Foundry 2.0SM

The Next Generation of Foundry-Fabless RelationshipsWhy it’s Different and Why You should Care

July 2013

By G. Dan HutchesonVLSIresearch inc

TABLE OF CONTENTS

Index of Presentations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Overview and General Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Early Foundry Development — the 1980s . . . . . . . . . . . . . . . . . . . . . 4

Foundry 1.0 — the 1990s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Infrastructure Shifts of the Late Eighties and Early Nineties . . . . . . . . . . . 5

Foundry 1.1 — the 2000s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Market Pressures and Emerging Adversarial Partnering Styles . . . . . . . . . . 7

Technology Pressures for Closer Partnering . . . . . . . . . . . . . . . . . . . 8

Foundry 2.0 — the 2010s . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Addendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Notices, Terms of Use, Disclaimers, etc. . . . . . . . . . . . . . . . . . . . . . 17

INDEX OF PRESENTATIONS

Foundry 2.0, as presented by Ajit Manocha, CEO of GLOBALFOUNDRIES . . . . 3

Wafer Fab Cost Escalation: 1980-1993 . . . . . . . . . . . . . . . . . . . . . . 6

What Drove the Emergence of the Foundry Business Model. . . . . . . . . . . . 7

R&D Spending Rates Increase. . . . . . . . . . . . . . . . . . . . . . . . . . 10

How Foundry Partnering Styles Became Adversarial. . . . . . . . . . . . . . . 11

The Foundry 1.1 Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Key Features of each Foundry version . . . . . . . . . . . . . . . . . . . . . . 14

The Foundry 2.0 Revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Overview and General Synopsis

After a stunning run in the nineties, the foundry business model reached a plateau in the 2000s. At this plateau, relationships between foundries and their customers shift-ed from positive partnering styles to more adversarial positions with a greater focus on wafer prices. Daunting technology and cost challenges emerged as the industry crossed into the 2010s, which led to calls for new ways of doing business. Custom-ers needed a next generation foundry business model. And they began to call for one after huge hickups at the 40nm and 28nm nodes.

GLOBALFOUNDRIES responded to that call with Ajit Manocha’s Foundry 2.0 model. His vision was for a completely restructured fabless-foundry relationship that mimicked what he had experienced as Chief Manufacturing Officer at Philips Semiconductor. Yet this was the same person that had taken Philips/NXP out of the strict Integrated Device Model and had migrated them on a long journey through fab-lite to fabless. Indeed, this man who had once called the IDM model dead was now calling for a return to something similar to it. Could this be real or could it just be marketing spin?

This white paper looks into why this new approach to the foundry model is needed by first examining the history of how the semiconductor foundry business model developed. Then, it delves into why things went wrong in the 2000s and shows how that led to the need for a next generation — a need that Foundry 2.0 answers. It shows how Foundry 2.0 is far more than marketing hype. It is a completely different way to run the business.

Foundry 2.0, as presented by Ajit Manocha, CEO of

GLOBALFOUNDRIES

It is Time for Foundry 2.0

• Geographically centralized

• Pre-packaged technology

• Homegrown R&D• Opportunistic

investment• Contract

Manufacturer

Traditional Model• Globally distributed

• Optimized design solutions

• Collaborative innovation

• Long-term commitment

• Foundry Partner

Foundry 1.0

• Best of IDM world + flexibility of foundry model

• Seamless collaboration

• Innovate on our platform

• Extension of customer’s strategy

• Shared investment/success

• Collaborative Device Manufacturing

Foundry 2.0

Early Foundry Development — the 1980s

Prior to the first foundries, almost all semiconductor companies owned their own fabs. The design and manufacture of chips were tightly coupled. Then in the ear-ly eighties, the emergence of commercial EDA tools became the big bang that cleaved design from fab ownership. At first, this resulted in fabless companies going directly to the then emergent ASIC1 semiconductor segment or contracting out to semiconductor companies with excess capacity. System companies became more independent of this approach as EDA tools evolved hierarchical abilities that could take an electrical schematic, convert it into a physical layout of the chip, and tape it out to a mask writer to make all the individual layers.

