Foundry Future: Challenges in the 21st Century

The dedicated-foundry industry was established in 1987, with the incorporation of Taiwan Semiconductor Manufacturing Company (TSMC). Silicon-wafer production at foundries has increased significantly since that time, to account for over 20% of all wafer volume. Foundries are now an integral part of the overall semiconductor supply-chain. There is every reason to anticipate that the importance of the foundry industry will increase further. The authors believe that the foundry business-model is an important positive influence on the health of the overall IC industry. Accordingly, it is critically necessary to scan the future for potential issues that might inhibit foundry-industry growth. The foundry company must develop strategies to avoid commoditization. In our opinion, one of the most important aspects of the foundry response to commoditization must be to create a much deeper and broader relationship between the foundry and each of its customers. This new type of integrated relationship differs from many previous foundry-customer relationships, in that both design and technology engineering proceed concurrently from an early stage in the product-development effort. Note that the success of this relationship will require a much greater information flow between the design and foundry teams, and optimization of both design and process technology to meet product requirements. Such relationships can offer a significant advantage to customers in meeting product-cost, performance, and time-to-market requirements.