SAN JOSE -- Chip maker austriamicrosystems AG of Austria is pushing hard to put itself on the semiconductor map--globally speaking. The 22-year-old semiconductor company says it is taking aggressive steps to make a name for itself outside of Europe as a major supplier of ASICs and specialty foundry processes for worldwide customers.
For years, Graz-based austriamicrosystems has operated a modest 4-inch wafer fab, capable of producing 3.0- to 0.8-micron chip designs. But recently, the company began ramping up a new 8-inch (200-mm) wafer fab, initially with a 0.8-micron process, said company officials during a visit in Silicon Valley with SBN this week.
But starting in June, the Austrian chip company plans to begin producing ICs with a 0.35-micron mixed-signal CMOS process in the new fab. The company licensed this technology last year from foundry powerhouse Taiwan Semiconductor Manufacturing Co. Ltd. The TSMC technology will enable the Austrian chip maker to develop mixed-signal, radio-frequency (RF), and high-voltage devices, based on BiCMOS, CMOS, and silicon-germanium (SiGe) processes, said company officials.
The Austrian company aims to be both an ASIC and application specific standard product (ASSP) supplier while honing its foundry business on niches and speciality processes. "We don't compete in the digital CMOS market against TSMC, UMC, and Chartered," said Peter Gasteiner, director of worldwide sales and marketing for the Silicon Foundry Business Unit at austriamicrosystems. "We're not in that league," he said, referring to the "Big Three" foundry players.
Two weeks ago, austriamicrosystems announced development of a new generation of design functions in an ASIC library for electro-optical interface ICs for passive optical networks (PON). In addition, the company said it has created a new chip set, called Key Electro-Optical Elements (KEOPE), which will be fabricated in a high-speed, low-power SiGe technology (see April 24 story).
In a move to develop ASSP devices for wireless Bluetooth connections, austriamicrosystems has teamed up with Wipro Technologies Ltd. of India. The two companies will package austriamicrosystems' Bluetooth-enabled radio-frequency (RF) technology and Wipro's baseband intellectual property (IP) design cores (see Feb. 18 story).
A unifying strategy between the business segments at the company is to become better known in the U.S. market, said officials at austriamicrosystems, which was formerly called Austria Mikro Systeme International GmbH.
"We provide ASICs and ASSPs," Gasteiner explained. "We also call ourselves a full service foundry company."
In fact, the company promotes itself as a one-stop shop for foundry services--offering IC design, wafer-processing, and testing services. It also has its own, internal blank photomask shop and a ceramic-chip packaging facility.
In its fast-growing foundry business, the company focuses on specialty markets, Gasteiner said. "Our focus is mixed-signal, RF, and high-voltage," he said during an interview at the company's U.S. headquarters in San Jose on Thursday.
In the so-called "specialty" mixed-signal foundry arena, however, austriamicrosystems does compete against several companies, including two of its former partners in the semiconductor business: AMI Semiconductor Inc. of Pocatello, Idaho and X-Fab Semiconductor Foundries AG of Germany. In addition, austriamicrosystems also considers PolarFab Inc. of Minneapolis, Minn., as another key foundry competitor as well in the U.S. market.
The Name Game
Founded in 1981, the Austrian chip supplier was first known as Austria GmbH. The company originally was a joint venture between Voest-Alpine AG of Austria and semiconductor pioneer AMI (then called American Micro Systems Inc.) In 1988, AMI broke off its ties with Austria GmbH. Today--like austriamicrosystems--AMI offers both ASICs as well as competitive foundry services.
Meanwhile, in 1987, Voest-Alpine acquired Austria GmbH, which then was renamed Austria Mikro Systeme International GmbH. And during the mid-1990s, Austria Mikro was affiliated with another future competitor--X-Fab Semiconductor. But two years ago, the Austrian chip maker parted ways with the Germany foundry provider.
In 2000, Aspern Industrie Beteiligungs AG acquired more than 98% of Austria Mikro's stock. And then last year, the chip maker assumed the new and less known name of austriamicrosystems.
Today, the chip maker has 940 employees worldwide and it focuses on four main IC markets: automotive, communications, industrial, and foundry services. Its sales are split 50/50 between its own chip products and foundry services.
This diversity enabled the company's sales to grow last year in spite of the IC downturn, from 121.9 million euros ($107 million) in 2000 to 147.5 million euros ($130 million) in 2001. Despite the 16% growth in revenues, profits dropped from 7 million euros ($6.2 million) in 2000 to 5.5 million euros ($4.8 million) last year.
For 2002, the company is painting a mixed picture. It projects that its foundry business will grow faster than its own chip lines. "It's a little bit of bad luck that we're opening a new fab during the downturn, but we're seeing some signs that the upturn is coming," Gasteiner observed.
Another major challenge is that the Austrian chip maker is attempting to expand its horizons on the heels of the worst downturn ever in semiconductor history. In 2001, about 75% of the company's sales were in Europe, 18% in North America, 6% in Asia-Pacific, and just 1% in Japan.
Initially, austriamicrosystems intends to expand its efforts in North America, but the company also knows it faces an identity challenge. "We are not really known in the U.S., but still, we think we have a lot of opportunities in North America," Gasteiner said.
Staffing up in U.S.
To became a better known chip player, the company took some drastic steps. Last month, it named semiconductor veteran John A. Heugle as its new president and CEO, replacing Hans Jorg Kaltenbrunner, who resigned from the company (see April 19 story). Industry insiders believe Heugle will be more of a marketing-oriented leader, pushing the company to expand its efforts into the U.S. and other markets worldwide.
In the U.S. market, the chip maker is also beefing up its staff. Recently, it named foundry veteran Eric Gunn formerly of ESM Ltd., as its director of technical sales in North America for its Silicon Foundry Business Unit.
At the same time, it is also ramping up its new 8-inch fab to support its own chip lines and the foundry business. The plant, which cost some 305 million euros ($268 million), is capable making 150,000 wafers a year.
At present, the company is ramping up 0.8-micron devices, but it will soon begin prototyping using TSMC's 0.35-micron process. Production for its own ASIC, ASSPs and standard chip lines will begin in June, according to the company.
In August, austriamicrosystems plans to begin qualifying 0.35-micron devices for foundry customers. The company will offer "a standard, mixed-signal CMOS process," Gunn said. "We can add BiCMOS, SiGe and high-voltage modules to the process," Gunn told SBN.
The company has been developing SiGe processes for some time. In 2000, it expanded its efforts by signing a deal IQE Silicon Compounds Ltd. of the United Kingdom. Under the terms, IQE will supply SiGe epitaxial wafers to austriamicrosystems.
As part of the collaboration, austriamicrosystems has transferred its production proven SiGe process know-how to IQE, allowing IQE to act as an identical source of SiGe wafers for austriamicrosystems.
Besides SiGe, the Austrian chip maker is gearing up its mixed-signal, RF, and a high-voltage process. Its high-voltage process is geared for automotive and other applications. It will provide both 70- and 90-volt modules.