At the same time, node development became stable with few process changes. Things like Copper and HKMG2 were on the far horizon. So, the electrical effects of scaling were reasonably model-able and easily constrained by design rules, further separating process from design. So as the cost of fabs rose, OEMs began to shift out of captive manufacturing into a new world of contract manufacturing.

This independence of design also led to the first fabless chip companies, the most famous being Chips and Technologies. There were inherent conflicts of interest with this early contract manufacturer approach, because the semiconductor companies doing the contract manufacturing also sold their own, sometimes competing, chips. The potential for IP theft, real or imagined, was high. This restricted opportunity, thus opening the window for the foundry model.

Foundry 1.0 — the 1990s

Morris Chang is generally credited with inventing the foundry business model with the founding of TSMC. While the word ‘foundry’ existed before TSMC, there was little difference other than its use as a marketing term between what was called a foundry and contract manufacturing. Chang clarified the difference by declaring that TSMC would never compete with its customers by selling semiconductors in the open market. It would only handle the manufacturing part of the process flow, leav-ing design, marketing, and sales to their customers. Chang also established strong IP security, so that TSMC could not be a conduit for a fabless company’s ideas to leak out.

The key breakthrough was Chang’s vision that trust was the essential ingredient of a true foundry partnership that would stand the test of time. This unlocked the growth potential of the foundry business model. He then built TSMC around the mission of being a trusted partner. This distinction catapulted them into the lead-ership position.

1 ASIC: Application Specific Integrated Circuit2 High-K Metal Gate

Chang’s model came at a critical juncture in history. Differentiation in the semicon-ductor market had shifted from manufacturing to design with the development of VLSI3 scales of transistor integration. Semiconductors were making the leap from being system building blocks to accounting for significant portions of the system itself, on a Moore’s Law march that would ultimately lead to SOCs4.

Infrastructure Shifts of the Late Eighties and Early Nineties

The shift of manufacturing to foundries was also aided by several key infrastructure shifts: The most important of which was that fabs were becoming too expensive to own and keep.

The foundry movement hit high gear in the early nineties, when the cost of a fab was just passing the one-billion dollar mark. The cost of a fab was roughly rising at about half the rate of Moore’s Law, or a doubling every two nodes.5 Moreover, it was not just the cost of building a new fab, because existing ones had to be up-graded every node for a chip maker to stay in the game. The incremental cost of keeping a fab up-to-date was a growing capital burden, which became another big barrier to entry. Too big for venture capital, early fabless customers were beginning to pool funds in a fab sharing model, where they would get guaranteed access to capacity without threat of IP theft.

3 Very Large Scale Integration, designating chips with transistor counts above 100K.4 SOC: System-On-a-Chip5 Sometimes called “Moore’s Second Law” due to an erroneous quote in Business Week, as Moore never showed the

correlation. It’s also been called “Rock’s Law” and “Hutcheson’s Law.” The observation was first published back in the late ‘80’s by VLSIresearch, the chart shown here was used then to demonstrate the tendency of fab costs to double every two nodes. The trend was first named “Hutcheson’s Law” in 1989 by Hartwig Ruell of Siemens; then “Rock’s Law” in 1994 by Ken Thompson of Intel; and finally “Moore’s 2nd Law” by Business Week in 1996.

Wafer Fab Cost Escalation: 1980-1993

Chart approved for public release with attribution. Copyright © 2013 VLSI Research Inc. All rights reserved.

Average Cost to Build & Equip a Wafer Fab:1980-1993

YEAR

CO

ST

IN $

M

‘8010

100

1000

‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93

At the time, it was getting harder to gain a differentiable advantage with process, while the cost of developing unit processes was rising fast. These were two import-ant infrastructural shifts that favored foundries.

IDMs also played a significant role in making it possible for the emergence of found-ries. One was that during periods of sluggish growth and downturns, IDMs would shed engineering talent. This talent migrated to equipment companies and Asia. Equipment companies started to offer complete process solutions that came free with the purchase of their tools. This and an excess of manufacturing talent willing to move to Asia, Morris Chang being the most notable, made it structurally possible for the foundries to emerge in Taiwan and Singapore.

