EETimes Supply Network
>
Opinion
IDMs follow dinosaurs out
The NXP-STMicroelectronics wireless IC joint venture announced Thursday (April 10) sounded the death knell for the semiconductor industry's most enduring business structure.
Only a handful of IDMs — semiconductor companies that own their own fabrication plants, design, test and assembly services — exist today as the industry pursues a relentless quest for productivity improvements and reduced operating costs.
In order to remain competitive, most semiconductor suppliers have over the last 10 years increasingly opted to outsource their wafer production to foundries, adopting instead a fabless strategy that helps them avoid the stupendously high costs of running $3 billion-plus fabs.
The IDMs were the last to follow and now it appears they are all rushing for the exit door into a new world of asset-smart production system dominated by foundries, which combine demand from dozens of IC makers and theoretically should be in a better position to fund fabs.
Even Intel Corp., the world's No. 1 semiconductor company and one of the industry's biggest spenders on manufacturing plants, isn't immune to the wind of change blowing across the entire IC landscape.
While Intel isn't likely to shed its IDM model anytime soon — it can easily afford the multi-billion dollar cost — it has for some time been supplementing internal wafer production with outsourced procurement.
To augment capacity, we use third-party manufacturing companies (foundries) to manufacture wafers for certain components, including chipset, networking and communications products, Intel said in its latest annual filling with the U.S. Securities and Exchange Commission.
Intel, with $15 billion in cash and short-term investments at the end of the December-quarter, can afford to finance its own fabs but the company is also hard pressed to reduce costs in a bruising battle with rival microprocessor supplier Advanced Micro Devices Inc.
AMD, meanwhile, has embraced a version of the outsourced wafer procurement model although the Sunnyvale, Calif.-based company has yet to disclose details of its plans.
What's clear though, is that for the remaining IDMs, including AMD, NXP and ST, a fabless operating model is no longer just a matter of wafer augmentation. The strategy simply isn't competitive anymore and, in any case, they also lack the financial strength to continue pushing the IDM model.
ST, for instance, closed 2007 with about $2.6 billion in cash and short-term investments while NXP had 706 million euro, or approximately $1.1 billion, nowhere near enough in both cases to continue funding expensive fabs.
It's no surprise therefore that the wireless joint venture announced by both companies won't dabble in fab ownership. It will start out with zero debts and the two partners hope to keep its capital structure as light as possible, they said.
Not owning any wafer fabs, the joint venture is designed with low capital intensity, while having access to secure leading-edge manufacturing capacity from both parent companies and foundries, ST and NXP said in the statement.
DISCLAIMER: THE VIEWS EXPRESSED IN THIS BLOG ARE THOSE OF THE AUTHOR ALONE WHO PROMISES TO BASE HIS SOMETIMES BIASED, POSSIBLY IGNORANT, OCCASIONALLY IRRELEVANT BUT ABSOLUTELY STIMULATING THOUGHTS ON VERIFIABLE FACTS ALONE. ANY COMMENTS SHOULD BE SENT TO BOJO@CMP.COM.
