An age-old argument in the industry is: Is it affordable? Can anyone carry on paying for the horrendous costs of fabs?
A Synopsys Fellow, Tom Williams, has told a US conference that 45nm fabs will cost $3bn, and 32nm fabs may cost $10bn.
Williams reckons this will mean IDMs will get fewer.
But, as Future Horizons pointed out at their recent IFS Seminar, fabs cost have always cost the same, when measured as a proportion of the semiconductor TAM.
Since 1970, the cost of a state-of-the-art fab has grown at exactly the same rate, 14.1 per cent CAGR, as the semiconductor TAM.
1970 Semi TAM was $2.4bn, fab cost was $30m
1975 Semi TAM was $4.0bn, fab cost was $150m
1980 Semi TAM was $12.8bn, fab cost was $250m
1985 Semi TAM was $21.5bn, fab cost was $330m
1990 Semi TAM was $50.5bn, fab cost was $600m
1995 Semi TAM was $144bn, fab cost was $1.2bn
2000 Semi TAM was $204bn, fab cost was $1.8bn
2005 Semi TAM was $245bn, fab cost was $3bn
And there's always a government somewhere in the world which will put up a substantial proportion of the cost of a fab.
Look at China and India today. India will pay 20 per cent of fab costs. China probably more.
Only a wuzzy pays the full cost of fab.
So, while the cost of fab hasn't changed, what has changed is CEOs' responses. In the old days it was: "We don't care, we're doing it anyway?"
Nowadays CEOs say: "We'll do it, if the accountants let us."
The industry hasn't changed. Only the CEOs.
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Comments (1)
When Corning Glass owned Signetics, back in the early 70s, one Corning Exec, bothered by the cost of a new epitaxial reactor, wanted to know the useful lifetime. He was horrified that it was only a few years before it would be trashed or given to a University, since a pie-plate press was still going after being installed in the 1920s. Probably why Corning sold their interest to Philips.
Posted by Peter B | April 10, 2007 10:19 PM
Posted on April 10, 2007 22:19