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In microelectronics, the foundry model refers to the separation of a semiconductor fabrication plant operation (foundry) from an integrated circuit design operation, into separate companies or business units.

Contents

OverviewEdit

Although many companies continue to both design and manufacture integrated circuits (achieving efficiency through vertical integration), these integrated device manufacturers (IDMs) are not alone in the marketplace. Economic forces have led to the existence of many companies that only design devices, known as fabless semiconductor companies, as well as merchant foundries, or Pure Play foundries that only manufacture devices under contract for other companies, without designing them. Examples of IDMs are Intel, Samsung and Texas Instruments, examples of fabless companies are Qualcomm, Broadcomm, Nvidia, AMD, and examples of Pure Play foundries are TSMC, Globalfoundries and UMC.

Integrated circuit production facilities are expensive to build and maintain. Unless they can be kept at nearly full utilization, they will become a drain on the finances of the company that owns them. The foundry model uses two methods to avoid these costs: fabless companies avoid costs by not owning such facilities. Merchant foundries, on the other hand, find work from the worldwide pool of fabless companies, and by careful scheduling, pricing, and contracting keep their plants at full utilization.

HistoryEdit

Originally, microelectronic devices were manufactured by companies that both designed and produced the devices. This was necessary because manufacturing involved tweaking parameters, precise understanding of the manufacturing processes being used, and the occasional need to redesign. These manufacturers were involved in both the research and development of manufacturing processes and the research and development of microcircuit design.

However, as manufacturing techniques developed, microelectronic devices became more standardised allowing them to be used by more than a single manufacturer. This standardization allowed design to be split from manufacture. A design that obeyed the appropriate design rules could be manufactured by different companies that had compatible manufacturing methods. An important development that allowed this was the introduction of advances in electronic design automation (EDA), which allowed circuit designers to exchange design data with other designers using different foundries.

Because of the separation of manufacture and design, new types of companies were founded. One type of company is called a fabless semiconductor company. These companies do not have any semiconductor manufacturing capability but rather contract production from a manufacturer. This manufacturer is called a merchant foundry. The fabless company concentrates on the research and development of an IC-product; the foundry concentrates on fabricating and testing the physical product. If the foundry does not have any semiconductor design capability, it is called a pure-play semiconductor foundry.

An absolute separation into fabless and foundry companies is not necessary. Some companies continue to exist which perform both operations and benefit from the close coupling of their skills. Some companies manufacture some of their own designs and contract out to have others manufactured or designed, in cases where they see value or seek special skills. The foundry model is a business vision that seeks to optimize productivity.

MOSISEdit

The very first merchant foundries were part of the MOSIS service. The MOSIS service gave limited production-access to designers with limited means, such as students, researchers at universities, and engineers at small startups.[1] The designer submitted designs and these submissions were manufactured with the commercial company's extra capacity. Manufacturers could insert some wafers for a MOSIS design into a collection of their own wafers when a processing step was compatible with both operations. The commercial company (serving as foundry) was already running the process, so they were effectively being paid by MOSIS for something they were already doing. A factory with excess capacity during slow periods could also run MOSIS designs in order to avoid having expensive capital equipment standing idle.

Under-utilization of an expensive manufacturing plant could lead to the financial ruin of the owner, so selling surplus wafer capacity was a way to maximize the fab's utilization. Hence, economic factors created a climate where fab operators wanted to sell surplus wafer-manufacturing capacity, and designers wanted to purchase manufacturing capacity rather than try to build it.

Although MOSIS opened the doors to some fabless customers, earning additional revenue for the foundry and providing inexpensive service to the customer, running a business around MOSIS production was difficult. The merchant foundries sold wafer capacity on a surplus basis, as a secondary business activity. Services to the customers were secondary to the commercial business, with little guarantee of support. The choice of merchant dictated the design, development flow, and available techniques to the fabless customer. Merchant foundries might require proprietary and non-portable preparation steps. Foundries concerned with protecting what they considered trade secrets of their methodologies might only be willing to release data to designers after an onerous nondisclosure procedure.

