STMicroelectronics: On Top of Key Markets
by Adele Hars
STMicrosystems operations in Agrate, Italy.
How do you stay on top when times are tough? For Europe’s biggest chipmaker, STMicroelectronics, it takes a renewed focus on the five markets where the company has the products, technology and ambition to lead.
ST already holds top-3 positions in some of those key markets—and plans to win more. Orio Bellezza, executive vice president and general manager of Front-End Manufacturing & Technology R&D for ST’s Sense & Power and Automotive Product (SP&A) segment (and member of ST’s Strategic Committee) explains how. “You need scale,” he said. “You need to be on top of large, growing markets, with leading customers, and driving innovative applications. The name of the game is to be fast and first.” A key component in the strategy, he says, is “relentless commitment to process technology.”
ST already has the leading customers: Apple, Bosch, Cisco, Continental, HP, Samsung, Sony and Western Digital, among others. But the company also sells more and more to diversified markets and smaller customers, especially through its distribution channel.
The company has six front-end manufacturing sites serving two main product blocks: Sense & Power and Automotive (SP&A), located primarily in Italy (around Milan and Catania) and Singapore, and Embedded Processing Solutions (EPS), located mainly in and around Grenoble and Rousset. ST also manages its own back end and packaging, primarily at sites in China, Malaysia, Malta, Morocco, the Philippines and Singapore.
The main technologies ST will focus on are: MEMS and sensors; smart power; set-top box/home gateway and ASICs; microcontrollers; and automotive.
Orio Bellezza, executive vice president and general manager of Front-End Manufacturing & Technology R&D for ST’s Sense & Power and Automotive Products segment and member of ST’s Strategic Committee
Clusters of Competencies
The manufacturing sites are organized into “clusters of competencies” comprising design, technology and manufacturing, explained Bellezza. Each fab has a technical mission, but there is also flexibility across sites and with foundry partners to ensure appropriate support for customers as needed.
Because ST offers thousands of products, each fab runs anywhere from one- to three-dozen processes, each with multiple variations and each variation requiring multiple mask sets. Price pressure on high-volume applications requires optimal scheduling across the manufacturing sites.
While this kind of scheduling is complex to manage, “ST has a very efficient planning system at a central level to optimize asset utilization and deliver the service and responsiveness expected by our customers,” said Bellezza. “At a local level, of course the MES and automation systems play important roles in fab management and we work on their continuous evolution and adaptation in the fab. In 150 and 200mm our focus is not so much on the transportation [AMHS] but more on WIP management, advanced process control and data analysis.”
Manufacturing is tightly coupled with R&D; together they account for almost a quarter of the company’s workforce. “It’s very important for us to have manufacturing and R&D people working side-by-side, developing technology and translating it to volume,” explained Bellezza. “We often have R&D and manufacturing in the same fab, which speeds development.”
In fact, Bellezza attributes ST’s leadership in MEMS today to the strong contribution and ability of the teams around Milan (and in Malta’s back end) to manage a very efficient coordination among design, technology and manufacturing, enabling fast time to market and volume. It’s an excellent example of how the flow of information toward manufacturing, the learning and the anticipation of problems in the development phase are naturally addressed with time-to-volume in mind. And with good R&D and coordination comes higher yields.
“There is a lot of innovation here,” said Bellezza. Teamwork and meetings are part of the daily job. Process control, stored program control, equipment management—all are well mastered when ownership is transferred from the R&D team to the manufacturing engineers.
ST also insists on strong cooperation with the equipment suppliers, he noted, not just for 300mm work but for analog, MEMS and even discrete products. Things like wafer thinning and doping, and specialized interconnection schemes, as well as new materials integration, require specific tools and strong support from suppliers.
The tight coupling of R&D with manufacturing is another reason that a major move to outsourcing is not envisioned for the SP&A segment. “We have a broad portfolio, we’re building on it, and we need to be very fast,” said Bellezza. Take MEMS for example, where ST is the world leader. ST was the first company to move to 200mm MEMS R&D and production. The company’s MEMS sales exceeded $1 billion, according to research firm Yole Développement, while its market share grew from 43% in 2011 to 48% today. While there might be some outsourcing of very high volume motion sensors, there are a lot of other flavors of MEMS and sensors in the pipeline.
With the “humanization” of user interfaces, ST is anticipating a radical expansion in smarter technologies for capturing gesture, voice and touch for markets such as health and wellness, wearable electronics, and applications related to the Internet of Things. Targeting strong growth for MEMS, the company is looking beyond its successful lines of accelerometers and gyroscopes to actuation (for example, mirrors for micro-projectors), acoustics and environmental sensors.
