IBM's $2.5B fab turns Hudson into silicon valley

IBM's $2.5B fab turns Hudson into silicon valley
EAST FISHKILL, N.Y. — As leading U.S. semiconductor companies forge ahead with 300-mm fabs — downturn be damned — New York's Hudson Valley region is angling for status as a silicon valley in its own right, led by longtime-presence IBM.

Among the three announced openings this year — by Texas Instruments, Intel and IBM Microelectronics — IBM's fab, in Building 323 here, will be the only one that, when fully deployed, will produce chips using all three of the sophisticated technologies on the industry's bleeding edge: low-k dielectrics, copper interconnect and silicon-on-insulator based transistors. IBM will use the triple threat to build up chips on 12-inch wafers that pass from station to station in wafer pods on centrally controlled, automated, elevated rails.

The company brought the $2.5 billion fab on stream last week, two weeks after International Sematech and the State University of New York at Albany announced plans to establish a Sematech North branch in the Hudson Valley to develop next-generation lithography processes. IBM has a hand in the Sematech North project, in which the company and the state plan to invest $325 million. The initiative includes a five-year project to develop an extreme-ultraviolet lithography infrastructure.

IBM's $2.5 billion fab represents the largest private-sector investment in New York state history and the nation's largest since 1995, with 1,000 jobs expected to be created as a result at East Fishkill Hudson Valley Research Park. The fab is part of a $5 billion capital investment program launched in October 2000 to create a broad-based manufacturing hub in the state.

'Better place to work'

"IBM has been a critical partner in our economic development efforts, which will bring thousands of good high-tech jobs to our state," said New York Gov. George E. Pataki at the fab's ribbon-cutting ceremony. In a dig at the valley more widely associated with chip development, Pataki quipped, "I've been to Silicon Valley. They don't have the trees we have. They have earthquakes, and their lights go out. Hudson Valley is a much better place to innovate and work."

But until recently there were no guarantees that IBM would remain a presence in the region. The talks that ultimately kept IBM in New York commenced in 1994 and involved complex negotiations with the state.

Calling the 300-mm facility "the center of nanotechnology," John Kelly, an IBM senior vice president and group executive of the Technology Group, recalled that developers working in the Hudson Valley had deployed single-transistor devices to form the backbone of the IBM 360 mainframe back in the 1950s. "Today we can't even imagine the products that will be produced as a result of this new state-of-the-art fab," Kelly said. "One thing is for sure: We couldn't have done it without the support of the state."

Kelly said that the company's Burlington, Vt., plants are running at full capacity and that demand for microchips manufactured with the latest technologies has remained strong even in the downturn. Customers for the chips manufactured at East Fishkill will include game system makers Nintendo and Sony.

Full qualification of 300-mm wafers and the start of volume production of 0.1-micron chips are expected in 2003. Today, some 100 processing tools are putting wafer lots through their paces in the refurbished plant, which until 1993 had been used to manufacture bipolar chips on 5-inch wafers. To accommodate the 300-mm equipment, IBM had to take down 4.5 million pounds of concrete to raise the roof 4 feet.

"What's good about this facility is that the development area and the manufacturing area are under one roof," said Richard Brilla, director of 300-mm operations. "As we produce 130-nm devices, we will test out the 90-nm and 65-nm nodes right here, allowing for a quick transfer to production later."

The 300-mm development line will consume 34,000 square feet of the building's 140,000 square feet of clean-room space.

The state of automation in Building 323 is such that 20,000 sensors are used to track wafer lots in front-opening unified pods that are transported from one tool to the next on rails using linear induction motors. The setup resembles an intricate monorail system tuned to millimeter-precision specs. A central control system monitors all stations and tracks wafer lots via 802.11 wireless communications. Technicians and engineers in bunny suits walk the floor with wireless PC notebooks, monitoring the lots.

"This is the first fab whose IT infrastructure is all Linux-based, controlled by some 1,700 1-GHz microprocessors able to access some 600 terabytes of data," said Perry Hartswick, project manager for factory integration solutions. "Together with Cisco, we developed this IT manufacturing environment with off-the-shelf parts."

Linux beats Windows

Hartswick said Linux was evaluated against a Windows-based system and performed flawlessly for three months, whereas the Windows-based system failed after six or seven days.

An internally developed master software system called SiView controls all manufacturing operations. An IBM spokesperson said the manufacturing execution system is being licensed to others for fab control.

As for the intended output of Building 323, Bijan Davari, vice president for technology and emerging products, said the company has "spent $500 million on process development alone in order to maintain our technology leadership, and we are experiencing a significant recovery via intellectual-property licensing and alliances. Our value proposition is that we are one to two years ahead of the best of the best."

Davari, whose mission is to drive industry-defined breakthroughs from the laboratory into manufacturing as quickly as possible, maintained that "IBM is not a me-too foundry business" but works with a set of customers that are able to leverage the best technology.

"We will be expanding the PowerPC licenses, and we will provide functional integration between EDA [electronic design automation] tools and processing tools for our customers," said Davari. About two-thirds of the 300-mm fab capacity will be for OEM use, Davari added.

"Technology continues to be one of our cornerstones in delivering value to our customers," Samuel Palmisano, IBM's president and chief executive officer, said at the ceremony. Palmisano thinks the 300-mm facility will play a major role in IBM's continued collaboration with New York state and the state's university system.

Alian Kaloyeros of the State University at Albany, who is involved in student recruiting, quipped that "with so many of our students going straight from school to work for IBM, sometimes I feel that I am working for [John] Kelly, but without pay." Davari concurred that "a very large contingent of new physicists out of school yearn for the chance of working at the leading edge of technology here."

"Unlike others who go fabless and whose technologies are all starting to look the same, IBM Microelectronics is expanding into the high-volume foundry space with the added-value resources customers want and the capacity they need," concluded Michel Mayer, general manager of IBM Microelectronics.

But in this economic environment, it remains to be seen whether the fab will help New York realize its ambitions as a semiconductor manufacturing center or set those dreams adrift on the Hudson.