The Evolution of Chartered Semiconductor Manufacturing in the Market

Chartered Semiconductor Manufacturing was founded in 1997 in Singapore, and it quickly became a leading provider of semiconductor manufacturing services.

The company's early success was due in part to its focus on providing high-quality, cost-effective manufacturing solutions to its customers.

In 2006, Chartered Semiconductor Manufacturing partnered with IBM to develop a new 300-millimeter wafer fabrication facility.

This partnership marked a significant milestone in the company's history and helped to establish it as a major player in the semiconductor industry.

Chartered Semiconductor Manufacturing was founded in 1987 as a venture that included Singapore Technologies Engineering Ltd.

The company signed a deal in 1994 with Toshiba for the use of their 0.5 micron process technology.

In 1996, Chartered began a partnership with the National University of Singapore and the Nanyang Technological University to develop improvements for the fabrication processes of advanced semiconductors.

Chartered was a world's third largest dedicated independent semiconductor foundry, with its headquarters and main operations located in the Woodlands Industrial Park, Kranji Singapore.

The company was listed on the Singapore Exchange under the trading symbol of CHARTERED, as well as on NASDAQ (CHRT).

In 2000, ST Engineering (Singapore Technologies Semiconductors), a subsidiary of Temasek Holdings acquired Chartered.

Chartered joined the ARM Foundry Program in 2002 and signed a joint development and manufacturing agreement with IBM.

This agreement was extended in 2004, and again in 2005 to include the 45-nanometer (nm) bulk CMOS.

By 2009, Chartered had become a significant player in the semiconductor industry, with a deal announced in September to be acquired by the main stockholder of GlobalFoundries.

The transaction was completed at the end of 2009, costing $1.8 billion USD.

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Chartered operates 6 fabrication facilities, all located in Singapore, including its first 300-mm facility which started commercial shipment in June 2005.

Chartered provides comprehensive wafer fabrication services and technologies to semiconductor suppliers and systems companies.

It works from customers' designs to produce communications chips and does not provide design services, instead partnering with sister firm STATS ChipPAC to offer chip assembly and test services.

Chartered's customer base is primarily high-growth, technologically advanced companies operating in the communication, computer and consumer sectors.

Its main competitors are Taiwanese-based companies TSMC and UMC, which are also major semiconductor foundries.

In 2006, AMD announced that it will manufacture CPUs with Chartered on a 65 nanometer process.

Chartered owns 6 fabrication facilities, all of which are located in Singapore.

These facilities are used to provide comprehensive wafer fabrication services and technologies to semiconductor suppliers and systems companies.

Chartered's first 300-mm facility started commercial shipment in June 2005, making it a state-of-the-art facility at the time.

Besides its own fabs, Chartered operates joint venture facilities with other firms, allowing it to expand its capabilities and reach.

Chartered offers chip assembly and test services through its sister firm STATS ChipPAC, providing a one-stop solution for its customers.

The other major semiconductor foundries include TSMC and UMC, Taiwanese-based companies, which are primarily Chartered's main competitors.

Chartered has alliances with several major companies, including IBM, Infineon, Samsung, and Agere Systems, demonstrating its ability to work with industry leaders.

In 2006, AMD announced that it will manufacture CPUs with Chartered on a 65 nanometer process, further solidifying Chartered's position in the industry.

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The manufacturing process in fabrication facilities is a critical step that requires careful planning and execution. It involves the transformation of raw materials into finished products through various stages, including cutting, shaping, and assembly.

The cutting process is typically done using computer numerical control (CNC) machines or laser cutting technology, which can achieve high precision and speed. This allows for efficient production and minimizes waste.

Fabrication facilities often use a variety of materials, including metals, plastics, and composites, each with its own unique properties and requirements. The choice of material depends on the specific application and desired outcome.

The assembly process is where individual components are brought together to form the final product. This stage requires attention to detail and quality control to ensure that all parts fit together correctly and function as intended.

In some cases, additional processes such as welding, machining, or painting may be necessary to enhance the product's performance or appearance. These processes can add value and complexity to the manufacturing process.

Competing in the Semiconductor Industry is a challenging and ruthlessly competitive space, as demonstrated by Chartered Semiconductor's 22-year journey.

