By definition the pure-play foundry business model separates the design and manufacturing of a semiconductor device. TSMC was the first dedicated (pure-play) foundry which enabled the incredible fabless semiconductor ecosystem we have today. If not for the fabless business model we would not have the supercomputer class mobile devices in our pockets. We, as integral parts of the fabless semiconductor ecosystem, have changed the world, absolutely.
So the question is: As an executive for a fabless semiconductor company, why would you even consider turning back the clock and renting fab space from an IDM (a company that both designs and manufactures semiconductor devices)?
As a student of history I have always felt that it is critical to understand how you got to where you are today in order to predict where you will be tomorrow. As a 30 year veteran of Silicon Valley I have seen many companies succeed but I have also seen many more fail due to one fundamental truth, they failed at the future. In writing “Fabless: The Transformation of the Semiconductor Industry” Paul McLellan and I both agree that the key to the fabless business model is competition. Unfortunately, at 28nm there was no real foundry competition and that has opened the foundry business doors to IDMs once again.
You can’t fault TSMC. They executed at 28nm and were rewarded with a dominant market position. Had GlobalFoundries been able to provide a competitive 28nm offering I would not be writing this blog. Trust me on this: fabless semiconductor companies would NOT even consider doing business with an IDM foundry if they had two or more leading edge pure-play foundry options.
Intel thinks they are clever by getting into the foundry business. Unfortunately Intel is being used as a pawn in a very high stakes game of foundry chess. I also believe this to be true in the SoC business but that is another blog. Samsung on the other hand is a chess grandmaster which puts Intel between a serious rock (Samsung) and a very hard place (TSMC). Take a close look at Samsung’s latest announcements:
Samsung ♥ GLOBALFOUNDRIES
Both are excellent moves in becoming an integral part of the fabless semiconductor ecosystem. Samsung is also the only foundry to show working 14nm Silicon at the Design Automation Conference last week. My sources tell me that Samsung 14nm is 3-6 months ahead of TSMC’s 16FF+. My sources also tell me that TSMC 16nm FF+ is today the most competitive FinFET offering, meaning power, performance, area, AND cost. This is based on information from the associated PDKs and not from PowerPoint slides or press releases.
Competition is what drives the fabless semiconductor ecosystem and I thank Intel and Samsung for the investments they have made. If not for that competitive pressure we would not have the ultra-aggressive FinFET process development schedule nor would we have the competitive wafer pricing I have seen of late. Unfortunately all FinFET processes are not created equal so it will be difficult for the fabless companies to design to multiple foundries which mean there will be clear winners and losers in this game. If this was a horse race and I had to make a bet today it would be TSMC to win, Samsung to place, and Intel will not even show. Just my opinion of course.
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