Silterra's strategy for success: Q&A with Steve Della
Rocchetta, EVP, Silterra, part three
By Chris Hall
30 December 2005)
Despite the attractions of the fabless-plus-foundry model, any
foundry hoping to compete in an industry dominated by the
likes of UMC and TSMC will need to think carefully about its
strategy. In the case of Silterra, whose production facility
is located in the Kulim High-Tech Park, Malaysia, the strategy
combines carefully timed moves to deep submicron with the
cultivation of mass-market customers. The result is financial
stability after troubled times in the semiconductor industry,
and strategic relationships that include a partnership with
Taiwan design-service house Goyatek. Silterra is also involved
in a joint development project with IMEC in Europe. According
to Steve Della Rocchetta, EVP, Sales and Marketing, Silterra
is going into 2006 with optimism.
DigiTimes.com spoke recently with Della Rocchetta about
Silterra's strategy, technology and prospects. This interview
also includes contributions from Koh Meng Kong (MK), director
of Marketing for Silterra in Asia.
Q: Do you have any comments on the difficulty of designing and
implementing RF and mixed-signal devices in CMOS process? Are
there still special challenges in these areas, or is this kind
of design and fabrication now pretty much standard?
A: When you design for mixed-signal and RF-CMOS devices, the
quality of the model you use is very important. Here I'm
referring to the SPICE models that designers work with. We
believe that one of the factors that differentiates Silterra
is the quality of our RF models. We believe that it's among
the best, if not the best model available for RF technology,
particularly when you're look at it from the point of view of
signal-to-noise ratios as
you extend the gigahertz range. We try to listen to what
designers say and then give them better models with which to
work, so that their silicon has a better chance of having
MK: Our RF model has in fact been fully characterized to
10GHz, and we have demonstrated the model at 10GHz. That's
good enough for wireless LAN, for example, and it goes beyond
what most players in the RF market can supply.
A: Most players in the RF market only characterize their
designs up to 5GHz.
Q: I'm getting a very strong message from you that your
strategy is to focus on mass markets. Clearly RF is becoming a
mass market. What about high voltage and mixed signal?
A: High voltage is a huge market. There are two distinct
market segments. You have large-panel displays, where the
application would typically be digital TV. Then you also have
small-panel displays, and these are typically used for cell
phones – as either the main panel or the sub-panel.
I believe that the small-panel market for cell phones
represents more than a billion displays per year, when you
total both main and sub panels. We are very focused in that
area, and we have industry-leading technology. We have 0.22-,
0.2- and 0.18-micron technologies in production and more
advanced 0.16- and 0.13-micron technologies on the horizon.
We're defending this market very aggressively.
Q: Can you comment on your competitive position in those
A: I think we're very well positioned competitively. We work
very closely with customers to jointly define process
specifications in order to provide them with the most
cost-effective silicon solution. As an example, we fine-tuned
the SRAM cell to 3.99-square-micron for our 0.18-micron
Q: Would you like to make any further comment on your
A: Virtually all designs today incorporate analog to some
degree, so we don't really differentiate between CMOS logic
and CMOS mixed signal. To us those are very much the same, and
of course, these are gigantic markets. We're there at 0.18
micron, moving into 0.13 micron to maintain a competitive
edge, and it's strategically important for us to do that.
Today, CMOS logic is a fast-driving market. If you look at
companies such as Qualcomm, Broadcom and Marvell, these are in
many ways the companies that are driving the technology.
They're adopting 0.13-micron, and 90- and 65-nanometer
processes in rapid fashion. If you don't do 0.13 micron and 90
nanometers, you're going to be relegated to the backwaters of
Q: What would be the backwaters, today?
A: Probably 0.25 micron today, 0.25 micron and above for that
If you look at the predominant designs today, not in terms of
the square inches of silicon they consume, but in terms of the
actual number of designs, 0.18 micron is still the number one
designed-in technology, and by quite a wide margin, with 0.13
micron starting to move up. So as far as CMOS logic and
mixed-signal are concerned, there are very few designs being
done today at 0.25-micron and above.
Q: In pursuing mass markets, would it be true to say that your
broad strategy is to try and collect, at lower pricing,
customers who would otherwise be picked up by TSMC and UMC?
A: It's fair to say that's part of our strategy, yes.
Particularly when you are in the multi-sourced customer-owned
tooling (COT) market, there's almost no getting around that.
Obviously, we intend to move to a primary-source strategy, but
that takes time. I have a saying, "No foundry manager
ever got fired for selecting TSMC." That's a kind of
variation on the old saying, "No IT director ever got
fired for choosing IBM!" So for a newcomer like us, it
really takes a while to achieve a level of trust where you can
begin to be the initial source or the primary source of design
work. It takes a while.
Q: That would also be a question of yield and right-first-time
silicon, and so on?
A: Exactly. A smooth factory operation, a good cycle time and
good fab execution, these are obviously crucial. You have to
do it right every time, and you have to be able to do it in
under four weeks.
Q: Can you sketch in Silterra's financial state of health,
profitability, business strategy and so on?
A: In 2004, we were EBITDA positive, and likewise for 2005 and
2006. We're optimistic about 2006. It's always hazardous to
predict the future, but it seems to me that about every five
years a silicon shortage comes along, and it appears we are
due for another shortage in 2006. If you look back at history,
the last time that happened was in 1999-2000, and previous to
that was 1994-1995. I believe that if the foundries can
control their rates of
capital investment, and business continues on its current
trajectory, next year could be a very good year for us and for
the industry in general.
In the meantime, I can say that we control our costs very
well. We don't add capital until we need it, so we have a good
Q: Your production base is in Malaysia. How has that worked
out for Silterra?
A: I think it's a good strategic location, simply because of
the predominance of back-end operations in Malaysia and the
Penang area. Apart from that, we also have the same kind of
incentives that you would get in Singapore or in Taiwan, so I
would say that the playing field is very flat in that regard.
Labor isn't really a big issue for wafer fabs. Our labor costs
are in line with those of everyone else. It really comes down
to your capital costs and your operational efficiency. These
are the things that really separate the men from the boys.
Silterra Malaysia Sdn. Bhd.:
Market demand driven, SilTerra Malaysia Sdn Bhd is a
semiconductor wafer foundry offering major foundry compatible
CMOS logic, high-voltage and mixed-signal/RF technologies down
to 0.13-micron feature size. This includes complete,
competitive contract manufacturing for fabless and IDM
customers’ designs. SilTerra’s wafer fab has a design
capacity of 40,000 eight-inch wafers per month.
vigilant, SilTerra delivers award winning, world-class
performance to its customers seeking flexible capacity,
competitive advantages and around the clock customer support.
SilTerra is ISO 9001:2000 and ISO 14001 certified. Founded in
1995, the company’s headquarters and factory are located in
Malaysia’s Kulim High-Tech Park, and SilTerra has sales and
marketing offices in San Jose (California) and Hsinchu
(Taiwan). For additional information on SilTerra or its
services, please visit www.silterra.com.
Koh Meng Kong
+6-012-491-0425 (Cell phone)
Lu Ping Chiang
Tel : +886-3-574-1587 (o)