GLOBALFOUNDRIES Drops 7nm to Focus on Other Geometries

GF put out a press release last week with the title GF Reshapes Technology Portfolio to Intensify Focus on Growing Demand for Differentiated Offerings. What this actually means is that GF is putting its 7nm process development on hold indefinitely. So why would GF do this? 

Although the leading edge processes like 7nm get the spotlight, a huge percentage of designs are done in 22nm, 28nm, and older processes. The design cost is less, the mask cost is less, the fabs are already fully depreciated. GF's FD-SOI can do some things that FinFET processes cannot, in particular putting RF on the same die as digital (my understanding is that you can't do RF with FinFET due to the high gate capacitance, but I make no claim to being an RF expert, I just know enough to be dangerous). It is also cheaper to manufacture, with a shorter cycle time. So from a business point of view, the non-leading edge processes are important. GF have historically had a dual roadmap process strategy (for details, see my post GlobalFoundries' Dual Roadmaps) and now they are focused on one. There are older process nodes too, of course, but the FD-SOI roadmap starts at 22nm with 22FDX, and also adds in eMRAM. The next node is 12FDX which also adds in eNVM. I would predict that the next node after that on that roadmap will be something like 8nm, or as far as they can push FD-SOI without needing to use EUV. By going for differentiated processes that are not insanely expensive to design and manufacture, GF is looking to create a good business, even if it seems a little boring.

But boring is often where a lot of the money is. It reminds me of a guy I sat next to on a plane once who owned several concrete plants in the Midwest. It is a boring business, but it returns over 30% of its invested capital every year. A small town can support one concrete plant but not two. So the competition for that one plant is in the next town over, which may be 50 miles away. Unlike silicon chips, where competition can be anywhere in the world, concrete is heavy. Competition 50 miles away is no competition at all. GF wants to be the concrete manufacturer of semiconductor, not so sexy but nicely profitable.

Another analogy I like to use sometimes is with cars. The most advanced nodes are like Formula-1 racecars, the fastest thing you can build if cost is not much of a consideration. To go fast if you care about cost, a Porsche might be a better choice. And for many applications, a Toyota is just fine. The real money is in the Toyotas, not even the Porsches, and there is a reason Formula-1 teams need a lot of sponsors.

Moore's Law has stopped, not in the sense that 7nm and 5nm will not happen, but in the sense that the economics have changed. The old rule of thumb was that a new process node would be twice the density of the old node, at a 15% cost increase, leaving a reduction in the cost of a given design (or the cost-per-transistor, which comes to the same thing) of 35%. But the cost reduction has pretty much stopped. If you need lower power, or a lot more transistors, these nodes are attractive. If you don't, then there is no economic driver like there was at, say, 180nm where you couldn't compete if your competition moved and you didn't. For many designs, GF's FDX processes are a sweet spot, with low manufacturing costs (a lot fewer masks than FinFET), straightforward to integrate RF and analog, and suitable for all designs except the very highest performance, which really will require 7nm FinFET.

The GF press release summarizes their strategy going forward:

GF is intensifying investment in areas where it has clear differentiation and adds true value for clients, with an emphasis on delivering feature-rich offerings across its portfolio. This includes continued focus on its FDX platform, leading RF offerings (including RF SOI and high-performance SiGe), analog/mixed signal, and other technologies designed for a growing number of applications that require low power, real-time connectivity, and on-board intelligence. GF is uniquely positioned to serve this burgeoning market for “connected intelligence,” with strong demand in new areas such as autonomous driving, IoT and the global transition to 5G.

There was a change of CEO in March when Tom Cauldfield took over as CEO of GF. He is a manufacturing operations guy by background, so reading between those lines is that there is an increased focus on building a profitable manufacturing business and working with a more limited budget than would be required for 7nm and 5nm. Since EUV is not required for older nodes, I am assuming that the work on EUV (or much of it) will also be put on hold.

So now there are just three manufacturers of 7nm FinFET. Technically, in FD-SOI there are also three. ST developed FD-SOI at 28nm and licensed it to both Samsung and GF. But only one company seems to really be taking FD-SOI seriously with a roadmap to the future: GlobalFoundries.

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