Recently, the Semiconductor Industry Association (SIA) released data showing that in 2022 global chip sales, analog chip sales increased by 7.5% year-on-year to $89 billion, the largest increase in sales of all chip types in the category. Analog chips have continued to grow in wave after wave of windfall.
In the history of the semiconductor cycle, analog chips due to its model rich and widely used, time and again to carry the industry cold wave. In the production model, analog chips and digital chips are very different, IDM is the current analog chip manufacturers are more inclined to the model, represented by Texas Instruments and Adano, the world’s top ten analog manufacturers are using IDM model.
The IDM model allows analog manufacturers to debug their own processes for product requirements, allowing for a closer integration of design and process. In addition, IDM companies can also synchronize product design and process development work, R & D design departments and manufacturing departments to communicate quickly and shorten the development time.
An industry insider once said: “In general, the success of the digital chip is 70% in the design, 30% is in the process platform to help. For analog chips, the contribution of the process platform is much higher than 30 percent.” This highlights the importance of the process platform for analog chips. It is these factors, IDM model prevalent in the international analog chip manufacturers.
However, the threshold of the IDM model is high, the full process of chip design and manufacturing is still a huge expense for domestic companies, therefore, few domestic IDM model companies, let alone the IDM model of analog chip companies. With the development of the three major models of IDM, Foundry, Fabless, there are now also many people are beginning to explore new chip manufacturing models.
01
Virtual IDM
Virtual IDM (Virtual IDM) is a new approach currently explored by analog manufacturers. In this model, the company concerned not only focuses on the IC design process, but also has its own process platform. They are able to request the foundry to cooperate with them to introduce their unique manufacturing processes and proprietary equipment, but the production line itself does not belong to the design vendor.
This approach has three major advantages. First, compared to the IDM model, virtual IDM reduces the initial cost of entry for IC design companies, because they do not need to organize their own wafer manufacturing and other production and processing links, the enterprise has less investment in fixed assets and can focus on IC design and sales, and their own operations are more lightweight and flexible.
Second, compared to Fabless manufacturers, virtual IDM companies can continuously improve the performance of the process platform, so that the level of process manufacturing and chip development needs to match, in order to achieve optimal chip performance, higher reliability and efficiency, more able to enter the communications electronics, automotive electronics and other emerging applications.
Third, it can better design process co-optimization, accelerate product iteration and enhance market competitiveness. General chip design companies based on the fab common public process platform for product design, because the fab process platform iteration cycle is relatively lagging, platform-related indicators, parameters and performance compared to the international advanced design manufacturers own process platform there are certain differences, resulting in output products in performance, reliability and efficiency and other aspects of a competitive disadvantage. Virtual IDM companies, with their own process platforms, can further accelerate the update of iterative chip products and continue to maintain the advanced products in the market.
However, virtual IDM also has its development barriers, on the one hand, the foundry needs to believe that the chip design company has the ability to adjust the virtual IDM process, and needs to ensure that the process adjusted is the mainstream of the market process, can contribute sufficient revenue. On the other hand, the difficulty of adjusting the process, the cycle is long, which for the chip design companies involved in a higher demand.
Virtual IDM is not proposed this year, as early as 2017, TrendForce’s Topology Research Institute said that the semiconductor industry in mainland China in 2017 in the three major areas of manufacturing, design, packaging and testing to “virtual IDM” type of integration will be more obvious trend.
Domestically, the only analog manufacturer that has been listed and claims to have adopted virtual IDM is Javat. Sigma adopts the virtual IDM model and has developed its own internationally advanced BCD process platform in cooperation with its main partner foundries.
In addition, Guangzhou Yuexin Semiconductor, which is not yet listed, also implements Virtual IDM as its operation strategy, providing users with microprocessors, power management chips, analog chips, power discrete devices and other products to meet the demand for analog chips for innovative applications such as Internet of Things, automotive electronics, artificial intelligence and 5G. Recently, Yuexin Semiconductor has announced the completion of its Series B strategic financing.
02
Shared IDM Model
In addition to the virtual IDM model, the shared IDM (CIDM) model has also been mentioned before.
CIDM was first created by overseas companies, the whole set of models in Singapore, the United States and Taiwan, China and other places have been practiced, TECH is more famous CIDM company, it is by Texas Instruments (TI), the Singapore government Economic Development Board (EDS), Canon (Cannon), Hewlett-Packard (Hewlett-Packard) four companies It is a joint investment by four companies, Texas Instruments, Singapore Government Economic Development Board (EDS), Canon (Cannon) and Hewlett-Packard (Hewlett-Packard), to produce mainly memory, and plans to achieve profitability on top of meeting its own demand for DRAM.
