Chapter 1106: 4 Smoke Signals From the Wafer Factory

Wafer is the basic raw material of the manufacturing industry, and its significance in chip manufacturing technology is flying back

Wafer refers to the silicon wafer used in the production of silicon semiconductor integrated circuits. Because of its round shape, it is called a wafer; various circuit component structures can be processed on the silicon wafer to become four products with specific electrical functions.

The original material of the wafer is silicon, and there is an inexhaustible amount of silicon dioxide on the surface of the earth's crust. Silicon is refined from sand rich in silicon dioxide. The sand rich in silicon dioxide is refined in an electric arc furnace, chlorinated with hydrochloric acid, and evaporated to produce high-purity polysilicon with a purity of up to eleven nines.

The wafer manufacturing plant then melts the polysilicon, and then mixes a small grain of silicon crystal seed into the melt, and then slowly pulls it out to form a cylindrical single crystal silicon rod. Since the silicon rod is gradually generated from a small grain in the molten silicon raw material, this process is called crystal growth.

Wafers are purified silicon elements, and then these pure silicon are made into long silicon crystal rods, which become the materials for quartz semiconductors for manufacturing integrated circuits. After photolithography, grinding, polishing, slicing and other procedures, polycrystalline silicon is melted and pulled out into single-crystal silicon crystal rods, and then cut into thin wafers.

People often hear about wafer factories with several inches. This is because if the diameter of the silicon wafer is larger, it means that the wafer factory has better technology. There are also some technologies that can reduce the size of transistors and wires. Both methods can produce more silicon grains on a wafer, improve quality and reduce costs.

So among six-inch, eight-inch and twelve-inch wafers, twelve-inch wafers have higher production capacity.

Of course, in the process of producing wafers, the yield rate is a very important condition.

Fan Wubing is indifferent to the news that TSMC plans to enter the big 6 and build an eight-inch wafer factory.

In fact, after Fan's Investment Group built an eight-inch wafer factory, he expected that this day would come sooner or later.

In a sense, this is also the inevitable result of the blockade of China's technology by the United States and the Taiwan authorities. A long time ago, the United States or some Western countries set up investment projects for China based on China's technological frontier.

For example, China did not have a wafer factory before. Well, I will not allow investors to build a wafer factory in China. Later, China built a four-inch wafer factory and mastered the key technology. Well, I will allow investors to build a four-inch wafer factory in China to form competition. The result of the competition is naturally that foreign-invested wafer factories with mature technology will squeeze out China's wafer factories, so that technological advantages will continue to be formed.

After China has mastered the technology of six-inch wafer factories, they will still invest in the construction of six-inch wafer factories.

The reason is the same as before. It is nothing more than worrying that China's own wafer technology will develop and threaten its survival. After all, China's manufacturing cost is low, which is clear to everyone.

This also creates a fait accompli, that is, as long as China does not master the technology, foreign capital will not invest in the construction of the technology in China.

Just like TSMC now, the wafer factories they built in Taiwan are mainly 12-inch wafers.

Sure enough, one month later. That is, at the end of March, news came that the leading manufacturer TSMC took the lead in formally applying for the investment in the 8-inch wafer factory in Taiwan, which has attracted much attention from all parties in Taiwan.

TSMC said on March 29 that it had applied to the Investment Review Committee of the Ministry of Economic Affairs to set up a wafer factory in Taiwan yesterday afternoon. It is expected that after obtaining the license, a subsidiary wholly owned by TSMC will be established in Taiwan, and an 8-inch wafer factory with a monthly production capacity of 35,000 pieces will be established in Songjiang Science and Technology Park, Shanghai. TSMC estimates that the total investment amount of the four domestic big 6s will reach 898 million US dollars.

Taiwan's Minister of Economic Affairs Lin Yifu immediately made a statement, stating that the Investment Review Committee had received TSMC's wafer registration application and would send the information to relevant ministries and commissions for written review. Once the ministries and commissions reach a consensus, they will convene a cross-ministerial chairman meeting according to the key points of the operation to conduct a formal review of the case.

Taiwan's Ministry of Economic Affairs has announced the review and supervision of wafer fab investment in the Greater China region. TSMC will submit relevant information to the Investment Review Commission in accordance with regulations. Next, the Investment Review Commission will send these materials to the Taiwan Economic Commission, the Central Bank of Taiwan, the Ministry of Finance, the Council of Labor Affairs, and the Council of Economic Planning and Development for written review.

