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IBM shows signs of fab-lite shift

Posted: 26 Nov 2010 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor? manufacturing? fab-lite? research?

It looks like IBM is shifting away from semiconductor manufacturing and planning to rely on Samsung and GlobalFoundries as foundry suppliers. Both foundries are set to have wafer fabs for foundry operations in the United States, which could help cement relations.

IBM, GlobalFoundries and Samsung are co-hosting the 2011 Common Platform Alliance Technology Forum, but while GlobalFoundries and Samsung are set to spend $12 billion in 2011, IBM's spending is likely to be less than $500 million according to data from an analyst at Gartner Inc.

IBM has long been a beacon of research in semiconductor technology and has carried that work into manufacturing with its own processes and wafer fabs. The company has pioneering work has included process miniaturization, high-frequency RF on CMOS and silicon-on-insulator. Its position in research enabled it to drive the Common Platform Alliance as a means of sharing semiconductor process research costs.

But an analysis of the capital expenditure plans show that IBM is gradually exiting from leading-edge manufacturing at high volume. It appears that the company has joined the broad class of semiconductor companies that will never build a major wafer fab again.

The last time IBM spent more than $1 billion on semiconductor capital expenditure in one year was 2004, when it was the 11th biggest spender, according to data from Gartner. IBM is not in the top 20 of semiconductor capital expenditure in 2010 and nor is it expected to be in the top 20 in 2011, according to Bob Johnson, research VP, Gartner.

There are going to be 10 or 11 companies in the billion-dollar capex club in 2011, according to Johnson's latest figures. The top 20, with their spending in millions of dollars, is currently set to be:

-Samsung $9,200

-TSMC $5,700

-Intel $5,000

-GlobalFoundries $3,200

-Hynix $2,750

-Micron $1,900

-Toshiba $1,900

-UMC $1,800

-Inotera $1,600

-SanDisk $1,400

-SMIC $1,000

-ASE $850

-Texas Inst. $800

-Renesas $748

-Elpida $634

-ST $600

-Rohm $574

-Amkor $552

-Infineon $550

-Siliconware $533

Johnson forecasts the 2011 global semiconductor capex at about $51.1 billion, about 5 percent down on a spend of $53.9 billion in 2010.

It is noticeable that semiconductor test and assembly houses such as Advanced Semiconductor Engineering, Amkor and Siliconware appear higher on the list than IBM.

As Johnson said the key to semiconductor manufacturing going forward is that "You are either involved in memory, in foundry or you are Intel." Johnson added that even Intel is getting involved in foundry through its deal with Achronix.

This capex forecast could decrease if an oversupply situation materializes in 2H 2011.

The synchronization of manufacturing processes by IBM, GlobalFoundries and Samsung provides second-sourcing opportunities. In New York, 90-minutes away from IBM's East Fishkill complex, GlobalFoundries is building Fab 8, a 300,000 square foot clean room fab that should be capable of 80,000 wafer starts per month. Meanwhile, Samsung is building a wafer fab in Texas, that is expected to be dedicated to foundry work.

"GlobalFoundries and Samsung will be strong competitors to TSMC at the leading edge," said Johnson.

"IBM is not investing heavily in manufacturing. It plays the research leader role," said Johnson. "It looks like fab-lite with a research emphasis. Bernie Meyerson would never give up the research," he added.

- Peter Clarke
EE Times

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