|
 |
EE Times caught up with T.J. Rodgers, founder, president and CEO of Cypress Semiconductor, to get his take on how the semiconductor industry will be impacted by the financial crisis and how the current downturn compares with others. ; 1996; 2001; balance; Book-to-Bill; cash; credit; Cypress Semiconductor; downturn; economy; EE Times; financial crisis; sheet; T.J Rogers; At the recent Renesas Developers' Conference in San Diego, Dan Mahoney, president and chief executive of Renesas Technology America Inc., talks about the economy, the IC market and whether or not the company is moving towards ''green design.'' ; consumer; design; Freescale; green; ic; Japan; microcontroller; Renesas; semiconductor; wireless; High aspect ratio microelectromechanical systems (MEMS) could harness the physics of inertial mass to enhance the sensitivity, signal-to-noise ratio and mechanical dampening of accelerometers for automobile airbags.; Air Bags; aspect ratio; Deep Reactive Ion Etching; DRIE; EE Times; EETimes; Electronic Stability Control; electronics; Freescale; High Aspect Ratio; MEMS; Micro Electro Mechanical Systems; National Highway Traffic Safety Administration; NHTSA; Signal to Noise; Signal to Noise Ratio; Galileo Destura, a product manager at Philips Research, demonstrates the uWand, a sort of wireless mouse that aims to replace the 40-button TV remote control.; gesture interfaces; Philips Research; Philips uWand; TV remote controls; Jos Benschop, vice president of research at ASML, talks about the road map for double pattern immersion and EUV lithography and the chief challenges getting those systems ready to ship.; ASML; double patterning; EUV; Lithography; semiconductors; IMEC researchers demonstrate C-programmable analog front-end and baseband chips running software-defined radio at rates approaching 100 Mbits/second.; analog front ends; FEC; forward error correction; IMEC; SDR; Software Defined Radio; wireless basebands; Cassini, the NASA spacecraft orbiting Saturn, made its closest flyby of the possibly habitable moon. By analyzing molecules being ejected from geysers there, Cassini hopes to determine if Cassini is manned outposts are possible there.; Cassini; EE Times; EETimes; electronics; Enceladus; habitable; Huygens; NASA; national aeronautics and space administration; NextGenLog; Oceanic and Space SciencesElectronic Engineering; saturn; University of Michigan Department of Atmospheric; Warren East, chief executive of ARM Ltd., shares his thoughts on the likely downturn in the cellular industry and the impact of Intel's rollout of the Atom processor in an interview at the ARM Developers' Conference.; arm; atom; cellular; handsets; Intel; mobile; Warren East; Kevin Meyer, vice president of industry marketing and platform alliances at Chartered Semiconductor Manufacturing, shares his reactions to the news about AMD's fab spinoff.; AMD Fab Spinoff; Chartered Semiconductor; Foundaries; Process Technology; Mark Pinto, chief technology officer at Applied Materials, talks about the company's move into equipment for producing solar panels, its technology challenges and the outlook for solar.; Applied Materials; Mark Pinto; photovoltaics; solar panels; A two-wheeled, inverted pendulum robot that demonstrates posture control in robots that must balance was shown at Ceatac Japan by Waseda University's Humanoid Robotics Institute and industry partner STMicroelectronics.; arm; ceatec; Combined Exhibition of Advanced Technologies; cortex; EE Times; EETimes; electronics; Humanoid Robot; Humanoid Robotics Institute; inverted pendulum; NextGenLog; stmicroelectronics; UBM; Waseda University; Neel Sundaresan, director of eBay Research Labs, talks about his R&D priorities and his thoughts on cloud computing.; cloud computing; eBay Research Labs; R&D; research; search; Massachusetts Institute of Technology (MIT) researchers have created the helicopter-of-the-sea, the Odyssey IV, which can hover in place anywhere in the sea by virtue of thrusters and smart software that senses currents and compensates.; Autonomous Underwater Vehicles Laboratory; EE Times; EETimes; electronics; helicopter; Massachusetts Institute Of Technology; MIT; NextGenLog; odyssey; Odyssey IV; robot; robotic; sea; Sea Grant College Program; undersea; Undersea Robot; Anthony Wood, founder and chief executive of Roku, shares his thoughts on the technical challenges of Internet TV, the competitors he faces with his set-top and the role of established TV makers.; internet tv; Roku; set-top boxes; streaming video; web tv; TI principal Fellow Gene Frantz discusses the latest in low-power signal processing and novel concepts such as energy buffering.; dsp; Energy Buffering; Gene Frantz; Low-Power Research; MIT; Patrick Mannion; Texas Instruments; ti; Azzedine Boubguira, vice president of marketing and business development at DiBcom, showed off two different connectivity devices that will turn PS3 and iPod into DVT receivers. ; Azzedine Boubguira; BBC; BT Movio; Connectivity Interface; consumer electronics market; Demodulator; DiBcom; Digital TV Standards; DTV tuner; DVB-T; IBC; International Broadcast Conference; mobile TV; PacketVideo; playstation 3; Telly; usb; wifi; Technical Director of P2P-Next Project Mark Stuart explains how its EU-funded research is bringing P2P technology to millions of TV sets at home to create a next generation P2P content delivery platform.
