Our blind faith in fabless strategies must be challenged. Why does ST value its Rousset Fab, and why on earth is Apple sending a design team to Grenoble?
Those who have seen the rise and demise of integrated device manufacturers (IDMs) tend not to appreciate the value of fabs. We say, “Fab? Hardly!”
However, on a recent trip to Rousset, France, I chatted with industry executives and analysts, who opened my eyes to the fact that our blind faith in fabless strategies needs to be challenged.
STMicroelectronics in Rousset, France (photo: EE Times)
I’m not talking about whether fabs create jobs. My point, rather, is the value of having design/engineering teams close to fabs.
My example is STMicroelectronics’ Rousset fab. Jean-Claude Nataf, strategic planning director of ST’s Microcontrollers and Digital ICs Group (MDG), told me that Rousset’s lines are currently in full production at 9,000 wafers per week. Engineering managers and workers on the floor “take great pride in fast feedback” among them.
Or, take the example of the imaging-tech landscape growing rapidly in the Grenoble/Lyon area. Pierre Cambou, activity leader for imaging and sensors at Yole Développement, explained that imaging technology innovation often demands advancements in new manufacturing techniques. In return, it creates a tech-driven environment.
Reportedly, more than a dozen Apple engineers are moving to Grenoble to open an R&D center. This is happening precisely because the region has the expertise in image sensors and production — led by ST. “You need to have factories” to make an ecosystem, said Cambou.
These examples highlight an emphasis not necessarily on saving manufacturing jobs. Instead, they demonstrate the constructive and creative interplay that can emerge from constant contact among researchers, designers, engineers, technicians, fab operators and management.
Millstone around the neck
In my own defense, semiconductor industry history has taught us that latecomers to the fab-lite business model and skeptics of fabless movement eventually floundered under the unsustainable weight of their own fabs.
Chip manufacturing lines constantly demand high-cost investment just to stay current. We all know that market demands offer no assurances of full fab utilization. Further, the chip industry is susceptible to boom-and-bust IC market cycles.
In short, industry observers, including myself, generally concluded that for most semiconductor companies nowadays, except for Intel and Samsung, fabs are a millstone around your neck.
When I was in Rousset last week, I even had the gall to decline ST’s generous offer to take a tour of its 200mm fab. I’m not exactly a fabophile. I dreaded the thought of climbing into yet another bunny suit. At ST, my attitude was: Seen one fab, seen ‘em all.
So, I was wrong.
Luckily, Michel Buffa, group vice president and general manager of the microcontroller division at ST, saved me from my prejudice by charming me into the fab tour. I’m glad I gave in.
Buffa asked me if I’d seen SMIF. No, I haven’t, and to be perfectly honest, I told him I didn’t know SMIF from Smurfs.
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