Many IDMs responded to meeting the foundry challenge by focusing on cost re-duction and automation, which made their fabs inflexible. Worse, they were often inefficient, leaving an important window of opportunity open for the foundries. The ultimate response to this was the ‘fab-lite’ movement, in which IDMs ceased to invest in leading edge manufacturing. In short, they were recognizing that differenti-ation was now mostly in design.

FOUNDRYCREATION

Chart approved for public release with attribution. Copyright © 2013 VLSI Research Inc. All rights reserved.

EDA

Fab cost

What Created Foundry 1.0

Processvalue lower

Do not compete withcustomers rule

Differentationshift to design

What Drove the Emergence of the Foundry

Business Model

Foundry 1.1 — the 2000s

By 2000, the foundry business model had moved from an idea for companies who could not afford fabs to being front and center in the mainstream of manufactur-ing. IDMs had joined the fabless, with their fablite approach. Moreover, the largest fabless companies now had the scale to build their own fabs, but they were not building fabs. This was a powerful demonstration of the foundry business model’s strength. Many had come to believe the foundry was the future of manufacturing. But the nature of the business was changing as storm clouds formed on the hori-zon. These storm clouds grew darker as conflicting market and technology pres-sures were forcing change.

Market Pressures and Emerging Adversarial Partnering Styles

The market pressures of the 2000s were multifold. There was a rush of capital into the business, making the number of foundries competing for business rise. Price competition emerged as a significant force in business relationships. This rise in competition eroded the foundation of trust between fabless and foundry compa-nies. The thinking on the fabless side was that if process offered no differentiation, wafers were commodities and so price should be the most important factor in the buy decision. This downplayed the service foundation of the foundry. Partnering styles became more adversarial. Fabless companies began to push for a reference process platform via the FSA6 to easily move production between foundries, thus giving greater leverage over pricing. They were also aggressively building their own internal process teams to have a better understanding of manufacturing costs for the purpose of price negotiation leverage. Also, the very infrastructure shifts and IP fluidity that had benefited emergent foundries in the 1990s was now biting back in the 2000s. Now, IP and people were flowing out of the leading foundries.

The leading foundries responded by reducing transparency — limiting access to early process and electrical results to avoid IP transfer to their competitors. Service, early in the design cycle, was still where foundries gained their highest price lever-age. This was especially true if they could restrict information flows, thus making it more difficult for customers to enable price competition.

At the same time, consumer and mobility, the fastest growing markets for fabless companies, demanded shorter design cycle times. Getting to market late resulted in costly market share losses that could even drive a fabless chip company under. Design times needed to be shorter and getting the design right at the first tapeout, called first-time-right, became essential. So the battles over wafer prices were not easily solvable.

6 Fabless Semiconductor Association, which is now the GSA or Global Semiconductor Association.

Technology Pressures for Closer Partnering

At the same time, the technology imperative to follow Moore’s Law was suddenly getting more difficult. The era of simple scaling was coming to an end as the indus-try crossed the 100nm boundary, marking the transition from microchips to nano-chips. The rising challenges of new wafer sizes, materials, and processes would prove daunting. 300mm meant retooling entire factories. Entire processes had to be reintegrated before they would yield on 300mm. Copper had problems with thermal-migration and via fill. Lo-K inter-metal-dielectrics were fragile. CMP caused dishing. Then, variability due to random dopant fluctuations came into play. Many times, the problems were not known beforehand, causing costly re-spins in the 130nm, 90nm, 40nm, and 28nm nodes. At the same time, the explosion of transis-tors gave rise to SoC, which added more complexity and density variation, creating design-specific micro-loading problems across the die. Design and Process were intertwining, leading to the need to insert a new layer into design flows called DFM7.

