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Chip manufacturers make smart choice

Posted: 01 Jan 2004 ?? ?Print Version ?Bookmark and Share

Keywords:ic? fab? fables? foundry? manufacture?

The electronics industry heads into 2004 with a sense of optimism, albeit tempered with lingering caution. The caution stems from the new depths of the downturn we have just lived through and the concern that any upturn may only be temporary. The optimism stems from the continuing emergence of positive customer indicators, as well as the steady stream of product innovation particularly in communications and consumer applications, which are predicted to drive demand for semiconductor products and new silicon usage.

In the foundry industry, we see this year as a pivotal one for companies that are reinventing themselves to shift to new process technologies and SoC implementations, which require new investment economics. It is clear that the fabless or fab-lite outsourced manufacturing model is not only surviving, but thriving. What might appear to be the obvious or easy choice is not always the smart choice.

Traditionally, manufacturing decisions are based on short-term capacity requirements. For many companies though, such as small-to-medium-sized product developers, bigger is not always better, especially if there is a waiting list to get access to that capacity. The decision-making process must evolve and consider new strategies that provide companies with flexible manufacturing platforms today, and more control over their choices for the future. Their choice must also give them the most options with the least cost.

However, the manufacturing decision is further complicated by increasingly divergent philosophies in the foundry industry concerning openness and design portability. At Chartered, we believe the new economics of 90nm or 130nm design require that it be capable of manufacturing at more than one foundry, and that this is critical to the long-term health of the industry. The benefits of design portability are obvious and most dramatic during periods of limited manufacturing capacity, but the risks of being locked into one foundry source should not be underestimated even when capacity is not a primary concern.

Companies should be able to implement design for multisource manufacturing strategies without being penalized by higher engineering costs, IP infringement liability and arbitrary wafer pricing policies. This means that IP business models, standardization of common design platforms and foundry services must become open so that companies can reclaim control over their design and manufacturing options.

Certainly, there are less proven options that are attractive on the surface. However, the tradeoff is one where emerging foundries don't always have the resources to consistently and reliably be on the leading-edge of manufacturing technology, which also leads to limitations in services, IP and EDA tool support. For product developers compelled to meet stringent time-to-market demands and get the most leverage from their engineering investments, this route may not be the best option.

For companies looking to take advantage of advanced manufacturing processes but maintain a sense of control over their design and costs, 2004 may be the year that mandates a new, expanded checklist of decision-making criteria that includes:

? Capacity road map to support the entire lifecyle of the product - current and future needs;

? System-level technology and process integration - increase first-pass success and reduce design costs for SoC implementations;

? Scalable manufacturing platforms - with support for leading-edge process geometries such as 0.13m - leverage design investment through several generations;

? A plan for the future that includes nano-age process support - 90nm and beyond;

? Mature, reliable product solutions and niche processes for price-performance sensitive applications - value-added options at 0.25m and higher;

? Flexible access to fab resources, including advanced 300mm wafer production;

? Open-IP model for foundry and third-party sources of specialized and commodity functions - design portability without extensive customization or costly changes;

? Silicon-validated support for the most popular, leading-edge EDA tools and flows;

? Robust service network to assist in all aspects of design implementation and process transition.

Most importantly, consider the benefits of baseline foundry support that allow maximum leverage for the most critical design and manufacturing decisions. As we turn the corner toward a more hopeful period, making the "smart choice" could spell the difference between survival and success in the long term.

- Mike Rekuc

Sr. Vice President

Worldwide Sales and Marketing

Chartered Semiconductor Manufacturing

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