Here’s Everything You Need To Know About Foundry

What Is A Foundry?

A foundry is a factory that manufactures semiconductor devices like integrated circuits (ICs) for other companies. These foundries specialise in complex and expensive manufacturing processes but don’t design the chips.

The foundry model has become a dominant force in the semiconductor industry. It allows companies to specialise and focus on their strengths. Foundries can leverage their expertise and advanced equipment to manufacture chips for multiple clients.

What Are The Two Types Of Foundries?

In the world of semiconductor foundries, there are two main categories that companies fall into:

Pure-Play Foundries: These companies specialise in manufacturing chips designed by other companies. They act as the manufacturing arms for such companies. This, they avoid competing with them by focussing on the complex and capital-intensive chip fabrication processes. 

Pure-play foundries invest heavily in cutting-edge manufacturing equipment and advanced process technologies, such as extreme ultraviolet (EUV) lithography and fin field effect (FinFET) transistors. This allows them to offer their clients access to the most advanced chip features and performance. 

TSMC (Taiwan Semiconductor Manufacturing Company) and Samsung Foundry are examples of pure-play foundries.

Integrated Device Manufacturers (IDMs): Unlike pure-play foundries, IDMs are vertically integrated companies that handle both the design and manufacturing of semiconductors. They possess internal design teams that develop chip architectures, microarchitectures, and logic circuits. IDMs may also invest in research and development to create new materials, device structures, and design methodologies. 

In addition to their in-house design capabilities, some IDMs may licence or acquire intellectual property (IP) cores from external sources. These IP cores are pre-designed and pre-verified building blocks that can be integrated into larger chip designs, accelerating development.

However, IDMs often have foundry capacity that exceeds their internal requirements for chip production. This excess capacity can be utilised to offer foundry services to fabless companies. 

By leveraging their expertise, IDMs can provide fabless companies with a comprehensive foundry solution, including process design kits (PDKs) and design for manufacturability (DFM) support. Examples of IDMs include Intel and GlobalFoundries.

Is Setting Up A Foundry Expensive?

Setting up a foundry can be extremely expensive because of the following requirements:

• High-Tech Equipment: Foundries rely on incredibly advanced and expensive machinery to manufacture chips at the microscopic level. This includes equipment for photolithography, deposition, etching, doping, and metallisation, each costing anywhere from hundreds of thousands to millions of dollars.
• Cleanroom Facilities: Chip production requires an immaculate environment. Foundries necessitate specialised cleanroom facilities with strictly controlled temperature, humidity, and air filtration to minimise contamination that can ruin chips. Building and maintaining these cleanrooms adds significantly to the cost.
• Research & Development: The semiconductor industry is constantly evolving. Foundries need to invest heavily in research and development to stay ahead of the curve. This also ensures they can offer the latest chip fabrication processes and features.

Which Are Some Of The Top Foundries In The World?

As of April 2024, here are some of the top foundries across the world, ranked by their revenue in the foundry market:

• Taiwan Semiconductor Manufacturing Company (TSMC): TSMC is the undisputed leader in the foundry business, boasting a market share of over 60%. It is renowned for its cutting-edge chip manufacturing processes and the ability to produce state-of-the-art chips.
• Samsung Foundry: Samsung is the closest competitor to TSMC, holding around a 10-15% market share. It leverages its expertise in consumer electronics to manufacture powerful processors for smartphones and other devices.
• GlobalFoundries: This American company holds a 6-7% market share. It primarily focusses on mature manufacturing processes for less complex chips used in a variety of applications.
• United Microelectronics Corporation (UMC): Headquartered in Taiwan, UMC occupies a similar market share to GlobalFoundries. It caters to a broad range of customers with a diverse portfolio of chip fabrication processes.
• SMIC (Semiconductor Manufacturing International Corporation): SMIC is the leading foundry in China, capturing around a 5-6% market share. It is investing heavily in research and development to bridge the gap with the leading players.