The move from tape-out to production kept getting delayed when leading-edge nodes came out of the foundries. Managing design rules and the risk associated with them became another problem. In Foundry 1.0, control went in the direction of fab through the PDK and design rules to the designer. Follow the rules and the fab would never stand in the way of getting silicon right the first time. As Foundry 1.1 developed, the combination of growing design and process complexity led to more conflicts between the two. Designers were forced to take on more risk of first-time failure via exclusion sign-offs. Exclusions are when a design rule is broken, as invariably happen, and the designers sign-off takes the foundry off the hook for any failure related to it.

Initially, exclusions were simply ways to manage and assign risk while freeing de-signers to execute according to their judgment. Initially, exclusions were relatively small in number, easy to manage and the risk levels easy to comprehend. However as design complexity exploded, the number of exclusions blew up with it. Delays in getting to market grew with it. Managing the many design rule exclusions with each became so bad that EDA companies responded with tools to help. Not to question the value of these tools, but is this any way to treat a customer? The very fact that it exists implies lack of trust.

Meanwhile the IDMs, with tight couplings between design and process, were not experiencing delays in getting to market — Intel the most notable. This highlighted the growing importance of process and how it no longer could be had for free when you bought tools from equipment suppliers.

7 DFM: Design for Manufacturing

Process integration became very difficult as materials and device physics played a larger role with each successive node. This drove process research back into the chip manufacturers. As the need for a tighter connection between design and pro-cess rose, so did the cost. These factors led to IBM founding the Common Platform to pool R&D resources across several companies, keeping members on the leading edge for significantly lower costs. This was a precursor for the transition to Foundry 2.0, as GLOBALFOUNDRIES was involved earlier as a full IDM inside AMD.

But the large traditional foundries adapted slowly to the swiftly changing technical landscape. Foundries had historically underspent on R&D, at an average of only 4.7% of sales in the mid-90s. They relied on suppliers to carry far more of the load than traditional IDMs. Even though the spending rate increased by almost half in the mid-2000s to 6.4%, it was only about a third of what IDMs were spending at the finished wafer level. It can also be argued that their greater secretiveness and low participation in global conferences hurt them and their customers. They were often reacting to problems rather than anticipating them, even though the knowl-edge needed to anticipate them was public.

Compounding this, many customers were slowing their adoption of new nodes, favoring a ‘second mouse to the trap gets the cheese’ strategy. So it was hard for foundries to get the volume runners that could be used to drive defect densities down fast. Moreover, their traditional use of SRAMs as yield learning vehicles was failing to yield predictable first-time-right results with logic and mixed-signal. There was too much interaction between the design and the process. This was com-pounded by the rise of SoCs, which made for far more complex chip floorplans. The relatively lower level of leading-edge volume-production ramps at foundries also meant that the return on the R&D investments was getting pushed out.

R&D Spending Rates Increase

MIid-1990’s Mid-2000’s

Foundry

IDM Wafer Level R&D

Chart approved for public release with attribution. Copyright © 2013 VLSI Research Inc. All rights reserved.

R&D Spend Rates

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Pricing models broke down, as foundry customers began to insist on factoring yield variability into wafer prices. Meanwhile, foundries wanted to charge for test wafer runs not seeing their need as a better yield learning vehicle. It is a key sign of broad trust erosion in a market when pricing models breakdown.

Meanwhile, the size and cost of Gigafabs drove the large foundries to reduce flexibility, favoring larger customers who were willing to pay for the volumes to drive defect density down. They also started tailoring capacity investments closely to wafer order volumes, versus the nineties when they would build entire fabs before a market for the next-node had developed. This and the unpredict-ability of ramps would result in capacity crunches just when a market was taking off, frustrating customers. Customers also became frustrated as some foundries started to expand outside of their traditional markets and take on conflicting roles in advanced packaging.

As the 2000’s came to a close, the leading edge was in danger of becoming the bleeding edge. IDMs had pulled ahead, their integrated development model giving them a time-to-market advantage without the disruptive ramp hiccups that Foundry 1.0 had evolved into. Some even speculated the foundry model might be dead.

