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It is definitely a strategy to change your foundry partner when you are not ...
Upset TI slams Samsung’s foundry efforts
Mark Lapedus
4/4/2011 7:49 PM EDT
SAN JOSE, Calif. – Texas Instruments Inc. has updated its leading-edge digital foundry strategy-and slammed Samsung Electronics Co. Ltd.’s foundry efforts in the process.
For its current applications processor-the OMAP 4-TI has three foundry partners building the 40-nm device: Globalfoundries Inc., Samsung Electronics, and United Microelectronics Corp. (UMC).
Recently, TI rolled out the next-generation applications processor based on a 28-nm process, dubbed the OMAP 5. Taiwan’s UMC will take the ''lead role’’ in making the OMAP 5 device on a foundry basis for TI, said Kevin Ritchie, senior vice president and manager of TI's technology and manufacturing group.
For the OMAP 5, TI may work with other foundries, but Samsung does not appear to be one of the candidates. With the OMAP 4, TI has been ‘‘dissatisfied’’ with its foundry arrangement with Samsung, Ritchie said.
''We have not been pleased with the results’’ at Samsung, he told EE Times in a telephone interview.
Samsung has indeed built and shipped parts for TI. ''I can’t complain about the yields,’’ he said. ''I can complain about everything else.’’
He implied that Apple Inc. is taking an inordinate amount of time and attention away from Samsung’s foundry unit-a possible reason why TI is upset.
Apple is a huge customer for Samsung. As reported, Samsung is building Apple-designed processors for the iPhone and iPad on a foundry business for Apple. Samsung is adding a $3.6 billion addition to its fab in Texas, reportedly just for Apple. And Samsung is hiring 300 new fab engineers for the plant.
Regarding Samsung’s future as a foundry partner within TI, Ritchie said TI will rely on Samsung to a ''lesser extent’’ at 45-nm. Samsung is ''off our radar at 28-nm,’’ he said.
Surprisingly, TI’s ''lead’’ OMAP 5 foundry partner is UMC. ''UMC, for us, is everything that Samsung is not,’’ he said. UMC ''does not get enough credit.’’
An e-mail to Samsung public relations officials was not returned. A call to Samsung was not returned by presstime.
Globalfoundries, Samsung and TSMC have announced their respective 32- and 28-nm processes and are not shy to talk about them. On the other hand, UMC has been eerily quiet in recent years. In various technical papers, Taiwan’s UMC has discussed its process technology, but it does not brag about it.
TI’s disclosure raises more questions about Samsung’s ambitions in the foundry business. For some time, the company claims it will be one of the biggest players in the business and is throwing money around in the arena.
Samsung has garnered several foundry customers, such as Ixys, Qualcomm, TI, Xilinx, among others. But according to the rankings, Samsung was only the world’s 10th largest foundry in terms of sales in 2010, behind the leaders by a wide margin, according to one research house.
There are now rumors that Samsung’s biggest foundry customer-Apple-may work with rival TSMC on the A5 processor and follow-on devices. That could be a blow for Samsung and its foundry efforts. However, Samsung is fabbing the A5 processor used in the Apple iPad 2, according to teardowns of the system and chip conducted by UBM TechInsights, a division of United Business Media, publisher of EE Times.
Regarding TI, the Dallas-based chip maker works with multiple foundries, such as Globalfoundries, Samsung, SMIC, UMC and others. TI and UMC are no strangers to each other. UMC was TI’s ''lead’’ foundry for its digital products at the 90-nm node. TI also worked with other foundries at that node.
At 65-nm, TSMC was the lead foundry for TI. TSMC is making ''high-performance’’ devices on a foundry basis for TI at the 40-nm node, Ritchie said.
At 45-nm, for the OMAP 4, TI relies on Globalfoundries, Samsung and UMC. At 28-nm, TI will work with UMC and others.
Like Taiwan rival TSMC, UMC is devising two options for its 28-nm process. One is a traditional polysilicon gate stack. The other is a high-k/metal-gate offering. Initially, TI plans to go with a polysilicon gate-stack technology for the OMAP 5.
