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Over the past couple of years, more than ten
companies have fallen from the $1 billion
capital expenditure (capex) club – and the
majority of those are integrated device
manufacturers (IDMs). With capex
decreasing, and the cost of state-of-the-art
fabs increasing, IDMs are pursuing other
options for manufacturing their leading-edge
technologies. Partnering with pure-play
foundries and creating joint ventures (JVs) is
the newest trend for IDMs and all indications
suggest these strategies will become the
adopted business model in the future. The Fabless Semiconductor Association (FSA) has a progressive vision of what the industry will look like over the next ten years, in that there will be a major shift in the way most semiconductor companies are run. By 2010, the FSA forecasts that 50 percent of all semiconductor revenues worldwide will come from outsourced operations. This will come from three sources: the growth of existing fabless companies and emerging businesses – or organic fabless growth; the mass adoption of the fabless business model by vertically integrated companies and second- and third-tier IDMs; as well as the continuing opportunistic outsourcing of leading IDMs.
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