Qualcomm and some other companies are leaving money on the table because they can't get enough 28-nm chips to meet demand out of foundry TSMC. That has driven companies into the arms of other foundries but could it also prompt a return the customer-funded joint venture fab designed to guarantee IC supplies for the backers?
Firstly it must be considered that circumstances are different now.
Back then foundries were about manufacturing and supply and the machine-readable interface between design and manufacturing was relatively straightforward and clean. You put in your masks and you got your chips back. It has become a lot more complex and iterative now with IP coming from multiple sources and at the leading-edge much of it is by definition not silicon-proven.
So now, I would argue, there are are two things to think hard about; manufacturing capacity and manufacturing technology.
Right now there is plenty of foundry capacity available; but not at the leading-edge 28-nm process node, exactly the place where there has been an arms race in processors for mobile applications.
That foundry undersupply at the leading edge is accentuated by the fact that fully-fabbed chip giant Intel Corp. is turning up the heat on the foundries – and through them on Qualcomm and others in the mobile device sector – with its launch of 22-nm FinFET silicon.
If Qualcomm and others were to team up and invest in a joint venture wafer fab, presumably with an experienced chip manufacturer – such as a TSMC, Samsung, Globalfoundries or UMC – it might help them with capacity at the 22-nm/20-nm node but only in 2013 or 2014. And they could potentially be outflanked in terms of process technology or any fabless chip companies that Intel my chose to work with.
Therefore the more important need is for Qualcomm those of its fabless peers who want to compete at the leading edge to collaborate to help the foundries make up ground on Intel in terms of process technology. And that requires a longer term view and a focus on how 14-nm silicon is going to be made and ramped into volume production. In effect, Qualcomm and its peers may be able to avoid the capital cost of owning their own wafer fabs but they can no longer ignore the cost and progress of process development R&D.
Qualcomm for one has said it does not deem it necessary to become an IDM to continue to thrive in the semiconductor business, but that it will likely get closer to its foundry partners. I interpret that to mean that Qualcomm and its leading-edge peers will have to spend R&D money in aggregate to help TSMC and one or two other foundries compete with Intel, but in return could get first claim on the capacity to manufacture the resulting leading edge process technology. And a joint venture fab part funded by the customers would be one way to account for it.
Well one of the points that i tried to tease out in this analysis/opinion piece is that Qualcomm and others may need to enter into a Crolles-style joint venture that is as much about process development as it is about manufacturing capacity. OR watch an IDM continue to eat their lunch even when there is a foundry oversupply situation.
I agree with Peter here. What Qualcomm and Co. need is a long term view. Intel had a process technology advantage because of the economies of scale of its x86 processor business. That is no longer the case (the PC market is no longer the cash cow it used to be and x86 in mobile does not make much sense IMO). So if Qualcomm and Co. invest heavily in R&D in the form of a JV fab, ultimately they will bridge the gap and surpass Intel in leading process technology.
This article shows how important it is to have your own manufacturing. Besides the points raised in this article, there is the additional risk of foundries creating their own products directly or indirectly (Samsung anyone) in which case the fabless companies would have funded their competition.
Qualcomm is much more likely to use their money to help the other foundries catch up to TSMC than to build their own fab. There mistake was waiting so long to start. They appear to be spreading it around now, but it will take awhile. 28nm may be old news by then. It might make more sense to help one of more fabs pull in the jump to 14nm with FinFets than to pour the money into 28nm capacity.
Interesting article. Intel does seem to hold quite a few important cards in their hand. I think one of the reasons that AMDs Athlon & Opteron products didn't do better is because Intel is a lot more than just design & archtecture. When their designs weren't as good as their competition, they were still to out-muscle them with faster transistors and lower die costs due to their powerful manufacturing division. Intel held about a process node advantage over AMD during all of that time and even when AMD was architecture-competitive, they were still beaten by process technology & Intel's lower costs. And now it's history. AMD is w/o a fab.
I expect Intel to do a repeat of this bit of history with the ultra mobiles. They have even more of a commanding lead in process technology than a few years ago and now have a competitive smartphone. They'll quickly move it to 22nm and to 14nm within a year after that. They just forecasted that ~25% of their mainstream CPU product shipments in Q2 with be 22nm. This is a huge volume.
It would seem that their 22nm process is pretty healthy. Die supply for the very much smaller Medfield chips and its successor will never be an issue. Intel has been hitting on all cyclinders for several years & I expect them to start pulling ahead by the end of 2012 and extending that lead in 2013 with 14nm.
There were a number of JV fabs built in 90's. UMC has USC, UICC, et al. Chartered had 3 fabs that were JV's with IDM/fabless companies. In my opinion, you picked the wrong one to use as an example. The Camus fab was built far from the other TSMC fabs and suffered some unique problems associated with that distance and culture. The UMC fabs were all built in Hsinchu and the Chartered fabs were all built in Singapore. There were pros and cons to the concept, but you are better served by looking at ones other than Camus for judging a potential return to the concept.
I don't think that even Qualcomm is big enough to own JV fabs. It does not make any sense to own JV financially. Each generation of process development is multi-billion dollar effort PLUS it will cost JV $6-$7B to build just one 28nm fab. Qualcomm is running 28nm poly-Sion process not HKMG. So using HKMG is another story. For HKMG, TSMC and Common platform uses different gate stacks - gate last vs. gate first. This means Qualcomm has to port designs from one technology to the other along with all their IPs/design enablements. I don't believe they even have enough resources and money to maintain one generation of process and products with multiple technologies/foundries. How about 20nm? and 14-finfet? So this whole story simple does not make any sense.
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