TI is also evaluating foundry vendors for the 20-nm node. ''We have not finalized that yet,’’ he added. Globalfoundries, Samsung and TSMC have announced their respective 20-nm processes.
For its current applications processor-the OMAP 4-TI has three foundry partners building the 40-nm device: Globalfoundries Inc., Samsung Electronics, and United Microelectronics Corp. (UMC).
Recently, TI rolled out the next-generation applications processor based on a 28-nm process, dubbed the OMAP 5. Taiwan’s UMC will take the ''lead role’’ in making the OMAP 5 device on a foundry basis for TI, said Kevin Ritchie, senior vice president and manager of TI's technology and manufacturing group.
For the OMAP 5, TI may work with other foundries, but Samsung does not appear to be one of the candidates. With the OMAP 4, TI has been ‘‘dissatisfied’’ with its foundry arrangement with Samsung, Ritchie said.
''We have not been pleased with the results’’ at Samsung, he told EE Times in a telephone interview.
Samsung has indeed built and shipped parts for TI. ''I can’t complain about the yields,’’ he said. ''I can complain about everything else.’’
He implied that Apple Inc. is taking an inordinate amount of time and attention away from Samsung’s foundry unit-a possible reason why TI is upset.
Apple is a huge customer for Samsung. As reported, Samsung is building Apple-designed processors for the iPhone and iPad on a foundry business for Apple. Samsung is adding a $3.6 billion addition to its fab in Texas, reportedly just for Apple. And Samsung is hiring 300 new fab engineers for the plant.
Regarding Samsung’s future as a foundry partner within TI, Ritchie said TI will rely on Samsung to a ''lesser extent’’ at 45-nm. Samsung is ''off our radar at 28-nm,’’ he said.
Surprisingly, TI’s ''lead’’ OMAP 5 foundry partner is UMC. ''UMC, for us, is everything that Samsung is not,’’ he said. UMC ''does not get enough credit.’’
An e-mail to Samsung public relations officials was not returned. A call to Samsung was not returned by presstime.
Globalfoundries, Samsung and TSMC have announced their respective 32- and 28-nm processes and are not shy to talk about them. On the other hand, UMC has been eerily quiet in recent years. In various technical papers, Taiwan’s UMC has discussed its process technology, but it does not brag about it.
TI’s disclosure raises more questions about Samsung’s ambitions in the foundry business. For some time, the company claims it will be one of the biggest players in the business and is throwing money around in the arena.
Samsung has garnered several foundry customers, such as Ixys, Qualcomm, TI, Xilinx, among others. But according to the rankings, Samsung was only the world’s 10th largest foundry in terms of sales in 2010, behind the leaders by a wide margin, according to one research house.
There are now rumors that Samsung’s biggest foundry customer-Apple-may work with rival TSMC on the A5 processor and follow-on devices. That could be a blow for Samsung and its foundry efforts. However, Samsung is fabbing the A5 processor used in the Apple iPad 2, according to teardowns of the system and chip conducted by UBM TechInsights, a division of United Business Media, publisher of EE Times.
Regarding TI, the Dallas-based chip maker works with multiple foundries, such as Globalfoundries, Samsung, SMIC, UMC and others. TI and UMC are no strangers to each other. UMC was TI’s ''lead’’ foundry for its digital products at the 90-nm node. TI also worked with other foundries at that node.
At 65-nm, TSMC was the lead foundry for TI. TSMC is making ''high-performance’’ devices on a foundry basis for TI at the 40-nm node, Ritchie said.
At 45-nm, for the OMAP 4, TI relies on Globalfoundries, Samsung and UMC. At 28-nm, TI will work with UMC and others.
Like Taiwan rival TSMC, UMC is devising two options for its 28-nm process. One is a traditional polysilicon gate stack. The other is a high-k/metal-gate offering. Initially, TI plans to go with a polysilicon gate-stack technology for the OMAP 5.
TI is also evaluating foundry vendors for the 20-nm node. ''We have not finalized that yet,’’ he added. Globalfoundries, Samsung and TSMC have announced their respective 20-nm processes.
