Taiwan steps up work on next-generation chip production

The Taiwan government plans to work closely with the island’s chipmakers to move forward on advanced chip production using 18-inch round silicon wafers.

The silicon discs are meant to replace the 12-inch wafers currently used in mainstream chip manufacturing, and are expected to lower costs in addition to allowing smaller and smaller chip sizes. The materials are important as people demand electronics gadgets in increasingly smaller sizes, such as smartphones, digital music players and cameras, and other items.

The challenge for chipmakers is not only to create semiconductors powerful enough to run these items, but to be able to manufacture them cheaply enough that they can be used in products for everyone.

Taiwan hopes to encourage the adoption of the technology by working with chipmakers and research groups on future projects such as setting up test 18-inch production lines. There are no concrete plans to build such a line, said an official from the island’s Industrial Development Bureau, but Taiwan’s Industrial Technology Research Institute will likely win government funding for 18-inch-related projects in the future.

The government also hopes Taiwanese companies will start manufacturing chip equipment.

“We haven’t put a lot of effort into that, so we want to figure out how to build up that kind of expertise,” said Lu Cheng-chin, an official at the Industrial Development Bureau in Taiwan.

He gave no time frame on the proposal, saying only that current efforts are focused on getting companies and research groups together for discussions on how best to proceed with development of the technology.

The new technology faces a major hurdle in its expected cost. A factory designed to make chips on 18-inch wafers could cost between $12 billion and $15 billion to build, nearly triple the price of an equivalent 12-inch (300-millimeter) wafer factory, according to the industry group, Semiconductor Equipment and Materials International (SEMI). Not many companies will be able to afford to build such factories.

It’s important that they find a solution to the problem because without the new wafers, chip manufacturers won’t be able to reduce costs at the pace users and gadget makers have come to expect. Chips are the foundation of every electronic device, and often one of the most expensive components.

Two main efforts hold the key to reducing the cost of chip production: shrinking the size of transistors to make chips smaller, and enlarging the wafers to hold more chips. Typically, the industry has focused on shrinking the transistors, but that is becoming more difficult as they are nearing the size of an atom.

The new 18-inch wafer initiative is the latest stab at making the silicon discs larger. The 12-inch wafers used today can yield 2.25 times more chips per wafer than older 8-inch (200mm) wafers, yet take just about the same amount of time to pass through a factory, significantly boosting total monthly output. An 18-inch factory would show a similar leap in output.

Taiwan is home to the largest concentration of 12-inch wafer plants in the world, including 14 already in mass production and 5 more under construction. The island’s chip manufacturers accounted for 11.5 percent of all chips produced last year, the government said. Taiwanese contract chipmakers took a 68.4 percent share of the made-to-order chip market last year, while the island’s memory chipmakers made 20 percent of the world’s supply of DRAM.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, is already working with an industry group led by the International SEMATECH Manufacturing Initiative (ISMI) to figure out how to make 18-inch silicon wafer technology more economical, as well as overcome some technical challenges.