by Anton Shilov
07/15/2012 | 01:12 PM
The rumors regarding possible acquisition of IBM's contract semiconductor manufacturing divisions have just resurrected. This time it came out from an additional comment to a Future Horizons report. Perhaps, it makes a lot of sense. Or may not at all.
"We assume GlobalFoundries will purchase IBM’s semiconductor division and that Hynix/Micron will buy up the remaining smaller memory firms," said an analysts from Future Horizons research company in an additional comment to the call for the European Union to fund transition to 450-mm wafer processing in Europe.
450mm fabs cost $10 billion to build. Meanwhile, many chips nowadays become commodity products. Moreover, the margins of the foundry businesses are shrinking, which is why the contract semiconductor business make a great sense for Abu Dhabi (the emirate that controls Globalfoundries), which is looking forward for long-term investments and has plenty of money. For Europe in general, with the exception of countries like the Russian Federation (which budget is plagued by Vladimir Putin's military ambitions amid necessity for high oil and gas prices, which is why no investments into leading-edge manufacturing will be made while this president keeps office) and Germany (which needs to keep high-tech manufacturing at home, but does not want to support companies, yet it has finances to do so) long term investments are unlikely to be made by the governments despite of obvious necessity. Given the situation, it hardly makes sense for European private groups to help to invest into semiconductor manufacturing facilities due to lack of spare cash and the current economic climate.
In the long run, commoditization will happen to complex chips, such as Qualcomm Snapdragon or Nvidia Tegra; hence, the margins in the foundry business will eventually drop. Historically, IBM has got rid of all commodity/low-margin businesses. As a result, in 450mm world, IBM may not be interested in doing this business in the long-term, but may enter the market of very [relatively] high-scale 450mm manufacturing as one of a few 450mm contract makers, enjoy the situation for several years (so to get part of the investments back), and then sell the business off to its partner, Globalfoundries.
GF will have two leading-edge fabs located in one region, which will make it relatively easy to transfer manufacturing technologies from one to another, in a manner similar to Intel's "copy exactly". Such an approach explains why IBM teamed up with Intel, Globalfoundries, TSMC and Samsung to research 450mm production.
Nonetheless, in case IBM wants to get rid of foundry business at 300mm level, then the negotiations are underway and the deal may happen rather sooner than later. On the other hand, this does not explain, why IBM is researching 450mm manufacturing.
IBM, GF did not comment on the news-story.