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Nowadays it is extremely expensive to build, own and operate semiconductor manufacturing facilities. Intel Corp. is among a handful of companies, who can afford to own numerous leading-edge facilities across the globe, whereas other companies have to turn to contract makers of chips. But Intel claims that as process technologies get thinner and processors more sophisticated, foundry model may fail.

“The foundry model is collapsing. [...] Qualcomm will not be able to use that [TSMC's single 20nm] process,” said Mark Bohr, director of process architecture & integration and senior fellow of technology & manufacturing group at Intel, in a brief interview with EETimes.

TSMC recently announced that it would offer only one version of 22nm process technology that would be aimed at both low-power and high-performance devices. Intel, which has been manufacturing commercial chips using general purpose 22nm process technology for several months now, vows to introduce a special version of the 22nm manufacturing technology for system-on-chip devices shortly. Intel concludes that without special tailoring of fabrication processes for chip designs and vice versa the end product will not be the best one possible.

There are clear advantages in having own fabs, but very few companies these days sell as many chips as Intel does and therefore they cannot afford building factories and develop their own process technologies. Once semiconductor fabs start to process 450mm wafers, even fewer companies will be able to have their own facilities and tailor designs for processes and vice versa, which solves a lot of problems, according to Intel.

“Being an integrated device manufacturer really helps us solve the problems dealing with devices this small and complex,” said Mr. Bohr.

But since far too many chip designers are fabless, contract makers of semiconductors will have to ensure the best possible process technologies in order to stay competitive. Therefore, the process technologies will only get better and the foundry industry will prosper in the coming decades.

Tags: Intel, 22nm, Semiconductor, Business, TSMC, Globalfoundries, UMC, SMIC, IBM, Samsung

Discussion

Comments currently: 12
Discussion started: 04/25/12 01:18:46 PM
Latest comment: 04/30/12 01:14:52 PM

[1-8]

1. 
Intel is trolling.
6 5 [Posted by: sirroman  | Date: 04/25/12 01:18:46 PM]
Reply

2. 
Diagrammatic representation of the Intel vs. ARM battle:

https://picasaweb.google....VsARM#5725128377329412914
2 1 [Posted by: KartikJay  | Date: 04/25/12 03:27:34 PM]
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3. 
Real men have Fabs. Jerry Sanders said it, and its just as true today as it was when he said it.

There's a bit competitive advantage there. Of course, the cost is high, but you can see the issues when you don't. AMD got double mounted, and just can not compete in any meaningful way with Intel. They've had to surrender any type of performance contest. They had to pay Global Foundries a ton of money to break a contract, and their processors use way more power, while performing much worse than Ivy Bridge.

Part of that is design, of course, but some of it is related to having no control over the manufacturing technology, and not having the synergy Intel has. They chose to runt off, and yield. I thought it was a mistake then, and I think it's a mistake now. It would have been far better for them to keep their fabs, and do much more manufacturing for other companies (or move ATI stuff to their own fabs) than to surrender like they did. They took the easy route, but the as is often the case, the wrong one. They are paying now.
3 3 [Posted by: TA152H  | Date: 04/25/12 04:27:52 PM]
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4. 
This happens when bean counters run companies with a very short term profit motive. Don't blame the companies who got rid of manufacturing plants, blame the Universities who have been teaching the bean counters the incorrectly. The business model adopted Wall street with a quick profit motive is the trouble. If a business is run by an engineer or the founder then there seems to be a long term plan for the company, But any-one with a MBA seems incapable of steering any company for any length of time. These are the people who have caused the GFC the non-productive bean counters who are there for their own benifit not the companies or the shareholders.
2 1 [Posted by: tedstoy  | Date: 04/25/12 05:50:52 PM]
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5. 
AMD board has shown their best engineers the door.
3 1 [Posted by: Tukee44  | Date: 04/25/12 11:06:23 PM]
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6. 
I agree with this. Since AMD "lost" their fabs, ... well we all know what happened next.
1 1 [Posted by: TAViX  | Date: 04/26/12 03:18:47 AM]
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7. 
Isn't intel a contract chip maker themselves?
0 0 [Posted by: nitro912gr  | Date: 04/27/12 11:28:24 AM]
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8. 
Why does intel feel the need to continually talk themselves up ???
0 0 [Posted by: alpha0ne  | Date: 04/29/12 11:52:51 PM]
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