Global Semiconductor Alliance DRIVING PACKAGING INNOVATION SEMICONDUCTOR COST REDUCTION STRATEGIES MACRO-ECONOMIC TRENDS IN THE FABLESS INDUSTRY SEMICONDUCTOR INNOVATION IN AN INVESTMENT-CONSTRAINED ECONOMY INNOVATION THROUGH COLLABORATION: GUIDING PRINCIPLE FOR THE 21ST CENTURY Moving Forward with Strategy for Innovation and Success Vol.16 No.4 Dec. 2009 Published by GSA $60 (U.S.) 1 A Powerful Platform for Amazing Performance Performance. To get it right, you need a foundry with an Open Innovation Platform™ and process technologies that provides the flexibility to expertly choreograph your success. To get it right, you need TSMC. Whether your designs are built on mainstream or highly advanced processes, TSMC ensures your products achieve maximum value and performance. Product Differentiation. Increased functionality and better system performance drive product value. So you need a foundry partner who keeps your products at their innovative best. TSMC’s robust platform provides the options you need to increase functionality, maximize system performance and ultimately differentiate your products. Faster Time-to-Market. Early market entry means more product revenue. TSMC’s DFM-driven design initiatives, libraries and IP programs, together with leading EDA suppliers and manufacturing data-driven PDKs, shorten your yield ramp. That gets you to market in a fraction of the time it takes your competition. Investment Optimization. Every design is an investment. Function integration and die size reduction help drive your margins. It’s simple, but not easy. We continuously improve our process technologies so you get your designs produced right the first time. Because that’s what it takes to choreograph a technical and business success. Find out how TSMC can drive your most important innovations with a powerful platform to create amazing performance. Visit www.tsmc.com Copyright 2008 Taiwan Semiconductor Manufacturing Company Ltd. All rights reserved. Open Innovation Platform™ is a trademark of TSMC. ARTICLES CONTENTS 2 Driving Packaging Innovation Bob Warren, Director, Packaging Engineering and Assembly Manufacturing, Conexant Systems Inc. ACCELERATE THE 6 Semiconductor Cost Reduction Strategies GROWTH AND Bob Scarborough, Chief Executive Offi cer, Tensoft Inc. Regis Bescond, Corporate Controller, Amlogic INCREASE THE 10 Macro-economic Trends in the Fabless Industry RETURN ON Anthony Simon, Vice President, Marketing, Zoran Corporation INVESTED CAPITAL 14 Semiconductor Innovation in an Investment-Constrained Economy OF THE GLOBAL Steve Z. Szirom, President, InsideChips.com 18 Innovation through Collaboration: Guiding Principle for the 21st Century SEMICONDUCTOR Katrien Marent, Corporate Communications Director, Business Development, IMEC INDUSTRY BY 22 The Benefits and Architecture of IP Test Program Re-use in an ATE Environment FOSTERING A MORE Donald W. Blair, Principal Consultant, Verigy Ltd. EFFECTIVE FABLESS 26 Design Quality Closure: Enabling Less Iteration at Every Handover in a Design Process ECOSYSTEM Michel Tabusse, Ph.D., Chief Executive Offi cer, Satin IP Technologies THROUGH 30 Semiconductor Commoditization: The $250 Billion Question Sanjay Krishnan, Business Manager, High-Performance Analog Group, Maxim Integrated Products COLLABORATION, 32 Funding for Innovation in Challenging Times INTEGRATION AND Bob Strasser, Partner, Technology Practice, BDO Seidman INNOVATION. 35 Part 3 of 4: Immigration: Finding the Good in the Bad Economy Irina Plumlee, Partner, Gardere Wynne Sewell LLP ▪ Address the challenges and enable industry-wide solutions within the supply chain, including intellectual IN EVERY ISSUE property (IP), electronic design 4 Semiconductor Member News automation 8 Foundry Focus (EDA)/design, wafer 12 Back-End Alley manufacturing, test and packaging 16 Supply Chain Chronicles ▪ Provide a platform 20 Global Market Trends for meaningful 24 Industry Refl ections global collaboration 28 Global Insights ▪ Identify and 34 Private Showing articulate market opportunities 37 Innovator Spotlight ▪ Encourage and support INTERESTED IN CONTRIBUTING TO THE GSA FORUM? entrepreneurship To contribute an article or submit product or company announcements, contact: Chelsea Boone, Managing Editor, [email protected]. To advertise, contact: Monica Dominguez, Advertising Executive, [email protected]. ▪ Provide members with comprehensive FOR MORE INFORMATION CONTACT and unique market Lisa Tafoya, VP, Global Research, GSA Forum Executive Editor, [email protected] ▪ GSA ▪ 12400 Coit Road, Suite 650, intelligence Dallas, TX 75251 ▪ phone 888.322.5195 ▪ fax 972.239.2292 MISSION AND VISION STATEMENT Driving Packaging Innovation Bob Warren, Director, Packaging Engineering and Assembly Manufacturing, Conexant Systems Inc. he number of fabless