SilTerra sees boost from chip industry

By RUPA DAMODARAN

The New Straits Times Press 

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SilTerra Malaysia Sdn Bhd, a semiconductor wafer foundry, is optimistic that the strong consumer-driven semiconductor industry will boost its revenue and sales volume this year.

Executive vice president for sales and marketing Steve Della Rocchetta expects sales to grow on the back of the semiconductor enabled digital devices such as mobile phones, game stations and panel televisions — which require integrated circuits (ICs) that use chips.

“We will grow sales aggressively and impressively this year. The US market will continue to grow, but South Korea, Japan and Taiwan markets will grow at a faster rate, in excess of 45 per cent,” he said in an interview in Kuala Lumpur yesterday.

He said although the first part of 2005 had been somewhat slow, the company managed to record a positive EBITDA (earnings before interest, tax, depreciation and amortisation), for the second year running.

“For the third and fourth quarters of last year, our new customer base had been ramping production impressively.”

The Kulim-based SilTerra, which is majority-owned by Khazanah Nasional Bhd, will ramp up the production of its 0.13 micron process technology this year apart from the introduction of the 0.16 micron process geometry (which is similar to the 0.18 version), he added.

Its Fab 1 facility is expected to reach its maximum production capacity of 40,000 wafers per month this year and he expects some expansion by 2007.

SilTerra will also shrink the production of its 0.22 micron feature size, its oldest wafer technology.

Rocchetta said another boost to the company’s bottom line is its “additional channels” or its business-to-business tie-ups last year with Taiwan-based Goyatek and European provider of silicon integration services, Essensium, last year to develop and support fabless semiconductor customers worldwide.

In the case of Taiwan, Goyatek will provide complete integrated circuit design and silicon intellectual property service while Silterra will provide wafer foundry services — towards product designs requiring process technologies at 0.18- and 0.13-micron and below.

“We have also teamed up with Unive of South Korea and in the pipeline are three more tie-ups with design service provider companies across Asia and the US which we have yet to announce.”

Rocchetta said by providing these tie-ups, SilTerra is able to eat into the market of sector leader Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest supplier of made-to-order chips, as it also provides virtually-identical TSMC matched process technologies.

Of SilTerra’s additional 30 customers in the pipeline, he said almost half came through this alternative channel, and will provide the boost to the revenue and sales volume.

“These new customers are fabless semiconductor companies located around the world and participate in a variety of businesses — chips for cell phones, networking and wireless infrastructure. In terms of size, many are in excess of US$2 billion (RM7.48 billion) in annual turnover while others are small start-ups.”

He is targeting the number of customers to double before the end of the year.


About Silterra Malaysia Sdn. Bhd.:

Silterra Malaysia Sdn. Bhd. is a leading semiconductor wafer foundry that provides advanced foundry standard CMOS logic, high-voltage and mixed-signal/RF technologies. The company’s wafer fab has a designed capacity of 38,000 eight-inch wafers per month. Silterra, which is committed to world-class service and environmental friendliness, received Notable Mention in the Malaysian Prime Minister’s Hibiscus Award competition for Environmental Performance in 2003. The company is ISO 9001:2000 and ISO 14001 certified. Silterra’s headquarters and factory are located in Kulim, Malaysia, and has offices in San Jose (California), Scottsdale (Arizona) and Hsinchu (Taiwan). For additional information on Silterra or its services, please visit www.silterra.com.