Foundry model

The foundry model is a microelectronics engineering and manufacturing business model consisting of a semiconductor fabrication plant, or foundry, and an integrated circuit design operation, each belonging to separate companies or subsidiaries. Integrated device manufacturers (IDMs) design and manufacture integrated circuits. Many companies, known as fabless semiconductor companies, only design devices; merchant or pure play foundries only manufacture devices for other companies, without designing them. Examples of IDMs are Intel, Samsung, and Texas Instruments, examples of pure play foundries are GlobalFoundries, TSMC, and UMC, and examples of fabless companies are AMD, Nvidia, and Qualcomm. Integrated circuit production facilities are expensive to build and maintain. Unless they can be kept at nearly full use, they will become a drain on the finances of the company that owns them. The foundry model uses two methods to avoid these costs: fabless companies avoid costs by not owning such facilities. Merchant foundries, on the other hand, find work from the worldwide pool of fabless companies, through careful scheduling, pricing, and contracting, keep their plants in full use. Companies that both designed and produced the devices were originally responsible for manufacturing microelectronic devices. These manufacturers were involved in both the research and development of manufacturing processes and the research and development of microcircuit design. The first pure play semiconductor company is the Taiwan Semiconductor Manufacturing Corporation, a spin-off of the government Industrial Technology Research Institute, which split its design and fabrication divisions in 1987, a model advocated for by Carver Mead in the U.S., but deemed too costly to pursue. The separation of design and fabrication became known as the foundry model, with fabless manufacturing outsourcing to semiconductor foundries. Fabless semiconductor companies do not have any semiconductor fabrication capability; and contract production with a merchant foundry manufacturer.

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Fabless manufacturing

Fabless manufacturing is the design and sale of hardware devices and semiconductor chips while outsourcing their fabrication (or fab) to a specialized manufacturer called a semiconductor foundry. These foundries are typically, but not exclusively, located in the United States, China, and Taiwan. Fabless companies can benefit from lower capital costs while concentrating their research and development resources on the end market. Some fabless companies and pure play foundries (like TSMC) may offer integrated-circuit design services to third parties.

GlobalFoundries

GlobalFoundries Inc. (GF) is a multinational semiconductor contract manufacturing and design company incorporated in the Cayman Islands and headquartered in Malta, New York. Created by the divestiture of the manufacturing arm of AMD, the company was privately owned by Mubadala Investment Company, the sovereign wealth fund of the United Arab Emirates, until an initial public offering (IPO) in October 2021. The company manufactures integrated circuits on wafers designed for markets such as mobility, automotive, computing and wired connectivity, consumer internet of things (IoT) and other industrial applications.

Semiconductor fabrication plant

In the microelectronics industry, a semiconductor fabrication plant (commonly called a fab; sometimes foundry) is a factory for semiconductor device fabrication. Fabs require many expensive devices to function. Estimates put the cost of building a new fab over one billion U.S. dollars with values as high as

3–4 billion not being uncommon. TSMC invested

9.3 billion in its Fab15 300 mm wafer manufacturing facility in Taiwan. The same company estimations suggest that their future fab might cost $20 billion.

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