Time for a return to the customer-backed joint venture foundry?
4/20/2012 11:05 AM EDT
Time to get closer to foundries and process R&D?
Firstly it must be considered that circumstances are different now.
Back then foundries were about manufacturing and supply and the machine-readable interface between design and manufacturing was relatively straightforward and clean. You put in your masks and you got your chips back. It has become a lot more complex and iterative now with IP coming from multiple sources and at the leading-edge much of it is by definition not silicon-proven.
So now, I would argue, there are are two things to think hard about; manufacturing capacity and manufacturing technology.
Right now there is plenty of foundry capacity available; but not at the leading-edge 28-nm process node, exactly the place where there has been an arms race in processors for mobile applications.
That foundry undersupply at the leading edge is accentuated by the fact that fully-fabbed chip giant Intel Corp. is turning up the heat on the foundries – and through them on Qualcomm and others in the mobile device sector – with its launch of 22-nm FinFET silicon.
If Qualcomm and others were to team up and invest in a joint venture wafer fab, presumably with an experienced chip manufacturer – such as a TSMC, Samsung, Globalfoundries or UMC – it might help them with capacity at the 22-nm/20-nm node but only in 2013 or 2014. And they could potentially be outflanked in terms of process technology or any fabless chip companies that Intel my chose to work with.
Therefore the more important need is for Qualcomm those of its fabless peers who want to compete at the leading edge to collaborate to help the foundries make up ground on Intel in terms of process technology. And that requires a longer term view and a focus on how 14-nm silicon is going to be made and ramped into volume production. In effect, Qualcomm and its peers may be able to avoid the capital cost of owning their own wafer fabs but they can no longer ignore the cost and progress of process development R&D.
Qualcomm for one has said it does not deem it necessary to become an IDM to continue to thrive in the semiconductor business, but that it will likely get closer to its foundry partners. I interpret that to mean that Qualcomm and its leading-edge peers will have to spend R&D money in aggregate to help TSMC and one or two other foundries compete with Intel, but in return could get first claim on the capacity to manufacture the resulting leading edge process technology. And a joint venture fab part funded by the customers would be one way to account for it.