IC Industry On The Cusp Of Radical Change
The semiconductor industry appears to be edging back to its roots – making its own manufacturing equipment and fabbing its own chips.
Qualcomm is thinking of buying 10% of the No.2 foundry UMC in order to try and secure advanced IC fabrication.
UMC asked for strategic partners to help defray the cost of investing in more advanced process technology.
UMC has fallen behind TSMC, the No.1 foundry, in process technology, and wants to raise the money to catch up. At UMC’s current market cap of $5.4 billion, 10% would cost $540m.
Earlier this month Intel bought 10% of lithographic tools manufacturer ASML. ASML asked for strategic partners to help defray the cost of developing 450mm wafers and EUV.
Before the 1980s, it was normal for every IC company to have its own fab. Now, maybe, we’re seeing a move back to owning, if not a whole fab, at least a part of a fab.
And in the early days of the industry, a device manufacturer had to make its own manufacturing equipment.
That all changed with the rise of the foundries in the 80s, and the rise of the independent semiconductor manufacturing equipment industry.
Clearly the entire semiconductor industry is now on the cusp of change. The foundries need investment; the tools makers need investment. In both cases investment has to come from the device manufacturers.
Recently TSMC, the No.1 foundry, said it was considering setting up dedicated fabs for individual customers. TSMC, and the other Asian foundries, may well be worried at the prospect of US device manufacturers building fabs in the USA again. Political pressures are encouraging the US companies to repatriate manufacturing.
Provoking these moves is the shortage of 28nm parts which has rattled IC companies and made them look at taking more control over their manufacturing.
Sharing fabs has seemed an obvious way for the industry to go for some time. Now the problems at 28nm have forced the device manufacturers to move a bit quicker along this road.