; BBC; EU; IBC; internet infrastructure; ISPs; Mark Stuart; P2P Networks; P2P-Next Project; Peer-to-Peer File Sharing Network; TVs; Video Content Delivery; Andrew Setos, president of engineering at the Fox Group, talks of the studio's plan to bring 3D home, and his web strategies.
; 3d; amsterdam; Andrew Setos; EE Times; experiments; Fox Group; home; IBC; internet; internet tv; Junko Yoshida; movie theaters; myspace; President Of Engineering; Social TV; Studios; web tv; The U.S. Fermi National Accelerator Laboratory and the CERN supercollider in Geneva are both searching for particles not seen since the Big Bang at the beginning of time.; black hole; CERN; collider; Conseil Europeen pour la Recherche Nucleaire; EE Times; EETimes; electronics; European Council for Nuclear Research; Fermi National Accelerator Laboratory; Large Hadron Collider; LHC; Peter White, sales and marketing director of Bodelin Technologies (Seattle) demonstrates the USB-based ProScope HR at the BiomeDevice expo in San Jose on Sept. 10. ; Bodelin Technologies; ProScope HR; USB cameras; USB microscope; Web imaging; Michael Lebby, CEO of Optoelectronics Industry Development Association, gives a preview of the inaugural “Green Photonics Forum”; Concentrator Photovoltaic Cells; Continuous-Wave Lasers; Fiber Interconnect; light-emitting diodes; Optoelectronics Industry Development Association; silicon photonics; Vertical Cavity Surface Emitting Laser; CERN circulate its first particle beam in the Large Hadron Collider (LHC) on September 10, 2008. Housed in a 16-mile tunnel, it produces beams seven times more energetic than today's most powerful particle accelerator.; black hole; CERN; collider; Conseil Europeen pour la Recherche Nucleaire; EE Times; EETimes; electronics; European Council for Nuclear Research; Fermi National Accelerator Laboratory; Large Hadron Collider; LHC; Example performance by virtual musician iMe and its programmer, Marcelo Gimenes. By learning the melodic, harmonic and rhythmic features of any musical style, iMe is capable of playing along with any soloist.; composition; EE Times; EETimes; electronic music; electronics; harmony; ICCMR; ime; improvisation; Interdisciplinary Centre for Computer Music Research; melody; music; rhythm; University of Plymouth; Java virtual machine specialist Lars Bak deomonstrates V8, the Javascript engine for Google's new Chrome browser.; browsers; chrome; google; Google's Chrome; Internet Explorer; JavaScript; microsoft; v8; virtual machine; web browsers; A first look at the Chrome from a technical leader of the browser's user interface.; Browser Tags; browsers; chrome; google; Google's Chrome; Omnibox; web browsers; Larry Page, Google co-founder and president of products, talks about his experience using Chrome, the company's new Web browser.; browsers; chrome; google; Google's Chrome; Internet Explorer; Larry Page; web browsers; Missouri University of Science and Technology (Rolla) analyzed the use of green hydrogen fuel technologies at airports and for shuttle buses.; Department of Energy; Doe; EE Times; EETimes; electronics; ESF; European Science Foundation; fuel cell; Green Energy; Green Power; Hydrogen fuel cell; Missouri University of Science and Technology; Patrick Mannion interviews Sumit Sadana, who has since left Freescale Semiconductor.; Freescale; ftf; interview; Sadana; Sumit; Sample video showing examples of segmentation, classification and tracking -- three basic elements of video analytics -- from a Video/Imaging DesignLine how-to article providing an overview of video analytics.; John Carmack, best known as one of the lead creator of the Doom video game, spoke at the Intel Developer Forum Wednesday (Aug. 20), showing clips from his latest creation and his support for a new set of visual development tools Intel is rolling out ; Carmack; doom; games; graphics; IDF; Intel; video; Eric Kim, general manager of Intel’s digital home division, spoke at the Intel Developer Forum on Wednesday (Aug. 20) with EE Times reporter Rick Merritt about