Fabless companies saw what IDMs could do and wanted the same. The value of in-tegration had awakened after having lain dormant since the nineties. The dual ascent of the Cloud and Mobile Era were placing a premium on power-performance at a level never seen before and that put the focus back on transistors. Hence, design-pro-cess integration was now a differentiator in the market. Both Qualcomm and Nvidia called for a closer working relationship with their foundries. Then, Nvidia’s John Chen caught the world’s imagination with a new fabless-foundry relationship he called the “Virtual IDM.” What was new, according to Chen, was a critical question to ask in each fabless-foundry decision: “If we were one company, what would we do?”

One thing was certain: there was a need for something new.

How Foundry Partnering

Styles Became Adversarial

TECHNOLOGY FACTORS• Technology more difficult• New materials/processes• Process value higher• Variability rises• DFM essential

MARKET FACTORS• New entrants• Wafers commoditized• Price competition• Faster design cycle• Customers price oriented

Foundry 2.0 — the 2010s

GLOBALFOUNDRIES, to a great extent, was perfectly positioned to address the emerging need for a new foundry model: Its roots were as an IDM, having spun out from AMD in 2009. Having acquired Chartered, it also gained deep roots in the foundry 1.0 model, allowing it to bridge both worlds. Its CEO, Ajit Manocha, deeply understood the issues. He had been in the senior management of an IDM, taken it through a migration to fab-lite, and then fabless, spurring the development of the original foundry business model in the process. He had been chairman of the SSMC TSMC-NXP joint venture fab in Singapore. He had started his career in R&D at Bell Labs. So he understood what needed to be done as design and process began to interact again. He could relate to the frustrations with Foundry 1.1 the fabless companies were having -- not just strategically, but also on a personal level. Unlike other foundry CEO’s, he had no personal stake in a status quo that he had defined. He was starting all over again at GLOBALFOUNDRIES with a clean sheet of paper. So it was no surprise that Manocha would be the first foundry CEO to address the issue, spelling out a new model he called Foundry 2.0.

The Foundry 1.1 Problem

IDM Foundry 1.1

Chart approved for public release with attribution. Copyright © 2013 VLSI Research Inc. All rights reserved.

The Foundry 1.1 Problem

Process

DesignDesign

Process

Buyers/Sales

The core of Foundry 2.0 is about “Collaborative Device Manufacturing,” as Mano-cha puts it. This new working relationship must meld the seamless collaboration of an IDM with the flexibility of the fabless-foundry model. A Foundry 2.0 company must be structured to collaborate seamlessly, meeting Chen’s test of ‘one company decision making.’ This structure must allow the fabless company to innovate on the foundry’s platform as an extension of its own strategy starting early in a new pro-cess node’s development. This is far beyond Foundry 1.0’s model of primarily being a source of generic fab capacity.

With Foundry 2.0, fabless designers must be allowed to innovate early on the platform in a parallel development process versus Foundry 1.1’s serial development model. Engineers on both sides must be able to communicate freely and openly without sales or procurement running interference, like in Foundry 1.1. Designers can drive the fab, tearing down design rules where possible; as they work with FTS8 improve the PDK and the process bandwidth of the fab. This is the only way to rap-idly overcome design-process coupling challenges. This also allows the foundry’s process technology to be an extension of the customer’s strategy. When the pro-cess enhances the design, Foundry 2.0 results become like today’s most advanced IDMs, rather than the plain vanilla processes of Foundry 1.0.

8 FTS: Field Technical Services

Key Features of each Foundry

version

Foundry Version Features

Foundry 2.0

Foundry 1.1

Foundry 1.0

Seamless parallel collaboration • ° One company decision making • ° Cross-company team collaboration • ° Parallel development • ° Design-process coupling • ° Process technology critical • ° Price focused, solution assumed • ° Partnership first • ° •Service oriented business model • • •Foundry does not compete w/customer • • •Foundry shoulders capital burden • • •

•: Solution Provided °: Problem Area Chart approved for public release with attribution. Copyright © 2013 VLSI Research Inc. All rights reserved.

One of the key problems with Foundry 1.1 was that short-term profit got in the way of partnering for long-term gain. Foundry 2.0 overcomes this limitation by enforcing Bruck’s rule that “partnering only occurs when common interest rises above pro-prietary interest” fully down the command chain. This is not as easy as it sounds because every link in that chain needs to think like a customer, which builds trust. Trust is what makes customer and supplier willing to go long on profit together by maximizing the partnership and never sacrificing it for short-term cost gains.