Zhang Ruking had introduced: “CIDM is not quite the same as virtual IDM, CIDM is a joint investment by several design companies to set up a Fab, which actually owns the foundry factory and can plan the capacity structure according to the actual needs of each design company. This is a shared, common IDM company. And virtual IDM means that a design company consigns its products to a foundry for processing and production, but the capacity of the foundry is dedicated to meet the needs of the design company, and this part of the capacity cannot be used by other companies. So, the advantages of CIDM are shared by all, resources are shared, risks are shared, synergies are greatly increased, and there are many benefits.”
The first domestic CIDM company is Coren (Qingdao) Integrated Circuit Co., Ltd, a joint-funded semiconductor company by more than 10 individual companies. in December 2019, Coren topped out the six main buildings and began moving in the 8-inch fab equipment. in August 2021, Coren held a vow meeting in Qingdao. It was officially announced at the meeting that the 8-inch fab was successfully commissioned with power devices and the yield rate reached over 90%, and the photomask fab also completed product delivery at the same time.
Ji Minghua, vice president of R&D of Coreon, said that Coreon adopts PDK (process kit) from European IDM majors, and it will not compete with foundries.
The PDK of each foundry is different, and under today’s business model, there are more barriers and the whole industrial system does not operate efficiently because resources are isolated. the goal of CIDM is to gradually break these barriers and maximize resource sharing. And the ideal state is that Fabs, including foundries, can share their PDKs with each other, so that they can accelerate their R&D progress and improve efficiency.”
03
The Fablite Debate
Virtual IDM, shared IDM, are the semiconductor industry to face the wafer manufacturing problems to try a new way, but there is another “old” model has been adopted by many analog companies – Fablite.
Fablite also evolved from IDM, is a company to reduce investment risk, “asset-light” a strategy. That is, IDM companies transfer part of their manufacturing business to OEMs (e.g. Qorvo, Skyworks, etc.) while retaining part of their own manufacturing business.
In an interview about the IDM model, TSMC founder Chang Chung-Mou said, “I don’t agree that there are a few large IDM companies in Europe, and I don’t agree with the word large.
In fact, 10 years ago, Fablite model has been proposed. European analog chip companies foresight, such as NXP, the original Freescale, ST and Infineon earlier implementation of Fablite strategy. For example, after NXP acquired Freescale in 2015, it rarely launched other big acquisitions, but instead, it kept divesting some businesses more; RuiNeng Semiconductor, NXP also participated in the beginning to fund the construction, and later all withdrew. Ltd. was also established by acquiring NXP’s RF division; on August 16, 2019, Huitian Technology acquired NXP’s voice and audio application solutions business (VAS).
Analog chip giant Texas Instruments has also selectively adopted the Fablite model, using outsourcing cooperation in the 32nm process and below, and no longer investing in building fabs itself. The silicon size on 6-inch and 12-inch, Texas Instruments is actively expanding production. In 2017, Texas Instruments outsourced the production of 65nm chips to UMC Electronics and SMIC produced 130nm chips for Texas Instruments, but the final metal plating of the wafers is still done at Texas Instruments’ own fabs.
Japanese analog chip companies, such as Toshiba, Renesas, Sony and Fujitsu have joined the Fablite camp one after another. Renesas executive Sailesh Chittipeddi said that while the company still adheres to its chip manufacturing plan, advanced process nodes will choose to outsource to foundries such as TSMC. He said, “In the long run, the more advanced nodes we will have to rely on third parties, for any chip more advanced than the mature process of 40 nanometers, we have to rely on foundry partners.”
There are also many domestic analog manufacturers exploring the Fab-Lite business model, such as Jusheng Micro starting to build its own filter production, Sirui Pu starting to build its own test center, and Shengbang Microelectronics also set up a wholly owned subsidiary to establish a test program.
However, whether the simulation of large manufacturers from IDM to Fablite model of streamlining (streamlining the fab is not the same as fabless), or analog design companies to explore virtual IDM, shared IDM, all illustrate the importance of manufacturing in the analog chip for the chip. IDM, Foundry, Fabless three models have been a long time, in the future whether there can be more flexible and In the future, whether there can be more flexible and more suitable for different companies to allocate their own manufacturing methods, all need to analog manufacturers continue to try, continue to innovate.