Dedicated foundryEdit

In 1987, the world's first dedicated merchant foundry opened its doors: Taiwan Semiconductor Manufacturing Company (TSMC).[2] The distinction of 'dedicated' is in reference to the typical merchant foundry of the era, whose primary business activity was building and selling of its own IC-products. The dedicated foundry offers several key advantages to its customers: first, it does not sell finished IC-products into the supply channel; thus a dedicated foundry will never compete directly with its fabless customers (obviating a common concern of fabless companies). Second, the dedicated foundry can scale production capacity to a customer's needs, offering low-quantity shuttle services in addition to full-scale production lines. Finally, the dedicated foundry offers a "COT-flow" (customer owned tooling) based on industry-standard EDA systems, whereas many IDM merchants required its customers to use proprietary (non-portable) development tools. The COT advantage gave the customer complete control over the design process, from concept to final design.

Foundry sales leaders by yearEdit

  • Pure-play semiconductor foundry is a company that does not offer a significant amount of IC products of its own design, but instead operates semiconductor fabrication plants focused on producing ICs for other companies.[citation needed]
  • Integrated device manufacturer (IDM) semiconductor foundry is where companies such as Texas Instruments, IBM, and Samsung join in to provide foundry services as long as there is no conflict of interest between relevant parties.

2016–2014Edit

As of 2016, the top pure-play semiconductor foundries were:[3]
Rank Company Foundry type Country of origin Revenue (million USD)
2016 2015 2016 2015 2014
1 1 TSMC Pure-play   Taiwan 29,488 25,574 25,138
2 2 Globalfoundries Pure-play   United States 5,545 5,019 4,355
3 3 UMC Pure-play   Taiwan 4,582 4,464 4,331
4 4 SMIC Pure-play   China 2,921 2,236 1,970
5 5 PowerChip Pure-play   Taiwan 1,275 1,268 1,291
6 6 TowerJazz Pure-play   Israel 1,249 961 828
7 7 Ruselectronics[4][5] Pure-play   Russia 971 774 800
8 8 Vanguard (VIS) Pure-play   Taiwan 800 736 790
9 9 Hua Hong Semi Pure-play   China 712 650 665
10 10 Dongbu HiTek Pure-play   South Korea 672 593 541
11 12 X-Fab Pure-play   Germany 510 331 330
12 13 Crocus Nano Electronics (CNE) Pure-play   Russia -- -- --
Others Pure-play 2,251 2,405 2,280

2013Edit

As of 2013, the top 13 semiconductor foundries were:[6]
2013 Rank 2012 Rank Company Foundry Type Country of origin Revenue (million $USD)
1 1 TSMC Pure-play   Taiwan 19,850
2 2 Globalfoundries Pure-play   United States 4,261
3 3 UMC Pure-play   Taiwan 3,959
4 4 Samsung Semiconductor IDM   South Korea 3,950
5 5 SMIC Pure-play   China 1,973
6 - Ruselectronics[7] Pure-play   Russia 1,200
7 8 PowerChip Pure-play   Taiwan 1,175
8 9 Vanguard (VIS) Pure-play   Taiwan 713
9 6 Huahong Grace Pure-play   China 710
10 10 Dongbu Pure-play   South Korea 570
11 7 TowerJazz Pure-play   Israel 509
12 11 IBM IDM   United States 485
13 12 MagnaChip IDM   South Korea 411
14 13 Win Semiconductors Pure-play   Taiwan 354
15 14 Crocus Nano Electronics (CNE) Pure-play   Russia --

2011Edit

As of 2011, the top 14 semiconductor foundries were:[8]
Rank Company Foundry type Country of origin Revenue (million USD)
1 TSMC Pure-play   Taiwan 14,600
2 UMC Pure-play   Taiwan 3,760
3 Globalfoundries Pure-play   United States 3,580
4 Samsung Semiconductor IDM   South Korea 1,975
5 SMIC Pure-play   China 1,315
6 TowerJazz Pure-play   Israel 610
7 Vanguard (VIS) Pure-play   Taiwan 519
8 Dongbu HiTek Pure-play   South Korea 500
9 IBM IDM   United States 445
10 MagnaChip IDM   South Korea 350
11 SSMC Pure-play   Singapore 345
12 Hua Hong NEC Pure-play   China 335
13 Win Semiconductors Pure-play   Taiwan 300
14 X-Fab Pure-play   Germany 285

