ADI Invests €630 Million to Expand Wafer Capacity and Transform in Europe
The chip giant, ADI, recently announced a €630 million investment in its European regional headquarters in Limerick, Ireland, aimed at significantly expanding wafer capacity. Martin Cotter, President of ADI Europe, Middle East, and Africa, stated in an interview with eeNews that ADI used to be an electronic components company but has evolved beyond that.
According to the announcement, ADI plans to establish new research and manufacturing facilities, creating 600 new job positions. This expansion will support ADI's development of next-generation signal processing products for industrial, automotive, and healthcare chips, which do not require cutting-edge process technology. Cotter did not provide specific details on the manufacturing capacity of this plan, but emphasized that the focus should not be solely on the number of wafers produced, but rather on the processes and product varieties that can be manufactured.
Furthermore, the timeline for this project remains uncertain as ADI has applied for the European Union's Important Project of Common European Interest (IPCEI ME/CT) initiative for microelectronics and communication technology. The approval of the EU Commission is required, but the project has already received strong support from the Irish government.
"While many are focused on investments worth billions of dollars in wafer foundries for high-performance chips in data centers, we must remember that all this data comes from the interfaces of the real world. In Limerick, we manufacture circuits for electric vehicles, Industry 4.0, digital healthcare, 5G communications, and more. We see an increasing demand for silicon. Foundries are investing in more advanced digital nodes, but the investment in high-functionality nodes is not sufficient," stated Cotter.
Currently, approximately 50% of ADI's demand is outsourced to foundries. Cotter described their business model as a mix of manufacturing methods, with outsourcing for geometries below 65nm or 40nm. However, for higher geometries, ADI possesses unique products and processes that others cannot replicate. In the range between 180nm and 90nm, ADI can both manufacture internally and outsource.
Therefore, ADI's uniqueness lies in three aspects: "ADI proprietary technologies," an "elastic buffer zone," and the outsourced portion. Cotter added that ADI is not just a component manufacturer but provides multi-level manufacturing and software support in its operating sectors. ADI also operates an integrated passive devices (IPD) wafer fab and may enter into contracts for board-level manufacturing and software additions.
"Cotter emphasized the advantage of ADI's diversity, stating that it manifests in terms of customers, product base, and the services provided.
Although most of ADI's internal manufacturing is based on CMOS, they are also involved in research and development of compound semiconductor manufacturing and new materials such as wide-bandgap materials like silicon carbide and gallium nitride. Cotter said, "We are working on wide-bandgap development and manufacturing some gallium nitride. In terms of end applications, gallium nitride is still niche, but with the emergence of low-voltage gallium nitride, it is opening doors for industrial applications."
It is worth noting that Cotter recently assumed the role of President for ADI in Europe, and the global market trends are shifting towards Europe. Europe's advantageous industries are concentrated in the automotive, industrial, and communication sectors, similar to ADI.
"In the past three years, the electronic content in the automotive industry has doubled, and the average price of electronic products for robots and collaborative robots has increased from $80 to $400. Industry 4.0, electric vehicles, and digital healthcare are growing at a double-digit rate every year," said Cotter.
Cotter also highlighted the astonishing level of automation in newly built factories. Across Europe, there are approximately 60 brand-new battery factories, with each factory costing around $4 billion. These industrial companies have revamped their manufacturing processes, resulting in a 25% reduction in electricity consumption compared to previous generations of factories.
"Europe is playing a crucial role in leading the transformation of industries, automotive, and healthcare," stated Cotter. "The world is changing, and alternative trends are replacing globalization. ADI is seeking more comprehensive solutions. We used to be an electronic components company, but now we are much more than that."
