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IBM *PAYS* Globalfoundaries $1.5B to take its chip arm
I think Maurice has it basically right. The semiconductor industry is hugely capital intensive, so much so now that even companies like IBM have to take a deep breath and think carefully about whether they want to invest billions in the next round of device manufacturing.
You're seeing more and more consolidation, not only on the fab side but on the tool side (the companies that make the equipment that manufacture the chips) - AMAT and TEL recently agreed to merge.
Decades ago, companies designed their devices, built their own manufacturing equipment (tools) and used them to manufacture their designs. As equipment became more expensive (and the process a bit more standardized), companies gave up on making their own tools. Around a quarter century ago, foundries started, because it was more cost effective (especially for low tech chips) to manufacture in bulk, as Maurice described. As wafers got larger (now 300mm), circuitry smaller, yield more difficult to achieve, the trend accelerated.
There's something to be said for IDMs - they'll be at the leading edge. The best foundries, like TSMC, will come close, but there's still lag time. I expect the arrangement IBM has made will allow it to preserve an IDM-like product cycle.
In plain English, vertical integration has benefits. I don't think that's the kind of one-stop shopping Maurice was referring to.
Disclaimer: I've been to the fab at E. Fishkill, as well as fabs in the midwest, Silicon Valley, and Asia. I've jumped into more bunny suits than one would like (i.e. once in a lifetime should be enough for anyone).
Comments
You're seeing more and more consolidation, not only on the fab side but on the tool side (the companies that make the equipment that manufacture the chips) - AMAT and TEL recently agreed to merge.
Decades ago, companies designed their devices, built their own manufacturing equipment (tools) and used them to manufacture their designs. As equipment became more expensive (and the process a bit more standardized), companies gave up on making their own tools. Around a quarter century ago, foundries started, because it was more cost effective (especially for low tech chips) to manufacture in bulk, as Maurice described. As wafers got larger (now 300mm), circuitry smaller, yield more difficult to achieve, the trend accelerated.
There's something to be said for IDMs - they'll be at the leading edge. The best foundries, like TSMC, will come close, but there's still lag time. I expect the arrangement IBM has made will allow it to preserve an IDM-like product cycle.
In plain English, vertical integration has benefits. I don't think that's the kind of one-stop shopping Maurice was referring to.
Disclaimer: I've been to the fab at E. Fishkill, as well as fabs in the midwest, Silicon Valley, and Asia. I've jumped into more bunny suits than one would like (i.e. once in a lifetime should be enough for anyone).