GlobalWafers, one of the world’s top three makers of silicon wafers used to make central processors and other chips, plans to invest $5 billion to build a 300-mm wafer manufacturing plant in Sherman, Texas.
The Taiwan-based company said the move would bring more wafer production capacity to the U.S. It comes at a time when a global shortage of chips has pushed Washington to become more self-reliant when it comes to chip-making.
The 3.2 million-square-foot silicon wafer plant is set to become the largest facility of its kind in the U.S. as well as one of the biggest in the world. GlobalWafers said production will hit around 1.2 million wafers per month after it completes several stages of equipment installation. That translates to around 10% of global wafer shipments in 2021, which rose to a record-high 14.165 million units, according to SEMI.
While companies are investing in production capacity to help turn the tide, other factors are prolonging the global chip shortage, including a short supply of silicon wafers that are processed and then diced into chips.
Production snags have also hit supplies of substrates and other raw materials used to mass-produce chips, such as chemicals and gases. The sprawling supply chain used by the chip industry has also been tangled by the ongoing war in Europe, while harsh lockdowns in China have been playing havoc on supply and demand. These factors are leading to higher costs for chip vendors and long lead times for their customers.
GlobalWafers said it will use the $5 billion production facility to help address the supply woes. It continues to sell out future capacity due to unprecedented demand, including the output anticipated from its new facility.
From Sand to Silicon
Most wafers are made from a type of sand called silica. The manufacturing process involves melting and refining the raw material in a crucible and then turning it into a cylindrical bar of silicon—all a single crystal—also called a boule.
The ingot is then sliced into discs about a millimeter thick that are polished mirror-smooth to remove as many irregularities and impurities as possible. The blank slabs of silicon measure up to 300 mm in diameter. Semiconductor companies buy the pristine plates of silicon and scorch transistor-shaped patterns on the surface using intense beams of light before slicing them into logic, memory, analog, or other types of chips.
The GlobalWafers facility is set to join a number of new fabs now being built in the U.S. Intel, Samsung, and TSMC have announced fab projects in Arizona, Texas, and Ohio that will cumulatively cost around $70 billion.
Intel has said that it could potentially invest up to $100 billion by the end of the decade in its new 1,000-acre manufacturing site outside of Columbus, Ohio, which is able to accommodate up to eight chip fabs.
TI plans to spend up to $30 billion to construct a new manufacturing site outside of Dallas, Texas, by 2025, in a bid to stay a step ahead of demand in the automotive and industrial sectors ravaged by supply issues.
The facility that GlobalWafers plans to erect in Texas will create as many as 1,500 jobs when it comes online. Production from the site is expected to begin as early as 2025.
Shoring Up Supplies
Most of the world’s silicon wafers are currently manufactured in Asia, forcing semiconductor firms in the U.S. to buy imports. “This investment will represent the first new silicon wafer facility in the U.S. in over two decades and close a critical semiconductor supply-chain gap,” said GlobalWafers.
Other companies are hopping aboard the U.S. chip boom. Merck, in early 2022, said it will invest $1 billion in its U.S. operations to increase its output of chemicals and other raw materials essential to run chip fabs.
"The chip shortage needs industry-wide cooperation to resolve the supply-chain issues consumers are currently facing," said Kai Beckmann, the CEO of Merck's electronics subsidiary, EMD Electronics, in January.
GlobalWafers’ move comes as the U.S. struggles to approve the CHIPS Act, which would allocate $52 billion in funding to shore up chip manufacturing in the U.S. The company may be eligible for subsidies if the bill passes.
The CHIPS Act, which was passed by the U.S. Senate in 2021, is a bid to fight against future chip shortages and make the U.S. more competitive against China and other countries in Asia, where about 80% of chips are fabricated today. The House, in early 2022, passed a bill backing the same amount of funding. But the Senate and House have been struggling for months now to reconcile the differences between their two proposals.
While the U.S. slogs along trying to approve the funding, some in the semiconductor industry fear that most of the funding will end up in the hands of the largest chip makers, while neglecting other parts of the electronic ecosystem.
But unless the U.S. passes the subsidy package, everyone is out of luck. “We are at a make-or-break moment to expand domestic semiconductor production,” Secretary of Commerce Gina Raimondo said in a statement.