ISS: Panelists debate fate of IC manufacturing

At SEMI's Industry Strategy Symposium (ISS) here, panelists agreed to disagree and debated the subject. There was disagreement about the future of 450-mm fabs, Moore's Law and the R&D funding gap. All agreed that there must be more collaboration between the IC and fab tool industries--and for good reason.

Today's 300-mm fabs cost about $4 billion per facility, a pilot line runs $1-to-$2 billion, and R&D process costs run from $500 million to $1 billion, said Robert Bruck, vice president of the Manufacturing Group and general manager of Technology Manufacturing Engineering at Intel Corp.

Soaring costs, coupled by the recession, are ''shaping the consolidation'' in the IC industry, Bruck said. He also urged the industry to take a ''long term view'' about future investments and R&D, including the possible development of 450-mm fabs and tools.

Here are comments from other panelists on this subject and others:

Rick Hill, chairman and chief executive of Novellus Systems Inc.

''2010 should be up (in terms of IC equipment). TSMC's spending was up in 2009. UMC will get there, followed by GlobalFoundries.

There will be no 450-mm. (450-mm is) dead.

The developing world is driving everything. Asia/Pacific dominates the market.

Higher R&D spending should enable higher gross margins. (But) semiconductor companies have garnered lower gross margins in exchange for higher R&D spending from the 2000 to the 2007 peak. Their stock prices have performed worse than other industries as a result.''

G. Dan Hutcheson, chairman and CEO at VLSI Research Inc.

''Moore's Law drives consumption butMoore's Law has not driven a revenue growth difference.

In 2010, the R&D crisis (has been) averted. 32-nm (was) brought to production with only a 2.2 percent rise in R&D cost, proof that coopetition and consolidation work.''

Bob Johnson, an analyst at Gartner Inc.

''By 2014, 10 companies at most will be operating fabs at the leading edge. (1-2 non-memory IDMs, 4-5 memory companies, 3 foundries).

By 2014, the ability of the industry to stay on the traditional Moore's Law rate of technology advancement will depend not upon the laws of physics but upon the laws of economics.

The cost is increasing to participate at the leading-edge. $2 billion minimum TAM needed to justify 32-nm advanced SoC designs.'' (By 2013, the $2 billion TAM markets will include the following segments: mobile phone--$11.8 billion; PC--$8.1 billion; video games--$6.8 billion; TV--$3.7 billion; set-top-box--$3.4 billion).