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Technology Stocks : Dupont Photomasks (DPMI) -- Ignore unavailable to you. Want to Upgrade?

To: Duane L. Olson who wrote (772)	2/12/1999 11:51:00 PM
From: Katherine Derbyshire	Read Replies (1) \| Respond to of 955

LSI specifically may actually suffer from the shift to foundries. First, a few terms: IDM=Integrated Device Manufacturer=Intel, etc. Company designs chips, makes chips, and sells the chips to systems integrators. ASIC house=LSI, etc. Company designs and manufacturers specialty chips "to order" for a specific integrated system. foundry=UMC, TSMC, etc. Company sells processed wafers, using whatever mask set the customer specifies, regardless of who did the design. fabless=Xilinx, etc. Company owns no fabs, just does designs for which it then contracts capacity from a foundry. Now, part of the reason for the technology glut mentioned in the article is that the foundries built tons of very advanced capacity, but the fabless houses haven't migrated their designs to the smaller linewidths yet. Foundries are increasingly partnering with IP (reusable design "modules") suppliers so that they can help with this kind of design migration and generally help their customers make more advanced (therefore more expensive) designs. All of this potentially threatens the ASIC houses because their design expertise is becoming less valuable with the proliferation of reusable IP. A system integrator could theoretically use TSMC's IP library to build its own design, and bypass the ASIC house. But, as Itow noted, this is likely to be a very gradual transition. I'm not sure whether the above clarifies things or just adds to the muddle. If the latter, please let me know. Katherine