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The IDM Business Model is Collapsing!

Daniel Nenni said:
https://www.semiwiki.com/forum/content/1239-intel-says-fabless-model-collapsing-really.html

But given that the high cost of fabs has driven the semiconductor industry to become fabless or fab-lite I think one could argue that the IDM model is in fact collapsing (consolidating).
Click to expand...

I make a point of reading through links. You said in 2012,

"Speaking of crowd sourcing, according to LinkedIn there are about 500,000 people in the semiconductor ecosystem now. Since going online in January of 2011 over 250,000 people (unique visitors) have viewed more than 2,000,000 pages on SemiWiki. Now that's a crowd!"

Do you have equivalent stats on a current basis? My guess is that they will show that Semiwiki is, de facto, the forum for the industry.

I don't see how you can argue that the IDM model is in fact collapsing but you can certainly argue that it will collapse if the fabless companies start selling TSMC fabbed chips, with a good margin, into data centres at or around Intel's cost of production. Intel said in 2012 their manufacturing lead was such that no one could stay with them. Now all they can claim is a design lead.
 
Brianhayes said:
I make a point of reading through links. You said in 2012,

"Speaking of crowd sourcing, according to LinkedIn there are about 500,000 people in the semiconductor ecosystem now. Since going online in January of 2011 over 250,000 people (unique visitors) have viewed more than 2,000,000 pages on SemiWiki. Now that's a crowd!"

Do you have equivalent stats on a current basis? My guess is that they will show that Semiwiki is, de facto, the forum for the industry.
Click to expand...

As of today:
Users: 1,807,497
Posts: 25,858
 
Brianhayes said:
I don't see how you can argue that the IDM model is in fact collapsing but you can certainly argue that it will collapse if the fabless companies start selling TSMC fabbed chips, with a good margin, into data centres at or around Intel's cost of production. Intel said in 2012 their manufacturing lead was such that no one could stay with them. Now all they can claim is a design lead.
Click to expand...

It depends on how far you go back. When I started in Silicon Valley back in 1984 computer companies were the big IDMs. IBM, HP, DEC, DG, Prime, Wang, etc... all had their own fabs. Motorola, Intel, and AMD changed that of course with off the shelf micro processors. The next big transformation was TSMC and the fabless revolution.

Now aged IDM fabs are closing every year and are not being replaced by new ones. The foundries control the logic wafer market. In fact, TSMC is now the largest logic manufacturer buy a significant margin. Even the IDMs that still have fabs are most likely also TSMC customers. GlobalFoundries now owns the AMD and IBM fabs.

Look what happened to the IDMs in Japan. They have been decimated. I used to spend a lot of time in Japan but I have not been back since the Tsunami.

Other than Intel, Samsung, and memory companies, what other IDMs are opening new fabs?

And I wouldn't be too comfortable as a traditional fabless company either. Fabless System Companies are on the rise and will probably lead the next semiconductor industry transformation, with the help of TSMC, ARM, and the rest of the fabless semiconductor ecosystem of course.
 
I think that what is best - being an IDM or not - is a quickly moving target. The problem though is that with such a time-consuming process and huge costs, one does not have the luxury to adapt or be really flexible.

If Intel were dead serious about mobile and actually did a good job, their model of operation would have caused crazy headaches to the rest of the industry. Now that Intel messed things up, the trickles are apparent to their model. In general, I believe that the IDM model works when you have a market share above a certain (high) level - and also when you have few opponents. Otherwise, things are really nebulous.
 
lilo777 said:
Is this [3-5x cost disadvantage] about the cost of manufacturing for Intel or the average cost of making a chip for customers? Either way it sounds strange.
Click to expand...
It is far from strange to me. Depreciation is over half of the costs of manufacture of a semiconductor and the cost of depreciation per unit depends almost entirely on volumes that Intel, relative to TSMC, just does not have.
 
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Brianhayes said:
It is far from strange to me. Depreciation is over half of the costs of manufacture of a semiconductor and the cost of depreciation per unit depends almost entirely on volumes that Intel, relative to TSMC, just does not have.
Click to expand...

TSMC is focused on manufacturing efficiency and cost reduction. Intel is focused on Moore's Law. TSMC is using the same fabs for 20nm/16nm and 10nm/7nm and with Apple volumes that saves a lot of money, right? Just imagine how much those Altera FPGAs cost to manufacture compare to Xilinx? And what about the other leading edge Intel Custom Foundry customers? 3-5x sounds reasonable to me.
 
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