Semiconductors and Components

Samsung, Globalfoundries Form 14nm Alliance to Fight TSMC

17 April 2014

Samsung Electronics Co. Ltd. and Globalfoundries Inc. said Thursday (April 17) they will offer foundry customers the same FinFET manufacturing platform for the next-generation 14nm node, a move they say comes in response to customer demand to mitigate risk.

Globalfoundries is abandoning its 14XM process, which has been in development for at least two years, and has instead licensed on a multi-year term, the 14LPE and 14LPP processes developed by Samsung. Physical design kits are available from both manufacturers with prototyping and multiproject wafer (MPW) runs to follow. Both companies expect to be in volume production before the end of 2014.

This should enable both companies to offer more advanced process technology than leading foundry Taiwan Semiconductor Manufacturing Co. Ltd (Hsinchu, Taiwan), which is expected to start volume production of its 16nm FinFET process at about the same time.

According to Len Jelinek, senior director and chief analyst at IHS, Samsung and Globalfoundries needed to leapfrog TSMC in process technology in order to gain market share. "It's truly a game-changer," Jelinek said. From a perception standpoint, the announcement also improves the position of both firms, Jelinek said, noting that in the past many companies have been reluctant to publicly identify either Samsung or Globalfoundries as their foundry partner, but have been very quick to say they are using TSMC. "This changes that," he said.

The goal of the agreement, according to executives from Samsung and Globalfoundries, is to meet the requests of customers to provide economies of manufacturing scale, reliability of supply, dual-source capability and geographic diversity. Under the cooperation the two foundries will have four fabs, two in Korea and two in the United States capable of running the 14nm FinFET processes. The U.S. fabs are Samsung's S2 Fab in Austin Texas and Globalfoundries Fab 8 in Saratoga, New York.

"All the fabs are 100 percent synched. Customers can take a design to one foundry or another or both," SW Jeong, executive vice president for foundry at Samsung, told Electronics 360.

The advantage for a customer is that a common manufacturing process makes it easier to transfer a design to a second foundry if a first foundry should have supply constraints or if a natural disaster should strike a fab. Jeong acknowledged that there could be business issues around the transfer of advanced IP from one foundry to another to complete a customer's SoC. But technically such a transfer is possible and it saves the customer the extreme cost of developing a complete SoC chip for two different processes.

Customers asked for it

"Customers have been asking us for this," said Sanjay Jha, who was appointed chief executive officer of Globalfoundries at the beginning of 2014. "Go back to 28nm node and understand that customers didn't have a choice," said Jha.

In 2012 several foundry customers, including Qualcomm and others, could not get enough 28nm chips from TSMC to meet the demand excited by booming sales of smartphones. TSMC had a near monopoly position in the supply of 28nm wafers.

"Clients who are designing at these nodes do not want that situation," Jelinek said.

The deal also helps both companies offset the advantage that TSMC has in terms of sheer capacity, according to Jha. Offering the same process technology mitigates the risk for customers who fear tight supply, he said.

The disadvantage of the process sharing for Globalfoundries and Samsung is that they will be into more intense price competition with each other. However, the hope is that by working together with a common process technology they can grow the market for them both with the second-largest foundry Globalfoundries and the smaller foundry Samsung becoming a credible alternative to TSMC's 16nm FinFET processes at the next node.

The terms of the licensing agreement were not disclosed. While it is to be expected that Globalfoundries is paying a fee or royalty for the use of Samsung's processes, executives from the two companies made it clear that the driver for the collaboration was creating more business for both companies. This deal will provide a “much better value proposition for the entire ecosystem," Jha said.

Best FinFETs

Nonetheless much attention will be paid to the technical capabilities of the various processes on offer from finFET pioneer Intel, TSMC and Samsung and Globalfoundries. Globalfoundries was expecting to be in production with 14XM during the first half of 2014 but had acknowledged that, because it used a 20nm back-end interconnect provided little area saving compared with a 20nm bulk CMOS.

Samsung qualified its 14LPE process in February and claims that it provides up to a 15 percent area saving compared with 20nm bulk CMOS, while it lets engineers tradeoff between 20 percent more performance or 35 percent less power. The 14LPP process is intended to follow on offering more performance and lower power.

The companies claimed that Samsung's 14nm FinFET manufacturing platform is the first in the industry to area scaling from 20nm. Jha said the Samsung process is at the leading-edge in density, power consumption and performance.

Jelinek said that in developing a 14nm FinFET process Samsung had pulled in the pace of technology migration in the foundry industry, which for the past several years has operated on a roughly-two year cadence at the 65, 40 and 28nm nodes. "They have executed on pulling in the bar," Jelinek said, adding that "they had to do that."

Advanced Micro Devices Inc. (Sunnyvale, Calif.) is one customer that has publicly backed the alliance. “This unprecedented collaboration will result in a global capacity footprint for 14nm FinFET technology that provides AMD with enhanced capabilities to bring our innovative IP into silicon on leading-edge technologies,” said Lisa Su, senior vice president and general manager of Global Business Units at AMD.

Whither IBM?

Harmonizing Samsung's and Globalfoundries' 14nm manufacturing is likely to be easier because both cooperated with IBM Microelectronics in the Common Platform Alliance and have developed processes from a common research starting point. However, IBM was not mentioned in announcement between Globalfoundries and Samsung and IBM is reported to be looking to sell-off its chip unit. It is notable that the

Globalfoundries has been tipped as the favorite to take on the IBM semiconductor research legacy if a price can be agreed.

A number of other companies have worked with IBM research as the starting point for manufacturing process development including United Microelectronics Corp., SMIC and STMicroelectronics.

However, when asked if there was scope for other chip manufacturers to join with Samsung and Globalfoundries and adopt the 14nm FinFET processes the executives showed no enthusiasm. "It is easier to sync a limited number of fabs, " said Jha. "We are committed to making this collaboration work."

Jha also declined to say whether Globalfoundries' commitment to the 14LPE and 14LPP manufacturing processes licensed from Samsung had any implications for its support for the fully-depleted silicon-on-insulator (FDSOI) that has been championed by STMicroelectronics. Globalfoundries has been reported to have agreed to run FDSOI wafers for ST to meet volume requirements if necessary but there is, as yet little sign that there is volume demand for FDSOI.

The process alliance between Samsung and Globalfoundries is likely to be carried forward to the 10nm node and as such could provide a further disincentive for customers to adopt the FDSOI process.

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