2010Edit

As of 2010, the top 10 semiconductor foundries were:[9]
Rank Company Foundry Type Country of origin Revenue (million USD)
1 TSMC Pure-play   Taiwan 13,332
2 UMC Pure-play   Taiwan 3,824
3 Globalfoundries Pure-play   United States 3,520
4 SMIC Pure-play   China 1,554
5 Dongbu HiTek Pure-play   South Korea 512
6 TowerJazz Pure-play   Israel 509
7 Vanguard (VIS) Pure-play   Taiwan 505
8 IBM IDM   United States 500
9 MagnaChip IDM   South Korea 410
10 Samsung Semiconductor IDM   South Korea 390

2009–2007Edit

As of 2009, the top 17 semiconductor foundries were:[10]

Rank Company Foundry type Country of origin Revenue (million USD)
2009 2009 2008 2007
1 TSMC Pure-play  Taiwan 8,989 10,556 9,813
2 UMC Pure-play  Taiwan 2,815 3,070 3,430
3 Chartered(1) Pure-play  Singapore 1,540 1,743 1,458
4 GlobalFoundries Pure-play  USA 1,101 0 0
5 SMIC Pure-play  China 1,075 1,353 1,550
6 Dongbu Pure-play  South Korea 395 490 510
7 Vanguard Pure-play  Taiwan 382 511 486
8 IBM IDM  USA 335 400 570
9 Samsung IDM  South Korea 325 370 355
10 Grace Pure-play  China 310 335 310
11 HeJian Pure-play  China 305 345 330
12 Tower Semiconductor Pure-play  Israel 292 252 231
13 HHNEC Pure-play  China 290 350 335
14 SSMC Pure-play  Singapore 280 340 359
15 Texas Instruments IDM  USA 250 315 450
16 X-Fab Pure-play  Germany 223 368 410
17 MagnaChip IDM  South Korea 220 290 322

(1) Now acquired by GlobalFoundries

2008–2006Edit

As of 2008, the top 18 pure-play semiconductor foundries were:[11]

Rank Company Country of origin Revenue (million USD)
2008 2008 2007 2006
1 TSMC  Taiwan 10,556 9,813 9,748
2 UMC  Taiwan 3,400 3,755 3,670
3 Chartered  Singapore 1,743 1,458 1,527
4 SMIC  China 1,354 1,550 1,465
5 Vanguard  Taiwan 511 486 398
6 Dongbu  South Korea 490 510 456
7 X-Fab  Germany 400 410 290
8 HHNEC  China 350 335 315
9 HeJian  China 345 330 290
10 SSMC  Singapore 340 350 325
11 Grace  China 335 310 227
12 Tower Semiconductor  Israel 252 231 187
13 Jazz Semiconductor  United States 190 182 213
14 Silterra  Malaysia 175 180 155
15 ASMC  China 149 155 170
16 Polar Semiconductor  Japan 110 105 95
17 Mosel-Vitelic  Taiwan 100 105 155
18 CR Micro (1)  China - 143 114
Others 140 167 180
Total 20,980 20,575 19,940

(1) Merged with CR Logic in 2008, reclassified as an IDM foundry

2007–2005Edit

As of 2007, the top 14 semiconductor foundries include:[12]

Rank Company Foundry type Country of origin Revenue (million USD)
2007 2007 2006 2005
1 TSMC Pure-Play  Taiwan 9,813 9,748 8,217
2 UMC Pure-Play  Taiwan 3,755 3,670 3,259
3 SMIC Pure-Play  China 1,550 1,465 1,171
4 Chartered Pure-Play  Singapore 1,458 1,527 1,132
5 Texas Instruments IDM  United States 610 585 540
6 IBM IDM  United States 570 600 665
7 Dongbu Pure-Play  South Korea 510 456 347
8 Vanguard Pure-Play  Taiwan 486 398 353
9 X-Fab Pure-Play  Germany 410 290 202
10 Samsung IDM  South Korea 385 75 -
11 SSMC Pure-Play  Singapore 350 325 280
12 HHNEC Pure-Play  China 335 315 313
13 HeJian Pure-Play  China 330 290 250
14 MagnaChip IDM  South Korea 322 342 345

