According to a new set of figures out of IC Insights, fabless IC companies will command at least 33 percent of the total IC market by 2017.
In the long run fables IC suppliers and the foundries that serve them will continue to become an ever stronger force in the total IC industry. Fears of an almighty Intel with huge 450mm fabs seem unfounded, at least if IC Insights crunched its numbers right.
Fabless IC sales growth always tended to outpace IDM IC sales growth. The trend reversed only once, back in 2010, as fabless IC suppliers failed to cash in on the DRAM and NAND boom.
However, fabless IC suppliers saw their growth rates rebound in 2011, with a 5 percent increase compared to a 1 percent decline for the IDM gang. The positive trend continued in 2012, as fabless IC supplier grew by 6 percent, outperforming IDMs by 14 points.
In 2012 fabless companies accounted for 27.8 percent of worldwide IC sales, up from 13 percent in 2002.
United Microelectronics Corporation is investing in a new $8 billion fab to drive 28nm production and move towards a future generation of 20nm production.
The semi firm broke ground on the factory today, and will start moving towards phases 5 and 6 of production. UMC has already invested $8 billion in its Fab 12A and the next two phases will mean the same amount of money. UMC also has plans for phases 7 and 8 at the plant.
UMC, the main foundry competitor to domestic rival TSMC, is investing a sizeable wad of cash in the 300mm fab at its Tainan, Taiwan complex, in order to expand capacity for 28nm production.
The extra capacity at 28nm will be welcomed in the supply chain, with reports that TSMC has struggled to maintain production at this process size.
Customers such as Qualcomm, AMD and Nvidia ended up switching some orders to UMC after 28nm production delays from TSMC.
Production will also get started for UMC at the 20nm process as foundries try to keep up with Intel’s trailblazing, and will also provide some 14nm capacity when equipment moves during the latter part of 2013.
Chip firm TSMC upped its research and development spending by nearly 50 percent in 2010, making it one of the top 10 spenders in the R&D department of the semiconductor industry last year.
IC Insights released a report that showed TSMC rising into the top 10 with a 44 percent increase in R&D spending, up from $656 million in 2009 to $945 million in 2010.
This increase secured it the tenth spot on the list, beneath a number of other big names who have been spending big time on research lately. Intel topped the list, with Samsung and STMicro taking second and third slots respectively. Renesas, Broadcom, Toshiba, Qualcomm, TI, and AMD also featured above TSMC.
The majority of the above companies, including TSMC, operate a fabless or fab-lite model, which is becoming an increasingly successful business model. R&D is a larger element of the fabless approach, with these companies typically spending more of their revenue in this area.
Integrated device managers and fabless IC suppliers tend to spend between 15 and 20 percent of their budgets on research, nearly double the five to 10 percent that foundries spend, even though the latter will often have more money at their disposal.
TSMC’s research spending is forecast to increase by another 20 percent this year, resulting in a total R&D spend for 2011 at $1.1 billion.
Well placed sources tell TechEye that fabless manufacturers are finding themselves on strict allocation, meaning that their customers are having to wait while the foundries struggle to supply them with products.
It’s always good to have your products in demand but if supplies are that tight, it’s not that great at all because you’ve got nothing to sell.
This news rather contradicts a report in today’s Digitimes, that suggests TSMC is “alarmed” by the fabless companies not taking delivery of their wafer starts.
The truth is that the foundries are not being entirely straight with the rest of the industry – after the economic crash they re-trenched and are taking their time to get their act together.
But customers don’t like being dictated to and now there are serious alternatives to TSMC in the shape of GlobalFoundries, they don’t necessarily have to be dictated too by Yoda.
It’s pretty clear that Apple’s A4, using technology from PA Semi that it owns, signals a sign that the company is serious about using its energy and resources to design chips.
But MacNews.com, a new magazine, speculates that there could be much more than just dabbling with the idea.
We already know that Apple has two ex-ATI chief technology officers working on something or other in Cupertino. They won’t be twiddling their fingers, that’s for sure.
The author of the piece in Macnews.com speculates that in five years time Mac OS X will run on nothing but Apple designed microprocessors, and suggests that Apple doesn’t want to have all its eggs in the Intel basket.
Even AMD has become a fabless design company, despite its founder Jerry Sanders III proclaiming on every possible occasion that only real men have fabs.
Apple won’t be building $2 billion fabs, that’s for sure. Macnews.com is here.