By Bob Haavind, Editorial Director, Solid-State Technology

Panasonic has developed strategies and business models aimed at vertically integrating its chipmaking with its appliances and electronic equipment. This approach was detailed by Michihiro Inoue, executive engineer with Matsushita Electric Industrial Co. Ltd.’s semiconductor company, in his ConFab presentation on a new IDM business model.

Combining many devices on the same system LSI can create extensive chip design and manufacturing complexity if each end product is developed individually. Instead, within Matsushita, Panasonic aims to create a new value chain by tightly integrating its semiconductor production with electronic appliances, according to Inoue. The key strategy is to “black box” the core system LSI chip technology in “self-manufactured” semiconductors. System evolution is implemented by devising leading edge technology, including materials know-how and manufacturing schemes, and incorporating it into highly integrated system-on-chip (SoC) devices.

In the old approach, semiconductor devices were implemented separately (a horizontal approach), and then redone to fit the specific requirements of different appliances. This often led to lower margins in boundary areas, as chips were force-fit into system designs, leading to yield loss and performance degradation.

The vertical integration approach starts instead with defining the LSI targets for a variety of appliances and semiconductors. This forces designers to face up to technology limitations, and allows them to forecast how well the potential solutions will work in various systems. Performance and key parameters can be investigated with T-CAD as designs are tuned within actual technology limitations. This joint effort can optimize the compromises needed to provide robust devices that meet systems requirements as closely as possible.

It is interesting to note that a few decades ago, vertical integration was considered to be a major strength of giant Japanese electronics manufacturers. The equipment group kept driving semiconductor technology to meet specific product requirements for the future. In recent times, though, the chipmaking groups have become more independent, so this new strategy is actually somewhat of a revival of what worked successful for companies like Matsushita in the past.

Concurrent product development is another benefit cited by Inoue for the vertically integrated approach. In older times, different sectors of the company operated in a “bucket-brigade” fashion. Process development went on independently of fab construction, and then a process transfer phase was needed, and design technology was developed. This was followed by end-product development once chip specification had been defined.

Now all this is done concurrently, with sharing of strategies, plans, and goals, according to Inoue. There is a concurrent start on each aspect on the basis of exchanged data. Now fab construction, process development, fab start-up, design technology, and end-product development all go on simultaneously, greatly compressing the time-to-market.

This shared development allows more competitive semiconductor and electronic appliance designs to be realized because of clear targets for the SOCs involved, Inoue said, along with coordinated technology from the outset of development. One drawback, he noted, is the difficulty of quickly expanding the scale of production, particularly within cost constraints.

Costs are skyrocketing, he said, for R&D and process integration as well as for circuit/system design. To contain process R&D and integration costs, Inoue cited work with consortia, such as IMEC and Selete. Development and integration are also being addressed through alliances with other chipmakers, such as the collaboration between Panasonic and Renesas.

To deal with design costs, Panasonic has devised a new integrated platform for SOCs for digital consumer electronic devices, says Inoue. SOCs for mobile phones, as well as personal, home, and automobile devices are designed on this common platform, he explained. Basic functions are commoditized, and processors are programmed depending on the individual usage. Software is used in multiple systems, achieving five times the development efficiency, according to Inoue.

The result of this high level of vertical integration is the use of a common platform to break down technical barriers across different types of appliances, while improving the efficiency of development as well as design quality. Sharing of technology plus soft and hard assets across the end-product groups, Inoue said, is resulting in new value creation for Panasonic. — B.H.