Semiconductor consolidation

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Semiconductor consolidation is the trend of semiconductor companies collaborating in order to come to a practical synergy with the goal of being able to operate in a business model that can sustain profitability.

History

Since the rapid adoption of the modern day chip in the 1960s, most companies involved in producing semiconductors were extremely

plants and also the processing technologies that facilitated the creation of the chips. Research, design, testing, production, and manufacturing were all kept "in house". Advances in the semiconductor industry made the market extremely competitive and companies began to use a technology roadmap that helped set goals for the industry. This roadmap came to be known as This increase in transistor numbers meant that chips were getting smaller and faster as time progressed.

As chips continued to get faster, so did the levels of sophistication within the circuitry. Companies were constantly updating machinery to be able to keep up with production demands and overhauls of newer circuits. Companies raced to make transistors smaller in order to pack more of them on the same size silicon and enable faster chips. This practice became known as "shrinkage".

Companies were now in a race against each other and themselves to create the next fastest chip, as all goals were to meet or exceed Moore's Law. With the shrinking of sizes in semiconductors, production became much more intricate. Fabrication machines, which were producing chips at the millimeter level in the 1960s, were now operating in the

strand. The process at which most of these intricate chips are being produced at is called photolithography, and the cost of equipment and operating them has grown astronomically, resulting in an inevitable consolidation of semiconductor companies.

Divergence

Companies like

.

This business model grew in such popularity that the new initiative was being promoted by a group called the Fabless Semiconductor Association (FSA) which is now the Global Semiconductor Alliance.

These fabs, commonly referred to as foundries, were able to update assembly and photolithography systems much more easily than their counterparts as all they focused on is handling bulk orders that come from these fabless businesses. In addition, the

of these two business models became much stronger.

Convergence

Although many companies grew and profited well from a fabless business model, new hurdles still had to be dealt with. The modern day microprocessor now has billions of dollars of research put behind it, with months and even years of research in creating the micro circuitry and teams of hundreds of engineers testing and developing a chip. Now even keeping fabrication and development apart is not enough^{[citation needed]}.

"On one side will be Intel and a select few that can afford their own fab plants—which will cost between $2.5 billion and $3 billion to build in 2003 and $6 billion by 2007—and perform basic research on transistor design or new chip materials. These new fabs will process wafers with 300-millimeter diameters, larger and more complex to make than today's 200-millimeter variety. On the other side will be everyone else. They will have to share fabs, pool research, buy technology or rely more heavily on outside foundries, which in turn will have to seek help." The theory,

.

in July, 2006,

]

In 2000,

The outsourced semiconductor assembly and test (OSAT) industry has also seen a considerable amount of consolidation in recent years.[8] This is because OSAT companies are looking to differentiate themselves, and consolidation, in a horizontal sense, is one of the best known ways to achieve better differentiation.^[9]

Exceptions

According to analysts ^[

fields (in that order).

See also

• Foundry model
• Semiconductor device fabrication

References

1. ^ By Jon Mundy, TrustedReviews. “What is Moore's Law?.” February 17, 2016. Retrieved February 26, 2016.
2. ^ CNW Group. “AMD Completes ATI Acquisition and Creates Processing Powerhouse.” October 12, 2007. Retrieved February 26, 2016.
3. ^ By Ashlee Vance, The New York Times. “A.M.D. to Split Into Two Operations.” October 6, 2008. Retrieved February 26, 2016.
4. ^ By Mark LaPedus, EE Times. “TI reportedly to forge foundry deal with China's SMIC.” August 29, 2002. Retrieved March 3, 2016.
5. ^ By Hui Yuk-min, South China Morning Post. “Infineon seals deal with SMIC.” December 10, 2002. Retrieved March 3, 2016.
6. ^ "IBM BladeCenter QS20 blade with new Cell BE processor offers unique capabilities for". 12 September 2006.
7. ^ By David Becker, CNET. “PlayStation 3 chip has split personality.” February 7, 2005. Retrieved February 26, 2016.
8. ^ By Mark LaPedus, Semiconductor Engineering. “Consolidation Hits OSAT Biz.” February 18, 2016. Retrieved February 26, 2016.
9. ^ By Mark LaPedus, Semiconductor Engineering. “Inside The OSAT Business.” March 17, 2016. Retrieved March 18, 2016.