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Welcome to the 'fab-tight' era, says Penn

12/15/2010 08:24 AM EST
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Baolt
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re: Welcome to the 'fab-tight' era, says Penn
Baolt   12/24/2010 1:13:38 AM
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Many chip company has gone to fab lite because of economic downturn and advanteges of foundry services. However as soon as the economic situation comes back normal i dont think theyd be gone for fabless phase. The nicest example of fabless company model is AMD, where they were battling against intel. No need to talk about who is the winner of the race (ok let say AMD had some other issues but main thing was lack of production capacity/advanced pricing) Yeah, its true that building up a new fab gets more and more expensive and few can bear it but the rule is the same. Who is really eagered to be involved and win the game. Abu dhabi has money and would like to power up anybody who would be in their side. Who knows about Chinese fellows and their dreams I still dont think tight capacity and foundry fact would effect future of semiconductor markets that dramatically, its rather effecting speed of release of innovative electronics and of course the increasing the cost/value. in any case who has the money and will, can still gear up for higher capacity if their need increases. Example? TI and their vertical implementation of fabs, toshiba and now sony...So who has the money still can get fab capacity without need to deal with foundry.

Silicon_Smith
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re: Welcome to the 'fab-tight' era, says Penn
Silicon_Smith   12/22/2010 4:55:18 PM
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Agree. I think the few companies who are still holding onto and expanding their fabs while working on innovative products will win over the new and up coming players due to this scenario in the long run. It is neccessary for a more ambitious semiconductor company to retain considerable independance on the manufacturing front.

docdivakar
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re: Welcome to the 'fab-tight' era, says Penn
docdivakar   12/20/2010 8:04:28 PM
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I believe there is a healthy market for MEMS devices which do not need a state-of-the-art fab and the associated big price tag. These along with 3D chip integration via stacking are expected to provide economies of value as an alternative to few IDM's that afford economies of scale. The 3D integration though may be more a packaging and assembly play at the backend than the fab at the front. How ever, the 3D 'flows' are still evolving, it will be interesting what 2011 brings. Dr. MP Divakar

wilber_xbox
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re: Welcome to the 'fab-tight' era, says Penn
wilber_xbox   12/19/2010 12:07:07 PM
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I agree with dakeste that the cost of the fab is going to be so much that single company will not be able to afford the cost. But i think that this is just one scenario. Another scenario can be a monopoly (single or consortium) so that to be able to control the market prices better.

Dave.Dykstra
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re: Welcome to the 'fab-tight' era, says Penn
Dave.Dykstra   12/18/2010 10:52:08 PM
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Well, fab-light or fab-tight or fab-less, right now there is more concern over where the worlds economies are heading in the short term and that leads to a lack of investment until there appears to be more short term certainty.

gnipho
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re: Welcome to the 'fab-tight' era, says Penn
gnipho   12/18/2010 7:12:51 PM
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@Peter with 'new foundries eager for market share' i actually meant only Samsung and GF. I agree that apart from these two there probably isn't anyone else who has both the money, the technology and the will to become a major foundry player.

RobDinsmore
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re: Welcome to the 'fab-tight' era, says Penn
RobDinsmore   12/17/2010 4:25:22 PM
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450mm will not be possible until Intel builds D1X or TSMC, GF or Samsung builds a 450mm ready fab to house the tools. Even then where are the tools? Nobody, that I am aware of, has even built a prototype 450mm production tool. Scaling a production process from 300mm to 450mm is going to be very challenging, to say the least. If we go by Intel's model, it will take them 2 years to get 450mm process up and running once the tools are in place. Maybe 18months if they can transfer the previous process from 300-450 smoothly. Regardless that time is after the tools are developed and manufactured en mass. One thing that I don't like about this fab light, tight or whatever strategy, is that we do not have the R&D capacity for new technologies to be developed and incorporated into new devices. Foundries are all about using the same few processes to fab logic, dram, flash, bulk ICs, etc, and they are only looking to develop technologies that will fit those needs. What innovative technologies are we missing out on because companies cannot invest in technologies that are a little more out there? I mean things like superconducting quantum computation or other interesting analog technologies that come from cutting edge device research in academia. These types of technology really need an industrial approach to get them working, but the prevalence of the fab-light-tight model will have them labeled as too risky and unfundable.

Peter Clarke
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re: Welcome to the 'fab-tight' era, says Penn
Peter Clarke   12/17/2010 12:42:54 PM
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OK....I can see production on 450-mm diameter wafers coming from say, Intel, Samsung and TSMC, for example. But only after a period of stand-off when each waits for one of the others to commit the funds and pay the price of going first. So Floating Gate when do you see 450-mm production starting... 2015, 2020 or 2025 or later?....and a new player?....maybe in a niche ....but not in high volume, not on 450-mm wafers, surely?

Peter Clarke
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re: Welcome to the 'fab-tight' era, says Penn
Peter Clarke   12/17/2010 12:38:21 PM
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Some older or more specialized technologies perhaps. But in essence wafer production is about economies of scale and whoever makes on the biggest wafers in the biggest volumes has the per-chip price advantage. The problem is you have to commit to spend $5 to $10 billion to do that. So it comes down to the cost of capital. In Taiwan TSMC was encouraged and supported has now achieved a leading position. In Abu Dhabi they are providing about $10 billion to give GlobalFoundries a chance of getting established. That is helping to produce the GlobalFoundries' New York wafer fab but apart from that i don't see much reason for optimism about chip manufacturing "coming home."

the_floating_ gate
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re: Welcome to the 'fab-tight' era, says Penn
the_floating_ gate   12/17/2010 5:24:54 AM
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Guess what there will be 450mm and there will be a new player; you (the fabless chipmakers) will not put their eggs in one nest - that's risk mangement

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