As for how long this review will take? Will the review be completed? Lin Yifu was unwilling to give a direct answer, only saying that everything will be handled in accordance with the operating points, depending on the completeness of the information sent by TSMC and the consensus of various ministries and commissions.

However, while applying to invest in the Greater China region, TSMC also emphasized that Taiwan is still the core of the company's operations and research, and will continue to invest in 12-inch wafer fabs in the future. It is estimated that the total number of employees in Taiwan will grow by 5,000 from the current level to 20,000 in four years. This time, TSMC will go to the Greater China region to set up a factory, and some of the equipment will be moved to the Greater China region with idle equipment from Taiwan's 8-inch wafer fabs. All regulations are based on compliance with the Taiwan authorities' Greater China investment laws.

After the news that TSMC will settle in Songjiang, Shanghai was exposed by the media, it immediately became the focus of attention from the outside world. Considering that TSMC's 12-inch wafer mass production has reached the standards set by the Taiwan authorities, TSMC formally submitted an application to invest and set up a factory in Taiwan yesterday.

TSMC Chairman Morris Chang said. There are two main reasons for deciding to set up a factory in Greater China. One is to focus on the semiconductor market opportunities that are gradually emerging in Greater China and have huge potential.

The second is that due to the particularity of the Greater China semiconductor market, it will be difficult to gain a foothold in it if direct manufacturing services are not provided locally.

Therefore, when the mass production time and quantity of TSMC's 12-inch wafers have reached the standards set by the Taiwan authorities, TSMC formally applied in accordance with regulations.

Morris Chang also said that once this motion is approved, TSMC Shanghai Co., Ltd. will employ about 1,000 employees, with about 100 permanent employees sent from Taiwan in the initial stage, and the rest will be mainly recruited locally in Greater China.

After TSMC proposed the proposal to build a factory in Greater China, the board of directors of Taiwan ProMOS Technology also applied to the Investment Review Commission of the Ministry of Economic Affairs of Taiwan a few days later to invest in an 8-inch wafer factory in Greater China, with an investment limit of more than 8 billion New Taiwan dollars.

According to Taiwan media reports, according to the current Taiwan authorities' view, semiconductor factories that invest in Taiwan must set up 12-inch wafer factories in Taiwan and meet two basic conditions. One is to pass the customer's product and process certification, and the other is to have continuous mass production for six months.

ProMo Semiconductor Co., Ltd. said that ProMo Semiconductor currently meets the two qualifications, because the 12-inch wafer factory was certified on September 20 last year, and the current wafer production has reached 9,000 pieces, and the output is more than 4,000 pieces, accounting for more than 20% of the overall operation. As of March this year, it has been in operation for exactly six months.

In terms of investment amount. According to the current regulations of the Taiwan Investment Management Commission, the upper limit of semiconductor factory investment in Taiwan shall not exceed 20% of net assets. Based on ProMo Semiconductor's current net assets of more than 40 billion New Taiwan dollars, the company's investment limit is more than 8 billion New Taiwan dollars.

It is reported that the Taiwan authorities only allowed three 8-inch wafer factories to invest in Taiwan before 2005. In addition to TSMC and UMC, which are expected to get one seat each, ProMo Semiconductor Technology, a subsidiary of the ProMo Silicon Group, intends to compete with Powerchip for the third spot.

Then, Wang Wen-yang, son of Taiwan's tycoon Formosa Plastics Group Chairman Wang Yung-ching, also said that he was considering investing 650 million US dollars in China to build an eight-inch wafer factory.

Four years ago, Wang Wen-yang, the young master of Formosa Plastics Group, left Formosa Plastics due to a scandal and founded the Hongren Group. He invested in China and cooperated with mainland electronic companies. Two years ago, he planned to build three eight-inch and three twelve-inch wafer factories in Zhangjiang Industrial Zone, Pudong, Shanghai. The total investment amount will be as high as 6.4 billion US dollars. This will be the largest semiconductor investment case in China in recent years.

However, because it has to wait for the Taiwan authorities to lift the ban on such high-tech projects in China, the project has not been launched. Now that TSMC has broken the ice, Taiwan's electronic companies have followed suit. Obviously, the time has come.