Foundry 2.0 is not business as usual with a new name. Trust breakdowns between organizations are like a cancer, were things go wrong at small unseen sites and then metastasize throughout the relationship. So Foundry 2.0 requires a different culture. Foundry 2.0 is a way of doing business.

To pull this off Ajit Manocha had to build operational platforms and processes to be Foundry 2.0 compliant. One simply can’t say you’re going to think like one compa-ny. You have to build it into the organization so it becomes second nature. Manocha started by gluing together the disparate IDM culture of the old AMD manufacturing group and the Foundry 1.0/1.1 culture of Chartered. When he started, these two parts were largely functioning as two companies. As he integrated them, he also embedded trust building into GLOBALFOUNDRIES’ infrastructure by assembling a leadership team with backgrounds from wafer processing, foundries, IDMs, & Fab-less companies. These people had similar frustrations with how the foundry model had evolved and backgrounds to understand how to overcome many of the day-to-day road blocks that undermine trust.

Having done this, Ajit restructured the company to create what he calls “Mini-IDMs.” His innovation is to move the sales-buyer relationship up to the corporate level, thereby removing this wall separating fabless designers from foundry FTSs, and process engineers in the Foundry 1.1 model. This allows them to execute decisions like they are a single company.

Can Foundry 2.0 really drive change? The pressures that created Foundry 1.1 still exist. But the difference today is that it is the fabless companies who see the need for change the most. Markets change far faster when customers pull than when vendors push.

Foundry 2.0 has already seen significant successes at GLOBALFOUNDRIES. Those working under it note that getting a design to market is more like working together as two internal departments with a common goal, instead of Foundry 1.1’s model of two independent companies with independent focus on profit share. Working together is not encumbered by having to go up through procurement over to sales and down; and then return back through this torturous path.

One example of how GLOBALFOUNDRIES lowered the competitive barriers is where they worked concurrently with a major fabless chip company to bring up an alternate source capability for a new app processor in parallel with another found-ry. GF met the challenge of being able to align the technology definition to meet a single GDS in real time so their customer could ramp at 2 foundries simultaneously. They pushed aside proprietary concerns in favor of trust-based open collaboration, giving key access to their technology architecture team during the early technology definition stage. Giving this level of access showed an incredible level of trust on GF’s part. Yet, this high level of trust benefited the customer in lowering the risk of a first-time-right failure.

Trust is a two way street and one critical sign that GLOBALFOUNDRIES earned was the customer pushed back to the first source, insisting on more commonality from both foundries at the architectural level. The customer pushed for give and take on both sides. This told GF that the customer was taking care of their inter-ests. This is an important Foundry 2.0 difference, because alternate sources in the Foundry 1.1 model had margins compromised in trying to match the first source. Aligning foundry processes costs the customer little, other than effort, and the trust benefits are large.

Ensuring your supplier’s profitability is reasonable and fair is critical to long-term supply base health. If suppliers are not profitable, they won’t stay in business. So your supply base can shrink down monopolists. But companies only go to this length when they intend to partner with a supplier over the longer term. So this customer sent a clear positive signal to GF that it was not abusive. Small reciprocal trust efforts create positive trust feedback loops in a partnership.

Chart approved for public release with attribution. Copyright © 2013 VLSI Research Inc. All rights reserved.

The Foundry 2.0 Revolution

GLOBALFOUNDRIES

Mini-IDMs

Process

Design

Process

Design

Process

Design

Process

Design

Process

Design

Buyers/SalesThe Foundry 2.0

Revolution

With another major fabless chip company, GLOBALFOUNDRIES went deep with on-site support around their PDK and 3rd party IP libraries, which got the customer to market faster, enabling greater R&D efficiency as well. Deep means more than just training or application support. In this case, the actual PDK evolved as they worked together. The customer was implementing a high-performance high-voltage analog mixed signal design that required variable power based on dynamic operat-ing conditions in order to save battery life. In essence, GF allowed this customer to drive the fab with a living, breathing PDK -- a critical Foundry 2.0 difference.

