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Message: Ajit Manocha and Globalfoundry 2.0

Foundry 2.0: New White Paper and Video Interview with CEO Ajit Manocha

Today our friends over at VLSI Research released two thought-provoking commentaries on the evolution of the foundry industry.

The first is a video featuring GLOBALFOUNDRIES CEO Ajit Manocha being interviewed by G. Dan Hutcheson, VLSI’s chairman and CEO. In the video, which can be viewed on theweSRCH.com web site, these two industry veterans discuss the challenges facing the semiconductor industry and why a new foundry model is needed to enable continued innovation.

Today VLSI also released a new white paper by Hutcheson that delves into the historical development of the semiconductor foundry business model, how things went wrong in the 2000s, and why a new model of foundry partnership is needed—precisely the “Foundry 2.0” model that Manocha has called for since taking the helm at GLOBALFOUNDRIES. The white paper can be downloaded here (registration required).

After discussing the inception of the industry in the 1980s, Hutcheson reviews some of the key infrastructural shifts in the early 1990s that led to the rapid growth of the foundry segment—the most important of which was the rising cost of leading-edge semiconductor fabs. “The foundry movement hit high gear in the early nineties, when the cost of a fab was just passing the one-billion dollar mark,” Hutcheson writes. “The cost of a fab was roughly rising at about half the rate of Moore’s Law, or a doubling every two nodes. Moreover, it was not just the cost of building a new fab, because existing ones had to be upgraded every node for a chip maker to stay in the game. The incremental cost of keeping a fab up-to-date was a growing capital burden, which became another big barrier to entry.”

But just as the foundry industry was beginning to hit its stride, the fast-moving semiconductor marketplace continued to evolve. “By 2000, the foundry business model had moved from an idea for companies who could not afford fabs to being front and center in the mainstream of manufacturing,” Hutcheson writes. “Many had come to believe the foundry was the future of manufacturing. But the nature of the business was changing as storm clouds formed on the horizon. These storm clouds grew darker as conflicting market and technology pressures were forcing change.” Hutcheson reviews these market and technology pressures, which include rising competition, increasing emphasis on cost, and the daunting challenges presented by new wafer sizes, transistors, and materials. All of these factors led to an erosion of trust between foundries and their customers and opened the door for some to speculate that the foundry model might be dead.

To solve these problems, Hutcheson calls for a new working relationship that melds the seamless collaboration of an IDM with the flexibility of the fabless-foundry model. This “collaborative device manufacturing” approach must be structured to collaborate seamlessly, allowing the fabless company to innovate on the foundry’s platform as an extension of its own strategy starting early in a new process node’s development. “GLOBALFOUNDRIES, to a great extent, was perfectly positioned to address the emerging need for a new foundry model,” Hutcheson writes. “Its roots were as an IDM, having spun out from AMD in 2009. Having acquired Chartered, it also gained deep roots in the foundry 1.0 model, allowing it to bridge both worlds. Its CEO, Ajit Manocha, deeply understood the issues. . . . So it was no surprise that Manocha would be the first foundry CEO to address the issue, spelling out a new model he called Foundry 2.0.”

Readers of this blog will be no stranger to the Foundry 2.0 concept, but Hutcheson brings a fresh interpretation as he describes the intricacies of the new business model and puts Foundry 2.0 in its proper historical context.

full video on Globalfoundries 2.0

http://electronics.wesrch.com/wequest-EL10TL9-the-foundry-2-0-revolution-with-ajit-manocha-of-globalfoundries

cheers

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