How Outsourcing Fabrication Triggers Semiconductor Innovations

Outsourcing fabrication is leading structural innovations as well as triggering a series of technological advancements in the semiconductor industry.

FREMONT, CA: Trends in the semiconductor industry are often driven by various factors such as technological advancements, economy, business competitions and the perennial need for advanced processing capabilities. Researchers are continuously engaged with new means and design structures to build semiconductors with higher processing power and smaller chip size. Outsourcing fabrication is one such trend that is driven by the quest for structural change in the semiconductors. The above trend is also driving technology development in the form of chip design, fabrication, intellectual property, and packaging and testing.

The above-mentioned developments are triggering the emergence of more specialized workloads as well as the need for original equipment manufacturers (OEMs) to differentiate between the various kinds of chip innovations. Specialized workloads in the semiconductor world bring us back to outsourcing fabrication. Conventionally, the fragmentation of semiconductor design involved outsourcing of packaging and final testing. It was regarded as a low-level function that offered minimal differentiation or value. However, the above perception has been drastically changing at present. The use of multiple dies in 2D, and 3D structures have turned packaging into a valuable function and a new means of innovation in the semiconductor market.

Outsourcing the fabrication is allowing companies to share the high-cost as well as the capital costs of fabs and new process development. Thus, many of the semiconductor firms are currently referred to as fabless semiconductor manufacturers. Various firms have begun licensing IP from other companies or outsourced semiconductor design to specialized design houses. Such a system allows firms to share the expense of the design expert while having access to designers with expertise in specific domains as well. With this, there has been a massive growth in outsourcing chip-making and fabrication in the past few years.

Thus, outsourcing fabrication marks a structural shift in the new generation of semiconductors. The trend is expected to continue in the near future and will be complemented by technological advancements.