The combination of foundry plus fabless semiconductor company is going to produce the future model for the semiconductor industry as the IDM model increasingly runs out of steam, according to Dr Keh-Ching Huang, marketing director of Global Unichip Corporation (GUC), a design company on the eSilicon business model in which TSMC is the largest shareholder, and currently holds a 36 per cent stake.
It has long been expected that the foundries would move into design, and GUC appears to be TSMC's route into accomplishing that, without providing design services directly under the TSMC name which could be construed as competing with its IDM customers.
GUC was founded in 1998 and was one of a group of about 15 Taiwanese design houses which worked with TSMC. In 2003, TSMC decided that the differing aims and agenda of the various houses made it difficult to work with them all, and decided to work just with GUC. So, that year, TSMC took a 49 per cent share in GUC which was subsequently reduced to the 36 per cent stake it holds today.
Dr F.C. Tseng, former CEO of TSMC, and currently TSMC vice chairman, is the chairman of GUC, and Lora Ho, TSMC's CFO, sits on the GUC board.
GUC is doing about ten tape-outs a month and, last year, had revenues of $250m. In the first half of 2007, GUC had revenues of $147m. ROE is 32.4 per cent. Gross margin is "about 20 per cent" said Huang and net income "about ten per cent".
Asked by Electronics Weekly if GUC got a special price for wafers from TSMC, Huang replied: "No."
GUC has done more than ten 65nm tape-outs. It has not yet done a 40nm design for a customer but has run 40nm test chips.
GUC charges an up-front NRE. For a 50m gate 65nm chip with minimal IP requirement and including tooling and mask charges this would be $5-10m for "a few hundred" chips, said Huang.
If a chip needs a re-spin, then a customer may get a free re-spin in certain circumstances. If the fault is caused by faulty design by the customer, then the customer pays for the re-spin, but, if it is caused by a fault in GUC-suppplied IP, or a fault in the manufacturing process, then GUC or TSMC will pay for the re-spin.
Three quarters of GUC's revenues are coming from the US, with 12 per cent from Japan, 4 per cent from Taiwan, 3 per cent from Korea, 3 per cent from China, and 2 per cent from Europe.
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