Date: 29/05/2012

The market and technology trends indicated by Renesas going fablite

Japan's news sources have published Renesas is partnering with Taiwan Semiconductor Manufacturing Co (TSMC) to outsource its chip manufacturing. Renesas had become fablite quite a while ago but is now increasing the outsource to 30%. Renesas is partnering with TSMC to make 90nm and 40nm Microcontroller chips. With this Renesas will have contingency plan for any natural disaster like that of 2011 earthquake. It is also reported Renesas may sell some of its fab facilities to TSMC. Renesas is world's number one microcontroller vendor, more so in the automotive electronics domain.

The leading Japanese semiconductor companies had realized the risk and burden of maintaining advanced semiconductor chip foundries. What called as Integrated Device Manufacturer (IDM) business model requires huge resources and biz-smart strategies for the global market. Big challenge is keeping the semiconductor fabs at full utilization. Another challenge is regularly updating the chip manufacturing machinery to make chips at deeper nodes. This needs global market strategy with partnership and support from world-over.

The trends, which can be read from Renesas move of going further fablite are:
Fabless, fablite, or foundry services are working well in the market.
Pure IDM model is no more working and getting obsolete
Fables companies no need to own a fab
Fablite becoming more lighter
Big and advanced fabs of IDM type companies now offering Foundry services (including Intel)
Nature disaster handled batter
China is on the path of increasing domestic chip manufacturing, India is also working in that direction. Both China and India contribute huge market demand for chips.
The next step in node jump is sharp steep to climb and the risks are even steeper
Software is playing far more important role in chip making industry.
More than Moore (3D semiconductor packaging, innovative material and process) is the design trend.
More job cuts and hard decisions by IDM chipmakers (It is also reported Renesas is going for a 14000 job cut).