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IC biz models under pressure, says Xilinx CEO

Posted: 02 Feb 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Xilinx? IC business model? IC? semiconductor? fab?

The semiconductor industry is projected to experience moderate growth in the near termwith only three IC-manufacturing business models evolving over time, warned Wim Roelandts, president, chairman and CEO of Xilinx Inc.

In an interview at the DesignCon conference on Jan. 30, Roelandts predicted that the IC industry would grow about "10 percent, plus or minus a few points."

Some markets are expected to grow faster than others. "I think we're in an up cycle," he said. "A lot of the growth is driven by memory. Memory is growing the fastest."

There is also good news for Xilinx and other makers of FPGAs. "We are also seeing a lot of design activity," he said.

During a keynote at DesignCon, the Xilinx executive indicated that the growth is driven by the shift into a new cycle. "We're are entering into the next phase," he said. "Some people call it the 'triple play.'" Another name for the cycle is digital convergence, where voice, data and other technologies are finally merging. To boost the growth rates in electronics, the industry must continue to innovate, he said during the second of two presentations at the event.

Meanwhile, during the interview, the executive also predicted that the IC industry would see only three chip-manufacturing business models in the future: Intel, memory and fabless/foundry.

Intel Corp. will continue to build its own fabs and develop processes that are tuned for its processor lines. The memory makers will continue to build plants, although many are turning to partners to share the risks and costs, while the fabless/foundry model has been a smashing success, he said. Xilinx and a plethora of other fabless chip makers have prospered during the revolution.

What could get squeezed in the middle is the traditional fab or integrated design manufacturing (IDM) model. Over the years, this has been evident following the IDMs' shift towards the "fab lite" model.

But IEMs are under pressure to reduce their fab costs, forcing some to move what Gartner Inc. call a "process lite" model. Texas Instruments Inc. (TI) last week said that it will cease development of its internal logic process R&D at the 45nm and will work more closely with foundries. In the announcement, TI said it will continue to have fabs, including both logic and analog. But much of the logic process will be handled in partnership with foundries, TI said.

Last week, Freescale Semiconductor Inc. and STMicroelectronics Inc. also separately revised their chip manufacturing and R&D models.

- Mark LaPedus
EE Times




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