However, the company does take different approaches to R&D for CMOS logic vs. the analog and MEMS side of things. For advanced CMOS, ST has pioneered FD-SOI, which is in production now at 28nm, with 14nm to follow next year. As the investments required are immense, “competencies clustering” is shared across alliances with IBM and GlobalFoundries. Under the Nano2017 public/private investment initiative, enhanced R&D efforts will support customer demand by increasing the capacity of ST’s 300mm fab. It’s expected to grow from 3,500 wafers per week to 5,700 wafers per week by 2017, and ultimately reach 7,000 wafers per week.
The €3.5 billion Nano2017 initiative is so important that the French government has announced it will contribute €600 million to it. The French government contends that Nano2017 will make ST Grenoble one of the three pillars (along with GlobalFoundries Dresden and NXP Eindhoven) of the European Horizon2020 program, which begins in January 2014.
On the analog side (“south of the Alps”), ST is also investing in the next technology nodes for its fabs in Catania, which do volume production of smart power and other BCD-based products and development for advanced discrete products; and Agrate, which does advanced BCD, and smart power devices and MEMS R&D along with volume manufacturing.
Power and other BDC products are produced at ST’s Catania facility.
ST operates 150mm, 200mm and 300mm fabs, and like everyone else in the industry, is working to reduce costs. Is moving to larger wafer sizes the solution? Bellezza believes there are essentially three approaches to reducing costs: design and innovation, wafer diameter and optical shrink.
Optical shrink is slowing in CMOS, and while going to larger wafer diameters can be helpful, especially on the digital side, it is not a panacea. Bellezza cited issues in moving to 450mm with step-and-scan lithography tools. Basically, the bigger the wafer, the more step-and-scan steps you need to do. “Those machines have not yet made the leap—in fact, to expose a 450mm wafer takes two to three times longer [you have to stay on the wafer longer to get all dice exposed], so there’s no gain in those expensive process steps. The economics don’t yet make sense,” he said.
On the analog side, ST is moving two of its 150mm lines to 200mm, but Bellezza does not see MEMS products in his SP&A segment moving from 200mm to 300mm anytime soon. “There’s still a huge market for 200mm,” he said. “Of course you always need to continuously reduce process complexity and look for savings in material costs and energy consumption.”
But in a business driven by the steady reduction of price-per-function, where do you focus your cost reduction efforts? “You have to bet on innovation,” said Bellezza. “Collaboration and support of key suppliers is very important. For example, if you’re moving to cheaper materials, you need to address the processes and equipment, find new recipes, and improve equipment productivity and efficiency.”
As an IDM, “ST’s objective is to offer something differentiating,” noted Bellezza. As for analog, “our ability to compete is strongly related to our technology capabilities. So we keep developing internally those manufacturing technologies that enable us to differentiate our portfolio. Of course, we don’t sell technology; we sell products.”
In recent months, ST has announced a host of new technologies that are enabling new products. But if there’s one thing that gets Bellezza excited, it’s clearly the prospects for automotive applications. Historically northern Italy, including greater Milan and Turin, which are among Europe’s wealthiest cities, is an important area for the automotive industry. It is home to Fiat, Pirelli and Alfa Romeo, the prestigious Milan and Turin Polytechnic Universities, and the famous Monza racetrack.
ST is in the top three of the world’s biggest suppliers to the automotive market. It is first in smart power (with 25% market share), ASICs, active safety and audio power amps, and second in infotainment. “Our relentless efforts to improve safety, reduce fuel consumption, expand entertainment and infotainment options, and enable more efficient hybrid and electric vehicles, make the car our most exciting lab for electronics,” he said.
As is often noted, the percentage of electronics in automotive BOMs is increasing rapidly. “ST has a unique portfolio of technologies and products that cover the full spectrum of opportunities, in most cases with a leadership position,” he continued. Bellezza cited advanced BCD smart power for power train control, fuel consumption control, car radio and several other applications; embedded non-volatile memory (NVM) for microcontrollers; advanced CMOS for image sensing and processing; and MEMS motion and environmental sensors for active safety and comfort. ST’s new FD-SOI technology will be in a broad range of applications for higher performance with lower power consumption. “All of this is before you even start talking about electric vehicles!” he exclaimed.
“I think ST definitely has all the ingredients to enhance our leadership in this continuously growing and evolving sector, including full ownership and ongoing investments in process technology—especially at our Crolles and Agrate technology centers—and full control of the supply chain through internal manufacturing,“ said Bellezza.
With new technologies coming to the fore, opportunities abound. While typically ST works interactively with customers to provide options, performance and enabling products, sometimes in areas like analog and MEMS “we find we can offer things our customers couldn’t even have imagined!” concluded Bellezza.
Adele Hars is a writer and director of High Tech International, based in Paris, France.
Special thanks to Laura Bertarelli for her support of this article.