Need even more proof that the semiconductor fabless-foundry model is here to stay? Fabless companies grew at a higher rate than IDMs again in 2012, according to market research firm IC Insights Inc.
In fact, while fabless company sales increased by 6 percent last year, IDMs' sales declined by 4 percent, and total semiconductor sales declined by 2 percent as a whole.
Since 1999, fabless company sales have grown at a higher rate than IDMs in every year but one: 2010, according to IC Insights. That blip on the radar occurred only because the DRAM and NAND flash memory segments—where very few fabless suppliers participate—enjoyed a rare year of explosive growth in 2010. While IDM sales, driven by this growth in memory, increased by 34 percent that year, fabless company sales growth came in at a still pretty robust 29 percent, according to IC Insights.
From 1999 to 2012, the total semiconductor sales increased at a compound annual growth rate (CAGR) of 5 percent, according to IC Insights. IDM sales over this period showed a CAGR of 3 percent, while fabless companies turned in a 16 percent CAGR, according to the firm.
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Back in the day, the big wigs at IDMs like Jerry Sanders of AMD (now a fabless company) famously mocked the fabless-foundry model with the "Real men have fabs" slogan. As recently as last year, no less an authority than Intel manufacturing guru Mark Bohr declared that the fabless model was "collapsing"
after TSMC announced it would offer only one flavor of process technology at the 20-nm node. (Although, let's face it, Bohr is not impartial—a growing rivalry with TSMC and other foundries is only one of the many fronts on which Intel is picking fights.)