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The Changing Semiconductor Foundry Landscape!

The Changing Semiconductor Foundry Landscape!
by Daniel Nenni on 01-29-2014 at 8:00 am

The foundry landscape is changing again and it is definitely something that should be discussed. There are some people, mostly influenced by Intel, that feel the foundry business has hit the wall at 20nm which couldn’t be further from the truth. After spending 30 years working in Silicon Valley, I have experienced a lot of change which is why I founded SemiWiki.com and co-authored a book on the fabless semiconductor revolution. Chronicling this change and looking towards the future is for the greater good of the semiconductor industry, absolutely.


A big change happened at 28nm, when TSMC was the only foundry to yield, which resulted in wafer shortages and fab capacity issues. Of course TSMC did not initially build capacity for 90% market share. What semiconductor company would (with the exception of Intel)? Fabless companies such as Qualcomm, Broadcom, and Marvell that were used to multiple manufacturing sources were limited to a single source at 28nm which was not a comfortable position for them at all. Pricing and delivery is everything in this business thus the multiple manufacturing source business model. As it stands today, 20nm looks to be the same with TSMC in a dominant market position.

The top fabless companies will make a correction at 14nm and use both TSMC and Samsung for competitive pricing and delivery. There really was no other choice since GlobalFoundries does not have the capacity yet to source a QCOM or Apple and Intel 14nm failed to make a passing foundry grade. With the exception of Altera, NONE of the top fabless semiconductor companies will use Intel at 14nm, which is one of the reasons why the Intel fab #42 in Arizona is being shuttered, my opinion. If fabless companies had the choice between Samsung/Intel and GlobalFoundries they would chose GF without a doubt. Working with an IDM/foundry that competes with you is a last resort for sure.

This change is of great help to the fabless semiconductor ecosystem in regards to jobs and design enablement (EDA and IP for example). Due to ultra-strict security measures and process differences it will require many more engineers, tools, and IP to manufacture at both TSMC and Samsung at 14nm. This cost of course will be offset by cheaper wafers due to the pricing pressure competition brings.

If you want a more detailed understanding of the changing foundry landscape there are three very good sources of information:

[LIST=1]

  • IC Insights’ McLean Report
  • GSA 2014 Foundry Almanac
  • Me

    Why me? Because pound for pound I have access to more reports, attend more conferences, and talk to more semiconductor people than anyone else in this industry, believe it. I am connected to 17,962 semiconductor professionals on LinkedIn so if I don’t know the answer to your question I most certainly know someone that does. Generally I make people buy me lunch for a discussion on the foundry business but now that my book “Fabless: The Transformation of the Semiconductor Industry” is out, if you buy the book I would be happy to take your call or email and answer whatever questions you may have. Connect with me on LinkedIn, if you haven’t already, and let’s talk.

    More Articles by Daniel Nenni…..

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