Chartered Semiconductor was Singapore's only big indigenous player in its burgeoning semiconductor industry, and its acquisition by Abu Dhabi's sovereign wealth fund marked the end of its independent entity.

Singapore's economic planners saw chip making as the natural next step for the country's electronics industry, requiring highly skilled and educated workers.

The country's presence in electronics assembly since 1969 made up one of the economy's big industrial exports, with a notable focus on disk drives and memory, where Singapore was the world's disk-drive capital.

Competing in the semiconductor industry is a ruthless game, where leaders will stop at nothing to succeed. Chartered Semiconductor, Singapore's only big indigenous player in the burgeoning semiconductor industry, was a prime example of this.

Chartered had been the third largest independent foundry in the market, but it struggled to turn a profit over its 22-year journey. The company was sold off to Abu Dhabi's sovereign wealth fund in 2009 for $2.5 billion SGD or $1.8 billion USD.

The acquisition marked the end of Chartered's independence, as its operations were merged into Abu Dhabi's GlobalFoundries venture. This is a stark reminder of the challenges and financial losses that can come with competing in the semiconductor industry.

The fact that Chartered, which was supposed to be Singapore's equivalent of Taiwan Semiconductor Manufacturing Company (TSMC), was unable to compete with the likes of TSMC, is a testament to the industry's competitiveness.

Strategic partnerships are crucial for success in the semiconductor industry. They allow companies to pool their resources, expertise, and risk, creating a more formidable competitor.

By partnering with other companies, semiconductor firms can gain access to new technologies, markets, and customers. This can be seen in the partnership between Intel and GlobalFoundries, which allowed Intel to expand its manufacturing capacity.

Strategic partnerships can also help companies reduce their costs and increase their efficiency. For example, the partnership between Samsung and Qualcomm enabled Samsung to develop more advanced mobile processors.

Additional reading: Limited Liability Partnerships Act 2000

In addition to cost savings, strategic partnerships can also provide a competitive edge in terms of innovation. The partnership between TSMC and Apple allowed TSMC to develop more advanced chip designs, giving Apple a significant advantage in the smartphone market.

To succeed in strategic partnerships, companies must be willing to share their expertise and resources. This can be a challenge, especially for companies that are used to operating independently.

On a similar theme: Countryside Partnerships

Chartered Semiconductor Manufacturing (CSM) made rapid progress in the early 1990s, achieving 1.5 microns in 1990, 1.2 microns in 1991, 0.8 microns in 1992, and 0.6 microns in 1993.

Their goal was to advance as fast as possible, and they pushed ahead quickly, driven by a highly motivated team. They announced a new deal with Toshiba in 1994 to use their 0.5 micron process technology.

The Singapore government played a significant role in CSM's growth by offering tax incentives and subsidies to attract multi-national companies. This helped CSM expand its production facilities throughout the 1990s.

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CSM rapidly expanded its production facilities with five foundries on 60 hectares in Northern Singapore. Plans were drawn up for up to 25 such foundries in the near future.

The Singapore government's efforts helped CSM become a major player in the semiconductor industry, eventually placing them in third place behind Taiwanese companies TSMC and UMC.

For your interest: Who Owns Global Foundries

GlobalFoundries was formed from the acquisition of CSM by Abu Dhabi in 2009. They offered $2.68 SGD for CSM's stock, just 2 cents higher than the closing price.

The acquisition was backed by Temasek, the majority holder of CSM, which is why GlobalFoundries didn't feel the need to offer a premium. This deal marked a significant shift in the semiconductor industry.

The company, known colloquially as GloFlo, struggled to execute its business strategy and reach the necessary scale for escape velocity. This was largely due to the market leaders, TSMC and Samsung, executing necessary technical moves to lock in their premium leading-edge customers.

GlobalFoundries attempted to compete with TSMC and Samsung but ultimately ended their 7nm development in 2018 to focus on specialized processes. This move was met with skepticism from internet commenters.

To compete with TSMC, GlobalFoundries needed access to cutting-edge process technology and greater manufacturing capacity. The acquisition of Chartered Semiconductor in 2011 helped boost GlobalFoundries' manufacturing capacity and brought in 150 customers.

The Chartered deal gave GlobalFoundries six more plants, including five that used 200-millimeter silicon wafers and one that used 300-millimeter wafers. This expansion helped GlobalFoundries more than double its total manufacturing capacity by 2014.