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yalanand
4/4/2011 8:23 PM EDT
If at all Apple chooses TSMC for manufacturing A5 processor then it will be a big blow to Samsung. Seems like samsung ignored other customers because it considered APPLE as its prime customer. I guess this is huge win for UMC, which was struggling at 28nm.
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Warren
4/4/2011 9:19 PM EDT
Certainly much I don't understand... but I see folks reporting that Apple looks to be purchasing something like $7 to $8 Billion US dollars worth of electronics from Samsung. This Year. The reference in this article shows Samsung at #10 in Foundary for 2010 at $400 Million, so getting and hanging on to Apple seems like an incredibly wise move on Samsung's part. So TI buys National and makes sideways remarks about Samsung (a huge compeitor); shocking [not]. TI offers $6.5B for National... Samsung could pay that amount with their Apple revenues alone.
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seaEE
4/4/2011 10:03 PM EDT
For some reason I thought TI had pretty good in-house fab capability. Are they still doing much in-house work?
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mark.lapedus
4/5/2011 1:49 AM EDT
Thanks for the comment Warren. Here's the harsh reality for Samsung: One customer (Apple) does not make a foundry business. A foundry vendor must juggle multiple customers and try to do it well. Another warning for Samsung: Apple is fickle bunch. They can embrace a supplier and dump them too. Ask PortalPlayer.
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Warren
4/5/2011 7:21 PM EDT
Samsung has said, and repeated, that they want to be a (real) foundry biz contender so your warnings should be heeded. But I don't know if TI's observations are typical (that others are having a similar experience) or even if they are truly valid for TI itself - TI did just make a purchase offer for National and maybe the statements by TI point out why they did so... or maybe TI's statements are because of the purchase offer.
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mark.lapedus
4/5/2011 1:52 AM EDT
seaEE..FYI. TI exited the leading-edge, digital process technology race some time ago. They decided to outsource to the foundries on the digital side. It's too expensive and costly. TI still has fabs in analog.
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m00nshine
4/5/2011 8:04 AM EDT
Agree that "one customer does not make a foundry business", but its difficult to compare Samsung to any other foundry for the simple fact that Samsung is supplier/customer all in one. Is there any data available on the internal "sales" volume Samsung foundry provides to Samsung electronics and how that compares to it's outside foundry customers?
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fdunn
4/5/2011 6:19 PM EDT
@m00nshine
While it is true that Samsung does it's own products, it does so at cost or near. Samsungs foundry business is a seperate business unit of Samsung and has to support itself without choking the Parent Corporation. The only way it does that is by keeping its lines busy with outsourced customers.
As for Warrens comments the Foundy estimates are probably very close since Apple also puchases Flash Memory Components from a different division of Samsung. Samsung is a HUGE conglomerate of components and each is expected to show profit. TI moving away may not hurt Samsung while they are in good with Apple but as someone else mentioned Apple has turned on their suppliers on many different occassions for reasoning unknown outside Apple.
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GREAT-Terry
4/6/2011 3:26 AM EDT
Samsung is such a big manufacturer but its foundry biz is really small as compare to the Taiwanese. I don't think TI's movement will hurt the Samsung group as a whole. TI is smart in selecting different foundries for making its high performance digital product while still keep the analog fab which is relatively low cost.
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Stanley_
4/7/2011 2:19 AM EDT
Samsung will never be real foundry contender. The reason that Samsung keeps foundry business is funding R&D cost of leading edge process for their internal customer. Samsung even doesn't have R&D capability in house, thus outsourcing at IBM camp. As long as they can sustain process development by having some big guys in customer list, they don't need to take care of other customers. Some Samsung foundry guys would refuse this thought, but so far this is true considering their investment plan and the way of handling customers. One more thing. Samsung foundry is part of Samsung semiconductor division within Samsung electronics. Samsung foundry never will be a separate entity.
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elctrnx_lyf
4/7/2011 12:03 PM EDT
It is definitely a strategy to change your foundry partner when you are not treated as the number one customer. That is what TI did. Hope TI will get bigger reception at UMC.
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Dandycon
10/26/2011 1:16 PM EDT
You could have Playboy centerfold model for girlfriend, and still have some complaint about her.
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