Toshibas logic unit goes fab lite

Toshibas logic unit goes fab lite.

Toshiba Corp.’s logic IC unit is going fab lite. SAN JOSE, Calif. – Toshiba Corp.’s logic IC unit is going fab lite.

The company’s so-called Logic LSI Division will expand its outsourcing of cutting-edge products, including 40-nm chips, to multiple foundries from fiscal year 2011, according to Toshiba. This has been in the works for some time.

As part of the strategy for transforming its system LSI business and ”securing an asset light business model,” Toshiba has signed a memorandum of understanding with Sony Corp., expressing the intent to dissolve Nagasaki Semiconductor Manufacturing Corp. (NSM) and to transfer 300-mm wafer fabrication lines
there from Toshiba to Sony. The move was expected.

Toshiba will continue to keep and maintain its NAND flash fabs. There appears to be no change on that front.

However, Toshiba is implementing a series of measures to transform its System LSI  business, with the goal of boosting profitability by allocating resources to focus product areas. Towards this, the company will restructure its current System LSI Division on Jan. 1, 2011.

In other words, it will go fab lite or asset lite on the logic front. Other Japanese chip makers-including Fujitsu, Renesas, and, to some degree, Elpida-have moved in a similar chip outsourcing direction for good reason: It is simply too expensive to have and maintain a leading-edge fab. And they are embracing foundries after years’ of avoiding them.

Toshiba’s non-memory unit will will be reorganized into two parts: the Logic LSI Division, responsible for cutting-edge SoC (system-on-chip) fabricated on 300-mm wafer fabrication lines; and the Analog and Imaging IC Division, which supplies key components for a wide range of products.

The Analog and Imaging IC Division will concentrate on analog ICs and imaging ICs, particularly CMOS image sensors, and use existing production lines at Oita Operations, including 300mm wafer lines, and Iwate Toshiba Electronics Co. Ltd. The main focus will be general-purpose products, allowing the division to streamline its production lines.

As part of the plans, the Logic LSI Division will promote a flexible manufacturing strategy responsive to demand volatility by combining use of its own production line with outsourcing.

Meanwhile, as reported this week, Sony plans to re-acquire a semiconductor fab in Nagasaki, Japan, that it sold to Toshiba in 2008. Sony will buy the fab for about $597.2 million in order to double its capacity to produce CMOS sensors. The acquisition will double Sony’s image sensor output to about 40,000 wafers per month, according to the report.

Sony transferred its Fab 2 in Nagasaki to Toshiba in March 2008 as part of a complex $835 million deal between the two companies that included the establishment of a joint venture.

NSM, which was established in March 2008 and is located in the Nagasaki Technology Center of Sony Semiconductor Kyushu Corp. (SCK), has been manufacturing the “Cell Broadband Engine™” processor, the graphics engine “RSX” and other high-performance semiconductors and leading-edge SoCs.

Toshiba and Sony aim to execute definitive agreements as soon as possible before the end of the fiscal year ending March 31, 2011. Thereafter, Toshiba and Sony aim to complete the transfer early in the fiscal year ending March 31, 2012, subject to any necessary government approvals.

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