The European semiconductor industry is goimg fab-lite, on its way to becoming fabless, as NXP, then Infineon, now STMicroelectronics take the route to disposing of their leading edge manufacturing capability, it was stated at the IFS 2007 meeting in London today.
The move to fab-lite strategies by so many semiconductor companies is actually a move to becoming fabless, and this trend is happening because executives are no longer willing to take the financial risk associated with fab building.
“Fab-lite doesn’t mean fab-lite, it means you’re going fabless”, said Malcolm Penn, CEO of Future Horizons.
Have fabs become too expensive? No so, argued Penn. The percentage of revenues spent on fab building has remained constant throughout the industry’s history.
“Capex has traditionally been 20 per cent of the market. It is still the case today”, said Penn, adding “when you build a fab, you bet the company. But today people have lost the stomach for betting the company. It’s not that fabs have become more expensive in relative terms.”
For Europe, the whole region is going fab-lite, said Penn, with first NXP, then Infineon, and now STMicroelectronics adopting fab-lite strategies which will lead to them becoming fabless.
“ST was a stalwart of the fab model from transistors to leading edge SOCs, with a plethora of incredible products. It’s going fab-lite. It’s spinning off its memory division, and all the state of the art fabs will go with it”, said Penn.
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