the Canmore, Intel’s first system-on-chip for consumer electronics, his opinions on Intern; Canmore; consumer; IDF; Intel; NetTV; SoC; web tv; Jeffrey Katzenberg, co-founder of Dreamworks, talks about the move to stereo 3D in movie theaters and eventually in TVs, speaking at the Intel Developer Forum Wednesday, August 20.; 3D TV; DreamWorks; IDF; Intel Developer Forum; Jeffrey Katzenberg; theaters; Intel Chief Technology Officer, Justin Rattner, will predict the future of technology at this week's Intel Developers Forum (IDF, August 19 – 21, 2008, San Francisco).; EETimes; electronics; futurist; Intel Developers Forum; Justin Rattner; Molecular Device; Nanobot; nanotechnology; Programmable Matter; quantum; Quantum Device; quantum mechanics; Ray Kurzweil; spin; Spintronic; Digital money--from smart cards to wireless wallets--will be featured in futuristic videos at this week's Intel Developers Forum (IDF, August 19 – 21, 2008, San Francisco). ; Digital Money; electronics; Intel; Intel Developers Forum; People and Practices; smart card; Wireless Wallet; Morris Jarvis, an Intel fab project engineer, describes his Hermes prototype spacecraft, a low-cost space shift aimed for commercial users; IDF; Jarvis; space; spacecraft; Sample video showing examples of segmentation, classification and tracking -- three basic elements of video analytics -- from a Video/Imaging DesignLine how-to article providing an overview of video analytics.; Paul Prince, CTO of Dell's server group, discusses issues and opportunities with solid-state drives and converged data center networks.; 10G Ethernet; Converged Networks; dell; iSCSI; Solid-state drives; SSDs; An interview with Paul Liao, CTO of Panasonic on green engineering, home networking and the emerging ITU G.hn standard; Home Networking; panasonic; Paul Liao; Texsa A &M project for robot that plays Guitar Hero III.; FPGA; Guitar Hero III; LabView; national instruments; robotics; Slashbot; texas a & m; Darwin robot from Virginia Tech; darwin; national instruments; robotics; Romela; Virginia Tech; NXT-sans underwater ROV demonstration at National Instruments Week.; lego; Mindstorm; national instruments; robotics; ROV; Underwater; A young process technology engineer laid off from the Hynix 200mm DRAM fab in Eugene, Oregon shares his thoughts about the plant closing down.; Eugene; fab; Hynix; Oregon; A look at the Hynix Oregon DRAM fab the day of the visit by the company's chief executive; DRAM fab; Hynix; Oregon; James Truchard, co-founder and CEO of National Instruments, talks about the evolution of LabView.; James Truchard; LabView; national instruments; Interview with Airvana vice president of marketing David Nowicki; 3G; 4g; Airvana; CDG; cdma; CPE; femtocells; lte; wireless gateway; Perry LaForge of CDMA Development Group talks about CDG plans for 2009, including LTE and WiMax; 700-MHz; CDG; cdma; femtocell; lte; mobile broadband; WiMAX; Matthew Nordan, president of Lux Research, speaks at Nano Renewable Energy Summit; Venture Capital; Michael Bruce, senior advisor for finance in the Department of Energy's Office of Energy Efficiency and Renewable Energy, talks about venture capital.; cleantech; Department of Energy; renewable energy; Venture Capital; Ixia Communications, in a suite at the NxtComm show, demonstrates traffic generation and analysis at 100 Gbits/sec; ethernet; gigabit; Ixia; Nxtcomm; Wirbel; Michael Sidenius of Tpack demonstrates forward error correction capability of the Tpack TPOX3203 packet optical engine
; ethernet; Nxtcomm; optical networks; Smartpack; Tpac; Wirbel; Three months into his tenure as chairman and chief executive officer of Freescale, Rich Beyer sat down with me to discuss the company's future growth areas and the technolgies and products that will propel it forward.
; CEO; Freescale; interview; Rich Beyer; semiconductor; EE Times editor Mark LaPedus interviews Rick Hill, CEO of Novellus ; Novellus; Rick Hill; SEMICON West; This is a player showing all of the latest videos for EETimes.
|
| |
|
|
|
|
|
