Cheering for the Home Team

Do U.S. foundry customers care if
their chips are Made In the U.S.A.?

Doug Grose, CEO of the new foundry
GlobalFoundries, thinks so.

Asked if big fabless companies such
as Qualcomm really care if their chips are made in New York or in
Hsinchu, Taiwan, Grose answered, “I think they do. They are
American-based companies, and they want to see the United States
regain its technology capability. But first, we have got to provide
value” as a foundry that can get the job done.

Grose also said
that U.S. executives are taking note of the large number of good
jobs that GlobalFoundries will create in New York. Some 1400 people
will work directly at the new fab, with another 5000 people getting
paychecks from the fab construction and maintenance.

The geographic proximity issue arose
earlier when Bill McClean at IC Insights said GlobalFoundries might
have a good shot at getting business from NXP Semiconductors and
Infineon Technologies. Those European companies are moving quickly
to a fab-lite model, and they might favor GlobalFoundries because
it is expanding a Dresden, Germany fab. With 32 nm foundry
capability nearby in Europe, GlobalFoundries might have a leg up,
McClean reasoned.

The issue also arose a few weeks
ago, when an analog fab launched
itself in Landshut, Germany. Called LFoundry, it pitches itself
as being able to better serve the nuanced requirements of European
analog customers. Ken Williamson, a U.K.-based consultant at
Symbiflo who works with the LFoundry, said, “If a fab is
geographically isolated, every time you want to do something it
takes two or three days, and then it may not be the right thing.
The whole process takes a lot longer. If they are in the same time
zone, that can shorten that loop.”

And the issue of location also arose
not long ago in an interview with Gerald Yin, CEO of the newly
established equipment company AMEC,
which touts itself as an “Asian” equipment company. Yin
& Co. reportedly have gotten their dielectric etch tools
installed at TSMC. On the one hand, the company waves its Asia flag
quite a bit, talking about the Asian backgrounds of its executives
and board members. And the R&D and manufacturing operation is
based in Shanghai. On the other hand, they cite their work
experience at Intel, Applied, Lam, and other U.S. locations.
We’ll have to see if AMEC can compete with Lam Research and
Applied in etch going forward.

Back to
GlobalFoundries, which is based in Sunnyvale. Does it matter where
a company is headquartered? The evidence would say, Not really. IBM
has largely failed as a foundry, even though its fab is also in New
York.

What matters are two things: first,
communication skills as a tool of customer service. The other is a
willingness to work hard. When Don
Brooks was president of TSMC, he acknowledged that TSMC got
certain tax breaks and other means of support from the Taiwan
government. But he cautioned not to take that as a fundamental
reason for TSMC’s success.

“The reason we are growing is
just how incredibly hard these Taiwan engineers work,” Brooks
said 18 years ago. That statement by Don Brooks is probably the
bottom line takeaway facing GlobalFoundries. If its engineers and
other workers can develop and maintain a work ethic that rivals
TSMC’s, the company will succeed. If not, it will join a long
list of TSMC wannabes.