New Model to Attract European Business
Staff -- Semiconductor International, 6/1/1998
The Flanders Foreign Investment Office (FFIO) announced that Meissner+Wurst GmbH+Co. (Stuttgart, Germany) is considering several new business models to make it simpler and more cost-effective for microelectronic companies to locate or expand their business in Belgium. This is part of a multimillion-dollar initiative by the Flemish government to develop semiconductor manufacturing in Northern Belgium.
One model under consideration is to have a financial consortium finance the building of a fab, then lease it to one or two semiconductor manufacturing companies. This model would cut down on the up-front costs generally associated with building a fab, enabling a company to concentrate on production. A company would have a fully functional facility and would only start to pay for it upon moving in. It would only need to bring management and engineering teams to manufacture products and focus on managing its core business; the rest would be provided.
Bob Fossiani of Meissner+Wurst said, "The model is not so different from the sale lease back model of a manufacturing facility, which is done quite often in other industries. It has not been done to date in the semiconductor industry." According to Fossiani, the trend is for semiconductor companies to concentrate more on the product, its design, its market positioning and other factors effecting the profitability of the semiconductor product. Facilities management is not considered to be one of those factors. One of the reasons this model is only now being considered, according to Fossiani, is that the marketplace, in terms of financing, was not as aggressive as it is today.
"More and more companies are partnering to build fabs worldwide to cut down on the extremely high up-front costs generally associated with this type of venture," said Dr. Roger De Keersmaecker, director of FFIO's IC Project. "In designing this proposal, FFIO and Meissner+Wurst believe that these partners do not necessarily have to be technology companies. One company could supply the technology, and the other could provide and maintain the facility."
