TI inks $1.2B Italy flash fab pact

Electronic News, Dec 23, 1996 by Peter Brown

Avezzano, Italy--Texas Instruments last week signed a four-year, $1.2 billion agreement with the Italian government to build a 300-millimeter (12-inch) wafer fab here for the manufacturing of flash memory and other memories. In addition, TI will expand its R&D facilities and its existing memory production facilities throughout the world.

Dubbed AMOS 3, the fab will produce wafers with 0.28-micron geometries and will be able to scale its process technology down to 0.18 micron and below. The agreement calls for TI to invest approximately 70 percent of the $1.2 billion for the fab, while the Italian government will invest the remaining 30 percent.

"Texas Instruments is committed to making the investments necessary to serve our customers worldwide, insuring our semiconductor technology leadership and providing the necessary manufacturing capacity as we go into the 21st century," said Dave Richardson, president of TI Europe. "This investment will reinforce our leadership position in advanced deep-submicron manufacturing technology."

According to a TI spokeswoman, the royalty situation has not been "worked out" since the time frame for volume production in the facility is sometime in 1Q99. TI said it will not break ground on the facility until some time next year and the Italian fab will be at full capacity in the year 2000, manufacturing 6,600 wafers per month. The first charge for the fab will take effect some time in 1998.

TI said it will initially manufacture flash memory in AMOS 3; however, TI can manufacture in the fab anything in its semiconductor library because of the 0.28-micron process technology that TI claims will be state-of-the-art.

The agreement adds to TI's "versification" program of branching outside of the U.S. and concentrating on a global marketplace. Two-thirds of TI's semiconductor revenue was generated from outside the U.S. in 1995, the spokeswoman said.

The fab will be TI's second facility in Avezzano. In 1989, TI signed a contract for $1.2 billion in which it would build, with the Italian government, a submicron CMOS wafer fab and an applications research center, dubbed AMOS 1.

By the year 2000, more than 100 new fabs will have to be built to sustain the demand for capacity and the Italy fab is one step TI is taking to make sure it will be in the right position going forward, the spokeswoman said.

The threat of TI focusing its resources on flash memory has not skewed its competition as flash memory leaders Intel and Advanced Micro Devices think the competition will be good for the market.

AMD said it expects and embraces competition in all its industries and this announcement of a new fab will not affect its flash memory plans in the future. A spokesperson for Intel said the company expects the flash memory market to continue growing, and the fact that companies are building new fabs for flash supports this.

Earlier this year, TI unveiled its plans to build a $2.5 billion megafab in Dallas, Texas for the manufacturing of digital signal processing (DSP) products (EN, Feb. 26). TI will also develop an R&D facility in Dallas as well.

In a related event, TechWorks, a developer of computer memory upgrade products, purchased a new 5,000-square-foot manufacturing facility in Shannon, Ireland, in order to begin the process of establishing a manufacturing presence in Europe. No purchase price was given.

Christophe DeBuchet, TechWorks' VP of European operations, said "The new Ireland facility will increase shipping capacity two-and-a-half times each month within the coming year. Initially, the new plant will consist of two manufacturing shifts, which we plan to double over the next 12 months."

Mike Frost, TechWorks' president, stated, "This expansion will take us closer to the company's global strategy, which is to include greater flexibility to produce 'just-in-time' manufacturing and delivery for the European market."