Taiwan's electronic companies have put pressure on the authorities to lift the above ban, mainly because Taiwan's competitors, Japan and the United States, have begun to build factories in China. If Taiwan does not enter as soon as possible, it may lose its competitiveness.

Under the pressure of merchants, the Taiwan authorities are also gradually adjusting their policy of patience and relaxation of investment restrictions. In recent years, they have agreed to set up computer assembly plants in Taiwan, but they still oppose the construction of wafer factories in Taiwan, advocating that Taiwan should retain some high-tech to prevent the growth of Taiwan's semiconductor industry and threaten Taiwan's economy.

Wang Wen-yang said that once the Taiwan authorities approve him to build a wafer factory in Taiwan, the funds needed for the construction will be raised from the overseas enterprises of the group, and he will form a strategic partnership with his sister's Volkswagen Group and his sister's VIA Technologies.

It is understood that Wang Wen-yang began to actively contact senior executives of several semiconductor factories in Taiwan as early as last year. Many celebrities in the semiconductor industry have been on the invitation list, and several senior executives of the top three semiconductor groups in Taiwan have been finalized recently. He will resign from his current position and move to Shanghai Exhibition. According to the general wafer factory construction schedule, it takes about one and a half years from groundbreaking to completion and production.

This series of news shocked the domestic electronics industry. For a while, domestic news media, especially the registered media, were all discussing the topic of wafer factories. The development prospects of the domestic chip industry expanded from this were countless, and the official media also reported on this in a relatively positive way, believing that it was a gratifying progress in cross-strait economic and trade relations.

Although Fan Wubing could be indifferent to these news, Wang Rongchang was a little restless. After all, the main project he cooperated with Fan Investment Group was related to this, and the profit was also lucrative. Once this direction went wrong, he would suffer the most.

He didn't want Fan Wubing to be rich and powerful, with many development directions. Even if he suffered losses in this area, it would not be a big deal. Therefore, Wang Rongchang came to Fan Wubing to discuss countermeasures and see how to deal with this situation.

At this time, Fan Wubing had learned some of the government's ideas through senior officials, so he said to Wang Rongchang, "Some local governments in China still hope to attract Taiwanese manufacturers to build high-tech projects such as wafer factories in the mainland, and are willing to provide a variety of preferential policies. Some are willing to provide ten years of tax exemption. And it is said that the government has promised the Hongren Group that it will give the best preferential treatment in terms of financing channels."

"In other words, once the Taiwan authorities relax regulations, many heroes will emerge as a reality for the Big 6 wafer factories?" Wang Rongchang asked with a headache.

"You don't need to be too anxious, Lord Wang. After all, there is no end to making money." Seeing Wang Rongchang's frustrated face, Fan Wubing smiled and comforted him, "The profit of this project is small, but there are other projects to do. In the past few years, you have made no less than 1 billion US dollars in this regard, right?"

Wang Rongchang touched his head and said, "It is precisely because it is easy to make money that I am more anxious. Once I lose the advantage of this project, which direction should I develop in the future?"

"There are many projects that can be developed, such as shipping, mining construction, high-tech research, and arms production. Khan, arms production, I guess you can't participate." After giving a few examples, Fan Wubing said to Wang Rongchang, "Let me put it this way, you can choose any of my overseas industries. As long as the funds allow, you can hold less than 5% of the shares. Domestic industries, as long as they are not key industries banned by the government, can also participate in the shares according to this example."

Wang Rongchang's eyes lit up immediately after hearing this, but Fan Wubing's suggestion made him a little moved.

Compared with the uncertain future of the chip industry, it is obviously more attractive to enter the high-profit industry that Fan Wubing took the initiative to open to him.

"If I do this, wouldn't it be a waste of your fame?" Wang Rongchang smiled

"It is a consensus in the business world that everyone can make money. I am not a person who eats alone. It's just that under certain historical conditions, it is inappropriate for some industries to introduce too many strategic partners in the initial development. After the development, it is necessary to establish a united front." Fan Wubing answered very pertinently.

In fact, Fan Wubing had already considered this.

His assets have now expanded to a considerable extent. It is true that he is rich enough to rival a country, but the saying that a big tree attracts the wind is also an old saying. Now that the company has entered a period of steady development, it is necessary to appropriately select some strategic partners to join in order to form a stable and unshakable industrial alliance.

Establishing a huge interest group has become the top priority that Fan's Investment Group needs to solve now.