Managing the economic constraints of foundries and fabless enterprises

This paper presents an empirically grounded model, which links organizational learning to pattern-specific fixed costs. The approach described in this paper helps fab managers make fundamental strategic decisions concerning product design and product mix by engaging in scenario planning. Four critical aspects of managing pattern-specific fixed cost are analyzed in detail - sensitivity to time, design cost and production volume; platform designs; process postponement solutions; and design penalties. The model suggests that fabless enterprises and foundries must collaborate extensively on the design and realizations of product platforms for state-of-the-art integrated circuit products to remain economically viable.