Globalfoundries’ Morgenstern: Diversity is key in Dresden
In 2017 when Morgenstern arrived to run Globalfoundries’ operations in Dresden, the fab had three major customers responsible for most of the demand at the fab. When one of those customers put a block on further orders it was time to look at the bigger picture and other opportunities, Morgenstern told eeNews Europe.
Morgenstern had come from Robert Bosch in Reutlingen, Germany, where he had been responsible for chip manufacturing. “My experience of ASICs and MEMS there [Reutlingen] means I know you can earn a lot of money with mature manufacturing processes,” Morgenstern said.
This also helped make Morgenstern a good fit for Globalfoundries in 2018 when under new CEO Thomas Caulfield the company was wrestling with the decision to pull out from competing at the leading-edge (see GloFo rethinks its future, drops 7nm FinFET).
“Up until then the focus in Dresden had been on 22FDX,” Morgenstern said. 22FDX is the name of Globalfoundries’ fully-depleted silicon-on-insulator (FDSOI) manufacturing process at a nominal 22nm design rule. But the process remains a technically sophisticated alternative to mainstream FinFET processes pursued by TSMC, Samsung and Intel. Samsung also offers FDSOI – at 28nm – but at whichever node the technology is offered, FDSOI has to fight its corner to gain design wins.
Morgenstern wouldn’t name the customer who “caught a cold” but said it was a company that was part of the smartphone supply chain. The customer had become a victim of the legal and commercial battles taking place in that market. Being whiplashed around at the end of the supply chain is a risk of participating in the consumer electronics space, Morgenstern said.
Nonetheless, as result Dresden’s manufacturing utilization rate went down in 2018 and Morgenstern found himself having to make lay-offs and instruct other workers to go on short time working (see Globalfoundries cutting 5% of staff).
Next: New strategy
The new strategy was one of diversification; to be achieved by bringing in 40, 55 and 65nm CMOS process modules – including mixed-signal, non-volatile memory and high voltage – from Globalfoundries older fabs in Singapore. “Dresden is made to run 28nm so the plan is to bring in the breadth of support the company offers at 55 and 40nm and transfer it down to 28nm.”
Fortunately, the period of short-time work did not need to be long. It is over now and Globalfoundries is hiring again, Morgenstern said. The Dresden facility currently employs about 3,200 people and is heading towards 3,300.
Thomas Morgenstern with the Minister President of Saxony, Michael Kretschmer. Globalfoundries is one of the largest investors and employers in Saxony. Source: Globalfoundries.
Offering 55 and 40nm CMOS with analog, BCD smartpower and embedded non-volatile memory (eNVM) as well as digital 28nm CMOS and 22nm FDSOI, plus RFSOI gives Globalfoundries Dresden, a better chance to be relevant to customers, said Morgenstern.
At present Globalfoundries has a couple of non-volatile memory options for 28nm CMOS and is offering embedded MRAM on its 22FDX process (see Startup tapes out MRAM-based MCU) and developing ferroelectric memory (see Dresden NVM startup raises funds). At 40nm Globalfoundries makes use of so-called ESF3 split-gate flash memory technology licensed from Microchip subsidiary, Solid-State Technology. The company has migrated ESF3 to 28nm CMOS.
It took a lot of effort to bring 22FDX to market, Morgenstern said. For the pure digital variant of 22FDX demand had lagged but it is building gradually, he added. But developing a broad range of varieties was also a benefit for 22FDX; providing opportunities in RF and millimeter waves with a good fit to automotive and 5G communications.
Morgenstern said Globalfoundries even has a high-voltage modular addition to 22FDX – below 20V – for use in a display driver project in development. It is due to go into production at the end of 2020.
Next: No thanks for the MEMS
It may be remembered that Globalfoundries has recently sold off a wafer fab in Singapore that was its centre of excellence for MEMS making (see GloFo sells MEMS business, fab to Taiwan’s Vanguard) to Vanguard International Semiconductor Corp. (Hsinchu, Taiwan).
However, with Globalfoundries increased emphasis on diversification – almost the antithesis of the now-abandoned pursuit of FinFETs at 7nm – was there any temptation for Globalfoundries to maintain MEMS manufacturing capability and bring it to Dresden?
Morgenstern’s answer is a simple “No” and the reason is equally simple: wafer diameter. The Tampines wafer fab in Singapore – known as Fab3e under Globalfoundries – manufactures MEMS on 200mm-diameter wafers while Dresden is a 300mm wafer fab.
There is no prospect that manufacturing MEMS on 300mm wafers will be economic before 2024 or 2025 at the earliest, Morgenstern said (see MEMS will be made on 300mm wafers, says Bosch exec).
Until then MEMS silicon tends to be so tiny and volumes required at such a level that a few containers of 300mm-diameter wafers could make a life time supply of a given product. That results in a lot of chopping and changing in the fab. It is simply a case that the economics are better for such small slivers on silicon to be made on 8- or 6-inch wafers.
