UMC, Xilinx Develop 0.18 Technology

Electronic News, Nov 30, 1998 by Peter Brown

SAN JOSE--A new 0.18-micron manufacturing process co-developed by programmable logic heavyweight Xilinx and United Microelectronics Corp. (UMC) will help Xilinx take field programmable gate arrays (FPGAs) to speeds of 1 gigahertz and densities in the two-million gate range while also giving UMC's other foundry customers access to the most advanced technology available.

The move further illustrates how the fabless semiconductor business model has flourished in recent years and gained significant power in the foundries. Although Xilinx does not have its own fab, the company has made significant investments in UMC's fab's and has helped the pure-play foundry move forward with its manufacturing advancement including its 0.25-micron process last year.

Without the help of Xilinx, many observers believe UMC may have not moved to 0.25-micron and now 0.18-micron so quickly. Wim Roelandts, president and CEO of Xilinx, said Xilinx is making an effort to be the process technology leader not only in the PLD market but in the semiconductor market as a whole. So it pushed, invested and help developed this technology aggressively to get a jump on its competition.

This lack of aggressiveness by UMC might be attributed to the hard times that have fallen on some of the foundries because of the semiconductor slump. Xilinx, wanting to move aggressively to a 0.18-micron process, may have felt the only way to move quickly was to invest and help develop the technology itself.

"This has been a tough year for the foundries and some of my data indicates wafer prices have declined over 25 percent," said Joanne Itow, senior analyst at Semico Research. "To combat this (UMC) is trying to develop niche markets for themselves by emphasizing the IP portion of their business and leading edge technologies where they see it as another added plus." Xilinx is not the only company investing in UMC for 0.18-micron, but it is the largest investor, reports indicate.

"UMC may be winning on the technology front because it has aggressive companies like Xilinx pushing them," she said. "However, until they come out with products, it really is all hype."

The credibility of UMC has been questioned recently by some industry observers who believe the company has fallen behind its main competitor TSMC in terms of capacity, customers and the ability to deliver what has been promised. While TSMC continues to build fabs and invest in several joint ventures, UMC has been stymied by a lack of funds and customers to build additional fabs, reports indicate. Lawsuits have alleged that UMC may have stolen some intellectual property (IP) from customers and third parties and incorporated it into its own portfolio.

However, according to Jim Ballingall, VP of worldwide marketing at UMC, the company has expanded its capacity by making "attractive" deals with fabless companies who invest in the facilities with UMC such as the agreement with Xilinx. This allows the company to expand the capacity while it invests in technology.

"We have been a lot smaller than TSMC in the past and not advertised as much but our technology is more advanced and we were the first to come out with 0.25-micron technology," said Ballingal. "The perceptions of UMC may be different than the things that are happening." He noted that during a slump in the market is the best time to invest because prices are low. UMC sees the market turning around next year and experiencing good growth the following year so it is investing to ensure technology and capacity for the future.

Ballingal claims the company is the volume leader at 0.25-micron products, 7 times more volume than TSMC. He also claimed the company is at similar volumes for its 0.35-micron parts. Semico's Itow said she could not verify that UMC was ahead or not at 0.25-micron but said she thinks that 7x volume advantage claimed by UMC over TSMC is really high. "TSMC without a doubt is still the largest foundry, but UMC is a formidable competitor," she said.

Itow said UMC is the big winner in this relationship because it already had plans to move to 0.18-micron but an extra push may have helped in that process. Xilinx wins by having the technology ahead of its competition that later down the road could provide some additional revenue.

Xilinx said enabling 0.18-micron technology will give the company a six to nine-month advantage over Altera. This will also allow Xilinx to hit two-million programmable logic gates with its Virtex devices along with an enhanced speed--up to a claimed 1GHz performance--and a lower power than current devices. The first FPGAs based on the 0.18-micron manufacturing process are expected to be available sometime in 1H99.

"We see FPGAs as the key components to every system," said Roelandts. "Over time all you will need is a reprogrammable core and just upgrade it with new standards or algorithms through software." He said this will save time and money by not having to change boards and chips every six months.

The investment in new process technology will also allow Xilinx to move into new and different applications including the portable space where the power issues have kept programmable logic out of many designs. u