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IBM leans towards research heavy, fab-lite

Posted: 01 Dec 2010     Print Version  Bookmark and Share

Keywords:semiconductor  manufacturing  fab-lite  research 

IBM seems to be shifting away from semiconductor manufacturing and planning to rely on Samsung and GlobalFoundries as foundry suppliers. Both foundries are set to have wafer fabs for foundry operations in the United States, which could help cement relations.

IBM, GlobalFoundries and Samsung are co-hosting the 2011 Common Platform Alliance Technology Forum, but while GlobalFoundries and Samsung are set to spend Rs.53,604.16 crore ($12 billion) in 2011, IBM's spending is likely to be less than Rs.2,233.51 crore ($500 million) according to data from an analyst at Gartner Inc.

IBM has long been a beacon of research in semiconductor technology and has carried that work into manufacturing with its own processes and wafer fabs. The company has pioneering work has included process miniaturisation, high-frequency RF on CMOS and silicon-on-insulator. Its position in research enabled it to drive the Common Platform Alliance as a means of sharing semiconductor process research costs.

But an analysis of the capital expenditure plans show that IBM is gradually exiting from leading-edge manufacturing at high volume. It appears that the company has joined the broad class of semiconductor companies that will never build a major wafer fab again.

The last time IBM spent more than Rs.4,467.01 crore ($1 billion) on semiconductor capital expenditure in one year was 2004, when it was the 11th biggest spender, according to data from Gartner. IBM is not in the top 20 of semiconductor capital expenditure in 2010 and nor is it expected to be in the top 20 in 2011, according to Bob Johnson, research VP, Gartner.

There are going to be 10 or 11 companies in the billion-dollar capex club in 2011, according to Johnson's latest figures. The top 20, with their spending in Rs. crores ($ in millions), is currently set to be:

-Samsung Rs.41,096.52 ($9,200)

-TSMC Rs.25,461.97 ($5,700)

-Intel Rs.22,335.07 ($5,000)

-GlobalFoundries Rs.14,294.44 ($3,200)

-Hynix Rs.12,284.29 ($2,750)

µm Rs.8,487.32 ($1,900)

-Toshiba Rs.8,487.32 ($1,900)

-UMC Rs.8,040.62 ($1,800)

-Inotera Rs.7,147.22 ($1,600)

-SanDisk Rs.6,253.82 ($1,400)

-SMIC Rs.4,467.01 ($1,000)

-ASE Rs.3,796.96 ($850)

-Texas Inst. Rs.3,573.61 ($800)

-Renesas Rs.3,341.33 ($748)

-Elpida Rs.2,832.09 ($634)

-ST Rs.2,680.21 ($600)

-Rohm Rs.2,564.07 ($574)

-Amkor Rs.2,465.79 ($552)

-Infineon Rs.2,456.86 ($550)

-Siliconware Rs.2,380.92 ($533)

Source: Gartner, November 2010

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