【TEJ Dictionary】Semiconductor Industry
IDM、Fabless、Foundry
🔸Introduction🔸
In Taiwan, semiconductor plays an important role. Typically, the semiconductor industry can be divided into three business models, namely IDM, Fabless, and Foundry. IDM means integrated device manufacture, and their business includes IC design, manufacturing, test, package, and sales. Fabless refers to those companies that only deal with IC design and sales. Foundry is a company only focused on semiconductor manufacturing. We will introduce the business models base on these three types in this article.
Highlights of this article
1. Introduction of semiconductor
2. Business models of semiconductor
3. Sales breakdown of semiconductors in Taiwan
1. Introduction of semiconductor
The chip we often heard refers to integrated circuits or IC, and the material of the chip is a semiconductor. The supply chain of semiconductors is generally like this: IC design ➡️ IC manufacturing ➡️ test & package
📍IC design
Just like building a house, an engineer needs a blueprint to construct a chip. The construction of a chip is very complicated. There are usually billions of transistors within a tiny chip. Based on the application, there are various types of chips, like GPU, CPU, and memory. Engineers will design a suitable chip base on the needs.
📍IC manufacturing
After designing the IC, the next step is IC manufacturing. The capital and technical requirement are very high for manufacturing chips. Building an IC manufacturing factory requires a huge fund. Besides, the production yield rate is also very important. The high requirement brings a new business model. We will talk about it later.
📍Test & Package
The last step is to test and package. After manufacturing, we need to examine if the chips malfunction. Then, the chips will be packaged to prevent them from dust and pollution.
2. Business model of semiconductor
📍IDM
The integrated device manufacturers are the first business model that appeared in this industry. They deal with all the processes mentioned above. The advantage of this model is that it can optimize the manufacturing process all over the supply chain, but the disadvantage is the model requires high capital to run. Most of the top semiconductor company in the world is IDM.
The famous IDMs in the world are Intel, Samsung, Texas Instruments, etc. Taiwanese IDM are Macronix (2337), Winbond (2344), etc.
📍Fabless
Due to the high capital requirement, a semiconductor without a factory, fabless, was born. Fabless can also be divided into IC design and semiconductor intellectual property.
An IC design company deals with design and sales. The company can focus on market research and IC design. They let a foundry help them manufacture the chip they design.
The famous IC design companies in the world are Qualcomm, Broadcom, NVIDIA, Apple, AMD, etc. Taiwanese IC design companies are MediaTek (2454), Realtek (3034), Novatek (2379), etc.
Semiconductor intellectual property company is a company that only deals with chip design. The company will design the chip, then sell the blueprint to other semiconductor companies to gain the license fee.
The famous IP company is ARM, and the M1 chip of apple is designed based on ARM. Taiwanese IP companies are Faraday (3035), GUC (3433), etc.
📍Foundry
Foundry refers to those companies that don’t involve in IC design. They gain orders from the fabless or IDM companies. A foundry only deals with manufacturing, testing, and packaging. TSMC could be the first company that started the Fabless-Foundry model. The advantage is that a foundry company doesn’t take the risk of selling chips, but building a new factory can cost billions of funds. For example, TSMC announce its capital expenditure was 30 billion in 2021, and it is predicted to be 40 billion in 2022.
The famous foundries in the world are TSMC (2330), UMC (2303), GlobalFoundries, etc. Test and package foundries are ASE, Amkor, JCET, etc.
3. Sales breakdown of semiconductors in Taiwan
After knowing the supply chain and business model of semiconductors, we can further analyze the sales. For example, the chips that NVIDIA designs are used for GPU, MediaTek designs chips for mobile devices, and Winbond is an IDM for DRAM. It is very hard to define a company’s business by the news released on the Internet. TEJ sales breakdown database provides fair data to analyze a company’s profit source.
The guideline of the database is below:
👉Click Taiwan Market DB(TEJ TAIWAN DB)➡️ TEJ Company DB➡️Sales breakdown(Yearly)
👉Click ID➡️ Choose IC Produce➡️ Click Confirm
3️⃣Then, you can see the sales break down of each semiconductor company.
🔸Conclusion🔸
Users can understand the semiconductor industry more through this database. If you have any further queries or suggestions regarding the TEJ database, please do not hesitate to send your inquiries or ideas by phone or by email to us.
☎️: 02–87681088
✉️: tej@tej.com.tw
🔸Related link🔸
⭐️E-Shop