Another Foundry 2.0 challenge is having an ability to work with smaller customers. In this case, GLOBALFOUNDRIES worked with an up-start to bring up an ARM-based cloud processor architecture on their 28nm HPP process. Collaboration with this customer began with an early PDK version, soon after the technology definition was completed. GF gave full access to GF’s relevant development teams. Togeth-er, they used Foundry 2.0 close partnering to take product performance to a higher level and do it faster without costly delays. They even helped the customer refine their product’s architecture. This customer had not experienced the level of techni-cal support GLOBALFOUNDRIES provided from any other foundry.

Importantly, this early 28nm design was right on first silicon and quickly moved to market. This is proof that Foundry 2.0 works, as there were plenty of 28nm high-performance designs brought up in Foundry 1.1 that met with failed first sili-con. Many had delays significant enough to arguably effect quarterly results.

These examples demonstrate that GLOBALFOUNDRIES has been able to take Foundry 2.0 beyond the buzzword level and deep into how their organization functions. One of the highest metrics of partnering ability is that you take care of your partner before you take care of yourself. With the above examples, GLOBALFOUNDRIES has demonstrated that they have instilled this ability at the working level and turned Manocha’s Foundry 2.0 into a way of doing business. In doing so, they have brought a fresh breath of life to the foundry business model.

Addendum

About the Author

G. Dan Hutcheson is CEO and Chairman of VLSI Research Inc. His career spans more than thirty years, in which he became a well-known visionary for helping companies make businesses out of technology. This includes hundreds of successful programs involving product development, positioning, and launch. Dan is a recognized authority on the economics of innovation and has a proven track record of being able to predict trends accurately using the economic models he develops. He is a senior member of the IEEE and a recipient of SEMI’s Award for outstanding contributions in marketing for his extensive development of the economics behind the semiconductor industry.

He has authored numerous publications on the economic, strategic and tactical aspects of how to succeed in the business of technology, which includes numerous articles and weekly analysis of the memory market. He is respected as a Moore’s Law scholar, having published many papers and invited talks on the subject over his career. This includes, most notably, work for the IEEE, the Semiconductor Industry Association, the National Institute of Standards and Technology, SEMATECH, SEMI, and The Electro Chemical Society. He has twice authored invited articles for Sci-entific American on Moore’s Law. He has also been the keynote or invited speaker on many other technology topics at dozens of conferences, including the Robert S. Strauss Center’s Technology, Innovation and Global Security Speaker Series.

Dan is arguably best known for his forecasting of strategic infrastructure shifts and his early-eighties development of the first factory cost-of-ownership models, which are now the basis for most large-scale capital decision-making. He predicted the shift of the DRAM memory market from the United States to Japan in the 1980’s, then the shift of it to Korea in 1990s, as well as the driving forces for the rise of Flash Memory. Most recently, he gave the invited talk, The Future of Memory: Chal-lenges and Opportunities, at the Applied Materials Technical Symposium in Japan.

His pro bono work has included serving as an advisor on innovation to the White House Council of Economic Advisors, teaching invited courses on Manufacturing Economics and The Economics of the Internet at Stanford University, and serving on the Board of Advisors to the Extension School at UC Berkeley. His work at UC Berkeley helped the Extension School avoid wasting millions on capital acquisitions, as well as developing the ‘Lifelong Learning’ strategy that was key in turning this part of the University into a profit center for UC Berkeley.

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Disclosure Statement

Dan initiated this white paper after hearing Ajit present his views on a new foundry business model he called

Foundry 2.0. Dan’s intent was to identify if it was truly different, detail what these differences were, and identify how

GLOBALFOUNDRIES was executing this model differently from the traditional foundry model.

GLOBALFOUNDRIES has subscribed to VLSIresearch’s services since its inception and regularly interacts and

seeks advice from them via a retainer. Dan Hutcheson has known Ajit Manocha since he ran operations at Philips.

They have often shared knowledge and advice over the course of this relationship.