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Customer Service in the Semiconductor Business Customer service is something that a lot of people like to talk about. But what is it really, and what does it mean? by Gary Kennedy

Customer service is a term much bandied about in the semiconductor business; however, much of the talk is rhetoric since, rather than accomodating their customers, most IC companies force customers to accommodate the IC vendor. One reason this is true is that the business model for IC companies is built around keeping a billion dollar fab fully loaded.

Thus, lead times are extremely long--on the order of months instead of weeks. This results from fab production managers being judged on the number of wafers they produce by the end of a period. Prototype runs are by definition a small-run job. Running prototype wafers when there are high-volume wafer runs waiting to be done is anathema to a fab manager.

Today, however, this business model is antiquated. Except for RAM memories, microprocessors, and other high-volume standard products, the vast majority of integrated circuits being produced are high-volume gate arrays, standard cells, and customer-specific integrated circuits. Developing custom devices helps system manufacturers differentiate their products.

At the same time, system vendors are under great pressure to not only get product to market, but to ramp production volumes rapidly. In addition, the integrated circuits being created are increasingly more complex. This tends to lengthen design times. System companies do not want IC manufacturers to tell them that a design will take two to three months to fabricate.

Reducing the time needed to produce prototypes and production chips is real customer service. In an industry where the largest amount of revenue is made in the first third of a product's life, the more time spent getting a design into volume means the less total revenue it will produce. This is especially true when the average product life cycle is 12 months or less.

Another trend in the semiconductor industry is the increasing partnering between large system manufacturers and IC suppliers. As a result, smaller companies wanting to purchase fab capacity are locked out or must pay large non-recurring engineering costs and guarantee minimum quantities of wafers.

The condition is further aggravated by the current scarcity of submicron fab capacity. In such a seller's market, IC manufacturers have little incentive to accommodate the design support requirements of customers.

These requirements run the gamut from customers supplying a complete GDS-II tape of their designs to those providing a netlist that must be verified and laid-out. Other customers come with several netlists of different programmable devices that must be consolidated into one large gate array.

Today, the vast majority of semiconductor companies are offering foundry service to fill unused production capacity not used by their high-volume standard products. Some newer companies, however, are offering only foundry service. They do not make and sell their own products but rather fab outside designs exclusively.

Neither provides the commitment to serve large and small customers alike. Neither accommodates all the design needs of a diverse engineering community. We at Orbit believe that an IC company purporting to offer customer service and put their customers' needs first, should serve all customers, large or small, that the IC company accommodate the various design requirements the customers have, and foremost, that the IC company deliver product in four to six weeks. That's what customer service really means.

Gary Kennedy is president of Orbit Semiconductor (Sunnyvale, CA).

To voice an opinion on this or any Integrated System Design article, please e-mail your message to: michael@asic.com.