Although Qualcomm, as fifth largest chip company, has about $6 billion of cash on hand, I don't think Jacob's reported sentiment means that Qualcomm is going to leave the ranks of the fabless any time soon. There are many ways to finesse ownership issues and almost all of them will be about partnership and finding common ground.
So for me this disclosure is more about the likes of Globalfoundries, Samsung and Intel, versus Taiwan Semiconductor Manufacturing Co. Ltd. and playing one of against another than it is about the creation of the Qualcomm Semiconductor Manufacturing Company.
Such is the long lead-time and high expense of bring up wafer fabs – typically between $5 billion and $10 billion at today's leading-edge – it is almost impossible to think Qualcomm would start from scratch on chip manufacturing.
An alternative would be for Qualcomm to buy all or a part-share in an existing wafer fab that can produce its processors. Some chip manufacturers are struggling for profitability and might be willing to cut a deal, although most of the chip companies able to manufacture at 28-nm and 20-nm are in a more profitable situation. Nonetheless at the leading-edge capital expenditure is ferocious and Qualcomm has been piling up the cash and has interest in changing a situation that has left it short of chips and disappointing customers.
Another more likely possibility is that Qualcomm would be asked to put a significant amount of cash down to reserve a proportion of the output of an existing leading-edge wafer fab's output. Such part equity, part pre-payment deals have existed in the past although the circumstances that have driven their creation have not always been long-lived. And Jacob's himself has said that the 28-nm chip supply situation is improving and Qualcomm would hope to be meeting customers' requirements by the end of 2012.
So if Jacob's musings are about partnership who is he thinking about partnering with?
Taking multiple approach rather than relying on one company could benefit Qualcomm. Rather than spending money and resources on buying a stake in fab, Qualcomm can buy advance nodes chips from Samsung and other chips from GF. Both should be desperate to expand their business due to Apple looking for another chip supplier than Samsung and GF looking to expand to Abu Dhabi.
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