“When I arrived in November 2017 we had three big customers,” said Morgenstein explaining that he immediately created the “3-30-300” program to broaden Dresden’s customer base. “Now we have more than 50 customers and 180 products being manufactured here,” he said. “We have customers from China, Israel, Europe. It might take four or five years to get to 300 customers but it is more about the attitude and direction of travel – oh and I am pretty sure that the customer that had to take break is coming back. And that’s because we provide competitive advantage.”
“We are strong in automotive and this gives us stability of loading. About 15 to 20 percent of our output is automotive. We still rely on consumer product demand, which can be lumpy, but it includes IoT in the form of smart-home and IoT also addresses industrial applications.”
However, manufacturing utilization at Dresden still stands at 60 percent, Morgenstern said. “We have a plan from corporate and we will improve through 2019.”
Morgenstern makes the point that until the end of 2017 Globalfoundries in Dresden was focused on 22FDX and it takes time to bring up the additional modules for that process and to bring in older CMOS processes and then to get customers signed up and designing. It is quite a long pipeline. “Also, ultimately the time-line is determined by the customers.”
One of the trends in semiconductor integration is the use of aggressive packaging and system-in-package techniques. Is it something that Globalfoundries is considering?
“At Globalfoundries the focus is on ICs. We have used external packaging firms. But I do see tremendous leverage across packaging. And we have a bump-and-test facility here in Dresden.
Wafer bumping is a process where bumps or balls of solder are formed on whole wafers prior to dicing into individual chips. It can be a stage in conventional packaging but also supports flipchip or board level semiconductor packaging. “We have the mask shop here, the foundry and the bump-and-test facility, so that may be something we can make use of,” said Morgenstern.
Morgenstern states that Globalfoundries is building up the ecosystem around Dresden in other ways of which one of the most concrete was the recent creation of Sensry GmbH. The company was created by Globalfoundries, the Fraunhofer-Gesellschaft and venture capital firm The Next Big Thing AG (see GloFo, Fraunhofer, NBT launch startup for IoT chips). Sensry is the result of a research project funded by the regional authority of Saxony and the European Union on a universal sensor platform.
“It is quite expensive for small and medium enterprises to access silicon. So Sensry provides a chance to access the technology of standardized platform at lower cost. We are looking at this and other such projects to form a smart-system hub here,” said Morgenstern.
The wheels of justice
One of the news stories reported in 2018 and that preceded Globalfoundries’ decision to drop leading-edge FinFET manufacturing process development, was the allegation that rival foundry TSMC was abusing a dominant position in the foundry market and preventing other foundries from competing (see Report: Globalfoundries asks China to probe TSMC and Report: GlobalFoundries accuses TSMC of unfair selling).
TSMC always denied the allegations and promised full cooperation with any legal inquiries, but the story has not gone away.
Indeed, there is a risk that as Globalfoundries is now operating behind the leading-edge, competitor foundries might try to bundle sales of leading-edge wafers and more-than-Moore wafers together preventing fair competition.
“We understand that questionnaires have gone out to a number of companies about anti-competitive practices in the semiconductor space. We appreciate that the European Commission is enforcing the rules in one the most critical sectors enabling economic and industrial advances,” said a spokesperson for Globalfoundries.
Next: Not for sale
Given the changes that have gone on at Globalfoundries in recent months – such as the sale of the Tampines fab in Singapore – we asked whether there had been any discussions with local European chipmakers about the acquisition of the Dresden wafer fab from Globalfoundries.
Such talks would not be out of the question because, as the likes of STMicroelectronics, Infineon Technologies and NXP Semiconductor have themselves pulled back from leading-edge manufacturing, they seem to be valuing and expanding More-than-Moore chip manufacturing again; using their ability to make various types of ICs for commercial differentiation. And foundries such as X-Fab and Tower Semiconductor have always expanded by the acquisition of mature sites.
Morgenstern’s response is clear: “Categorically Dresden is not for sale. The companies you mention are potentially customers of ours. We sell capacity, so that is what they can buy.”
He then provides an interesting potted history of the Dresden site. “We were started by AMD making CPUs in the PC era. Under Globalfoundries we moved on to making SoCs for the mobile phone era. Now we are making automotive ICs, IoT for industrial applications, chips for 5G communications and AI at the edge. We are making the focus what we can contribute; relevant chips for Europe.”
By way of a recap Morgenstern said he is implementing a three-pillar manufacturing strategy; More-than-Moore on mature processes and 28nm CMOS; 22FDX and differentiated FDX. But that also involves an expansion of the customer base and a transition in the manufacturing mind-set, he said. It is about security, quality and 100 percent on-time delivery. Although automotive ICs are only part of what Dresden is manufacturing, Morgernstern uses it as an appropriate maxim for the Dresden operation going forward: “Automotive is not a product, it is a mind-set.”
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