TI expands analog capacity with Japan fab buys

TI expects the fab acquisition will support more than $1 billion in annual revenue. Additional tools acquired will be moved to TI's 300-mm analog fab, RFAB, in Texas.

By Suzanne Deffree, Managing editor, news -- EDN, July 15, 2010

Texas Instruments Inc is again expanding its analog capacity, announcing Wednesday that it will purchase additional wafer fabs and related manufacturing equipment from Spansion Japan Ltd (SJL).

The fabs are located in Aizu-Wakamatsu, Japan, about two hours north of Tokyo. TI did not state the price of its purchase, only saying that the buy allows it to "cost-effectively" increase its production capacity.

The purchase includes a 200-mm wafer fab currently in operation that is capable of expanding TI's analog revenue by more than $1 billion annually, as well as a second non-operating wafer fab for either 200-mm or 300-mm production. TI said it will continue running the first fab and will preserve the second fab for future capacity expansion. The company further said it plans to offer employment to almost all of SJL employees in Aizu.

The acquisition is the most recent in a series of analog manufacturing expansions announced by TI over the past 24 months that collectively will add capacity for more than $3.5 billion of additional analog revenue per year when fully operational. The expansions have received much praise from financial analysts, who highlight TI's moves in the burgeoning analog market and its thrifty buys during the downturn. Most often noted is TI's RFAB, the industry's first 300-mm analog wafer fab that TI opened in September 2009 and outfitted with tools it purchased "at an opportune price" from struggling Qimonda. After reporting positive results for its Q1 in part based on its analog business, TI in April announced it would double the Richardson, Texas-based fab's capacity, bringing its revenue capability to about $2 billion.

"Analog technology is increasingly important as the vital link between the real world and digital domain in all electronic applications," said Gregg Lowe, senior vice president in charge of TI's analog business, in a statement. "This latest addition of analog capacity will further increase TI's ability to support our customers' growth, now and in the future."

The SJL purchase includes 300-mm production tools, many of which will be moved to RFAB. Other 300-mm tools that come with the acquisition in Japan are not needed for TI's advanced analog technology processes and will be re-sold, the company said. TI already has at least one buyer. UMC today said it will purchase numerous advanced 300-mm CMOS manufacturing tools from TI upon closure of its SJL buy. The foundry did not disclose its purchasing price.