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New Ecosystem for Chip Industry

Chip Industry is  70+ years old and has gone through several  transformations. In it’s nascent days companies planned for vertical integration (marketing, R&D, manufacturing) to have complete control over their technology IP. Beginning 1980s the fabless semiconductor model came to popularity because stand alone fabs offered manufacturing services, which in turn enabled smaller firms (marketing, R&D) to enter the IC market. The beauty of the fabless semiconductor model is that companies can focus on design innovation without worrying about manufacturing hassles. The downside was that process technology was easily available to your competition. As of early 2000s due to maturing industry and ample competition, firms are  trying to reduce their costs which has led to the recent ecosystem –  IC companies (marketing) + Design houses + Fabs. Design houses staff talented engineers who can work on variety of projects and have IC companies access to on demand talent pool which makes these current model viable.

 

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