For ranking in worldwide:[13]

Rank Company Country of origin Revenue (million USD) 2006/2005 changes
2006 2005 2006 2005
6 7 TSMC  Taiwan 9,748 8,217 +19%
21 22 UMC  Taiwan 3,670 3,259 +13%

2004Edit

As of 2004, the top 10 pure-play semiconductor foundries were:[citation needed]

Rank 2004 Company Country of origin
1 TSMC  Taiwan
2 UMC  Taiwan
3 Chartered  Singapore
4 SMIC  China
5 Dongbu/Anam  South Korea
6 SSMC  Singapore
7 HHNEC  China
8 Jazz Semiconductor  United States
9 Silterra  Malaysia
10 X-Fab  Germany

Financial and IP issuesEdit

Like all industries, the semiconductor industry faces upcoming challenges and obstacles.

The cost to stay on the leading edge has steadily increased with each generation of chips. The financial strain is being felt by both large merchant foundries and their fabless customers. The cost of a new foundry exceeds $1 billion. These costs must be passed on to customers. Many merchant foundries have entered into joint ventures with their competitors in an effort to split research and design expenditures and fab-maintenance expenses.

Chip design companies sometimes avoid other companies' patents simply by purchasing the products from a licensed foundry with broad cross-license agreements with the patent owner.[14]

Stolen design data is also a concern; data is rarely directly copied, because blatant copies are easily identified by distinctive features in the chip,[15] placed there either for this purpose or as a byproduct of the design process. However, the data including any procedure, process system, method of operation or concept may be sold to a competitor, who may save months or years of tedious reverse engineering.

See alsoEdit

ReferencesEdit

  1. ^ Suzanne Berger; Richard K. Lester (12 February 2015). Global Taiwan: Building Competitive Strengths in a New International Economy. Routledge. pp. 142–. ISBN 978-1-317-46970-4.
  2. ^ Hitoshi Hirakawa; Kaushalesh Lal; Shinkai Naoko (2013). Servitization, IT-ization and Innovation Models: Two-stage Industrial Cluster Theory. Routledge. pp. 34–. ISBN 978-0-415-63945-3.
  3. ^ McGrath, Dylan (2017-01-23). "X-Fab is Fastest Growing Foundry". EE Times. Retrieved 2017-05-10.
  4. ^ "RBK Data base of companies". rbc.ru. Retrieved 20 February 2018.
  5. ^ "United States dollar (USD) and Russian ruble (RUB) Year 2014 Exchange Rate History". Retrieved 20 February 2018.
  6. ^ IC Insights: Top 13 Foundries Account for 91% of Total Foundry Sales in 2013
  7. ^ http://itar-tass.com/en/economy/727118
  8. ^ semimd.com: 2011 Major IC Foundries.
  9. ^ dongbuhitek.com: 2010 Foundry Ranking (citing Gartner) (PDF).
  10. ^ IC Insights, "2009 Major IC Foundries" March 2009.
  11. ^ IC Insights, "Leading Pure-Play Foundry Companies" March 2009.
  12. ^ IC Insights, "2007 Major IC Foundries".
  13. ^ IC Insights, "Worldwide 2006 Top 25 Semiconductor Sales Leaders".
  14. ^ R. H. Abramson (28 Feb – 4 Mar 1994). "When the chickens come home to roost: the licensed foundry defensein patent cases". Compcon Spring '94, Digest of Papers.: 348–354. doi:10.1109/CMPCON.1994.282907. ISBN 978-0-8186-5380-3.
  15. ^ Carol Marsh and Tom Kean. "A Security Tagging Scheme for ASIC Designs and Intellectual Property Cores". Design & Reuse.

External linksEdit