power ICs are set for strong growth in the higher-voltage, higher-temperature markets. Spurred largely by EVs, SiC power IC and SiC power diodes could become roughly a half-billion-dollar market in five years, with a 60% compound annual growth rate (CAGR) over the period, Lineback said.
"Automotive is one area where SiC may take hold. Quite a few Japanese companies are going after SiC, more than GaN (gallium nitride). A lot of it is aimed at EVs, because they can get the size of the motors smaller," Lineback said.
X-FAB Texas is competing in the foundry portion of the market, working with startups as well as established players looking to extend their internal capability by accessing X-FAB’s SiC Foundry line, Wilson said. First development of SiC products at X-FAB began some time ago, in January 2014, and they are ramping to volumes now.
"We are not a TSMC or a GLOBALFOUNDRIES. For us, this is a market that is well matched for a company the size of X-FAB, something we believe we can develop into a nice-sized business," he said.
"Our biggest challenge is how to establish a viable fabless model for power devices because foundry is not the dominant model in that sector," Wilson said.
While most startups choose to remain quiet about their relationship with X-FAB, Wilson said Monolith Semiconductor, based in Round Rock, Texas, is public about its foundry relationship with the X-FAB-Lubbock operation. Monolith recently relocated from Ithaca, New York, to be closer to its foundry partner.
Much like the MEMS sector, SiC power startups seek to differentiate their products in both design and processes. For example, they may alter their implant schedules, or use a proprietary gate oxide or a unique passivation process.
X-FAB’s SiC effort has received key support from the PowerAmerica consortium, which is based in North Carolina and backed by $70M in funding over five years from the U.S. Department of Energy. PowerAmerica, which supports both SiC and gallium nitride (GaN) power semiconductor solutions, provided support that helped X-FAB establish an open SiC Foundry. "PowerAmerica has been a huge help. We’ve been able to accelerate our foundry offering by a full two years with their support," Wilson said.
There are relatively few 6-inch silicon fabs left, and Wilson said the SiC initiative is part of the Lubbock fab’s long-term business plan. "The reason this fab has stayed viable for so long is that it has continually reinvented itself. Silicon carbide is the next chapter for this facility."
 PowerAmerica is a public (tax exempt) consortium, based at the North Carolina State University. It receives its funding from the U.S. Department of Energy.