LONDON – IBM appears set to gradually back away from semiconductor manufacturing and to rely for its leading-edge silicon on Samsung and GlobalFoundries as foundry suppliers. Both Samsung and GlobalFoundries are set to have wafer fabs for foundry operations in the United States, which could help cement relations.
IBM, GlobalFoundries and Samsung are set to co-host the Common Platform Alliance Technology Forum at the Santa Clara Convention Center in California on January 18, 2011, but whereas GlobalFoundries and Samsung are set to spend $12 billion in 2011, IBM's spending is likely to be less than $500 million according to data from an analyst at market research firm Gartner.
For years IBM has been a beacon of research in semiconductor technology and had carried that work into manufacturing with its own processes and wafer fabs. As well as including aggressive process miniaturization its pioneering work has included high-frequency RF on CMOS and silicon-on-insulator. Such was its leading position in research that it was able to drive the Common Platform Alliance as a means of sharing semiconductor process research costs.
But an analysis of the capital expenditure plans show that IBM is gradually allowing itself to exit from leading-edge manufacturing at high volume. IBM appears to have joined the broad class of semiconductor companies that will never build a major wafer fab again.
An examination of capital expenditure data from Gartner reveals that the last time IBM spent more than $1 billion on semiconductor capital expenditure in one year was 2004, when it was the 11th biggest spender.
IBM is not in the top 20 of semiconductor capital expenditure in 2010 and nor is it expected to be in the top 20 in 2011, according to Bob Johnson, research vice president with Gartner.
There are going to be 10 or 11 companies in the billion-dollar capex club in 2011, according to Johnson's latest figures. The top 20, with their spending in millions of dollars, is currently set to be:
Most of the discussions are centered around the high cost of migrating to newer technology nodes and the ensuing high cost of equipment, hence consolidation. But the industry is also seeing an evolution of sorts with 3D chips stacking using older technology nodes. So isn't there a potential for new tools albeit lesser expensive that can give a leg up to the smaller companies to stay afloat without getting consolidated?
It seems to me that the talk of consolidation is a bit premature for across the board but will happen in select segments.
Dr. MP Divakar
Its all about streamlining your effort. If they feel lot of energy and money is being wasted in FAB research and they just want to concentrate on the design part what is wrong. I would call it disciple rather than self-imposed strangulation.
Thanks for this article. Yes, you are correct. For years IBM has been a beacon of research in semiconductor technology. I recall reading an article about this project years ago. I hope they are making better progress.
At the moment, the concept of consolidating costs and moving to fab-lite or fabless seems very reasonable. However, I believe that there is a point when the narrowing of options will cause problems for a lot of companies - especially the ones that require the latest and most advanced nodes. As I can see, there are at the moment two advanced options for foundries: TSMC and GlobalFoundries. Samsung will likely become a third option (and could Intel become a fourth? I'm not so sure about that but let's consider it). Suppose there is a company like nVidia. It can not manufacture at Intel nor GlobalFoundries for competitive reasons. As it is pursuing more and more the embedded market with the Tegra lines, maybe it will be hard for nVidia to manufacture its chips at a direct competitor Samsung. So, it practically has only one option - TSMC. If the latter screws a process (and we know how probable this is) it has a serious problem if at least one of its competitors can manage to manufacture to a different facility which does not face these problems.
Increasingly there will be other companies in a similar position.
Why not cut down on R&D as well ... that would save a whole bunch of money too! Sorry but cutting expenses like these doesn't grow your business ... it's a long slow death by self-imposed strangulation.
That's 2 very big 'ifs'. At 22nm and below, second sourcing will be history - transistor variability and ever-more complex DFM will take care of that - and leading-edge capacity, always tight, will be run even more leaner by the foundries (assuming there will be more than one 'real' choice) anxious to run in under rather than over capacity mode. Hey ho!
Peter, that is really an old news - we both know that. IBM is a system and R&D/Engineering services company and usually a decade ahead of the rest of the industry in strategic directions, including with its asset-lite strategy.
Its research is formidable and critical to, for example, GlobalFoundries' long-term viability. I was one of questining TSMC's prowess in research - versus its superb strengths in low cost manufacturing and customer service.
However, recently I was impressed by breakthrough credit to TSMC by Dr. Kelin J Kuhn, Intel Fellow, Director of Advanced Device Technology, Portland Technology Development. She led the development of 90nm, 45nm, 22nm and 15nm process technologies at Intel and is currently engaged in the development of the 11nm CMOS process technologies:
"Recently, TSMC found a method to overcome a technical problem related to fin FETs, which I have been concerning about for a long time. It developed a technology to apply strong strain to the channel of fin FET. This is a major advance toward commercial production of fin FETs."
Of course, we can be sure that both Intel and IBM are deep in the "post-silicon" IC research...
Boris @ Petrov Group
David Patterson, known for his pioneering research that led to RAID, clusters and more, is part of a team at UC Berkeley that recently made its RISC-V processor architecture an open source hardware offering. We talk with Patterson and one of his colleagues behind the effort about the opportunities they see, what new kinds of designs they hope to enable and what it means for today’s commercial processor giants such as Intel, ARM and Imagination Technologies.