In many of the fabless companies' 10-Qs I see the argument time and time again about product development costs to get qualified at foundries; also the time/costs involved in moving to new fab processes or design shrinks.
These costs should not vary that much between fabless and fabbed companies. The big difference is in wafer costs, which vary with supply and demand. These can especially be a differentiator at the leading edge geometries, where supply in the foundry market is often constrained (although TSMC is pushing to change that).
Product qualification is pretty standard whether it is done for a foundry's process or your own internal fab process. It is driven by the customer and is done according standards from organizations like JEDEC. These are the same for everybody across the board with minor variations.
The problem with moving between foundries was a lot more serious several years ago when the foundry industry was much less mature. The foundries were small and could not support larger customers, but that has changed to a large degree. It is still a factor, but to a lesser degree. Also, design shrinks done at a foundry are pretty similar to those done in your own fab.
In your own fab you do have more control over the process, but my experience has been that the foundries (at least the better ones--TSMC, for example) do a better job of controlling their processes than a lot of captive fabs do. Maybe the reason is that the foundry's paycheck is more directly dependent on their customer's happiness than an internal fab. Of course I'm sure there are exceptions, but that's my general observation.
I'm not saying that having a captive fab is a bad idea. In fact, for a company the size of LSI, it is pretty much a necessity. However, I don't agree that a fab owner necessarily has a big advantage over a foundry customer. Sometimes it is a disadvantage (when there's a glut of capacity) and sometimes it is an advantage (when wafer supply is constrained). Over the long haul it probably averages out to a small advantage cost-wise. However, the stability of supply provided by your own fab is a necessity for the biggest companies and probably the biggest reason to own a fab.
Regards,
G.P. |
