Barnett Silver, Senior Vice President & Principal at semiconductor consulting firm ATREG gave us his insight on the packaging and IC manufacturing markets.
The total costs for process and fab development has risen dramatically from one node to the next over the last decade, he notes, and only a handful of foundries will have the cash to stay in the race beyond the 14nm node, namely TSMC, Samsung and Intel. That makes OEMs and fabless companies overly reliant on very few foundry options, as rather captive customers. Hence the necessity for large OEMs to vertically re-integrate their strategic silicon supply chain.
Chip integration going full circle: source ATREG.
Silvers sees an inflection point coming over the next three years, when cash-rich OEMs such as Apple, Google or Amazon could invest more and more into foundries and IC packaging facilities to secure their supply chain, have better access to advanced nodes and reduce the risk of silicon allocation. Sitting at the negotiation table of many foundries and IDMs acquisitions/mergers, Silver said he had witnessed such large OEMs making bids (although unsuccessfully so far).