semiconductor companies has grown the fastest followers will need about a year to design and qualify Tat a 20 percent compounded annual growth rate (CAGR) their products with a new technology, giving the leader the ability to over the last decade. At present, more than eight out of 10 command more market share and possibly a higher selling price. semiconductor companies are outsourcing some or all of their Figure 1. Common Package Technology Gaps semiconductor fabrication and assembly. While use of the outsourced business model has allowed companies to lower costs, specialize and focus on core competencies, and reduce time-to-market, it has also created challenges for achieving and maintaining technology and product alignment. Selection of the right IC assembly and packaging technology is important to meet product cost, size, thermal, electrical, reliability and time-to-market requirements. Often, companies are faced with the dilemma of not having the right technology or capability available from their existing off shore assembly and test (OSAT) provider. The Changing Dynamics for Packaging R&D Just over a decade ago, new package technology was driven largely by vertically integrated original equipment manufacturers (OEMs) and integrated device manufacturers (IDMs) with their own foundries, assembly manufacturing facilities, and internal research and development (R&D) teams. Th e trend of outsourcing manufacturing continues today, and many companies have eliminated or drastically reduced internal prototyping or manufacturing R&D staff , relying on existing off -the-shelf technology from assembly subcontractors. Scarce R&D dollars are now spent largely on design, with the expectation that technology for manufacturing will be available Driving Innovation through OSAT Providers from the subcontractors and will meet current and future product One of the most eff ective and effi cient ways for a product company needs. Unfortunately, package technology has historically lagged IC to have the right packaging technology at the right time and at the advancements and transistor scaling, putting signifi cant constraints right cost is to work proactively with OSAT providers, sharing key on the ability to meet size, cost, electrical and thermal performance attributes and requirements of its future products. Examining details, (Figure 1). Th is has created a technology gap that requires marketing such as the product application, technology node, process technology, and design engineers to make undesired product compromises, such die size, wire or ball count, pin count, device thermal dissipation, as eliminating product features to reduce package size, pin counts, electrical requirements, package form factor requirements, product interconnect density or power dissipation. Today, packaging can environmental conditions (operating ambient temperature, airfl ow, account for 25 percent or more of overall chip costs, which is creating etc.), assembly and test cost budget, and tester and test confi guration a signifi cant entry barrier for many new products. Innovative package requirements, will help OSAT providers understand whether their technology is required to keep pace with the rapid scaling of wafer technology roadmap can provide the necessary solutions at the right process technology and allow the full true potential to be realized for time for their customers. It is also important to remember that OSAT new emerging products. providers have a limited amount of R&D money and resources, and Many companies have leveraged packaging technology as a must make tough decisions about development priorities, often product enabler, while others have leveraged it to diff erentiate their in the absence of frequent and detailed inputs from many of their products. While there are risks associated with being an early adopter customers. Most are more than happy to spend time to review of new technology, it can also be a competitive advantage by enabling their customers’ product roadmaps, share their package technology companies to be the fi rst out of the gate with a smaller, cheaper or development roadmaps, identify any gaps and generate actions plans higher performing device due to a superior package solution. Even to address them if the return on their investment is acceptable. 2 OSAT providers are often looking for beta customers who are provider by providing wafers for process development, performing willing to use their product as the lead qualifi cation vehicle for a electrical characterization testing, and performing reliability testing new package technology. Th ey generally look for a customer who can and sharing the data (including any failure analysis results) with the furnish a suitable amount of wafers so they can fully characterize