Chip Wars: Foundries battle for silicon supremacy

As foundries across the globe battle for silicon supremacy, it seems as if there may only be three remaining sources for high-volume, leading-edge semiconductor manufacturing by the end of 2011.

Unsurprisingly, the trio of industry heavyweights have been named as: TSMC, GlobalFoundries and Samsung Electronics.

“The most advanced complementary metal–oxide–semiconductor (CMOS) semiconductor process technologies now are at the 22- to 20-nanometer (nm) level,” explained IHS-iSuppli analyst Len Jelinek.

“Several other foundries, including United Microelectronics and Semiconductor Manufacturing International, will be capable of providing near-leading-edge foundry manufacturing in high volume, at the 32nm and 28nm nodes. However, the big three foundries will be the only high-volume sources for the most advanced processes.”

According to Jelinek, the “enormous cost” of advanced semiconductor process technology is “whittling down” the ranks of leading-edge foundries.

“[So] unless additional foundries join the party, semiconductor companies will face minimal competitive choices when it comes to advanced chip geometries.”

The analyst predicted that Intel “may decide” to use some of its advanced manufacturing capacity, while offering foundry services to design companies and fabless semiconductor suppliers that are incorporating an Atom microprocessor into their designs.

“Although such a move would represent a dramatic change of philosophy at Intel, it potentially could lead to significant revenue growth as well as more favorable asset utilization,” said Jelinek, who projected that TSMC would be the foundry market “winner” in 2011. 

“[TSMC] owns 50 percent market share of the foundry space, possesses leading technology and enjoys the most available capacity. The company now has an empty shell waiting for equipment to be installed as demand materializes. 

“Most likely, if TSMC were to begin selling directly to the merchant market, it would become the largest supplier of semiconductors, with revenue eclipsing that of current chip industry leader Intel,” he added.