It should also be pointed out that ~2 years ago TSMC produced an ATI/AMD GPU at 55nm before Intel had moved to 45nm. Of course Intel still preserves its process tech lead in CPU’s (and at a significantly higher capacity), but in the past it only had to stay ahead of the other IDM’s, the Foundries were nowhere to be seen – that is no longer the case. Now the Foundries are competitive with Samsung, Toshiba, Micron … and if you are an IDM Fabbing on process technology that is offered by a Foundry at a more advanced node and you *not* making similar developments, then you better be preparing for Fab shutdowns as soon as one of your competitors does take advantage to the Foundry developed process.
Preserving the old IDM model only benefits one main competitor in each sector … the leader … if you think that only process tech is critical. This is fine if you want a single monopolist dominating each sector. The future will be different where each design will succeed based on its own merit and not on whether or not the designer is also capable of getting the device into volume production. There will be more competition as the barrier to start-ups will be significantly reduced. We will have to live with it and the customers will benefit … and Intel can look back fondly to the days when it could keep its dwarf-like competitors at bay, by means of its long process-tech arms.
The article also ignores Intel’s use of all means at its disposal to crush competitors, so as to insure its market domination. This doesn’t work for every company in the semiconductor industry. So presenting Intel as if they could/should be emulated is fundamentally flawed … they are exceptional. If everybody behaved like Intel, everybody would have their own standards and refuse to recognize others architecture (unless fundamentally altered). Upgrading individual components would be impossible. And no architecture could survive into the next generation.
This blog is based on the premise that IDM’s Process Tech is something that is significantly differentiated from that offered by the Foundries. While certain IDM’s may be lucky enough to operate in a niche requiring little process innovation, it should be noted that Jerry Sanders also said, “Niches are for Roaches”.
The recent article here at EE Times that reported the cost of EUV litho equipment at $120 million per system tells you all you need to know about who can afford next generation fabs.
The semiconductor industry was way more fun back in the 1980s, when dinosaurs like Jerry Sanders still roamed.
@robotics Developer: you ask who will be left to build the next gen fab...the answer is fairly simple: Intel, Samsung, and TSMC...maybe someone in Japan, Toshiba? maybe someone in Europe/Middle East, GlabalFoundries?...that is pretty much it...Kris
It makes me wonder: Who will be left to build the next gen fab? Also, what really is the value add of the fabless vendor? It can't be solely IP, it must be the "mix": tools, IP, service, and lets not forget COST. How does a fabless vendor win new business unless it is based on cost? With the reduction in unique fabs and the subsequent sharing of the same fab between multiple fabless vendors what differentiates them, again I suggest that is is cost? In the end a good thing for the consumer but a hard place to be profitable for the fabless ones.
Small point.....Jerry Sanders ( who looked great at the SIA Dinner earlier this month where he sat next to Craig Barrett )was long gone from AMD when they made 1) the decision to overspend for the acquisition of ATI and 2) the decision to go fabless after a couple years of site-sourcing for what ultimately became the GloFlo fab in Tech Valley, NY. Jetty's other famous quip was that "chips are the crude oil of the 80's"
I agree with Hank that the automobile business suggests that the fabless model should work perfectly. I almost left it out of this article. It's there because I couldn't resist the idea that an automobile brand can appeal to consumer emotions -- something that should be much less successful with cynical engineers with managers and accountants always looking over their shoulders.
I think the car analogy proves the opposite point. There is a huge range in auto reliability, which suggests it isn't just the components. Clearly the system design, assembly and testing can produce very different outcomes.
The fab lite model can be viewed as investing in comparative advantage. A company with a mix of analog and digital products might shift out of digital fabs, invest more in analog fabs and analog and digital design, and wind up with a stronger market position.
Great points. It's hard to argue that the fabless-foundry model has been anything but an unqualified success, Sanders' quote be damned. But Intel's resistance to taking this path has arguably been one of the biggest factors in its success. (Perhaps it will become an even bigger differentiator now that Intel has signaled its willingness to at least dabble in foundry work).
In the end it seems the key point that this blog entry makes is that the key to success is to have a clear strategy and stay with it. Once an IDM goes fabless or even fab-lite it is committed to that path and there's no getting the genie back in the bottle.
The Other Tesla David Blaza5 comments I find myself going to Kickstarter and Indiegogo on a regular basis these days because they have become real innovation marketplaces. As far as I'm concerned, this is where a lot of cool ...