"You didn't want to do that..."

“You didn't want to do that...”
By EE Times UK
April 18, 2002 (12:39 p.m. EST)
URL: http://www.eetimes.com/story/OEG20020418S0035

“Eer! Yeeouw don't want to do that. You want to do this. “Building a DRAM plant? There's no money in that, is there? You want to be in the foundry game. That's what you want to do. “System-on-chip? How's that going to work? Who are you going to get to design one of those? “What you want to do is build a foundry. There's loadsamoney in that.”

We do not expect the advisers to various governments in the Far East to have an uncanny affection for nylon slacks and terylene jackets, but the advice that some of them seem to be following as they pile into the foundry business seems little better.The plan looks good on paper. Get a pile of money together for a really big fab. Run other people's designs through it at knock-down prices and pocket the difference.

Unfortunately, for a lot of the foundries springing up, unless they have a specialty, like tricky mixed-signal processes or effective economies of scale, they are going to find the difference going in other people's pockets.

The worrying factor is that an increasing number of companies that are finding the going tough in selling their own chip designs are looking at the foundry model expecting it to dominate the world. As Future Horizons has pointed out: it's not going to be the cure.