LONDON – The problems acknowledged by Qualcomm Inc. in getting enough 28-nm chips out of its foundry partner Taiwan Semiconductor Manufacturing Co. Ltd. are not about to prompt the company to build or acquire its own fab, according to Steve Mollenkopf, chief operating officer of the fabless chip company. But ways of doing business are evolving and Qualcomm is big enough to shape these to its own benefit, he said.
During a conference call for analysts held to discuss the company's second fiscal quarter financial results Mollenkopf was repeatedly questioned about supply-side and demand-side issues with regard to Qualcomm's leading-edge 28-nm products. The guidance given was that problems were due to high demand rather than low yields or IC supplies restricted below previous expectations by TSMC.
Mollenkopf was directly asked whether Qualcomm now saw owning its own wafer fab for leading-edge production as strategic.
Mollenkopf answered that it is not necessary for the company to own its fab but that it is likely that the way company works with regard to leading-edge technology will evolve and could cause the company to become even closer to is fab partners.
Mollenkopf said that the fabless business model has worked out well for Qualcomm. He said that now Qualcomm was becoming a leader in VLSI technology and competing with others on technology, change was likely. "I think we'll probably evolve the way we work; probably become even closer with our fab partners versus rethink our entire business. But I think that is just an evolution of how the industry is moving." Mollenkopf added: "And being at the size we are we're happy to be able to shape it in a way that's best for us."
Mollenkopf did not indicate how this would help Qualcomm compete with companies such as Intel or provide the company with guaranteed supply volumes.
Agreed--sounds like Mollenkopf is wedded to Qualcomm's fabless history. I loved the last line of the article, which questions the entire idea: "Mollenkopf did not indicate how this would help Qualcomm compete with companies such as Intel or provide the company with guaranteed supply volumes."
This sounds like the journalistic equivalent of an accountant commenting that its client may have a "going concern" challenge... :)
It is good to have your own fab so that you can control your supply, but the cost of a new fab today is enormous. Look at the companies trying to go to fabless or fab-lite. If you can't keep the fab full and keep it at the cutting edge, you will suffer the costs.