1st Silicon on US$129mil wafer expansion drive

  • Business
  • Thursday, 16 Jan 2003

By JACK WONG in Kuching

1st Silicon (M) Sdn Bhd is investing US$129mil this year to buy new equipment to ramp up the production of its wafer foundry in Sama Jaya Free Industrial Zone, Kuching. 

According to its newly appointed chief executive officer Dr John Nelson, 1st Silicon has embarked on the expansion project in anticipation of an upswing in the world semiconductor industry. 

He said that the company had placed orders for the new equipment to produce 0.18-micron wafers.  

Its wafer foundry has an installed capacity of 8,500 wafers a month, and this is expected to increase to between 15,000 and 17,000 wafers a month by year-end. 

The foundry used only 56% of its installed capacity last year, and this is expected to rise to 80% this year. 

John Nelson (centre) posing with the company's top management executives in Kuching.

The new equipment to be installed is also capable of producing 0.15- and 0.13-micron wafers, which fetch higher prices than the 0.25-micron wafers that the company has been producing in the past several years. 

“We will start the development of 0.15-micron wafer this year, and probably 0.13-micron wafer next year,” Nelson told a media briefing yesterday. 

He said the migration to 0.15-micron from 0.18-micron was a relatively easy process but the manufacturing technology for 0.13- micron was a complicated one. 

The development phase of each product is expected to take between 12 and 15 months. 

He said 1st Silicon had started the qualification process of 0.18-micron wafers, with mass production expected in the next 4 to 5 months. 

“We will optimise the production of 0.18-micron wafers because of higher profit (margin) than the 0.25-micron wafers, “ he said. 

The company has projected its production this year to comprise 10,000 pieces of 0.18-micron wafers and 8,000 pieces of 0.25- micron wafers. The production of 0.15-micron wafers is targeted for 2004. 

On 1st Silicon’s 2002 financial performance, Nelson said it achi-eved a more than 400% in revenue growth over 2001, and the target was between 100% and 150% growth this year. 

He said 1st Silicon was expected to break even and be self-funding next year when its monthly production shoots up to between 20,000 and 22,000 wafers a month. 

“I am reasonably optimistic that this can be achieved based on our sales projection and the prices of wafers,” he said. 

1st Silcon will set up sales offices in Europe, Japan and South Korea this year. 

Nelson said the company had planned for more capital investment in 2004, and the amount would be similar to that of this year. It raised US$614mil last year, comprising US$324mil in credit and US$290mil in equity.  

The credit facilities were guaranteed by the Malaysian government. 

Nelson said that the first fabless design house which would provide wafer designs for 1st Silicon was expected to be set up in Kuching in the next few months. 

This Taiwanese-funded firm based in peninsula Malaysia has access to some 200 design engineers worldwide. 

Nelson said 1st Silicon was now working with 17 fabless clients from the US, Europe and Asia and two integrated device manufacturers. 

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