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Chip Makers Should Merge to Benefit form Costs

The rising costs of chip production and design is forcing the industry to collaborate rather than building their own chips according to senior industry figures.

Speaking at the Common Platform Technology Forum GlobalFoundries' chief operating officer Chia Song Hwee told delegates that the huge costs of bring a new chip to market were eliminating integrated processing techniques in favour of production without a proprietary fabrication plant (fab.)

"The fabless model is well understood," he said.

"IBM doing this in US and we're also seeing the market shift in the EU. In last two or three years even the Japanese market is moving in that direction. There is no talk in the industry of going back to the integrated model."

For example, for a new 28nm chip a manufacturer would have to pay $50m to develop the base designs (not including the software) and another $250m to build libraries for the chip. The fabrication plant would cost $5-7bn and development costs would be $1-2bn over a four year timescale.

"To continue the roadmap forward cooperation is key," said Gary Patton, vice president of IBM's R&D Center

"The escalating costs of development needs a different model for advanced R &D. IBM recognised this ten years ago and has moved to a partner model."

He pointed out that technologies like High-K Metal Gate took over a decade to move from research to manufacturing. Research into new areas like silicon nanowires, phase change memory and silicon photonics need group effort he said.

Qualcomm, the world's largest fabless chip designer, is also committed to the cooperative route said Jim Thompson, senior vice president of engineering at the company.

"We're committed to the fables model," he said.

"Cooperation can be difficult but it's the way forward."

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