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Analysts see 'collision course' in IC supply

Posted: 18 Jan 2008 ?? ?Print Version ?Bookmark and Share

Keywords:silicon foundry model? semiconductor supply? Moore's Law?

The silicon foundry model falling apart as the semiconductor supply chain head towards a "collision course," with leading-edge foundries falling behind Moore's Law and finding themselves stretched too thin, according to analysts.

The "collision course" could result in shortages of foundry capacity in the second half of 2008, said Bill McClean, president for IC Insights Inc., at the Industry Strategy Symposium (ISS).

There are several forces in play to create the "collision course." In simple terms, many IDMs are moving towards a fab-lite model and using foundries. This, in turn, is putting more and more stress on the foundries to handle both the fabless and IDM requirements, McClean said.

But it's unclear if the foundries can respond to these growing demands. Mostif notall foundries are spending less on capital and R&D, in an effort to keep their margins up. Foundries are also being careful about expanding their capacities, but they are falling behind the technology curve, said G. Dan Hutcheson, CEO of VLSI Research Inc., at ISS.

"Foundries have fallen off Moore's Law," Hutcheson added. "Foundries are backing away from aggressive scaling." There is another concern. "R&D costs are escalating rapidly, yet the foundries are lacking." Hutcheson explained that the IDMs are becoming stronger, but the foundries are getting weaker.

There is a more alarming trend on the horizon: Perhaps the fabless/fab-lite/foundry model is already under huge stressor falling apartwhich could be a disaster for the industry.

- Mark LaPedus
EE Times

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