14 DAY TRIAL // Semiconductor specialist Samsung has just announced that it entered a partnership with its Arch-rivals Intel and TSMC in order to develop next-generation silicon wafers and to improve the production process.
Since the semiconductor market is working on a commodity basis (high sales with little premiums over the production costs), wafer capacity is a key element in the companies' survival. Samsung's decision to team up with Intel and TSMC comes at a time when the semiconductor industry is facing recession. Earlier this year, market analysis company Gartner estimated that the industry was in an indefinite slowdown that is unlikely to end soon.
According to a filing posted by Samsung, it will cooperate with Intel and TSMC to make the transition from the current 12-inch (300 mm) silicon wafers to 18-inch (450 mm) parts, able to offer more than twice the yields of the existing process.
"Increasing cost due to the complexity of advanced technology is a concern for the future", Mark Liu, TSMC's senior vice president of Advanced Technology Business, said in a press release. "Intel, Samsung, and TSMC believe the transition to 450mm wafers is a potential solution to maintain a reasonable cost structure for the industry", he continued.
Wafers are thin slices of semiconductor materials, which serve as substrate for the upcoming integrated circuits. The 18-inch (450 mm) silicon wafers (also referred to as pizza trays) would help the three companies meet the increased demand in semiconductors, used in mobile phones, portable MP3 players and other consumer electronics appliances.
Moreover, the three top-tier semiconductor manufacturers will cooperate with the entire industry, in order to set new and widely-accepted manufacturing standards through the International Sematech Manufacturing Initiative (ISMI) consortium.
According to industry analysts, the move to the 18-inch wafer standard would cost the companies about$10 billion or more, which is more than three times the investment required by a current 12-inch wafer factory. Intel, Samsung and TSMC are the first to make the switch as they are major players in the semiconductor industry, and at the same time, they hold the financial resources to afford the shift.