Government’s Wafer Fab On Schedule

Posted on July 1, 1999 
Filed Under Julian, Nikkei Electronics Asia

The Sarawak state government’s plan to build a US$1 billion wafer fabrication plant on the rainforest-clad island of Borneo is on schedule.

“There will be no more delays. The fab will be up and qualified by the third quarter of 2000 and in production by the end of that year,” said Claudio G Loddo, chief executive officer of start-up 1st Silicon (M) Sdn Bhd.

The 1st Silicon fab, is being built on a 39.4 hectare site at the Sama Jaya Free Industrial Zone, near Kuching, and will have a 8,500 sq m Class 100K cleanroom. It will be a pure-play foundry.

The company recently secured a loan of more than US$200 million from Ausfuhrkredit-Gesellschaft mbH, which represents a consortium of German banks.

The loan was arranged by Commerzbank AG and guaranteed by the Malaysian government. Loddo expects the company to secure another US$100 million from other sources soon.

German technology group Jenoptik AG won the US$300 million contract to build the fab and commissioned its subsidiary Meissner + Wurst Zander AG as turnkey contractor. The company has designed and constructed other plants in Europe, Singapore, Taiwan and Korea.

Loddo shot down criticisms that Sarawak lacked the resources and supporting infrastructure to host a commercial fab.

“We have consistent power supply and abundant water, and the state is building a toxic waste treatment plant, what more do you need?” he said.

Investors Welcome

Loddo said Sharp Corp will provide the technology transfer for 0.25µm processes on 200mm wafers, with a map towards 0.18µm processes.

Under the terms of the agreement, the Japanese manufacturer will also be its main customer.

“At full capacity we aim to produce 30,000 wafers a month and it will typically be logic products going into computers and telecommunication industries,” he said.

The company also plans to set up a sales, marketing and design support center in Silicon Valley, later this year. The company currently has a 100 staff and expects to expand to a workforce of 700 at full capacity.

Although 1st Silicon’s present major shareholder is the Sarawak Economic Development Corp, the company is still seeking foreign customer/partners especially from US, Europe and Taiwan.

Loddo said that between 45% and 75% of the company is up for grabs. The company is targeting fabless semiconductor players and integrated device manufacturers (IDM) looking to outsource their wafer supply as potential customers.

“The market is showing some signs of a rebound and we hope to capitalize on the expected upswing when we are up and running,” he said.

Published in Nikkei Electronics Asia, Jly 01, 1999
by Julian Matthews, Malaysian correspondent

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